GEL CUSTODIANS PTY LTD -v- DEWAR [2014] WASC 177 (23 May 2014)

2 In 2007 Ms Dewar had started working after 16 years out of the workforce, commencing her own business as a tiler. She wanted to increase the proportion of the Mint Circuit property she owned, so she sought some advice from a mortgage broker, Sebastien Ollier of 'X Inc Perth'. Ms Dewar needed around $170,000 to buy out the DHW and pay out the Keystart loan. She ended with a $245,000 'low doc' loan from GEL Custodians Pty Ltd, the plaintiff in this action, at a commencing interest rate of 9.19%.

3 By March 2010 Ms Dewar was in default of the loan. Accordingly, in June 2010 GEL commenced proceedings in the Supreme Court against her to recover the outstanding balance of the loan, then totalling $282,805.06, and enforce the mortgage over the Mint Circuit property. Over the preceding 18‑month period Ms Dewar had made repayments of $47,371.72.

5 By application dated 11 October 2011 GEL sought summary judgment against Ms Dewar. This was outside the time within which the application could be brought without leave. Accordingly, GEL is required to, and has sought, leave to bring the application.

6 Before GEL's summary judgment application could be heard, Ms Dewar lodged a complaint with the Credit Ombudsman Service Limited (COSL), which obliged GEL to suspend all enforcement action pending resolution of the complaint. The complaint to COSL ultimately did not resolve the issues between the parties. The summary judgment application was therefore relisted, but not until 6 March 2014, following which it was programmed through to a hearing before me on 29 April 2014.

7 Ms Dewar resists GEL's application for summary judgment, and the action generally, on the ground that she only entered into the loan as a result of irresponsible lending practices by GEL and misconduct by Mr Ollier. She filed two affidavits in opposition to the application, sworn 31 March 2014 and 4 April 2014. I have also had regard to her defence and counterclaim filed 9 January 2014 and the documents she annexed to her Affidavit Verifying List of Documents sworn 9 January 2014.

8 In her defence, Ms Dewar specifically alleges 'undue influence, duress, unconscionability in asset lending, unjust enrichment, misrepresentation, fraud, breach of fiduciary duty, breach of duty of care, breach of standard of care, imprudent lending practices, intentional moral obloquy, statutory unconscionability, unfair dealing'. These allegations intermingle a number of potential causes of action which I have sought to disentangle so as to analyse any potential defence by Ms Dewar at its highest. I have done so in the context of being required to consider potential defences against GEL's claim, rather than any causes of action against Mr Ollier or X Inc Perth.

9 Based on my review of the material before me, nine issues arise for determination:

• Should GEL be granted leave to bring the application?
• Has GEL established a prima facie entitlement to judgment?
• Is Mr Ollier a common law agent of GEL?
• Does Ms Dewar have an arguable defence based on misleading conduct by GEL?
• Does Ms Dewar have an arguable defence based on unconscionable conduct by GEL?
• Does Ms Dewar have an arguable defence based on a breach of a duty of care owed to her by GEL?
• Does Ms Dewar have an arguable defence based on a breach of fiduciary duty owed to her by GEL?
• Is GEL entitled to summary judgment?
• What final orders are appropriate?

10 Ms Dewar also referred to potential statutory obligations on GEL, for example, a requirement to allow her a cooling off period after having signed the mortgage. I have not been able to discern a relevant applicable statutory obligation.

11 On 7 April 2014, Ms Dewar filed two applications, one to join Mr Ollier as a third party, the other to join Andrew Walker as a third party. Mr Walker is described as the manager for X Inc Perth. These applications were also before me on 29 April 2014 at the same time as I heard the summary judgment application. I adjourned the two applications to the Master's chambers on 27 May 2014.

12 For the reasons that follow, I am satisfied that GEL is entitled to summary judgment. However, given the catastrophic consequences to Ms Dewar of GEL enforcing the judgment, and given the conduct of Mr Ollier that I will refer to, I am also of the preliminary view that enforcement of the judgment should be suspended on an interim basis until 25 July 2014. This is to allow some clarity to emerge in relation to Ms Dewar's proposed third party actions against Mr Ollier and Mr Walker. Following that date, she will need to persuade the court to extend the suspension order.

13 As will be apparent from the reasons which follow, I have drawn heavily on the analysis undertaken by Edelman J in Perpetual Trustee Company Limited v Burniston [No 2] [2012] WASC 383. Like the present case, that decision concerned an action by a financier to enforce a mortgage entered into by the defendant borrowers with the assistance of a mortgage broker. The mortgage was a 'low doc' mortgage, as is the present one. Again like the present case, the primary allegations of misconduct were made against the mortgaged broker. The borrowers were not able to prevent the mortgage from being enforced as the financier was ultimately found not to be responsible for the relevant misconduct by the mortgage broker. His Honour's introductory comments are apposite for present purposes [1] ‑ [2]:

In the years following the Global Financial Crisis, courts have seen numerous cases involving misrepresentations and other legal wrongdoing which were not exposed until defaults occurred under loan agreements. Many of these cases involved a type of loan colloquially described as a 'low-documentary' or 'lo-doc' loan. Hindsight has shown that these loans, with little documentary information provided to the lender, bore a substantial risk of default and a real possibility of legal wrongdoing. These loans are often euphemistically described as falling within the category 'sub-prime'.

A common lending structure in cases which have reached the courts involves a lender appointing an 'originator' whose function is to introduce borrowers to the lender, ie to 'originate' loans. The originator sometimes appoints a sub-originator. If, as in this case, the sub-originator engages in unlawful conduct, then a host of legal issues arise. Are the originator and the lender responsible for the conduct of the sub-originator? Is the sub‑originator an agent for the originator, or for the borrower? Is the lender independently liable? What relief should be given? Different results have been reached in different cases because different cases have often involved different transaction documents, different facts, different claims, and some States have different legislation.

Should GEL be granted leave to bring the application?

14 GEL filed its summary judgment application on 11 October 2011, more than 21 days after Ms Dewar filed her memorandum of appearance (25 August 2011). Accordingly, pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 14 r 1(1), GEL is required to seek, and has sought, leave to bring the application.

15 In support of its application for summary judgment, GEL filed two affidavits sworn by Michael Pollard. Mr Pollard is a Senior Recoveries Officer for GEL, and is responsible for Ms Dewar's loan accounts with GEL. The affidavits were dated 6 October 2011 and 16 April 2014. In his first affidavit, Mr Pollard explains that the delay was due to:

(a) Ms Dewar not serving her memorandum of appearance on GEL immediately after filing it; and

(b) GEL delaying further action after being advised by Ms Dewar that she was going to defend the action and would serve the memorandum of appearance, and an affidavit filed at the same time, on GEL's lawyers.

16 The application was prepared and filed once GEL had been provided with a copy of the affidavit.

17 The policy rationale for the time limit is to ensure that summary judgment applications are brought at an early stage of proceedings before too much expense has been incurred: Barrick Gold of Australia Ltd v F L Smidth Inc [2007] WASC 186 [10] (Templeman J); Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 9200989, 12 October 1992) (Master Adams). The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties: Bank of Western Australia v Stein [2005] WASC 43 [53] (Commissioner Siopis SC).

18 GEL's application was filed less than a month out of time. The reason for the delay was to receive information from Ms Dewar about her defence. This was an entirely appropriate reason to defer making the application. No other action appears to have been taken in the action. Ms Dewar has not identified any specific prejudice she has suffered, or will suffer, by reason of the delay in bringing the application. The delay in bringing the application has become immaterial in the overall progress of the action which ended up being deferred for over two years pending determination of the complaint to COSL.

