Iloski v National Australia Bank Ltd (Civil Claims) [2019] VCAT 1039

1. The proceeding is dismissed for the reasons provided in the attached written "Reasons".

All Applicants appeared in person and were represented by Mr Robert Iloski.

Mr Segal of counsel instructed by K&L Gates, solicitors

1. Donco Iloski and Liljana Iloska are the parents of Robert Iloski. Donco and Liljana were the registered proprietors of vacant land in Greenvale, Victoria (the Greenvale property).
2. Robert Iloski is the youngest son of Donco and Liljana. Robert Iloski was until 2 September 2010, a director of a company known as Creatd Motor Sports Pty Ltd (CMS), together with his older brother, Daniel Iloski.[1] CMS was engaged in business as a workshop for racing and performance motor cars. Robert Iloski was also the sole company officer of Creatd Investments Pty Ltd (CI). CI was an investment holding company. It was the registered proprietor of the factory site from which CMS conducted its business (the Campbellfield property).
3. Sophie Iloski is the wife of Robert Iloski.
4. The Respondent, the National Australia Bank Limited (the NAB), is and was at all material times:
   1. a corporation, incorporated pursuant to Australian Law; and
   2. engaged in trade and commerce as a bank.

1. The Applicants are members of a close-knit family. Donco Iloski and Liljana Iloska, came to Australia in 1975. They raised a family and purchased a home property at Thomastown. They also purchased a vacant block of land in Greenvale, for which they had significant plans.
2. Donco and Liljana planned to build three units on the Greenvale property to assist their two sons, Robert and Daniel and to keep the family together. They planned that their son Robert, and his family, would live in unit 1, their oldest son Daniel, and his family, would live in unit 2 while they would reside in unit 3. They also wanted to help Robert and Daniel in their business ventures.
3. To give effect to these aspirations, they obtained a home loan from the NAB, in late August 2010, to finance the construction of the units (the home loan). At the same time, their son Robert arranged a finance facility with the NAB to refinance the borrowings that one of his companies, namely Creatd Investments Pty Ltd, had with the Commonwealth Bank.
4. These loans were secured by a series of interlocking securities given by the Applicants and Robert's companies to the NAB.
5. When the foundations and cellars for the three units had been erected, Robert's company (CMS) was wound up by the Australian Tax Office (the ATO). This had the effect of putting the Applicants, and CI, into default under the securities given to the NAB. The NAB called up the interlocking mortgages and the guarantees.
6. After the failure of protracted negotiations, during which the Applicants were legally represented, the NAB sold the Greenvale property at public auction. The new owner subsequently on-sold the property to another person who demolished the partially constructed units.
7. The Applicants have filed pleadings in this action in which they allege that they were let down by their lawyers and cheated by their first builder, the NAB and "unknown fraudsters". The relief they seek is limited to the allegations made against the NAB.

1. In their Further Amended Points of Claim, dated 10 September 2018, the Applicants make the following allegations against the NAB:-
   • NAB had engaged in misleading and deceptive conduct by manufacturing and registering a "fake, fraudulent and falsified Certificate of Title";[2]
   • NAB had manufactured a discharge of mortgage to discharge the mortgage held by the Commonwealth Bank of Australia (CBA) over the Greenvale property;
   • NAB had fraudulently induced the Registrar of Titles to amend the records held by Land Use Victoria. Such conduct "constituted the highest level of unconscionable conduct";[3]
   • NAB represented that:
     • it would provide a home loan to the Applicants in the sum of $895,000 to enable them to build three, self-contained units on the Greenvale property;
     • the home loan would be secured by a mortgage over the Greenvale property; and
     • the mortgage would only be registered on the property after the NAB had paid out half of the loan ($447,500) to the Applicants;[4]
   • despite these representations, the NAB registered the mortgage over the Greenvale property before any drawdowns were made on the building loan;
   • NAB engaged in fraud and misleading and deceptive conduct by:
     • registering a false mortgage over the Greenvale property; and
     • lodging a fake discharge of mortgage which had the effect of discharging a mortgage held by the CBA over the Greenvale property;[5]
   • NAB contravened s. 119 of the Transfer of Land Act (1958) by lodging false documents with the Registrar of Titles;[6]
   • NAB drew down the following sums from the home loan without being authorised by the Applicants to do so:
     • $12,225.11 on 14 September 2010;[7]
     • $600 on 22 September 2010;[8]
     • $86,435 on 29 November 2010;[9]
     • $93,365.65 into the builders account as a progress payment on 15 March 2011;[10]
   • NAB, in September 2010, credited CMS' overdraft account with the sum of $800,000 and then debited the account. Neither of these transactions were authorised. Consequently, the ATO audited CMS leading to its liquidation.
   • NAB unlawfully sold the Greenvale property by public auction on 24 May 2014, notwithstanding that the Applicants had:
     • paid $200,000 to the NAB to discharge the home loan;[11] and
     • never given up possession of the Greenvale property.[12]
   • NAB had contravened s. 119 of the Transfer of Land Act 1958 by fraudulently procuring or being privy to the fraudulent procurement of a certificate of title or other instrument (this is a penalty provision).
2. At the commencement of the hearing Mr Robert Iloski confirmed that the claims set out above constituted the totality of all the claims being pursued by the Applicants against the Respondent. The Respondent's counsel confirmed that the Respondent was prepared to meet the allegation of unconscionable conduct although this allegation had not been properly pleaded by the Applicants.
3. Mr Iloski also filed an opening statement in which he alleged, inter alia, that:
   1. the guarantee given by CMS was unenforceable because - "it [the guarantee] is in breach of the Corporations Act"; and
   2. the NAB required CMS not to be in liquidation and that was - "an impossible task for the applicants because none of the applicants is the company".

