HomeSec Finance Express Pty Ltd v Richardson - [2012] NSWSC 1375 - NSWSC 2012 case summary — Zoe

NSWNSWSC

HomeSec Finance Express Pty Ltd v Richardson

[2012] NSWSC 1375

Supreme Court of NSW|2012-06-28|Before: Button J, Lee J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2012-06-28

Before

Button J, Lee J

Catchwords

(2006) 225 CLR 180 Ford by his Tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited [2009] NSWCA 186 Jones v Dunkel [1959] HCA 8
(1983) 151 CLR 447 Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17

Source

Original judgment source is linked above.

Catchwords

(2006) 225 CLR 180 Ford by his Tutor Beatrice Ann Watkinson v Perpetual Trustees Victoria Limited [2009] NSWCA 186 Jones v Dunkel [1959] HCA 8(1983) 151 CLR 447 Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17

Judgment (34 paragraphs)

[1]

Introduction 180Section 6(2) of the Act is as follows: "6 Certain restrictions on grant of relief (1) The Crown, a public or local authority or a corporation may not be granted relief under this Act. (2) A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by the person or proposed to be carried on by the person, other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by the person or proposed to be carried on by the person wholly or principally in New South Wales." 181In short, s 6(2) excludes contracts that were entered into: (a)"for the purpose of a trade, business or profession"; and (b)"carried on by the person or proposed to be carried on by the person". There is no suggestion that the farming exception applies.

[2]

"For the purpose of trade, business or profession" 182This part of the section has only received the attention of the High Court of Australia twice since its inception, and on neither occasion was it the subject of detailed analysis. 183In the course of canvassing the consistency of statutory remedies with the operation of provisions of the Industrial Relations Act 1996, Kirby J referred fleetingly to s 6 of the Act in the decision in Fish v Solution 6 Holdings Limited [2006] HCA 22; (2006) 225 CLR 180. However, his Honour did not provide any analysis of the operation of s 6 of the Act. 184The provision was also quoted and analysed briefly in Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17; (1994) 179 CLR 388. However, as that decision arose from an appeal from the Supreme Court of Queensland, the context in which s 6(2) was considered was limited. Section 6(2) was referred to in the course of interpreting "for the purpose of a trade, business or profession" which appeared in the terms of s 74(3) of the Trade Practices Act. 185In the course of considering s 74(3), Toohey and Gaudron JJ quoted the construction of s 6 of the Contracts Review Act that was adopted by Lee J in Collins v Parker (Supreme Court of NSW, Lee J, 11 May 1984, unreported). 186I consider that the judgment of Lee J is of assistance in construing the phrase "for the purpose of a trade, business or profession". The relevant portion of the judgment at p 18 is as follows: "The expression 'for the purpose of' has the meaning that the contract under consideration is entered into as an ordinary incident of the carrying on of a particular trade, business or profession then being carried on or proposed to be carried on." 187The approach of Lee J was also adopted by Young J in Ellison v Vukicevic (1986) 7 NSWLR 104 at 111. However, that case was concerned with a business that was a farming undertaking, and no further detailed analysis was deemed necessary by his Honour in resolving the issue. 188The "ordinary incident" test has received some, albeit reserved, endorsement in the Court of Appeal in Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 at [222]. 189In short, I propose to apply the "ordinary incident" test.

[6]

Statute 198I set out the most salient parts of the Act: "7 Principal relief (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, (d) it may, in relation to a land instrument, make an order for or with respect to requiring the execution of an instrument that: (i) varies, or has the effect of varying, the provisions of the land instrument, or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the land instrument. (2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order. (3) The operation of this section is subject to the provisions of section 19. 4 Definitions (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires: ... unjust includes unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner. ... 9 Matters to be considered by Court (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract. (3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made. (4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made. (5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made."