19 I am of the view that GEL ought to have leave to bring the application.

Has GEL established a prima facie entitlement to judgment?

20 In his first affidavit, Mr Pollard deposes that:

(a) Ms Dewar entered into a loan agreement with GEL on or about 8 January 2008 (Loan Agreement);

(b) the principal amount lent was $245,000;

(c) on or about 14 February 2008 Ms Dewar granted GEL a mortgage over the Mint Circuit property to secure the principal amount lent and interest thereon mortgage);

(d) the mortgage incorporated a memorandum of common provisions (Memorandum);

(e) pursuant to the terms of the Loan Agreement and Memorandum Ms Dewar was obliged to make regular payments to GEL as and when they fell due failing which she would be in default of the Mortgage and the Loan Agreement;

(f) Ms Dewar failed to pay the monthly instalments in June 2008, November 2008, January to February 2009 and December 2009 to April 2010, and was in arrears of $8,580.96 as at March 2010;

(g) on 10 March 2010 a written notice of default was served on Ms Dewar;

(h) Ms Dewar did not remedy the default within the time period specified or at all,

(i) the amount of repayments made by Ms Dewar as at 16 June 2010 was $47,371.72;

(j) the total amounts of fees and interest applied to the Loan as at 16 June 2010 was $52,668.73;

(k) the amount of interest in arrears at the date of issue of the writ was $9,530.06;

(l) the amount of interest in arrears as at 6 October 2011 was $44,208.04; and

(m) the total amount remaining due under the Mortgage as at 6 October 2011 was $282,805.06; and

(n) GEL claims interest at the default rate of 10.1% (as at 6 October 2011).

21 I am satisfied that Mr Pollard has verified the facts on which this claim is based as required by O 14 r 2(1). Mr Pollard also deposes that he believes that Ms Dewar has no defence to the action, also required by O 14 r 2(1).

22 I am satisfied that GEL has complied with the requirements of RSC O 14 r 2 so as to establish a prima facie right to summary judgment: Westwind Air Charter Pty Ltd v Hawker de Havilland Ltd (1990) 3 WAR 71, 74 (Murray J).

Is Mr Ollier a common law agent of GEL? Significance of the agency argument

23 As I have observed above [8], in her defence, Ms Dewar has identified a number of common law defences. Each relies on conduct by Mr Ollier, and not conduct by an officer or employee of GEL. Accordingly, on the facts as set out in the material available to me, in order to establish any of the common law defences, it is first necessary for Ms Dewar to establish that Mr Ollier (or perhaps X Inc Perth), was a common law agent of GEL with the effect that his acts would be attributed to GEL: Burniston [221]. More specifically, in relation to tort (for example, fraudulent or negligent misrepresentation), the 'basic rule is that a principal is jointly and severally liable with his or her agent for any tortious act or omission committed by the agent while the agent is acting within the scope of his or her actual or ostensible authority': G E Dal Pont, Law of Agency, 529 (Third edition, 2014, LexisNexis Butterworths, Australia) (see also [22.19] ‑ [22.34]). In relation to a contract, 'where in the negotiation of a contract by an agent on behalf of a principal, the agent is guilty of fraud, innocent misrepresentation, undue influence, unconscionable dealing or concealment of essential facts that ought to be disclosed to the other contracting party, the contract is voidable, and the other party may rescind it': Law of Agency, 435.

24 Before turning to this issue, it is necessary to briefly consider what Ms Dewar must establish in order to satisfy the court that judgment should not be given.

General principles for resisting an application for summary judgment

25 As GEL has satisfied all the requirements of RSC O 14 so as to give it a prima facie right to summary judgment, the burden shifts to Ms Dewar as the defendant to satisfy the court why judgment should not be given against her: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J); Westwind (74). Ms Dewar must satisfy the court 'with respect to the claim ... that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim': RSC O 14 r 3(1). She does not have to show a defence on the balance of probabilities, but must at least show cause why there is an arguable defence: Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27 [4] (Reasons of the Court). This is an evidentiary burden, the overall legal burden of persuasion remaining on the plaintiffs as applicants: Morgan v Pallister [2004] WASC 188 [4] (Pullin J).

26 An application for summary judgment is to be determined on the basis that the version of the facts put forward by the party opposing the application, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608 (Mason CJ, Deane & Dawson JJ). The court is, however, not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent: Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28] (Newnes M); Eng Mee Yong v Letchumanan [1979] UKPC 13; [1980] AC 331, 341 (Reasons of the Court). If after argument there remains real uncertainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused: Ansearch [28]; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VicLawRp 15; [1947] VLR 332, 335 (Herring CJ, Lowe & Fullagar JJ).

27 Ms Dewar first sought advice from Mr Ollier in late 2007. She wanted to obtain some advice whether she could increase the proportion of the Mint Circuit property that she owned. She instructed Mr Ollier to negotiate with Keystart regarding her taking a 'further apportionment or even the 30% share they had, and to see if I was able to financially commit to the idea' ([10], 4 April 2014 affidavit). I quote this passage to illustrate Ms Dewar's lack of financial knowledge even now; the correct position as I have set out above [1] is that it was DHW who held the remaining 30% equity in the property, and Keystart a loan.

28 In order to accurately convey what transpired, it is appropriate that I quote from Ms Dewar's affidavit sworn 4 April 2014 [11] ‑ [23]:

1. As such I contacted X Inc for advice and Sebastien Ollier made an appointment to see me at my rental of 441 Walcott Street, Coolbinia. I instructed Sebastien Ollier to negotiate on my behalf with Keystart Home Loans regarding taking further apportionment or even the 30% share they had, and to see if I was able to financially commit to the idea. I did not know what refinancing was until I met Sebastien and even with that I was still not really sure about it, only that it sounded good as it gave me more than I required.
2. Sebastien Ollier advised me that he could arrange $10,000 for renovations and that I was entitled to receive $54,000 equity from the property. He explained the equity was what the appreciation was from the time I purchased the property in 1995 and I was given the impression that it was in fact cash profit I earned in the 13 years.
3. Sebastien Ollier did not explain that the equity was in fact a loan. Only the $10,000 was mentioned as a loan, that's why I thought that equity was cash given to me as profit. However, I still expected him to go through Keystart as instructed to see the difference. I later found out from Keystart that he did not request any information in regard to taking further interest in the loan or how much it would be should I take further interest.
4. Sebastien Ollier advised that because I was working and not living in the mortgaged property that it was classed as an investment and that he would have [to] do this as an investment loan. I did not question this as I had no idea about investments or investment loans and relied on his professional knowledge.
5. When I first met Sebastien he stated that he was employed and earned a wage and did not receive any commission, I presumed that this was to reassure me that he had no ulterior motive in his recommendations and advice. However, only this year I found out that he was in fact the senior broker at X Inc Perth and that the business was not registered.
6. On the 20th November 2007 Sebastien Ollier came to my rental to request me to fill in a few lines on some documents. It was minimal and he advised the other documents would be filled by himself as he had all the information he received from me. I did not question this as on many occasions I have helped fill in forms for customers at RAC Insurance where I used to work many many years ago.
7. My friend Steve Pavy was subletting the main bedroom of the rental property 441 Walcott Street, Coolbinia and told me I should seek legal advice before I sign any more documents.
8. On the morning of 8th January, 2008 Sebastien Ollier telephoned around 8:00 a.m for me to sign the loan contract that day as it had to be sent back by 5:00 p.m. I advised as I was working I could only attend after 3:00 p.m and that this did not give me any time to make an appointment to seek legal advice and that I wanted to take the documents to a legal advisor.
9. Steve Pavy and I arrived at X Inc Perth, 101 Frobisher Street, Osborne Park just after 3:00 p.m and met Andrew Walker for the first time and was introduced as the representative of the lender who would witness the documents.
10. Upon perusing the loan document I was not sure of its contents, the meanings and especially the calculations which I did not understand. There was a lot I did not understand so I requested to take the documents away in order to seek legal advice. Both Andrew Walker and Sebastien Ollier refused to let me take the documents stating I would lose the offer as it had to be sent back by 5:00 pm.
11. I did not want to miss out on the offer as I required the $10,000 to help renovate the property and being eligible for $54,000 equity seemed too good to refuse. Although I felt under pressure I felt I had no choice but to sign as they refused to let me take the documents away. I had on several occasions whilst reading the document advised them I needed to seek legal advice as I could not relate to what was written. On all requests to take the documents away I was refused.
12. I remember asking Sebastien Ollier to reassure me that it was in my best interests and that he would not take advantage of my lack of knowledge to which he replied that he had no ulterior motives as he did not receive any commissions and that his recommendations were good for me.
13. I relied on his honesty and professional knowledge otherwise had I known, that I should have got a personal loan instead and that the investment loan was higher and did not protect me under some regulative authority, and that the equity was in fact a loan I would not have signed the document. I did not see any statement regarding a cooling off period and I did not know of that at all to even ask about it, I just felt bad to leave after he did so much work.
14. When I began having difficulty in repayments, I thought it was my fault for simply making the wrong decisions and because I had some injuries to my back, shoulder and knees. However, I walked past an article in The Australian and having read the problems that other people were having, realised that in fact I was just another victim and that the Lender would have received a huge profit in my default and to any repossession.