1. The NAB denied the allegations of wrongdoing and unlawful actions as alleged by the Respondents.[13]
2. The sequence of events relied upon in the Points of Defence is detailed below.
3. On 9 September 2010, the NAB drew down the CI facility by debiting the sum of $785,000. The sum of $799,210.03 was then debited from the CMS account to effect CI's refinance settlement with the CBA. Further sums of $6,460 and $1,345 were also debited to CMS' account as disbursements for the refinance settlement. All these transactions were authorised by Robert Iloski.[14] Accordingly, the NAB denied that it caused the default event.[15]
4. In the period 14 September 2010 to 28 September 2012, the home loan was drawn down by sums totalling $173,150.
5. On 28 September 2012, CMS was wound up by the ATO. This triggered a default of the home loan. The NAB then served default notices on the Applicants.
6. On 1 August 2013, the NAB took possession of the Greenvale property in accordance with the terms of the mortgage and pursuant to its rights under s. 81 of the Transfer of Land Act 1958 and at common law.
7. Between October 2013 to February 2014, Boutique Lawyers, representing the Applicants, put forward a series of refinancing proposals to the NAB. None of these proposals were completed.
8. On 17 May 2014, CI paid the sum of $200,000 to the NAB.
9. The amounts demanded by the NAB under the Greenvale mortgage on 16 January 2013 were $786,489.94 and $173,150.91 respectively and could not be satisfied by a partial payment of $200,000.
10. On 26 May 2014, the Greenvale property was sold at public auction. By these facts, the NAB contended that it had:

1. obtained possession of the Greenvale property lawfully; 2. made it clear that the payment of $200,000 would be accepted on a without prejudice basis only;

1. made it clear that it would not postpone the mortgagees' auction unless an unconditional offer to discharge the balance of the secured debt was received; and

1. it had acted only after the Applicants had failed to respond to this request.
2. Further, in addition to denying any wrongdoing, the Respondent's counsel submitted that the Tribunal had no jurisdiction under s. 119 of the Transfer of Land Act 1958 as this section provided for a criminal penalty rather than civil relief.

1. The Applicants sought the following relief:
   • an order directing the Registrar of Titles to:
     • restore Donco Iloski and Liljana Iloska as the registered proprietors of the Greenvale property; and
     • delete all records of the allegedly falsified documents lodged by the NAB; and
   • as against the NAB, damages in the sum of $3 million "combined with a sufficient amount to enable the Applicants and [two non-parties] to complete their homes, which are semi complete, on the Greenvale land" being a further $1,950,000.[16]

1. In about August 1992, Donco and Liljana purchased the Greenvale property for the sum of $75,000. The property comprised a vacant block of land. The purchase was facilitated by a loan of $55,000 from the CBA. The CBA registered a mortgage over the Greenvale property to secure the loan.[17]
2. The loan to the CBA was paid off in April 2004. A discharge of mortgage was prepared and dated 25 October 2006.[18] The discharge was not lodged for registration at that time.[19]
3. Donco and Liljana intended to build three self-contained units on the Greenvale property. Plans were drawn up for the construction of these units in or about 2009.
4. The documents tendered into evidence by the parties record the following matters:
   • in August 2010, the Applicants applied for a building loan from the NAB. The loan was to finance the construction of the units on the Greenvale property.[20]
   • Donco and Liljana entered into a major domestic building contract for the construction of three self-contained units on the Greenvale property. The building contract was a fixed price contract with all three units having a construction cost of $298,000 each or $894,000 in total. A building permit was granted on 25 August 2010.[21]
   • On 27 August the NAB issued a letter of offer to the Applicants, offering a base variable home loan. The Greenvale property was then valued at $300,000.[22]
   • On 30 August 2010, as security for the home loan, CMS provided a guarantee and indemnity to the NAB which was supported by a fixed and floating charge provided by CMS.[23]
   • At the same time, the NAB issued a letter of offer to CI with respect to an NAB Business Markets Facility (the CI facility).[24]
   • On 31 August 2010, as security for the CI facility, Donco Iloski, Liljana Iloska, Robert Iloski and CMS provided a guarantee and indemnity to the NAB (the CI facility guarantee). This guarantee and indemnity were supported by the Greenvale mortgage.[25]
   • On the same day, Robert Iloski, Donco Iloski and Liljana Iloska attended Kenyons Lawyers to obtain independent legal advice in relation to the CI facility guarantee and the Greenvale mortgage which secured the obligations under the CI facility guarantee.[26]
   • On 8 September 2010, Donco Iloska, Liljana Iloska, Robert Iloski and Sophie Iloski granted a first registered mortgage to the NAB over the Greenvale property. On the same day, CI granted a first registered mortgage to the NAB over the factory property to secure the CI facility.[27]
   • On 8 September 2010 settlement of the refinancing of the factory property to the NAB was effected.[28]
   • On 14 September 2010, Robert Iloski drew down the building loan by $12,015.07;[29]
   • On 27 September 2010 the NAB lodged a discharge of mortgage to discharge the mortgage lodged by the CBA over the Greenvale property[30].
   • On 8 November 2010, the ATO sends a letter to CMS advising that it has been selected for a tax audit.[31]
   • On 29 November 2010, Robert Iloski partially drew down $86,435 from the building loan.[32]
   • On 8 April 2011, Robert Iloski drew down $93,385.65 from the building loan.[33]
   • Shortly after that date, a dispute arose between the builder and Donco and Robert Iloski. The Applicants engaged a new builder.[34]
   • On 20 August 2012, the ATO commences wind-up proceedings against CMS and on 28 September 2012, a liquidator was appointed to CMS.[35]
   • On 10 December 2012, the NAB served default notices upon the Applicants advising that they were in default of the building loan and demanding repayment in full.[36]
   • On 8 January 2013, the NAB served notices of demand on Robert Iloski, Donco Iloski and Liljana Iloska pursuant to the CI facility guarantee.[37]
   • On 16 January 2013, the NAB served notices of demand pursuant to s. 76 of the Transfer of Land Act 1958 (Vic) on each of the Applicants advising that they were in default of the building loan and demanding payment.[38]
   • On the same day, the NAB served notices of demand pursuant to s. 76 of the Transfer of Land Act 1958 (Vic) on Donco Iloski and Liljana Iloska advising that they were in default of the CI facility guarantee and demanding payment.[39]
   • On 1 August 2013, the NAB took possession of the Greenvale property.[40]
   • On 3 October 2013, the NAB initiated proceedings in the County Court of Victoria against CI to obtain possession of the factory property (the CI proceedings).[41]
   • From at least 10 October 2013 until 29 May 2014, the Applicants were represented by Olivia Terziovski, solicitor, of Boutique Lawyers. During this period there were negotiations between NAB (through its solicitors, K&L Gates) and the Applicants and their solicitors, Boutique Lawyers;[42]
   • On 10 October 2013, as a result of the negotiations, the initial scheduled date for the mortgagee's auction of the Greenvale property was postponed from 19 October 2013, to allow further settlement discussions;
   • On 13 December 2013, Donco and Liljana transferred the Thomastown property (that is, the family's home) to Liljana and Tatjana Iloska as tenants in common. Liljana holding 90% of the property and Tatjana 10%.[43] At this time a loan of $431,249.08 was advanced by the CBA to Liljana and Tatjana Iloska.[44] This loan was secured by a mortgage over the Thomastown property. The Applicants allege that this loan and mortgage documents were not signed by Liljana who was in Macedonia at the time of this transaction. They allege that unknown fraudsters were involved.[45]
   • On about 2 April 2014, the NAB re-commenced the marketing campaign for the auction of the Greenvale property to take place on 24 May 2014;
   • On 23 April 2014, the NAB obtained default judgment in the CI proceedings.[46]
   • On 17 May 2014, payment of $200,000 was made by CI to the NAB.[47]
   • On 19 May 2014, Boutique Lawyers wrote to K&L Gates, advising that, "Our client is organising payment to your client for the balance to be provided by the end of the week";
   • On 20 May 2014, K&L Gates sent a letter to Boutique Lawyers advising that unless an unconditional offer of refinance was provided by 23 May 2014, the NAB would continue with its enforcement action against the Greenvale property. No response was received to this letter;
   • On 24 May 2014, the Greenvale property was sold at public auction by the NAB as mortgagee in possession for the sum of $490,000 plus GST;[48]
   • On 28 May 2014, Boutique Lawyers advised K&L Gates that it no longer acted for the Applicants;
   • On 22 August 2014, the sale of the Greenvale property was settled.[49]
   • On 19 September 2014, the transfer of the Greenvale property was registered. The registered proprietor was a Mr Bchinnati.[50]
   • CI was de-registered on 16 June 2015.[51]
   • The Greenvale property was sold once more. On 6 June 2018, the transfer was registered. The registered proprietor was M. Daniel.[52]
   • On 17 October 2018, in proceedings numbered Cl-18-04374 issued against the Applicants, the County Court of Victoria held that M. Daniel was entitled to possession of the Greenvale property.[53]