[7]

General Approach 199In Perpetual Trustee v Khoshaba [2006] NSWCA 41, Handley JA said: "99 In this appeal I have had the benefit of reading the reasons for judgment of the Chief Justice and Basten JA in draft form. I agree that a case under the Contracts Review Act involves a three stage process - the making of findings of primary fact where these are disputed, the formation of an evaluative judgment as to whether or not the contract is unjust, and why, and then, if necessary, the exercise of the Court's discretionary power to grant relief and determine its extent. 100 The first stage may involve credit findings, and the drawing of inferences which attract the usual standards of appellate review, the second involves a drawing of inferences and the application of an indeterminate legal standard which, as to fact is subject to review in accordance with Warren v Coombs (1979) 142 CLR 531, and as to law is open to full review. The exercise of the Judge's discretion on the nature and extent of relief is subject to review in accordance with the principles in House v The King (1936) 55 CLR 499. 101 I agree with Basten JA that the phrase "the unjustness calculus" is not helpful because it suggests, wrongly, that the exercise is mechanistic whereas in my view it is, within broad legal limits, impressionistic and evaluative." 200In the same case, and referring to the considerations under s 9, Basten JA said: "112 The considerations identified in s 9 are matters to which a court shall, to the extent that they are relevant, have regard. In judicial review terms, they would be described as mandatory considerations. They involve factors which may tend in different directions in a particular case or may simply be inapplicable. However, I do not, with respect, find it helpful to refer to them as part of "the unjustness calculus". This phrase appears to reflect a label adopted in relation to the exercise required of a court in determining whether there is negligence or not in a tort case, derived from Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47, known as the "Shirt calculus". As was said by Gleeson CJ and Kirby J in Mulligan v Coffs Harbour City Council (2006) 221 ALR 764 at [2], the use of the word "calculus" is unfortunate, because it tends to misdescribe the process to be engaged in as a method of calculation. In mathematical terms, it has a precise meaning, as in reference to differential calculus, which gives it a flavour far distant from the exercise required to be undertaken under ss 7 and 9 of the Contracts Review Act. 113 One danger of identifying the exercise as some form of calculation is that it may lead, subconsciously, to an approach whereby the power is thought to be engaged when at least one criterion is satisfied and should be exercised when a reasonable number of criteria are satisfied. That approach would be incorrect. The exercise requires an assessment of the relevant circumstances in relation to a broad concept of unjustness."

[27]

Evaluation 224Determining a defence under the Act requires a three step process: first, finding the primary facts; secondly, deciding whether the contract is unjust; and thirdly, if so, deciding whether in the exercise of discretion to make orders. 225As for the first step, I consider that I have found the facts, both generally and by direct reference to the mandatory factors, sufficient to determine the defence. 226As for the second step, although each case under the Act falls to be determined on its own facts, I have been greatly assisted by considering the approaches adopted in the judgments at first instance of James J in Chen v Song [2005] NSWSC 19, Adamson J in Permanent Custodians Ltd v Nobilo [2012] NSWSC 109, and Johnson J in Permanent Mortgages Pty Ltd v MacFadyen [2012] NSWSC 130. I have also considered the approach to this evaluation by the New South Wales Court of Appeal in Perpetual Trustee v Khoshaba, Kowalczuk v Accom Finance [2008] NSWCA 343 and Tonto Home Loans Australia Pty Ltd v Tavares. 227I do not find that the second loan and its attendant mortgage, or either of them as sought to be enforced, were unjust in the circumstances relating to the contract at the time it was made. I say that taking into account the fact that the defendant was under pressure from various sources. But balanced against that is the fact that the defendant was an experienced intelligent business woman, that she well understood the nature of the transaction into which she was entering, that she had received legal advice shortly before she entered into the second loan, that the mortgage was not a first mortgage over either the Lewisham property or the Summer Hill property, that the mortgage attached only partly to the family home (itself partly used to generate income), and finally that this is not a case of asset lending. 228I repeat that, on the evidence before me, and in light of the absence of any expert evidence as to the usual rates of interest pertaining in the very short term, very high risk lending market, I am unable to conclude that the rate of interest, when calculated on a simple basis, is unjust. It follows that I do not accept the ancillary submission of the defendant about adjusting the interest rate of the contract. 229Having said that, if the plaintiffs had sought to enforce, or were in the future to seek to enforce, an interest rate of 144 per cent per annum compounded monthly on a loan of $440,000 for four months, that would be, to use the words of Campbell JA in Kowalczuk v Accom Finance (with whom Hodgson and McColl JJA agreed) "utterly crushing". I would regard such a rate of interest as unjust within the meaning of the Act, and would have varied it. There is no need for me to provide a detailed calculation of the result, except to say that it would be in the order of an effective annual rate of interest of 290 per cent. Again, to adopt the words of his Honour, "there are some injustices too plain to need elaboration". 230As a result of my finding, the third step does not arise. 231In conclusion, I have borne in mind what McHugh JA (with whom Hope J agreed, and with whom Kirby P agreed on this point) said in West v AGC (Advances) Ltd (1986) 5 NSWLR 610 on this point at p 631 "The Contracts Review Act 1980 is beneficial legislation. It must be interpreted liberally." But, even adopting that approach, I do not find that this contract was unjust in the circumstances in which it was made.