29 Ms Dewar signed the Loan Agreement on or about 8 January 2008. The Mortgage was signed on 14 February 2008, the day on which settlement took place. Of the $245,000 lent:

(a) $108,703.81 went to DWH to buy out its 30% interest;

(b) $64,782.77 went to Keystart in repayment of the loan;

(c) $68,338.42 went to Ms Dewar; and

(d) the balance went on fees and charges.

30 There is scant information before me as to the formal legal structure between Mr Ollier and GEL. For present purposes, it is sufficient for me to find the following:

(a) Mr Ollier is either an employee of, or independent contractor engaged by, X Inc Perth;

(b) X Inc Perth is a mortgage broker;

(c) Ms Dewar is a client of Mr Ollier and/or X Inc Perth.

(d) one of the entities which X Inc Perth uses to source loan funds for its clients is GEL;

(e) there appears to be other entities interposed between X Inc Perth and GEL, in particular Wholesale Funds Australia Pty Ltd (WFA), which is described in the Loan Agreement as the 'Mortgage Servicer'; and

(f) the fruits of the endeavours of Mr Ollier and X Inc Perth was a contract between their client Ms Dewar and GEL.

31 In relation to the issue of common law agency as between Mr Ollier and GEL, the following findings by Edelman J in Burniston are directly applicable. X Inc Perth is in the same position as Mortgage Miracles. Collins Securities appears to be in the same position in the contractual chain as WFA, with the Burnistons as the clients: [243] ‑ [248], [251] ‑ [252] (footnote omitted but key references inserted).

1. There are several indicators which militate against any relationship of agency between Mortgage Miracles and Collins Securities.
2. First, in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd ([1986] HCA 14; [1986] HCA 14; (1986) 160 CLR 226, 234) the High Court said:

'[U]nder the general principles of the law of agency, a broker is the agent of the assured, not the insurer ... There will be rare circumstances in which a broker may also be an agent of the insurer, but the courts will not readily infer such a relationship because a broker so placed faces a clear conflict of interest between his duty to the assured on the one hand and to the insurer on the other.'

1. The same approach has been taken to finance brokers. As Professor Dal Pont has explained '[t]he reticence to characterise finance brokers as agents of the lender in any event rests on the basis that such an outcome does not reflect the commercial reality of the transaction. It is unusual for a broker to be vested with authority by the lender to represent it, or act on its behalf in soliciting business for it'.
2. In Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd ([2006] WASC 177 [65]) Newnes M (as Newnes JA was then) explained, after reference to numerous authorities, that although the question of agency is fact specific, it 'will not readily be inferred that a finance broker is the agent of the financier' and 'it is not sufficient simply to show that the broker possessed and completed the finance application form, provided to the financier information required by the financier and received a fee or commission from the financier'. In that case it was not sufficient for a relationship of agency to arise that the broker completed the finance application form and submitted it to the financier. Newnes M quoted with approval the following passage from the reasoning of Cole J in Octapon Pty Ltd v Esanda Finance Corporation Ltd (Unreported, NSWSC, 3 February 1989) (27):

'The circumstance that [the finance broker] received commission from Esanda for transactions which he introduced to that company, as well a fee from Octapon, does not render his position that of agent for Esanda. The fact that the broker approached a finance company, arranged for execution of documents, provided details of the vehicles and of Octapon's financial position, arranged for the obtaining of an invoice from the supposed vendor, and otherwise took steps to enable the smooth application for and completion of the transaction, in no way constitutes him the agent of Esanda.'

1. The examples of cases in which a finance broker has been held not to be the agent of the financier can be multiplied.
2. Finally, again emphasising this point, in the Streetwise litigation the Streetwise company's tasks included interviewing prospective borrowers and collecting and submitting information to Tonto HL. The Streetwise company had a degree of control over the administrative process once an application was lodged. However, the performance of these tasks did not require the conclusion that the Streetwise company was an agent of Tonto HL. Similarly, the performance of any organisational or enterprise tasks by Mortgage Miracles does not require a conclusion that it was the agent of Collins Securities.

1. A third factor is the fiduciary duties owed by Mortgage Miracles to the Burnistons; Mortgage Miracles owed duties to the Burnistons to act in good faith and in their interests. These fiduciary duties owed to the Burnistons ... are not consistent with a relationship of agency and the usual attendant fiduciary duties in that relationship between Mortgage Miracles and Collins Securities.
2. These indicia all militate against any relationship of agency between Mortgage Miracles and Collins Securities. I find that no agency relationship existed between Mortgage Miracles and Collins Securities.

32 For the same reasons as expressed by Edelman J, on the evidence available to me I do not find it arguable that Mr Ollier is a common law agent of WFA, let alone GEL.

33 I do not have sufficient information to consider the 'double attribution of acts' principle referred to by Edelman J [233] ‑ [242]. However, given that there is another level of relationship between WFA and GEL which appears to be similar to that in Burniston between Collins Securities and the ultimate lender Perpetual Trustee Company Ltd, this principle is likely to impose another obstacle on Mr Ollier or X Inc Perth being an agent of GEL.

Impact of the agency finding on other potential defences

34 The finding that Mr Ollier is not an agent of GEL means that it is not arguable that either the Loan Agreement or the Mortgage is voidable at common law due to any conduct by Mr Ollier that may amount to undue influence, duress, unconscionability, misrepresentation or fraud. Neither is it arguable that Mr Ollier's conduct can be attributed to GEL so as to give rise to a cause of action against it in tort, for example, negligence or fraudulent misrepresentation.