1. The home loan was secured by a mortgage given by the registered proprietors of the Greenvale property, Donco Iloski and Liljana Iloska. The home loan facility was limited to a sum of $895,000.
2. On 27 August 2010, CMS executed a guarantee and indemnity to guarantee the obligations of the mortgagors under the Greenvale mortgage. This guarantee was supported by a fixed and floating charge given over the assets of CMS.
3. The "Home Loan - Credit Contract Details", dated 30 August 2010, in the column adjacent to the word "Security" stated that:-[54]

The following are to be, or have been, taken as security for the repayment of the home loan:

Registered Mortgage over the [Greenvale Property].

Guarantee and Indemnity for $895,000.00 given by Creatd Motor Sports Pty Ltd ACN 122 608 164 supported by:

Fixed and Floating Charge over all of the present and future rights, property and undertaking of Creatd Motor Sports Pty Ltd ACN 122 608 164.

1. Clause 14.1 of the Home Loan contract provided that the borrowers would be in default under the contract if, inter alia:

(d) a security provider is in default under any security, or withdraws from it or breaches its terms, or an event of default occurs under a security or a security is or may be unenforceable;

(g) you or a security provider is or becomes insolvent or steps are commenced to make you or the security provider insolvent.

1. The contract defined each of the italicised terms. The word "insolvent" was defined to mean - when a legal person was, inter alia, "placed into liquidation or wound up". The term security was defined to mean - "any document or act creating a security for the payment of money or performance of obligations including a mortgage, charge, lien, pledge, trust, power, guarantee, or title retention". The expression "security provider" was defined to mean - "each person (other than you) who gives a security."[55]
2. On 30 August 2010, CI entered into the CI facility to refinance its borrowings, that is, to discharge its business loan with the CBA. The CI facility had a monetary limit of $785,000. This facility was secured by the following:-[56]

1. a registered mortgage over the Campbellfield property; 2. a guarantee and indemnity for $785,000 given by CMS, Robert Iloski, Donco Iloski and Liljana Iloska supported by:

1. a fixed and floating charge over all the present and future rights, property and undertaking of CMS; and

1. a registered mortgage over the Greenvale property.
2. CI, as the registered proprietor of the Campbellfield property, secured this facility by granting a mortgage over the Campbellfield property to the NAB, as mortgagee. In turn, CMS, Robert Iloski, Donco Iloski and Liljana Iloska executed a guarantee and indemnity to secure the CI facility. By this guarantee, the mortgage over the Greenvale property secured the CI facility.