[28]

Unconscionability 232Because relief under the Act is almost always more broadly available than relief pursuant to the doctrine of unconscionability, I consider that I can deal with this aspect of the case for the defendant quite quickly. 233I am not satisfied that the defendant was in a position of special disadvantage or disability. It is true that she was at a disadvantage, because of the pressing need to deal with the arrears to Bankwest, and the fact that the first loan would very soon come to an end. She was under pressure due to the failure of the development of the Lewisham terraces, her refusal to voluntarily sell one of her properties to deal with the arrears, her rejection of long-term finance on at least one occasion, and the words, oral and written, of Mr Goodwin. I have borne in mind what Deane J (with whom Mason and Wilson JJ agreed) said in The Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 at p 474: "The adverse circumstances which may constitute a special disability for the purposes of the principles relating to relief against unconscionable dealing may take a wide variety of forms and are not susceptible to being comprehensively catalogues." 234But even adopting a broad and open-ended approach to the question, I do not find that this experienced business woman was in a position of special disadvantage. In particular, I find that she was under pressure very largely as a result of her own actions. 235Secondly, I am not satisfied that any of the plaintiffs engaged in an exploitation of the weakness of the defendant that was morally culpable or would attract moral obloquy. In truth, as I have said, the documentary evidence suggests that, far from being eager to exploit the defendant, Mr Stone was cautious and reluctant about entering into the second loan. 236Finally, the contract has had disastrous consequences for the defendant, especially with regard to the amount of interest that she is called upon to pay with regard to it. It could also be said that, as things turned out, it was very improvident of the defendant to enter into that contract. However, I do not consider that the transaction was inherently oppressive. 237In short, I am not satisfied that the elements of unconscionability have been made out by the defendant.

[29]

