Consideration
333 The applicants contend that both NAB and FAST engaged in unconscionable conduct within the meaning of s 21 of the Australian Consumer Law. However, their conduct must be considered separately. They are separate entities and each had different relationships with, in the case of NAB, Ms Hudson and, in the case of FAST, Leaseworks and Ms Hudson as its representative.
334 Turning first to NAB's conduct, in their FASOC the applicants contend that NAB's conduct at the second file review meeting and in the manner in which it terminated Ms Hudson's accreditation with it was unconscionable. In effect, they contend that NAB's conduct leading up to, and its decision, to cease dealing with Ms Hudson was unconscionable. However, NAB had no obligation to deal with Ms Hudson.
335 The arrangement by which Ms Hudson was accredited as a broker with NAB was a purely commercial one. After Leaseworks entered into the Sub-Originator Agreement, Ms Hudson applied for accreditation with NAB and, having met NAB's requirements, obtained that accreditation. The commercial relationship between Ms Hudson and NAB operated within the framework of the National Credit Act, with NAB as credit provider. As NAB and FAST submitted, in the context of the National Credit Act, there is no room for behaviour which does not meet the standards required by the Act, for example failing to undertake a suitability assessment or to make proper inquiries. Having regard to that context, the nature of the relationship between NAB and Ms Hudson and the process undertaken by NAB before it made the decision first to suspend Ms Hudson and then to terminate her accreditation, it is not the case that NAB acted unconscionably.
336 NAB carried out the following steps prior to the second file review meeting:
(1) in April 2016 it held the first file review meeting with Ms Hudson. At that meeting NAB formed a view, based on its review, that Ms Hudson and Leaseworks had referred loans to it via FAST which seemed to be supported by fraudulent documents and which otherwise did not meet the standards required by it. Mr Davidson, who conducted the meeting on behalf of NAB, was concerned that loans which originated from a loan book which came from banned broker, Mr Dandachli (either because Ms Hudson had purchased that book or she otherwise had access to his files, which does not matter) were the source of the applications which caused NAB concern;
(2) following that meeting Mr Davidson recommended that FAST be given a first and final warning about Ms Hudson but that her accreditation not be removed or cancelled;
(3) NAB acted in accordance with Mr Davidson's recommendation. Further training was recommended for Ms Hudson and Leaseworks and FAST took steps to facilitate that training. However, Ms Hudson and Leaseworks did not undertake any such training immediately after the first file review meeting. The evidence discloses that she attended one webinar trading session on 28 March 2017 (see [169] above);
(4) in accordance with its usual procedure and as one of the outcomes following the May 2016 BPLAC meeting, six months later NAB undertook a further review of a sample of six of Ms Hudson's files. Despite the recommendation in the Second BPLAC Submission, which was prepared following that review, not to take any further action, at least one member of BPLAC expressed some concern about some of the findings from that review insofar as there was a reference to Mr Dandachli;
(5) Mr Davidson then had a telephone conversation with Ms Hudson inquiring whether she was writing loans from Mr Dandachli's loan book;
(6) following that conversation, and because it was unable to arrange a meeting with Ms Hudson within a relatively short period of time to discuss the findings following the further review, NAB suspended Ms Hudson's accreditation and informed FAST that it had done so; and
(7) on 28 July 2017 the second file review meeting took place at which five files were discussed. Ms Hudson was provided with a list of those files prior to the meeting.
337 The second file review meeting took place on 28 July 2017. Mr Davidson once again attended on behalf of NAB and Ms Nguyen attended as FAST's representative. Mr Davidson gave Ms Hudson notice of the files that were to be discussed and raised his concerns about those files. I do not accept that Mr Davidson asked questions in quick succession without giving Ms Hudson an opportunity to respond or that he or Ms Nguyen acted in a manner that was unprofessional or aggressive. It may have been that his questioning was robust and that Ms Hudson had some difficulty responding to some of the questions, including because she was unwell at the time. However, even assuming that was so, it does not follow that NAB's conduct at the second file review meeting was unconscionable.
338 The second file review meeting had a purpose. It was an information gathering exercise, based on which a recommendation would be made to BPLAC and a decision made about Ms Hudson's accreditation with NAB. Given that purpose and the regulatory framework within which NAB and Ms Hudson operated, the requirement for and nature of the meeting is easily explained and justified. In any event, there is no evidence that, at the time of the meeting, Ms Hudson complained about the nature or tone of the meeting, nor did she ask for more time to consider the issues and provide responses to any of the questions. Indeed, to the contrary, several days later in an email, in which she also set out her personal circumstances, Ms Hudson informed NAB that she had chosen to resign as a director of Leaseworks, remove herself as a principal on its ACL, that she took the "whole situation very seriously" and that she was going to take care of her personal health issues. After the second file review meeting and with the benefit of Mr Davidson's report about the files the subject of review and the discussion at the second file review meeting, which was recorded in the Third BPLAC Submission, NAB determined to terminate Ms Hudson's accreditation with it.