1. Mr Robert Iloski appeared on behalf of all the Applicants. He tendered an opening statement and an affidavit sworn by him on 30 May 2019. The affidavit was admitted into evidence. The affidavit set out a series of questions put to the NAB by the Applicants and the answers provided by the NAB to each of the questions. The questions were put, and the answers provided during a mediation process conducted under s. 88 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act). The Respondent made no claim of privilege over this material. Accordingly, the affidavit was accepted into evidence.
2. Mr Iloski also produced the Applicants' Tribunal Book which was contained in two arch lever folders. Mr Robert Iloski was then sworn and gave oral evidence and was cross-examined.
3. Whilst under cross-examination Mr Iloski sought to tender all the documents contained in the Applicants' Tribunal Book. He declined to have them produced by any of the other Applicants.
4. Although the Applicants' Tribunal Book did not correspond to the version provided by the Applicants to the Respondent, I, nevertheless, admitted it into evidence. I have had regard to all the documents contained in the Applicants' Tribunal Book in the preparation of these written reasons.
5. Mr Robert Iloski said that CMS had two directors, himself and his brother Daniel. He said that CMS was a trading company, engaged in business as a racing and performance car workshop. He said that it owned no assets and was financially unstable.[57] He produced no accounting records such as trading profit or loss statements to support these assertions.
6. Mr Iloski said that the NAB deposited $800,000 into CMS' bank account. He said that this transaction had not been authorised by the Applicants. He said that this payment triggered an investigation by the ATO into CMS's PAYG, superannuation guarantee and fringe benefit tax compliance. Consequently, the ATO issued penalties and later wound up the company.
7. Mr Iloski said that the NAB then served default notices on the Applicants. He said that the default notices required the Applicants to remedy the default by taking CMS out of liquidation. He said that such action was an impossibility. That being so, he said that the default notices were invalid.
8. Mr Iloski said that the NAB had behaved unconscionably because it had accepted a guarantee from CMS to support the home loan. He said that CMS gained no benefit from guaranteeing the home loan.[58]
9. Mr Iloski said that Mr David Cross, an employee of the NAB told him not to take any notice of the default notices because the documents were a "mere formality".
10. Mr Iloski said that in early October 2013 his father drove past the Greenvale property and noticed that a "For Sale" sign had been erected.[59] He said that the NAB had not contacted any of the Applicants about this development. He said that Donco and Liljana then consulted a lawyer.
11. Mr Iloski said that the families' lawyer contacted the NAB's solicitors. Consequently, he was told that $179,000 had been drawn down by the Applicants from the home loan. He said that his parents went overseas in November 2012. When they returned in February 2013, the Applicants obtained a loan for $200,000 to pay out the home loan. He said that he paid this money via a CBA bank cheque to the NAB on 23 April 2013.
12. Mr Iloski said that he understood, from the advice given to him by his lawyer, that this payment would extinguish the Applicants' liability under the Greenvale mortgage. He said that he expected a discharge of mortgage to be provided. No discharge was provided. Mr Iloski said that at that stage, as far as the Applicants were concerned, "our property was ours again, unencumbered." [60]
13. Mr Iloski said that the NAB sold the property at public auction on 24 May 2013. He said that this was improper because the Applicants had paid back the money drawn down from the home loan. He also said that the Applicants had never parted with possession of the Greenvale property. He denied that the guarantee given by CMS secured the Greenvale mortgage.
14. Mr Iloski said that the purchaser of the Greenvale property subsequently on-sold the property to another purchaser who demolished the unfinished units. He said that when that happened, he commenced the VCAT application and re-occupied the Greenvale property. He said that he pitched a tent on the land and then erected a cabin. The Applicants camped there until they were evicted.
15. Under cross-examination, Mr Iloski said as follows:
    • he admitted that none of the security documents, or for that matter any other contemporaneous document, supported his assertion that the Greenvale mortgage would only be registered against the title after half the loan funds had been drawn down;
    • he admitted that neither he nor his lawyer had ever raised this allegation during the protracted negotiations or legal proceedings;
    • he accepted that all of the drawdowns from the home loan occurred after the guarantee and indemnity and Greenvale mortgage had been executed;
    • he said that he did not remember executing the guarantee and indemnity as director of CMS. He said that the signature on the document was his, but the signature page may have been substituted by the NAB;
    • he said that he did not execute a guarantee with his mother and father on 30 August 2010 to guarantee the CI facility. He said that he signed an overdraft facility on that date and the NAB had fraudulently substituted the execution page of the overdraft facility into a guarantee and indemnity.
    • he denied that he signed the Campbellfield mortgage on behalf of CI;
    • he said that the certificates signed by the guarantors' solicitor (i.e. the solicitor charged with giving independent advice to Donco Iloski, Liljana Iloska and Robert Iloska) was also fabricated;
    • he denied that CI's overdraft facility with the CBA had been refinanced through the CI facility granted by the NAB to CI;
    • on being shown the settlement correspondence, he denied that the refinance settlement had been authorised by him;[61]
    • he denied that he requested Mr Cross of the NAB to establish accounts for Robert Iloski, Sophie and Robert Iloski, Donco Iloski and Liljana Ilsoka and a home loan drawing account, and for these four accounts to be linked together with the CMS and CI accounts;
    • he acknowledged that, in all the communications he had had with the NAB prior to the VCAT proceedings, he had never suggested that the NAB should not have registered the Greenvale mortgage prior to the draw-down of half the loan monies;[62]
    • he acknowledged receipt of a letter from the ATO dated 8 November 2010 addressed to him and his brother, as directors of CMS, which said, in part, that CMS had been:

"...selected for an audit of your compliance with Pay As You Go withholding, superannuation guarantee and a review of your fringe benefit tax obligations for the period outlined ...."

He denied, however, that the ATO audit was prompted by his non-compliance with his company's PAYG, superannuation guarantee and fringe benefit tax obligations. He further maintained that the audit was prompted by the unauthorised pooling of funds in the CMS account;[63]

• he was shown an email from his email address which was transmitted at 1:01pm on 2 October 2012 addressed to Mr David Cross of the NAB which had the subject heading - "Re: Rob, Please call me ASAP, urgent" and an attached letter addressed to Mr Cross and signed by him - he denied that he sent the email;[64]
• the letter read as follows:

"I acknowledge receipt of your correspondence in respect of Creatd Motor Sports Pty Ltd. As I have advised, the company was put into liquidation by the ATO, as it would not accept a long-standing instalment agreement.

.... The project in Greenvale will continue to go ahead, I have another builder who is in the final stages of his assessment and will consult me with a new project plan and extra costings.

...I would like to add that my plan for the project in Greenvale was to get it complete. Once complete I/we would sell the property in Thomastown and greatly reduce our debt. This is the house we currently live in."

Mr Iloski refused to give a responsive answer to the suggestion that the letter represented his position at that time;

he denied that he and his parents had executed a guarantee to secure the CI facility;

• he denied that an agent of the NAB took possession of the Greenvale property and chained and padlocked the gate on 1 August 2013. He said that he was living in a cellar on the Greenvale property. He said that he stayed at the property until 6 or 7 pm every day. He could not explain why he did not observe the NAB's agents on the property on 1 August 2013. He said initially that his father, when driving past the property, saw that a "For Sale" sign had been erected and that this was the first time that the Applicants became aware that the NAB intended to sell the property. He could not explain how that happened given his claim that he was living in a cellar on the property at the relevant time with the purpose of preventing the NAB taking possession;
• he could not explain why he had never alleged prior to this proceeding that the NAB had not obtained possession of the Greenvale property;[65]
• he acknowledged that the NAB had obtained an order for possession of the Campbellfield property from the County Court of Victoria. He said that the County Court proceeding "was a big waste of time". He said that the Campbellfield property had never been owned by CI. He said that the property was owned by a trust.
• he could not explain why he had never complained to his lawyer that the NAB had engaged in fraud, other than to say his former lawyer was not fit to be a "lollypop lady".[66]

1. Mr Robert Iloski refused to be cross-examined further. Mr Iloski and the other Applicants then walked out of the hearing. On the Respondent's application, the hearing was stood down until 10:00 am on 4 June 2019. The Applicants did not appear on the recommencement of the hearing. The hearing continued in their absence.