Trade Practices Act claim 238The defendant also relied upon Part IVA and Part V of the Trade Practices Act as it stood at the time of the loan. 239I note that the Trade Practices Act has since been repealed by the enactment of the Competition and Consumer Act 2010 (Cth). However counsel for the defendant invited my attention to the transitional provisions of that Act and submitted that, as the loan was entered into on 28 October 2010, the Trade Practices Act is the correct statute to apply under this head of the defence and cross claim. Counsel for the plaintiffs did not submit to the contrary, and was content for me to proceed under the Trade Practices Act, subject to the submissions regarding the applicability of the Act that I discuss below. 240Relevantly, the defendant asserts that the first plaintiff contravened ss 51AA, 51AB or 51AC and also s 52 of the Trade Practices Act. As I understand the structure of the relevant sections, the first group of provisions concerns unconscionability, whilst s 52 provides that corporations will not act in a misleading or deceptive manner. 241Counsel for the plaintiffs drew my attention to the inapplicability of both Parts of the Trade Practices Act relied upon by the defendant. When pressed by me, counsel for the defendant conceded that ss 51AA, 51AB and 51AC had no application in the present litigation by operation of s 51AAB of the same Act, which provides that Part IVA (in which ss 51AA, 51AB and 51AC appear) does not apply to the provision of financial services. She also conceded that the present dispute is in relation to the provision of financial services. 242However, the position of counsel for the defendant regarding the applicability of s 52 of the Trade Practices Act was not made clear. It appeared that the defendant pressed this Court to make a finding that the first plaintiff had behaved in a manner inconsistent with s 52 of the Trade Practices Act. However, when I drew her attention to s 51AF of the Trade Practices Act, noting that s 51AF appeared to operate in a similar fashion to s 51AAB but in the context of Part V (in which s 52 appears), counsel for the defendant was unable to assist the Court any further. 243Counsel for the plaintiffs urged this Court to note that s 51AF excluded s 52 from operation when financial services are the subject matter of dispute. In support of this submission, he took the Court to the Australian Securities and Investments Commission Act 2001 (Cth), and invited my attention in particular to Part 2 of that Act, which he submitted to be mirror provisions of the Trade Practices Act as applicable to providers of financial services. 244Counsel for the plaintiffs also sought to hold the defendant strictly to the case that was pleaded, both in the amended defence and the amended cross claim. Neither of those pleadings made reference to the Australian Securities and Investments Commission Act, instead only referring to the Trade Practices Act. Nor did the defendant seek leave relevantly to amend the pleadings on which she sought to rely. 245In light of the position of the parties, I propose to consider only whether the Trade Practices Act sections identified in the pleadings may be relied upon by the defendant. To be clear, as counsel for the defendant conceded that Part IVA has no application, I am only considering whether s 52 founds the grounds of relief sought by the defendant. 246As I drew the attention of counsel for the defendant to s 51AF of the Trade Practices Act, it is useful to set out the section (as it stood at the time of the impugned loan agreement) in full: "51AF Part does not apply to financial services (1) This Part does not apply to the supply, or possible supply, of services that are financial services. (2) Without limiting subsection (1): (a) sections 52 and 55A do not apply to conduct engaged in in relation to financial services; and (b) if a financial product consists of or includes an interest in land, section 53A does not apply to that interest; and (c) section 63A does not apply to: (i) a credit card that is part of, or that provides access to, a credit facility that is a financial product; or (ii) a debit card that allows access to an account that is a financial product. (3) In subsection (2): credit card has the same meaning as in section 63A. debit card has the same meaning as in section 63A." 247I consider that s 51AF(2)(a) excludes the operation of s 52 regarding conduct engaged in which relates to financial services. As counsel for the defendant has properly conceded that the impugned loan agreement is "in relation to financial services", I am satisfied that s 52 of the Trade Practices Act does not operate to provide any relief to the defendant. 248In short, I would not uphold any of the relief sought pursuant to any of the provisions of the Trade Practices Act relied upon in the pleadings of the defendant.

[30]