339 Having regard to those matters, there was, to adopt the language of the authorities set out above, no conduct on the part of NAB which could be seen as involving dishonesty, exploitation, sharp practice, significant unfairness, a lack of good faith or the exercise of economic power in a way that could be criticised. As I have already observed NAB and Ms Hudson were in a commercial relationship. Ms Hudson, via FAST, was accredited with NAB. NAB was not obliged to deal with Ms Hudson but, to the extent that it did so and granted her accreditation, both it and Ms Hudson were required to operate within the regulatory framework imposed by the National Credit Act. NAB had serious concerns about some of the applications which Ms Hudson had submitted to it and her practices. Those concerns led it to take certain steps including discussing the issues that arose with her. Ultimately, NAB was not prepared to continue to deal with Ms Hudson and thus cancelled her accreditation. No aspect of that conduct on the part of NAB, whether viewed in isolation or cumulatively, amounts to unconscionable conduct.
340 It is next necessary to consider the conduct based on which the applicants allege that FAST engaged in unconscionable conduct. Ms Hudson and Leaseworks' principal complaint concerns the suspension and subsequent termination of the Sub-Originator Agreement. They contend that FAST acted unconscionably in, among other things, suspending the Sub-Originator Agreement and sending the Suspension Email, making a series of telephone calls to lenders, including Westpac and ANZ, sending the Termination Email and declining to provide a clean letter of separation.
341 The circumstances in which FAST first suspended and then terminated the Sub-Originator Agreement are set out in detail above. I do not intend to repeat those matters save to note by way of summary that:
(1) FAST had a contractual right, under the Sub-Originator Agreement, to terminate without cause;
(2) notwithstanding that, it gave Ms Hudson and Leaseworks an opportunity to address the concerns which became apparent to it through its attendance at file review meetings arranged by NAB and submissions prepared for BPLAC. As to the latter, FAST's input was sought for the purposes of those submissions;
(3) the fact that those concerns were raised with Ms Hudson and Leaseworks, does not make FAST's conduct unconscionable. On the contrary there was a genuine attempt on the part of FAST (and NAB) to assist Leaseworks (and Ms Hudson) to address the concerns;
(4) the issues that arose were known to Leaseworks and Ms Hudson. They were raised at the first file review meeting and the second file review meeting. Despite that, and the passage of time, neither Leaseworks nor Ms Hudson has said that the conduct did not occur nor have they adequately explained why it did not give rise to a cause for serious concern;
(5) the alleged telephone communications with other lenders have not been established by evidence and, in any event, even assuming they occurred, it is not clear how the fact of those discussions means that FAST acted unconscionably. Further, it was Ms Hudson who informed CBA of her suspension, before any steps were taken by FAST to do so. Therefore it is difficult to see how any subsequent communication to the same effect could be unconscionable;
(6) the Suspension Email and the Termination Email recorded the fact of first, FAST's suspension of Ms Hudson and Leaseworks and second, its subsequent termination of them. Given that Ms Hudson and Leaseworks had accreditations with Panel Lenders because of Leasework's contractual relationship with FAST as aggregator, it is understandable that FAST considered it necessary to inform those Panel Lenders of these developments. Its communications in that regard did no more than to report matters of fact to the Panel Lenders;
(7) as set out above, FAST terminated Leaseworks pursuant to its contractual right to do so; and
(8) FAST provided Leaseworks with a letter of separation, albeit not in the terms Leaseworks requested. It refused to do the latter and to provide what has been termed a clean letter of separation because, as far as it was concerned, it was not able to make the statement that there had "not been any adverse findings by FAST against Leaseworks or any of its related or associated entities". Whether it could issue such a letter was a matter for FAST to determine based on what it knew at the time. Its representative, Ms Nguyen, was present at the second file review meeting and it had been given access to the Third BPLAC Submission. It was thus understandable that it refused to provide such a letter.
342 There is no substance to the applicants' allegation that FAST acted unconscionably in any of the events or steps it took which led to suspension of the Sub-Originator Agreement or in terminating that agreement. Once again the dealings between Ms Hudson and Leaseworks on the one hand, and FAST, on the other, were not dishonest, predatory or unfair. They did not involve exploitation on the part of FAST, there were no unfair tactics or undue pressure brought to bear, nor did FAST take advantage of Leaseworks or Ms Hudson dealing with them.
343 Leaseworks and FAST had entered into a contractual arrangement which FAST then took steps to terminate. It did so in circumstances where Leaseworks (and Ms Hudson) had provided loan applications which contained inaccurate information, a circumstance which was likely contrary to the spirit and purpose of the regime in which the parties were operating as mandated by the National Credit Act. It is difficult to see how advancing the purpose of that Act could result in a finding of unconscionable conduct.
344 Given that conclusion, it is once again not necessary for me to address causation. However, for completeness and in the event that I am wrong in my conclusion that neither NAB nor FAST engaged in unconscionable conduct in and about their dealings with Ms Hudson, the applicants have not established that such conduct, if it occurred, caused their loss. First, NAB had no contractual or other obligation to deal with Ms Hudson. It could refuse to deal, or cease dealing, with her at any point in time and without following any prescribed procedure. In other words, termination of their relationship with NAB was always a risk for Ms Hudson and the Leaseworks business. That being so, in my opinion, NAB's termination of its relationship with Ms Hudson as an accredited broker, after following the process it did, could not be causative of the whole of the loss claimed. No lesser case is brought. Similarly, although FAST had a contractual relationship with Ms Hudson, it was able to terminate that contract without cause. That termination necessitated the dispatch of the Termination Emails. The relationship was always open to termination at one month's notice and, on that basis, the conduct, even if it occurred, could not have caused the whole of the loss claimed.