1. The NAB relied upon a witness statement affirmed by Mr Ross McNaughton on 17 April 2018. At the time of affirming this statement, Mr McNaughton was engaged by the NAB as the general manager of its Strategic Business Services.
2. Mr McNaughton gave evidence to prove the identity and nature of the parties, the property holdings of the First and Second Applicants, the identity and property holdings of CI, the identity of CMS and the details of the relevant transactions (see pages 2-5 of the McNaughton Affidavit).
3. In relation to the discharge of the CBA mortgage over the Greenvale property, Mr McNaughton deposed that the CBA signed a discharge for the discharge of its mortgage over the Greenvale property on 25 October 2006. The discharge was not provided to the NAB at that time. A copy of the discharge was produced by Mr McNaughton.[67]
4. In relation to the drawdowns on the home loan and CI facility, Mr McNaughton deposed as follows:-

a The funds required to refinance CI were sourced from different accounts held with the NAB and then pooled into an overdraft facility held with the NAB by CMS;

1. The funds of $807,015.07 were sourced as follows:
   1. $785,000 was debited from the CI facility and credited to the CMS overdraft account;
   2. $12,015.07 was debited from the home loan and credited to the CMS overdraft account;
   3. $10,000 was credited to the CMS overdraft account.

1. The sum of $799,210.03 was then debited from the CMS overdraft account to effect the refinance settlement with the CBA; and

1. The further sums of $6,460 (application fee) and $1,345.04 (Govt. fees and charges) were also debited from the CMS overdraft account as disbursements for the settlement.

1. These details were confirmed by correspondence dated 14 September 2010 addressed to Mr Robert Iloski. The correspondence further confirmed that the funds had been drawn down and disbursed in accordance with the instructions provided by Mr Robert Iloski.[68] These transactions were also recorded in the statements for each of the customer's bank accounts.
2. Mr McNaughton's affidavit set out the matters detailed hereunder.
3. In the period from 14 September 2010 to 28 September 2012, the home loan was partially drawn down as follows:-

1. $12,015.07 on 14 September 2012 as part of the CI refinance settlement; 2. $86,435 on 29 November 2010; and

1. $93,385.65 on 8 April 2011.
2. On 28 September 2012, the ATO appointed a liquidator to CMS. This appointment constituted a default event under clause 14.1(d) and 14.1(g) of the terms and conditions of the home loan.[69]
3. As of 10 December 2012, the unpaid balance on the home loan was $172,993.45. On that date the NAB served a default notice on the Applicants advising them that they were in default of the home loan and demanding payment of $172,993.45 within 31 days.[70] Interest continued to accrue on the home loan after the default.[71]
4. On 8 January 2013, the NAB served a demand on the guarantors under the CI facility, namely, Donco Iloski, Liljana Iloska and Robert Iloski advising that the customer was in default and demanding payment of $785,380.[72]
5. On 16 January 2013, the NAB served demands pursuant to s.76 of the Transfer of Land Act 1958 on each of the Applicants advising that they were in default of the home loan and demanding payment of $173,150.91.[73]
6. On the same day, the NAB served further demands pursuant to s. 76 of the Transfer of Land Act 1958 on Donco Iloski and Liljana Iloska advising that they were in default of the CI facility guarantee and demanding payment of the total amount owing, being $786,489.94 and stating if payment was not received it may sell the Greenvale property.[74]
7. On 1 August 2013, the NAB took possession of the Greenvale property. At that time the property was a vacant development site and building work had ceased. There was no one living at the property on that date.[75]
8. From at least 10 October 2013 until 28 May 2014, the Applicants were represented by Boutique Lawyers and during that period the Applicants' lawyers negotiated with the Respondent's lawyers (K&L Gates).[76]
9. Between October 2013 and February 2014, Boutique Lawyers put a number of refinancing proposals to K&L Gates. These proposals included the following:-

1. a Bankwest offer of $431, 249.08 dated 9 December 2013; 2. an expected ANZ approval for $980,000 dated 9 December 2013; and

1. a Mortgage Connexions conditional offer for $975,000 dated 10 February 2014.
2. No finance eventuated so in early April 2014, the NAB recommenced marketing the Greenvale property for public auction on 24 May 2014.
3. On 14 May 2014, Boutique Lawyers contacted K&L Gates and stated that their clients wanted to provide a part-payment in the sum of $200,000 to the NAB and requested account details. K&L Gates provided the account details and said that they would accept the payment on a "without prejudice" basis and without releasing the Campbellfield mortgage until the balance of the amount owed to the NAB was paid.[77]
4. On 17 May 2014, CI paid a bank cheque for $200,000 to the NAB as a part payment of the debt. Following this payment, Boutique Lawyers requested that the Greenvale property be taken off the market as, "Our client is organising payment to your client for the balance to be provided by the end of this week."[78]
5. On 19 May 2014, K&L Gates responded to the request from Boutique Lawyers by correspondence which stated in part:

"... please provide us with a copy of the unconditional letter of offer evidencing that settlement of the refinance of the full amount of the debt owing to NAB by your client will occur by 4 pm this Friday 23 May 2014. Upon confirmation of the same, we are instructed that NAB is prepared to postpone the auction of the Greenvale property for one week. However, our client has confirmed that it will not take the Greenvale property off the market or release its mortgage over the property until it has received payment in full of the entire amount owing to it by your client".

1. No response was received to this letter, so on 20 May 2014, K&L Gates sent a further letter to Boutique Lawyers advising that unless an unconditional offer of refinance was provided by 23 May 2014, NAB would continue enforcement action against the Greenvale property.[79]
2. In the absence of a response to these letters, the NAB sold the Greenvale property at public auction on 24 May 2014. At the time of the auction the NAB was the mortgagee in possession, the sale price was $490,000 and the purchaser was a Mr Bchinnati. Prior to the auction, the NAB had obtained the following valuations of the Greenvale property:
   1. a valuation of $380,000 plus from Mortgagee Services Pty Ltd on 25 July 2013; and
   2. a valuation of $450,000 from the selling agent on 1 August 2013.[80]
3. On 26 May 2014, Boutique Lawyers transmitted an email message to K&L Gates which noted that the Greenvale property had been auctioned, "despite [K&L Gate] advising it would be delayed for 7 days." On the same day, K&L Gates responded by transmitting an email which stated in part:

"Your email below is incorrect. Our letter advised that if an unconditional letter of offer for the balance was received by 4 pm on Friday 23 May 2014, the auction would be postponed by one week. That was not provided so the auction proceeded as scheduled on 24 May 2014."