Fair Trading Act claim 249I now turn to consider the claim based on the Fair Trading Act. 250The pleadings referred to ss 42 and 43 of the Fair Trading Act. However I indicated to counsel for the defendant that it appeared to me that the references to those provisions could be incorrect, as the current s 42 of the Fair Trading Act refers to the issuing of a subpoena, rather than being relevant to unconscionable conduct. 251Counsel for the defendant then indicated that it may have been the case that the provisions she sought to rely upon had been moved, particularly in light of the enactment of the Competition and Consumer Act. 252I consider that it is appropriate for me to examine ss 42 and 43 of the Fair Trading Act as at the date of the impugned agreement. 253They were as follows: "42 Misleading or deceptive conduct (TPA s 52) (1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in this Part shall be taken as limiting by implication the generality of subsection (1)." 43 Unconscionable conduct (TPA s 52A) (1) A supplier shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a consumer, engage in conduct that is, in all the circumstances, unconscionable. (2) Without limiting the matters to which the Supreme Court may have regard for the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services, the Court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the consumer, (b) whether, as a result of conduct engaged in by the supplier, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier, (c) whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services, (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer (or a person acting on behalf of the consumer) by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services, and (e) the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the supplier. (3) A supplier shall not be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a consumer only because the supplier institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration. (4) For the purpose of determining whether a supplier has contravened subsection (1) in connection with the supply or possible supply of goods or services to a consumer: (a) the Supreme Court shall not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention, and (b) the Court may have regard to conduct engaged in, or circumstances existing, before the commencement of this Act. (5) (Repealed) (6) A reference in this section to the supply or possible supply of goods includes a reference to the supply or possible supply of goods for the purpose of re-supply or for the purpose of using them up or transforming them in trade or commerce." 254Counsel for the plaintiffs did not submit to me that I should not consider the sections as they stood at the time of the impugned agreement. 255However, it is common ground between the parties that these provisions only operate insofar as against the second and third plaintiffs, as they are natural persons rather than corporations. 256Both of these sections are concerned with the quality of the conduct of a party, and in that regard can be distinguished from relief pursuant to the Act, which is concerned with the justness or otherwise of a contract in the circumstances relating to it at the time it was made. The claim, therefore, depends upon the ability of the defendant to demonstrate that the conduct of the second and third plaintiffs is in some way a contravention of the two sections above. 257I can dispose of this issue shortly. 258No evidence was tendered at the hearing that demonstrated that the second and third defendants were in any way involved in the arrangement of the loan. 259To the contrary, the plaintiffs led evidence that the role of the second and third plaintiffs was simply to invest funds and receive a return on their investment that the first plaintiff arranged. I accept the proposition that they had no responsibilities, and took no action, in any of the pre-contract negotiations. 260In these circumstances, I am unable to find that the second and third plaintiffs engaged in any conduct related to the procurement of the loan under consideration, let alone any conduct that may have fallen foul of ss 42 and 43 entitling relief under ss 60 and 72 of the Fair Trading Act. 261It follows that I would not uphold any claim for relief under the Fair Trading Act.

Parties

Applicant/Plaintiff:

HomeSec Finance Express Pty Ltd

Respondent/Defendant:

Richardson

Legislation Cited (3)

Trade Practices Act 1974(Cth)

Australian Securities and Investments Commission Act 2001(Cth)

Competition and Consumer Act 2010(Cth)

Cases Cited (23)

The Rule in Jones v Dunkel and related matters 137Although the tenor of some of the cross-examination of the defendant suggested that he would do so, counsel for the plaintiffs did not ask me to draw an inference pursuant to the principle in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 to the effect that the failure of counsel for the defendant to call the accountant of the defendant meant that his evidence would not assist the defendant's case. Accordingly, I will not do so. Nor do I draw the same inference with regard to the absence of evidence from her solicitor. Client legal privilege was not waived by the defendant with regard to conversations between herself and her solicitor, and the rule in Jones v Dunkel should not be permitted to undermine the privilege in those circumstances. 138As for her failure to call Mr Goodwin and Mr Brockmuller, I do not draw any such inference against the defendant. One would hardly expect her to have called two persons whom she was asserting behaved inappropriately towards her, and who were both associated, to some degree, with HomeSec. 139If anyone was to call them, it could well have been the plaintiffs. However, I do not believe that it was incumbent in any sense upon them to call those two witnesses, and I do not draw a Jones v Dunkel inference against the plaintiffs either. 140Furthermore, counsel for the plaintiffs submitted that, if the professional behaviour of those persons was to be impugned, they should have been joined in the cross claim; if not Mr Brockmuller, at the least Mr Goodwin. There is some force to that submission. Furthermore, he submitted that the onus is on the defendant, having admitted the formal correctness of the documentation and other matters, to establish on the balance of probabilities the matters that would free her of her obligations under the loan contract. I accept that submission.