Does Ms Dewar have a prima facie defence based on misleading conduct by GEL? Misleading conduct ‑ issues

35 As I have mentioned, in her defence, Ms Dewar alleges misrepresentation. Having addressed common law liability, it is then necessary to consider whether there has been any representation or other conduct by GEL, or which can be attributed to GEL, which may constitute misleading conduct. As the alleged conduct in the present case concerns the provision of a financial service by GEL, the relevant statutory regime is that in the Australian Securities and Investments Commission Act 2001 (Cth): s 12BAB (the same outcomes would follow if it is the Fair Trading Act 1987 (WA) which is ultimately found to apply: see s 3D for transitional application).

36 The prohibition on misleading or deceptive conduct in the ASIC Act is contained in s 12DA, which provides:

12DA Misleading or deceptive conduct

(1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.

37 The purpose of the prohibition on misleading and deceptive conduct 'is to enforce a standard of conduct by corporations that meets community expectations of fair dealing in business activity': Burniston [190]; Westpac Banking Corporation v The Bell Group Ltd (in liq) [No 3] [2012] WASCA 157 [473] (Lee AJA). The conduct 'is measured against an objective view of what constitutes fair dealing in trade or commerce in the given circumstances': Burniston [190]; Westpac Banking Corporation [474]. There must be a 'likelihood that the conduct of a corporation would be misleading or deceptive having regard to all relevant circumstances': Westpac Banking Corporation [474].

38 If it is established that GEL contravened ASIC Act s 12DA, the court has power to set aside the Loan Agreement and Mortgage or decline to enforce it: ASIC Act s 12GM. However, as observed by Edelman J in Burniston, were the court empowered to make an order of this kind, it would have to bring to account the benefit actually received by Ms Dewar [10] ‑ [13].

39 For present purposes, GEL can be held liable for a contravention of ASIC Act s 12DA or s 12DF in three ways:

• Directly, that is by its directors or employees pursuant to ASIC Act s 12GH.
• Indirectly, by the attribution of the conduct of an agent, also pursuant to ASIC Act s 12GH.
• By being 'involved' in contravention by Mr Ollier pursuant to ASIC Act s 12GM.

40 In order to analyse whether Ms Dewar has an arguable defence to GEL's claim based on misleading conduct, five sub‑issues arise:

• Did any director or employee of GEL engage in misleading conduct?
• Did Mr Ollier engage in misleading conduct?
• Can any misleading conduct of Mr Ollier be attributed to GEL ‑ statutory attribution?
• Can any misleading conduct of Mr Ollier be attributed to GEL ‑ involvement?
• Is there a basis for a different conclusion for Mr Walker?

Did any director or employee of GEL engage in misleading conduct?

41 Any conduct engaged in on behalf of GEL by a director or employee within the scope of the person's actual or apparent authority is taken to have been engaged in by GEL: ASIC Act s 12GH(2) (considered in more detail below).

42 There is no evidence before me that any director or employee of GEL made any representation directly to Ms Dewar, nor engaged in any conduct towards her, that could be described as misleading or deceptive.

43 From the materials before me, Mr Ollier appears to have made four representations that would arguably amount to misleading or deceptive conduct.

44 The first representation was made in late 2007 at a meeting between Mr Ollier and Ms Dewar, probably not their first meeting. The representation that Ms Dewar was entitled to received $54,000 by way of equity increase from the Mint Circuit property that she could take as a cash profit. In a note in Mr Ollier's handwriting, which it seems he made at this meeting, there is a statement: 'equity release' with two lines going to figures of $56,000 and $20,000. This representation was false as the amount of $54,000 (the actual figure was closer to $68,000) was part of the Loan.

45 The second representation seems to have been made at the same time as the first. It is that Ms Dewar's mortgage payments may go up to $284 or $326 per week. These figures are also contained in the note in Mr Ollier's handwriting. From the information available it appears that the actual minimum monthly payment was in the order of $2,150 per month, over $500 per week. Ms Dewar states that Mr Ollier later came over to her house one evening and said that the mortgage payments may go up to $500 per week and asked if she could afford that. She said that she 'honestly did not know' and gave Mr Ollier information as to her income (in documents) that:

(a) in the period July 2006 to June 2007 her gross income was $42,393, with work related expenses of $36,665; and

(b) in the period July to September 2007, her gross income was $3,363, with work related expenses of $4,066.

46 The third representation was on the morning of 8 January 2008 when Mr Ollier telephoned Ms Dewar at 8.00 am to tell her that she had to sign the Loan Agreement that day as it had to be sent back by 5.00 pm. The Loan Agreement signed by Ms Dewar is annexed to Mr Pollard's first affidavit. It provides that the offer is open to be accepted for 14 days, or such longer period as the lender may approve. On its face the Loan Agreement does not provide a date on which this 14-day period commenced. For present purposes, it is sufficient for me to find an arguable case that this representation was misleading on one of two alternate bases:

(a) the 14 day period did not in fact expire on 8 January 2008; or

(b) the 14 day period did in fact expire on 8 January 2008, but Mr Ollier did not tell Ms Dewar that it had been in their possession for the preceding 13 days and that the time pressure was due to their delay.

47 The fourth representation was made on the afternoon of 8 January 2008 when Ms Dewar attended the offices of X Inc Perth to sign the Loan Agreement. Mr Ollier again told her that she would lose the offer is she did not sign it that day. For the reasons set out above [46], this representation also appears to have been misleading.

Can any misleading conduct of Mr Ollier be attributed to GEL - statutory attribution?

48 The relevant attribution rule by which the conduct of Mr Ollier could be attributed to GEL is contained in ASIC Act s 12GH(2) which provides:

12GH Conduct by directors, employees or agents

...

(2) Any conduct engaged in on behalf of a body corporate:

(a) by a director, employee or agent of the body corporate within the scope of the person's actual or apparent authority; or

(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent;

is taken, for the purposes of this Division, to have been engaged in also by the body corporate.

49 This section 'is an enlarging provision, that is, one that is intended to make proof of corporate responsibility for conduct easier than it is at common law': Burniston [275]; Lisciandro v Official Trustee in Bankruptcy [1995] FCA 1527; (1995) ATPR 40,897, 40,903 [18] (Kiefel J); NMFM Property Pty Ltd v Citibank Ltd (No 10) [2000] FCA 1558; (2000) 107 FCR 270 [1241] (Lindgren J).

50 To fall within ASIC Act s 12GH, the relevant conduct by Mr Ollier must have been done 'on behalf of' GEL, by Mr Ollier as an agent, and within the scope of his authority. As to the first element, in Burniston Edelman J quoted with approval the following passage from the decision of Kiefel J in Lisciandro ([18], omitting internal references):

Whilst the phrase 'on behalf of' is not one with a strict legal meaning ... there is a limit to how loose the connection can be. It still conveys that something is done 'for' the company ... or something similar to 'in the course of the body corporates' affairs or activities'.

51 Again broadly adopting the reasoning of Edelman J in Burniston [283], the following factors are relevant:

(a) Mr Ollier was not an agent of GEL generally ‑ see [27] to [33] above;

(b) the acts done by Mr Ollier were done for his benefit (to obtain whatever remuneration he was entitled to) and the benefit of Ms Dewar (to obtain the loan);

(c) the acts done by Mr Ollier were done as part of X Inc Perth's business which owed fiduciary duties to Ms Dewar (see further [89] below);

(d) no representation was made to Ms Dewar to the effect that Mr Ollier, or X Inc Perth, was acting on behalf of GEL; and

(e) there is no other evidence to the effect that Mr Ollier represented GEL (for example, evidence that he had a GEL logo on the side door of his car or used GEL letterhead or stationery);

(f) at the time Mr Ollier was also discussing with Ms Dewar obtaining a loan from Citibank (as set out his handwritten note which I have referred to above [44]).