1. On 26 May 2014 Boutique Lawyers transmitted an email to K&L Gates, acknowledging that the email sent by K&L Gates on 26 May 2014 correctly stated the position. On 28 May 2014, Boutique Lawyers advised K& L Gates that they no longer acted for the Applicants.

1. There were aspects of the evidence of Mr Robert Iloski that I found very disconcerting. Throughout his evidence he adopted an argumentative approach and mostly spoke in generalities. When forced to concentrate on specific details, his evidence was often at odds with contemporaneous documents and details and/or at odds with his own prior statements. For example, see his admissions set out under paragraph 52 above.
2. On other occasions there were inexplicable gaps. For example, Mr Iloski claimed that Donco and Iloska had never executed the NAB mortgage or the guarantee and indemnity. He said this despite the fact that their signatures were witnessed by their own lawyer.[81] These significant allegations were, however, not raised either by or with the lawyer acting on the family's behalf when the NAB was marketing the Greenvale property for sale.[82]
3. It became clear that Mr Iloski's strong sense of grievance got in the way of giving truthful evidence. For example, he also stated that he had not executed the CMS guarantee, although he agreed that the signature on the execution page was his. On another occasion, he asserted that CI had not discharged its borrowings with the CBA (CSA & Vic Lend) through a loan from the NAB, despite overwhelming evidence to the contrary.[83] At another point he claimed that the County Court judgment in the proceeding brought against his mother was under investigation by the Victoria Police Fraud & Extortion Squad.[84]
4. Mr Iloski's sense of grievance also induced a distorted world-view in other ways. He seemed determined to find fault against the NAB on the slimmest of conjectural bases.[85] This was most evident in his evidence concerning the "fraudulent certificate of title" and "manufactured discharge of mortgage" (see paragraphs 91 & 92 below).
5. Frequently, Mr Iloski would avoid giving an answer to a question put to him in cross-examination by asking his own series of questions. When not employing this tactic, he would avoid giving a responsive answer by reading out the words:

Please note that some fee and interest amounts applied to your statement - have been incorrectly applied. We are aware of this issue and we will correct this automatically in due course.

1. These words appeared on a bank statement issued by the NAB on the CMS account. Mr Iloski read out these words on many occasions rather than give a responsive answer to the question put to him.[86]
2. I explained to Mr Iloski that the Respondent was obliged to put its case to him and that it would be in his interests and the interests of the other Applicants if he gave responsive answers to the questions. This advice went unheeded. Mr Iloski, finally, refused to answer any more questions and walked out of the hearing.
3. I formed the view that Mr Iloski was not prepared to tackle questions because he was fully aware of the improbabilities and errors contained within his evidence. I found him to be an unreliable witness.

(ii) The "Fake, Fraudulent and Falsified Certificate of Title"

1. This allegation was not supported by any detail and, although the Applicants contended that the fake certificate of title was created by the NAB with the express intention:
   1. of causing detriment to the Applicants; and
   2. to obtain financial advantage for itself;

1. There was no explanation as to how any loss had occurred other than by those pleadings that alleged that the NAB had advanced banking accommodations to the Applicants and that these accommodations had been secured by a mortgage and guarantee over the Greenvale property.
2. The evidence presented by both parties at the hearing, was that Donco Iloski and Liljana Iloska were the registered proprietors of the Greenvale property at the time of the grant of the Greenvale mortgage and remained so until such time as the title was transferred following the mortgagee's sale. The allegedly fraudulent certificate of title, apparently, certified the correct particulars of the registered proprietors. While, the home loan contract demonstrates that it was the common intention of the parties to secure the home loan by a registered mortgage.
3. The Applicants' pleadings were somewhat obscure with regard to the allegation of fraud. No allegation was made as to the nature of the falsity of the fraudulent certificate of title. The only allegation made was that the original certificate of title was the old-style paper title, whereas the fraudulent certificate of title was the new-style digital form.[87] A mere change in format does not make the certificate of title "false" or "fraudulent".
4. All relevant dealings with the Greenvale property, including the registration of the CBA discharge of mortgage and the registration of the mortgage granted to the NAB, required the production of the certificate of title for the Greenvale property. There is nothing to suggest that the relevant requirements for the lodgement of these dealings had not been met, particularly given that Land Victoria registered all these dealings. The transactional documents disclose that it was the common intention of the parties that these security arrangements be put in place.
5. I note that the allegation of fraud is a serious matter. A party who alleges fraud must discharge a heavy evidential onus to prove the allegation.[88] The bare assertion and the mere speculation of the Applicants fall a long way short of discharging that onus. No credible evidence was adduced to support this allegation. Furthermore, this allegation was not made at any time prior to these proceedings, including on those occasions when the Applicants were represented by lawyers and, in particular, at those moments when the Applicants would have been expected to raise this matter.
6. The allegation seems to have formed in Mr Robert Iloski's mind after he noted the differences in form between the copy of the duplicate certificate of title held by his parents, which they had received following their purchase of the Greenvale property, and the digitised certificate of title subsequently produced by the Titles Office in 2010.[89] This difference simply represents a change in technology. The details of the certificate of title remained the same, save for the discharge of the CBA mortgage and the registration of the NAB mortgage.
7. I consider that this allegation is an example of Mr Robert Illoski taking an isolated fact out of context and constructing a theory to suit his argument while refusing to consider any other, more mundane, but considerably more likely, explanations. These remarks apply equally to Mr Iloski's contentions concerning the allegedly fake CBA discharge of mortgage.
8. For the reasons given above, I dismiss this claim.