171I was helpfully referred by counsel for the plaintiffs to the discussion regarding agency of Allsop P (with whom Bathurst CJ and Campbell JA agreed) in Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389. I am content to rely upon [176] of that judgment as follows: "It is appropriate to set out the whole of Art 1 from Bowstead and Reynolds on Agency (19 th Ed) at 1 [1-001] since Art 1(4), in particular, posits a form of agency of some relevance here - one in which the agent has no power to create or affect legal relations: "(1) Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent. Any person other than the principal and the agent may be referred to as a third party. (2) In respect of the acts to which the principal so assents, the agent is said to have authority to act; and this authority constitutes a power to affect the principal's legal relations with third parties. (3) Where the agent's authority results from a manifestation of assent that he should represent or act for the principal expressly or impliedly made by the principal to the agent himself, the authority is called actual authority, express or implied. But the agent may also have authority resulting from such a manifestation made by the principal to a third party ; such authority is called apparent authority. (4) A person may have the same fiduciary relationship with a principal where he acts on behalf of that principal but has no authority, and hence no power, to affect the principal's relations with third parties. Because of the fiduciary relationship such a person may also be called an agent." (Footnotes omitted.)" 172I have found on the balance or probabilities that the emails of Mr Goodwin before the entry into the first loan were designed to elicit an emotional response in the defendant, and that that they in fact pressured and upset her. There is no dispute on the part of Mr Stone that he was aware of the email sent by Mr Goodwin on 29 June 2010 and its contents. I have also found that Mr Goodwin, between the entry into the first and second loans and their attendant mortgages, further pressured the defendant. 173However, I have also found that the defendant was well aware that Mr Goodwin was her mortgage broker. I have also found that she was aware that, although there may have been some working relationship between HomeSec and Mr Goodwin, he did not represent them. Furthermore, I do not find that the defendant relied upon what Mr Goodwin said or did as being the acts or words of Homesec. I find that the defendant, whilst believing that there was some business connection between Mr Goodwin and HomeSec, understood that she was being pressured to resolve her position by her mortgage broker, not by one of her prospective lenders. 174As Allsop P explained in Tonto Home Loans Australia Pty Ltd v Tavares, what the parties say about their relationships is not determinative, but nevertheless important. It is important that there was an agreement between Mr Goodwin and HomeSec to the effect that Mr Goodwin was not the agent of HomeSec. It is also important that, as between HomeSec and the defendant, there were acknowledgements by the defendant that Mr Goodwin was acting as her agent. 175There is no evidence of express actual agency between HomeSec and Mr Goodwin. Nor is there is any evidence of an implied actual agency. Counsel for the defendant did not submit otherwise. 176It may well be that Mr Goodwin was, at the time of the first loan, the agent of HomeSec by way of the doctrine of apparent agency. I say that because of the form of the emails that Mr Goodwin sent to the defendant, and the fact that the director of HomeSec knew that Mr Goodwin was sending emails styled in that way. 177However, it is worth recalling a number of matters. The first is that the first loan, and those emails, predated the contract under consideration by some four months. The second is that I am not satisfied that, at any time, the defendant believed that the person whom she had retained as a mortgage broker was in fact representing someone else. The third is that, very shortly before entering into the contract under consideration, the defendant explicitly acknowledged that Mr Goodwin was her agent, and not the agent of HomeSec. The fourth is that, even if I were wrong in my finding of facts that the defendant did not consider, at the time of the first loan, that Mr Goodwin was in truth representing HomeSec, I would nevertheless maintain my finding that, by the time of the second loan, she was aware that he was her agent, in accordance with her acknowledgment. 178In short, even if one accepts that Mr Goodwin was the agent of HomeSec at the time of the first loan by way of apparent agency, it does not follow that he was the agent of HomeSec at the time of the second loan four months later. Finally, even if I am wrong in that legal characterisation, and he was indeed the agent of HomeSec at the time of the second loan, I am not satisfied that the defendant relied to any substantial degree on anything he said in deciding to enter into the second loan. 179That does not mean, of course, that the actions of Mr Goodwin are rendered irrelevant to the matter. They would certainly be relevant to, at the least, ss 9(2)(j)(ii) and (iii) of the Act. I will come to consider those provisions shortly.

[1994] HCA 17

(1986) 7 NSWLR 104

(2006) 225 CLR 180

(1959) 101 CLR 298

(1983) 151 CLR 447

(1994) 179 CLR 388

(1986) 5 NSWLR 610

(1979) 142 CLR 531

(1936) 55 CLR 499

(1980) 146 CLR 40

(2006) 221 ALR 764

[2005] NSWSC 19