52 In my view it is not arguable that Mr Ollier's conduct can be attributed to GEL pursuant to ASIC Act s 12GH as that of an agent of GEL acting on behalf of GEL. As there is no relevant agency or representative framework, there is no basis, nor need, for me to consider whether he was acting within the scope of any authority he may have had.

Can any misleading conduct of Mr Ollier be attributed to GEL ‑ involvement?

53 The remedial sections of the ASIC Act empower the court to grant relief not only against a person who contravenes a relevant section, but also against any person 'involved in' the contravention. Relevantly for present purposes, this includes ASIC Act s 12GM, pursuant to which the court could make orders setting aside the Loan Agreement and Mortgage or declining to enforce it:

12GM Other orders

(1) Without limiting the generality of section 12GD, if, in a proceeding instituted under, or for an offence against, this Division, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in in contravention of a provision of this Division, the Court may, whether or not it grants an injunction under section 12GD or makes an order under section 12GF, 12GLA or 12GLB, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (7) of this section) if the Court considers that the order or orders concerned will compensate the first‑mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage.

...

(5) An application under subsection (2) may be made at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.

...

(7) Without limiting the generality of subsections (1) and (2), the orders referred to in those subsections include the following:

(a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after a date before the date on which the order is made;

(b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after a date before the date on which the order is made;

(c) an order refusing to enforce any or all of the provisions of such a contract;

(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage;

(e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage;

(f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage;

(g) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:

(i) varies, or has the effect of varying, the first‑mentioned instrument; or

(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first‑mentioned instrument.

54 The phrase 'involved in the contravention' is defined in Corporations Act 2001 (Cth) s 79 (which applies to the ASIC Act: s 5(2)(b)), in the following terms:

A person is involved in a contravention if, and only if, the person:

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced, whether by threats or promises or otherwise, the contravention; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d) has conspired with others to effect the contravention.

55 In Australian Securities and Investments Commission v Maxwell (2006) 59 ASCR 373 Brereton J observed of CA s 79 ([92]):

The widest of those concepts is that of being 'knowingly concerned' in a contravention, and even that involves: (a) knowledge of the essential facts which constitute the contravention which, in the case of provisions such as those in issue here, requires knowledge that the relevant representation is being made and is misleading; and (b) some intentional participation or assistance in the contravening conduct.

56 As authority for these propositions, His Honour referred to the decisions in Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473, 494 (Mason J), 501 (Wilson, Deane & Dawson JJ); and Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661, 670 (Mason ACJ, Wilson, Deane and Dawson JJ). Further, in this context 'knowledge' means actual knowledge, not constructive knowledge: Maxwell [92]; Compaq Computer Australia Ltd v Merry [1998] FCA 968; (1998) 157 ALR 1, 5 (Finklestein J). It may, however, be possible to infer actual knowledge of the relevant essential matters where there is a combination of suspicious circumstances and a failure to make an inquiry it may: Maxwell [92]; Compaq Computer [7]; Pereira v Director of Public Prosecutions [1988] HCA 57; (1988) 82 ALR 217; (1988) 63 ALJR 1, 3 (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ).

57 The knowledge of directors or employees of GEL may be attributed to GEL: ASIC Act s 12GH(1). On the material available to me, there is no evidence to the effect that any director or officer of GEL had knowledge that Mr Ollier had made the relevant representations, let alone that they were misleading. The knowledge of an agent may also be attributed to GEL: ASIC Act s 12GH(1). However, as set out above, I do not consider that Mr Ollier can be considered an agent of GEL.

58 I am therefore of the view that it is not arguable that any misleading conduct of Mr Ollier can be attributed to GEL by virtue of it being involved in contravention by Mr Ollier pursuant to ASIC Act s 12GM.

Is there are basis for a different conclusion for Mr Walker?

59 Mr Walker appears to have joined in making the fourth representation. In Ms Dewar's affidavit, which I have quoted above, Mr Walker is described as 'the representative of the lender who would witness the documents' [18], quoted at [28]. In her application for leave to join Mr Walker as a third party he is described as the manager of X Inc Perth.

60 Given the little information I have before me about Mr Walker, I do not consider it arguable that his position differs from that of Mr Ollier as regards attribution to GEL of his conduct or involvement by GEL in any contravention by him.

61 For the reasons set out above, I am of the view that Ms Dewar does not have an arguable defence against the claim made by GEL on the basis of misleading or deceptive conduct by any of GEL, Mr Ollier or Mr Walker.

Does Ms Dewar have an arguable defence based on unconscionable conduct? Unconscionable conduct - issues

62 Ms Dewar also asserts that GEL has engaged in unconscionable conduct. Like misleading conduct, the relevant prohibition in relation to financial services is contained in the ASIC Act, specifically s 12CA and s 12CB. For present purposes, it is sufficient to consider whether GEL engaged in unconscionable conduct within ASIC Act s 12CA(1). That section provides:

12CA Unconscionable conduct within the meaning of the unwritten law of the States and Territories

(1) A person must not, in trade or commerce, engage in conduct in relation to financial services if the conduct is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.

63 As with misleading conduct, if it is established that GEL contravened ASIC Act s 12CA, the court has power to set aside the Loan Agreement and Mortgage or decline to enforce it: ASIC Act s 12GM.

64 The reference in ASIC Act s 12CA to unconscionable conduct in the unwritten law is a reference to conduct that is within the equitable doctrine of unconscionable conduct: Australian Competition and Consumer Commission (ACCC) v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51 [7] (Gleeson J), [38] (Gummow & Hayne JJ), [156] ‑ [160] (Callinan J).

65 The court may set aside a contract pursuant to the equitable doctrine of unconscionable conduct 'whenever one party by reason of some condition [or] circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created': Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447, 462 (Mason J). The principles by which a court will determine whether a contract may be set aside on the ground of the unconscionable conduct of one of the parties are conveniently summarised by Murphy J in Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10; (2010) 41 WAR 353 [219] ‑ [233]:

1. Equity's jurisdiction to set aside a transaction for unconscionable dealing is invoked where one party to the transaction is under a special disadvantage or disability in dealing with the other party, and that special disadvantage or disability was sufficiently evident to the other party to make it prima facie unfair or unconscionable for that other party to accept or retain the benefit of the transaction: Commercial Bank of Australia v Amadio; Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621, 637.
2. The underlying equitable principle may be invoked 'whenever one party by reason of some condition or circumstance' is placed at a special disadvantage of which unfair and unconscientious advantage is taken by the other party: Commercial Bank of Australia v Amadio (462).
3. The special disadvantage will be sufficiently evident to the other party if the other party knows facts which would raise the possibility of the special disadvantage in the mind of a reasonable person: Commercial Bank of Australia v Amadio (467 ‑ 468, 479).
4. Where such circumstances are shown to exist, the onus is on the other party to establish that the transaction was fair, just and reasonable: Commercial Bank of Australia v Amadio (474).
5. The special disadvantage need not have been created by the party taking the benefit of the transaction: Louth v Diprose (629).
6. The special disadvantage alleged must be one 'which seriously affects the ability of the innocent party to make a judgment as to his own best interests'; mere difference in bargaining power is insufficient: Commercial Bank of Australia v Amadio (462). The 'essence of such weakness is that the party is unable to judge for himself': Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362, 392; or 'to conserve his own interests': Blomley v Ryan (415); ACCC v C G Berbatis Holdings [12], [46], [55].
7. In this regard care must be taken not to 'eviscerate unconscionability of its meaning': NZI Capital Corporation v Fulton [1998] FCA 667 Black CJ & Lehane J, quoting Mason CJ in Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 503.
8. In ACCC v C G Berbatis Holdings, Gleeson CJ [14] said:

'Unconscientious exploitation of another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position. There may be cases where both elements are involved, but, in such cases, it is the first, not the second, element that is of legal consequence ...'