1. The Applicants allege that the Discharge of Mortgage dated 26 October 2006, executed by the CBA to discharge its mortgage over the Greenvale property was manufactured by the NAB for the purpose of enabling it to register its mortgage over the property.
2. This allegation is based solely upon the following premises:

1. Donco and Liljana became the registered proprietors of the Greenvale property in 1975. The CBA registered a mortgage over the Greenvale property at that time; 2. Donco and Liljana paid off the loan, which the CBA mortgage secured, in January 2004;

1. Donco and Liljana did not own a safe, so they requested the CBA to retain the duplicate certificate of title in its safe keeping;

1. The CBA discharge that was registered on 27 September 2010 is dated 25 October 2006; and 2. The NAB could not have obtained the discharge of mortgage document in October 2006 from the CBA because the NAB did not have any dealings with Donco and Liljana until 2010.[90] Therefore, the discharge must have been manufactured by the NAB.
2. The fault with this reasoning is that the conclusion contained in sub-paragraph (e) does not follow from the preceding premises (a) to (d). As the NAB has explained, it did not receive a discharge of mortgage for the Greenvale property from the CBA in October 2006. It received the discharge instrument, which was dated 25 October 2006, from the CBA in September 2010 when it refinanced the CI loan facility and when Donco and Liljana granted the Greenvale mortgage to the NAB.
3. There is nothing intrinsically suspicious in the fact that the NAB received a discharge dated four years earlier. That was the time when Donco Iloski and Liljana Iloska requested the preparation of the discharge. The explanation provided by the NAB fits all the facts. Further the Applicants acknowledged that Donco and Liljana had paid out the CBA loan prior to entering into the transactions with the CBA. There is simply no motive for the NAB to manufacture a discharge. The CBA was bound to provide a discharge.
4. I note that the sequence of events advanced by the NAB was found to be both correct and unremarkable by His Honour Judge Cosgrave in Commonwealth Bank of Australia Ltd v Liljana Iloska & Anor.[91]
5. I find that there is no evidence before the Tribunal that would warrant a finding that the NAB manufactured a false discharge of mortgage. I dismiss this claim.

(iv) The Representation that the Mortgage would not be registered until half the Loan had been drawn down

1. This allegation appears at paragraph 29 of the Further Amended Points of Claim. The surrounding paragraphs allege that the Applicants met Mr Cross of the NAB at an industrial estate on 30 August 2010. At this meeting Mr Cross presented the Applicants with a bundle of documents and requested them to sign them. They did so.
2. At this time, Mr Cross allegedly said that the Greenvale mortgage would not be registered on the title until such time as half the borrowings had been drawn down.
3. Mr Robert Iloski was cross-examined on this alleged discussion. Mr Iloski said that he understood that the bank would not register the mortgage until half the loan had been drawn down and that that understanding was based upon "the oral discussions we [the Applicants] had had with Dave". No detail was provided.
4. Mr Iloski admitted that:[92]

1. neither he nor any of the other Applicants, nor the lawyers acting for the Applicants referred to this alleged representation in any of their dealings with the NAB and its lawyers;[93] 2. this allegation was first made when the VCAT proceedings were issued in 2018; and

1. none of the loan documents or other contemporaneous documentation, including the mortgage, the CI credit facility documents and the guarantee and indemnities were consistent with this alleged representation.
2. Mr Iloski claimed that his version of events was, nevertheless, true because it would not be "fair for the bank to get a mortgage 100% over the unencumbered land without loaning one cent". Mr Iloski acknowledged, however, that the mortgage only secured borrowings that were actually advanced.[94]
3. The NAB provided this explanation to the Applicants:

"... the usual lending practice for a construction home loan is to take security at the time the loan is established whether or not the loan is drawn down straight away. NAB required a mortgage over the Greenvale property as a condition of the provision of the home loan facility (Home Loan). This is consistent with the documentation that was signed and, in particular, is reflected in the Home Loan letter of offer for finance of $895,000 dated 27 August 2010 accepted by the Applicants on 30 August 2010 (Home Loan Contract) and the Greenvale Mortgage which was signed by the first and second applicants on 8 September 2010. NAB notes that the documents were given to the applicants' broker, Nedir Elhajje, with instructions that the applicants should obtain legal advice in relation to the effect of the documentation before signing the documentation in the presence of a solicitor. NAB denies stating that a mortgage 'over the land [Greenvale] would be sought at a time when half of the total amount has been borrowed"[95]

1. I would note that it would be very unusual for a bank not to register a mortgage immediately. Immediate registration is necessary to protect the mortgagee from the possibility of subsequent dealings by the registered proprietors with third-parties. This is so because priorities, as between competing securities, are determined, not by the date of execution, but by the date of registration.
2. While the immediate registration of the mortgage by the NAB would be expected, I note that Mr Cross was not called by the NAB to give evidence. No explanation for this failure was provided. I have taken that matter into consideration in forming my view of this issue, together with:
   1. the failure of the other Applicants to corroborate the evidence of Robert Iloski; and
   2. my findings about the unreliability of Mr Iloski as a witness.[96]
3. As to the alleged discussion with Mr Cross, I note that Mr Robert Iloski gave no evidence as to how or why this somewhat remarkable statement was volunteered. It was a statement devoid of any context. Further, none of the other Applicants, who were apparently present when this representation was made, gave evidence. Taking into account all the matters detailed above and given the fact that:
   1. none of the loan and mortgage documents are consistent with the alleged representation; and
   2. none of the contemporaneous documents or oral communications made reference to this alleged representation:

I cannot be satisfied to the requisite civil standard, that this representation was made. I dismiss this claim.

(v) Contravention of s. 119 of the Transfer of Land Act

1. This allegation appears at paragraph 48 of the Further Amended Points of Claim. The allegation is neither linked to any other cause of action nor to any claim for relief.
2. The claim seems to be based on the premise that fraudulent documents had been lodged by the NAB with the Registrar of Titles. For the reasons set out in paragraphs 85 to 98 (inclusive) above, I am not satisfied that the NAB:-
   1. manufactured a fake certificate of title; or
   2. manufactured a fake discharge of mortgage.
3. Furthermore, the Applicants led no evidence that the NAB had contravened any of the limbs of s. 119(1) of the Transfer of Land Act (1958) (the TLA).
4. These findings are sufficient in themselves for me to dismiss this claim. In addition, I accept the Respondent's submission that this claim is misconceived. Section 119(1) of the TLA is a criminal offence. If a charge was brought under that section, it would have to be heard and determined by a court exercising criminal jurisdiction. The Tribunal does not have jurisdiction to hear a criminal charge.[97]
5. While criminal remedies are not available, civil remedies may be granted by the Tribunal with respect to some criminal contraventions. Significantly, the Tribunal may grant a declaration of contravention with respect to a limited range of criminal provisions, provided that there is some utility in doing so.[98]
6. If this pleading is read as a component of the Applicants' case that the NAB acted unconscionably in its dealings with them, then a declaration of illegal conduct may have some utility (if such a finding was open on the evidence).
7. The Tribunal's power in this regard is very limited. The Tribunal has no inherent declaratory power. Section 216A of the ACL&FTA empowers the Tribunal to grant declarations with respect to contraventions of that Act. This power extends to making declarations of contraventions with respect to the provisions contained within the "Consumer Acts," by virtue of cross-vesting provisions contained within each of those Acts. The Consumer Acts are those Acts listed under Schedule 1 of the ACL&FTA. The Supreme Court has held that the declaratory power provided by s.216A of the ACL&FTA extends to making declarations of contravention with respect to both civil and criminal contraventions of the offence provisions contained within the Consumer Acts.[99] The TLA is not a "Consumer Act." Accordingly, I find that the Tribunal does not have:
   • the power; nor
   • the evidential basis;
     • - to make a civil declaration of contravention with respect to s.119 of the TLA.
8. For all the reasons stated above, I dismiss this claim.