1. In ACCC v C G Berbatis Holdings, Gummow & Hayne JJ [56] also said that even a person in a 'greatly inferior bargaining position' may nevertheless not lack capacity to make a judgment about that person's own best interests.
2. In all cases, the court's equitable jurisdiction is to be exercised according to recognised principles, and the courts are not armed with a general power to set aside transactions which in the eyes of the judges appear unfair, harsh or unconscionable: Louth v Diprose (654) (Toohey J, although in dissent in the result). See also the observations of Sir Anthony Mason in 'The Impact of Equitable Doctrine on the Law of Contract', (1998) 27 Anglo‑American Law Review 1, 12 cited by Debelle & Wicks JJ in Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1 [648]:

'There is a strong objection to simply equating the concept to what is unreasonable and unfair. The object of the doctrine is not to protect people from the consequences of their own mistakes. Because our contract law, unlike that of the United States, does not impose a general obligation of good faith and fair dealing, it is preferable to think of unconscionable conduct in terms of that which shocks the conscience, something which is harsh or oppressive in that it involves taking advantage of another's special disability or disadvantage. So understood, the concept is not one which is open-ended, to be applied according to the subjective whim of the Judge, though like other standards, such as that of "the reasonable person", borderline applications will require an element of value judgment.'

1. In Bridgewater v Leahy [76], Gaudron, Gummow & Kirby JJ referred with approval to the Privy Council's observations in Hart v O'Connor [1985] AC 1000, in which unconscionable conduct was described as:

'[V]ictimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances.'

1. In The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 225 FLR 1 [4924], Owen J said that it is not enough for there to be unequal bargaining power ‑ the conduct of the stronger party has to be exploitative or oppressive.
2. Whilst the categories of disability are not closed, the requisite special disadvantage often involves poverty, need, sickness, age, infirmity of body or mind, sex, drunkenness, illiteracy, lack of education and lack of assistance or explanation when assistance or explanation is necessary: Blomley v Ryan (405, 415); lack of or limited comprehension of the English language: Commercial Bank of Australia v Amadio; impaired intelligence: Wilton v Farnworth [1948] HCA 20; (1948) 76 CLR 646; or infatuation with or emotional dependence upon another person: Louth v Diprose.
3. Absence of independent legal advice may in a given case be a circumstance of factual importance in determining whether a special disability exists: Bridgewater v Leahy [41].
4. Physical frailty and enfeeblement, with diminished knowledge by the party in question of that party's property and affairs generally, are not necessary elements of a special disadvantage: Bridgewater v Leahy [116].

66 In order to analyse whether Ms Dewar has an arguable defence based on misleading conduct, the following sub-issues arise:

• Did any director or employee of GEL engage in unconscionable conduct?
• Did Mr Ollier engage in unconscionable conduct?
• Can any unconscionable conduct of Mr Ollier be attributed to GEL ‑ statutory attribution?
• Can any unconscionable conduct of Mr Ollier be attributed to GEL ‑ knowing involvement?

67 Given Mr Walker's limited involvement it is not necessary for me to consider his position in relation to unconscionable conduct.

Did any director or employee of GEL engage in unconscionable conduct?

68 As I have already found, there is no evidence before me that any director or employee of GEL made any representation to Ms Dewar, nor engaged in any conduct towards her, that could be described as misleading or deceptive. Nor is there any evidence that any director or employee of GEL engaged in any conduct towards Ms Dewar that could be described as unconscionable. On the material before me, Ms Dewar signed declarations which were given to GEL to the effect that she had been given an opportunity to obtain legal advice and had declined to do so.

69 It appears also that Mr Ollier told GEL that Ms Dewar's gross annual income as at 11 December 2007 was $75,000. This appeared in a document entitled 'Mortgage Loan Servicing Calculator'. As set out above [45], her actual income at this time was minimal.

70 The issue of whether Mr Ollier engaged in unconscionable conduct needs to be analysed in four aspects: the personal position of the parties, Mr Ollier's conduct towards GEL, Mr Ollier's conduct towards Ms Dewar and the Loan.

71 As at the end of 2007 and beginning of 2008, Ms Dewar may fairly be described as someone of limited financial literacy. The fact that she genuinely believed that she could receive $54,000 by way of realised profit from her ownership of the Mint Circuit property without selling it is persuasive evidence of this. On the limited information before me, Mr Ollier appears to be a professional mortgage broker. In the circumstances, it was necessary for him to assist Ms Dewar and properly explain the transactions to her. For present purposes, I am satisfied that the inequality of knowledge, information and experience between them was such that Ms Dewar was at a special disadvantage vis-à-vis her relationship with Mr Ollier.

72 In relation to GEL, as I have already observed, it appears that Mr Ollier told GEL that Ms Dewar's gross annual income as at 11 December 2007 was $75,000. This was false. As set out above [45], her actual income at this time was minimal.

73 Second, it is apparent from the Loan Agreement that GEL had been told that the additional amount of $58,000 (over and above refinancing and an amount of $10,000 for renovations) was for 'Future Investment Purpose'. This is false.

74 Third, GEL was told that Ms Dewar had been given the opportunity to obtain legal advice on the Loan, but had declined to do so. This is also false.

75 In relation to Ms Dewar, the relevant conduct is that Mr Ollier:

(a) misled Ms Dewar as to the nature of the $54,000 'equity' ‑ see [44];

(b) did not tell Ms Dewar that he had told GEL that the additional loan amount (of $58,000) was to be used for investment purposes;

(c) did not tell Ms Dewar that he had told GEL that her gross annual income was $75,000;

(d) proceeded to submit a loan application requiring repayments over $500 per month when he was in possession of information which made it clear that Ms Dewar could not afford those repayments;

(e) refused to let Ms Dewar take the documents presented to her for signing on 8 January 2008 away in order to seek legal advice;

(f) misled Ms Dewar into signing the Loan Agreement on 8 January 2008 ‑ see [46] and [47];

(g) did not provide Ms Dewar time to obtain legal or independent advice about the transaction; and

(h) placed before her to sign, in the context of (g), a document acknowledging that GEL had advised her to obtain legal advice (which it had not) and that she had been given an opportunity to so (which she had not).

(a) the documentary evidence is to the effect that Ms Dewar's intention was to seek to buy out the DHW's interest in the Mint Circuit property and be provided with an additional $10,000 for renovations;

(b) as at 28 February 2008, the Mint Circuit property was worth $355,000;

(c) as at 28 February 2008, the payout figure for DHW and Keystart was $173,927.53, giving Ms Dewar about $180,000 equity in the property;

(d) the loan from GEL was for $245,000;

(e) settlement occurred on 14 February 2008;

(f) the amount of repayments made by Ms Dewar to 16 June 2010 was $47,371.72, that is around $3,000 per month over the 16‑month period;

(g) the total amounts of fees and interest applied to the Loan as at 16 June 2010 was $52,668.73;

(h) the amount of interest in arrears at the date of issue of the writ (15 June 2010) was $9,530.06.

77 I consider it arguable that Mr Ollier would not be able to satisfy the court that the Loan was fair, just and reasonable.

78 If all the information which Ms Dewar has placed before me is taken at face value, the picture that emerges is that Mr Ollier misled GEL into offering, and misled and pressured Ms Dewar into accepting, a loan which she neither needed nor could afford. When these four aspects are taken together, I have no hesitation in finding an arguable case that Mr Ollier acted in a manner that was unconscionable towards Ms Dewar in breach of ASIC Act s 12CA. In coming to this conclusion it is appropriate that I add that Mr Ollier has yet to be joined as a party to the action, and was not provided an opportunity to file any affidavit in this application. However, as I have indicated, GEL's application for summary judgment is to be determined on the basis that the version of the facts put forward by Ms Dewar, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster (608). I do not find her evidence to be inherently incredible.

Can any unconscionable conduct of Mr Ollier be attributed to GEL ‑ statutory attribution?

79 As with any misleading conduct by Mr Ollier, to fall within ASIC Act s 12GH, the relevant conduct by Mr Ollier must have been done 'on behalf of' GEL, by Mr Ollier as an agent, and within the scope of his authority. The relevant difference with the unconscionable conduct of Mr Ollier is that GEL was a party to the transaction procured by the unconscionable conduct of Mr Ollier. However, in my view, this still does not change the analysis set out above [51] ‑ [52].

80 In my view it is not arguable that the conduct of Mr Ollier said to comprise unconscionable conduct can be attributed to GEL pursuant to ASIC Act s 12GH as that of an agent of GEL acting on behalf of GEL.

Can any unconscionable conduct of Mr Ollier be attributed to GEL ‑ involvement?

81 As set out above, [55], for GEL to be involved in a contravention by Mr Ollier of ASIC Act s 12CA, Ms Dewar must establish that GEL (through its directors or employees) had knowledge of the essential facts which constituted the contravention and some intentional participation or assistance in the contravening conduct.

82 On the material available to me, there is no evidence to the effect that any director or employee of GEL had knowledge that Mr Ollier had engaged in the misleading conduct set out above. Nor is there any evidence to the effect that any director or employee of GEL had knowledge of the conduct of Mr Ollier towards Ms Dewar set out above [71] ‑ [78]. As I have set out above when considering whether GEL could have directly engaged in unconscionable conduct, the material available to GEL was that Ms Dewar earnt $75,000 gross per annum and had decided not to take up the opportunity she had been given to take legal advice on the Loan and Mortgage.

83 I am of the view that it is not arguable that any unconscionable conduct of Mr Ollier can be attributed to GEL by virtue of it being involved in contravention by Mr Ollier pursuant to ASIC Act s 12GM.

84 For the reasons set out above, I am of the view that Ms Dewar does not have an arguable defence against the claim made by GEL on the basis of unconscionable conduct by any of GEL, Mr Ollier or Mr Walker.

Does Ms Dewar have a defence based on a breach of any duty of care owed to her by GEL?

85 Ms Dewar also alleges that GEL owed her a duty of care, which it breached. There is no general common law duty upon a lender to advise or protect a borrower against fraud, or to check the accuracy of information or warn of the risk of loss: Burniston [238] ‑ [335]. Nor is there is duty on a lender to warn a borrower to take care to verify the borrower's loan application: Mirarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1, 121 [624] ‑ [625] (Debelle and Wicks JJ). A specific duty can arise at common law in some circumstances. For example, a duty of care may arise where a customer seeks advice from a bank and the bank assumes responsibility, or undertakes, to provide it: Smith v McCusker QC [No 7] [2011] WASC 88 [432]-[434] (Martin CJ); Burniston [337].

86 In the present case, I am not satisfied that there is an arguable defence based on a duty of care owed by GEL to Ms Dewar. As I have noted, there is no general common law duty of care. There is no evidence that GEL provided Ms Dewar with any advice or otherwise assumed any responsibility for any conduct or representation towards her.

87 In any event, a cause of action in negligence, being a claim for unliquidated damages, could not be raised as either an equitable or legal setoff: Westwind 85 ‑ 86. It could only be raised as a counterclaim amounting to a cross‑action, which does not provide a defence to the claim of a plaintiff so as to prevent the award of summary judgment: McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50, 57 ‑ 58 (Dixon J); Field Camp Services [6].

Does Ms Dewar have an arguable defence based on a breach of a fiduciary duty GEL?

88 Ms Dewar alleges that GEL breached a fiduciary duty owed to her by GEL.

89 It is the case that Mr Ollier and X Inc Perth as her mortgage broker owe her fiduciary duties to act in good faith and in her interests: Burniston [251]; Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 [177] (Allsop P, with whom Bathhurst CJ [1] & Campbell J [303] agreed).

90 The position as between Ms Dewar and GEL is different. 'The law does not recognise the relationship of banker and customer as one of the accepted categories of fiduciary relationship': Commonwealth Bank of Australia v Finding [2001] 1 Qd R 168 [9] (Reasons of the Court); Golby v Commonwealth Bank of Australia [1996] FCA 1136; (1996) 72 FCR 134, 136 (Hill J). The position is summarised by Justice Allanson in Brian Fletcher as Trustee of the Brian Fletcher Family Trust v St George Bank Ltd [No 2] [2011] WASC 277 [115] ‑ [116]:

1. The critical feature of a fiduciary relationship is 'that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense': Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 96 ‑ 97; Pilmer v The Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165, 196 ‑ 197 [70] ‑ [71]. From this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed: Hospital Products (97); John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2001) 241 CLR 1 [87].
2. The relationship between Mr Fletcher and St George Bank does not fall into one of the generally accepted fiduciary relationships: trustee-beneficiary, agent-principal, solicitor-client, employee‑employer, director-company, and partners inter se: see Hospital Products (96). The relationship between a banker and customer may be fiduciary in some circumstances. In particular, where a bank holds itself out as an adviser on matters of investment, and undertakes a particular financial advisory role, it may create in the customer 'the expectation that nevertheless it will advise in the customer's interests as to the wisdom of a proposed investment', and may become a fiduciary: Commonwealth Bank of Australia v Smith [1991] FCA 375; (1991) 42 FCR 390, 391. See also Daly v Sydney Stock Exchange Ltd [1986] HCA 25; (1986) 160 CLR 371; Aequitas Ltd v Sparad No 100 Pty Ltd (formerly Australian European Finance Corp Ltd) [2001] NSWSC 14; (2001) 19 ACLC 1006, 1026 - 1027. But absent some special feature, it is not part of the banker-customer relationship that the banker undertakes or agrees to act for or on behalf of or in the interests of its customer in the exercise of some power or discretion affecting the interests of the customer in a legal or practical sense: Golby v Commonwealth Bank of Australia [1996] FCA 1136; (1996) 72 FCR 134, 136; Finding v Commonwealth Bank of Australia [2001] 1 Qd R 168.

91 In the present case, the following facts mean that it is not arguable that there is a fiduciary relationship between GEL and Ms Dewar:

(a) there was no prior, let alone long standing, relationship between GEL and Ms Dewar;

(b) there was no communication or conduct by, or on behalf of, GEL which could have given Ms Dewar the expectation that GEL would either act in her best interests or advise her as to what was in her best interests; and.

(c) no advice was given by or on behalf of GEL to Ms Dewar as to the wisdom of the proposed loan.

92 Accordingly, I am not satisfied that Ms Dewar has an arguable defence based on GEL owing her a fiduciary duty.

93 Ms Dewar is not represented. Accordingly, it is appropriate that I approach the documents in which she articulates her defence with some flexibility: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 ‑ 537 (Kirby P), 543 (Hope & Samuels JJA agreeing); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J). She may require, and be given, some leniency in relation to compliance with the rules set out in the RSC: Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (Reasons of the Court). I need to be astute to ensure that, in a poorly expressed or unstructured document setting out her defence, there is no viable defence which, with appropriate amendment or permissible assistance from the court, could be put into proper form: Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338 [21] (Beech J); Tobin v Dodd [2004] WASCA 288 [15] (EM Heenan J with whom Murray J [3] and Le Miere J [70] agreed); Wentworth (536 ‑ 537). A 'frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy': Neil v Nott [1994] HCA 23 [5]; [1994] HCA 23; (1994) 68 ALJR 509, 510 (Brennan, Deane, Toohey, Gaudron & McHugh JJ); Ibrahim [21]; Glew [10]; Tobin [14]. In Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321, Kirby J stated:

[I]t is always important for every Judge to keep an open mind in case a person who has been rejected by courts in the past may have, hidden amongst the verbiage of his or her arguments, a point which has not previously been seen and which may have merit ... Vigilance, and not impatience, is specially required where that person is not legally represented (323).

94 Even taking into account the matters in the preceding paragraph, I am satisfied that the matters Ms Dewar raises by way of defence are so clearly untenable that they cannot possibly succeed: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 25; (1964) 112 CLR 125, 129 ‑ 130 (Barwick CJ); Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J), [54] ‑ [57] (Hayne, Crennan, Kiefel & Bell JJ); Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [113] (Le Miere J).

95 I therefore have the high degree of certainty about the ultimate outcome of the case required by the High Court in Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552, where Gaudron, McHugh, Gummow and Hayne JJ observed:

It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways ... but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way [57]. (citations omitted)

96 These observations were adopted in Batistatos v Roads and Traffic Authority (NSW) [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ).

97 The overall legal burden of persuasion to establish that summary judgment is warranted is on GEL as applicant: Morgan [4]. It has discharged that burden and is entitled to summary judgment in the action.

98 As I mentioned, Ms Dewar has filed a counterclaim. RSC O 14 r 3(2) provides that the 'Court may, by order and subject to such conditions, if any, as may be just, stay execution of any judgment given against a defendant under this rule until after the trial of any counterclaim made or raised by the defendant in the action'.

99 In her counterclaim, Ms Dewar claims 'damages for pain and suffering caused to myself and my children over the years 2008, 2009, 2010, 2011, 2012 and 2013'. As I have found, I do not consider that Ms Dewar has an arguable case that GEL owed her a duty of care in relation to economic loss. I am of the same view in relation to a duty of care to prevent personal injury.

100 Accordingly, I am of the view that the existence of the counterclaim is not sufficient to make it just to stay execution of the judgment.

1. The plaintiff have leave to enter summary judgment against the defendant.
2. The defendant deliver up possession within 28 days of the land described as Lot 124 on Plan 20305 being the whole of the land in Certificate of Title Volume 2027 Folio 332, the address of which is 17 Mint Circuit, Banksia Grove, Western Australia.
3. Judgment be entered for the plaintiff against the defendant in the sum then owing as at the date of the judgment.
4. The defendant pay interest on the judgment amount at the rate of 10.10% per annum until payment.

102 That leaves the proposed third party actions, and the issue of whether the court should suspend enforcement of the judgment that GEL is otherwise entitled to pending the determination of the third party applications.

103 The power of the court to suspend enforcement of a judgment is found in Civil Judgments Enforcement Act 2004 (WA) (CJEA) s 15. The court may only make a suspension order 'if there are special circumstances that justify doing so': CJEA s 15(3). By CJEA s 15(4), 'a suspension order may be made for any period (including an indefinite period) and may be made on terms as to costs or otherwise'. The onus is on the applicant to move the court to a favourable exercise of its discretion: M R & R C Smith Pty Ltd t/as Ultra Tune (Osborne Park) v Wyatt [2011] WASCA 43 [4] (Pullin JA); Spiers Earthworks Pty Ltd v Landtec Projects Corporation Pty Ltd [2010] WASCA 226 [16] (Newnes JA); Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308 [9] (Murray & Parker JJ).

104 In considering whether there are 'special circumstances' as required by CJEA s 15(3), the court may consider hardship and the balance of convenience: Hamersley Iron Pty Ltd v Lovell (No 2) [1998] WASCA 304; (1998) 20 WAR 79, 91, 94 (Anderson J); Duckworth v Commonwealth Bank of Australia [2013] WASCA 24 [2] (Pullin JA); Alvaro v Amaral [2013] WASCA 16 [3] (Pullin JA). The court may also consider whether it is 'just' for the enforcement to be suspended. This is evident from the explanatory memorandum to the CJEA which contains the following general comment about the power in s 15 (pages 5 ‑ 6):

Circumstances may arise where enforcement action has been commenced and it is just that the enforcement be suspended. An example is where judgment was obtained by default in that the defendant did not respond to a summons but there is an explanation for the default such as hospitalisation. Another example could be where the debtor was impecunious.

105 The issue of whether it is 'just' to suspend enforcement is perhaps more usefully expressed in terms used in the context of the grant of an injunction, where key discretionary consideration is sometimes expressed as the balance of the risk of doing an injustice: Cayne v Global Natural Resources plc [1984] 1 All ER 225, 237 (May LJ); Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, 536 (McLelland J).

106 A successful litigant at first instance will ordinarily be entitled to enforce the judgment pending the determination of any appeal: Spiers Earthworks [16]; Eastland Technology [9]. Moreover, in a mortgage action the general rule is that a stay will not be granted in circumstances where the mortgage debt has not been paid or paid into court: Inglis v Commonwealth Trading Bank of Australia [1972] HCA 74; (1972) 126 CLR 161, 164 (Walsh J); Duckworth [3].

107 What differentiates the present case from other mortgage actions like Duckworth and Perpetual Ltd v Buttarelli [2012] WASC 512 is that Ms Dewar has sought leave to commence third party proceedings against Mr Ollier. As set out above, I am of the view that there are arguable claims for misleading conduct and unconscionable conduct against Mr Ollier. If a contravention of ASIC Act s 12DA or s 12CA can be established, then Ms Dewar can seek damages from Mr Ollier pursuant to ASIC Act s 12GF (or alternatively seek the same remedy pursuant to FTA s 79(1)). This remedy is open even though as between GEL and Ms Dewar the Loan and Mortgage are not set aside. Any damages payable can then be used to repay the Loan or perhaps part of it.

108 It seems to me to be an unjust outcome for GEL to be able to enforce its judgment against Ms Dewar, with the effect of taking possession of her house, before her claim against Mr Ollier is determined. It may be, however, that Ms Dewar does not obtain leave to issue the third party notice. Or it may be that even if she obtains leave, there is no prospect of her recovering any amount of damages from Mr Ollier, for example, if he is bankrupt and/ or uninsured. If this were established, it would be difficult to distinguish the facts of the present cases from the position in decisions like Duckworth and Buttarelli so as to justify a stay. In my view, a short period of time needs to be given to allow some clarity to emerge in relation to Ms Dewar's proposed third party action against Mr Ollier (and also Mr Walker). In my view, an order of this kind is necessary to balance the risk of an injustice as between GEL and Ms Dewar.

109 For these reasons, I am of the preliminary view that enforcement of the judgment should be suspended on an interim basis until 25 July 2014. Following that date, Ms Dewar will need to persuade the court to extend the suspension order. I describe this as a preliminary view as I have not had the benefit of submissions on behalf of GEL on this issue.

110 I will hear from the parties as to the final form of the orders and costs. My preliminary view is that GEL as the successful party is entitled to its costs.