1. On this issue the evidence is overwhelmingly in favour of the NAB. The money was transferred at the request of Mr Robert Iloski in his capacity as director of CI. The money consisted of the CI business market facility, together with additional monies, which were pooled into the CMS overdraft account and then disbursed to discharge the loan that CI held with the CBA.
2. This is supported by the surrounding context, CI's mortgage with the CBA over the Campbellfield property was paid out and discharged while a new mortgage granted over the property by CI was registered by the NAB. In addition, Donco and Robert Iloski and Liljana Iloska executed a guarantee and indemnity to secure this transaction.
3. The details of the transaction were recorded in the contemporaneous statements of account issued by the NAB to CMS and to CI. Moreover, a letter confirming these transactions was forwarded to Mr Robert Iloski on 14 September 2010. This letter also recorded that these transactions had been carried out by the NAB in accordance with Mr Robert Iloski's instructions.[100]
4. After the ATO wound up CMS, Mr Robert Iloski sent an email attaching a letter to David Cross. In this letter Mr Iloski did not claim that this transaction had been executed without his authority, nor did he complain that this transaction had initiated the ATO investigation and wind-up action. Rather, he stated that the ATO had wound up CMS in circumstances where the ATO had failed to honour a "long standing instalment agreement."
5. I find that the payment of the funds for the refinancing of CI loan facilities was authorised by Mr Iloski. I further find that the ATO investigation and subsequent wind up action was caused by the non-compliance of CMS with its taxation and superannuation obligations. I dismiss this claim.

1. Mr Robert Iloski contended that the Applicants had raised a claim against the NAB based on unconscionable conduct. When asked to identify the pleading, he referred to the final dot point on page 5 of the Further Amended Points of Claim. This sub-paragraph reads as follows:

by causing the Registrar at the Office of Land Titles to incorrectly and by fraud make amendments to the records held at Land Use Victoria. Ought to constitute unconscionable conduct, of the highest form.

1. I also note that paragraph 35 of the Further Amended Points of Claim alleges that:

The first two applicants have minimum skill and knowledge of the English language and do not recall or understand what the conversation was about [that is the conversation that they had with the solicitor from Kenyons who provided them with independent legal advice with respect to the security documents].

1. Finally, I note that Mr Robert Iloski asserted, during the course of giving evidence, that the NAB should never have required CMS to guarantee the Greenvale mortgage because the company held no assets and was financially unstable.

The Legal Prohibition Against Engaging in Unconscionable Conduct

1. At the time of the initial transactions, the prohibition against unconscionable conduct was regulated by the common law doctrine of unconscionable dealing and by statutory formulations contained in the Fair Trading Act 1999 (Vic.) [the FTA]. sections 7 and 8.
2. The statutory provisions remained in force until replaced by the Australian Consumer Law (Vic.) [the ACL]. The ACL came into force, at the State level, on 1 January 2011 pursuant to amendments to the Fair Trading Act 2010 (Vic.) The ACL is now applied as a law of the State of Victoria pursuant to the Australian Consumer Law and Fair Trading Act 2012 (Vic.) [the ACL&FTA].
3. As a consequence of these amendments, the consumer protections against unconscionable conduct, at the State level, have since 1 January 2011, been found in sections 20, 21 and 22 of the ACL. The provisions of the ACL are relevant in two respects, firstly, because they are cast in very similar terms to sections 7 and 8 of the FTA and, that being so, the case law may be relevant. Secondly, because the prohibition against unconscionable conduct contained within s. 21 of the ACL is not limited to the conduct of the relevant party prior to the transactions in question but extends to encompass the conduct of that party in attempting to enforce or to retain the benefit of a dealing with a vulnerable person, in circumstances where that conduct is not consistent with good conscience. These provisions may, therefore, be relevant to the NAB's conduct in the enforcement of its securities over the Greenvale property in 2013-2014.
4. Section 7 of the FTA relevantly provides that:

A person must not, in trade or commerce, engage in conduct, which is unconscionable, within the meaning of the unwritten law, from time to time.

1. Section 8 of the FTA relevantly provides that:

(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services of a kind ordinarily used for personal, household or domestic purposes to a purchaser, engage in conduct that is, in all the circumstances, unconscionable.

(2) Without in any way limiting the matters to which a court or the Tribunal may have regard for the purpose of determining whether a person has contravened sub-section (1), a court or the Tribunal may have regard to -

(a) the relative strengths of the bargaining positions of the supplier and the purchaser; and

(b) whether, as a result of conduct engaged in by the supplier, the purchaser was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c) whether the purchaser was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against the purchaser or a person acting on behalf of the purchaser 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 purchaser could have been supplied with identical or equivalent goods or services from a person other than the supplier.

1. The ACL section 20 is cast in the same terms as s.7 of the FTA.
2. The ACL s. 21(1) provides that:

"A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of goods or services to a person (other than a listed public company); or

(b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable."

1. The expression "services" is given a very wide definition under the ACL. It includes - "any rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, including under banker-customer and moneylending transactions."[101]
2. The prohibition contained in s.8 of the FTA, on the other hand, is limited to conduct, in trade or commerce, in connection with "the supply of services of a kind ordinarily used for personal, household or domestic purposes". This is far narrower than the prohibition contained in s.21(1) of the ACL.
3. It has been held that the provision of a home loan facility constitutes a service "ordinarily used for personal, household or domestic purposes" while the grant of a business loan and the taking of a mortgage over a commercial property falls outside the ambit of such services.[102]
4. The statutory formulations seem to pre-suppose a two-party transaction, namely, a transaction between a supplier and a consumer, rather than a tripartite situation, such as between a lender, a customer and a guarantor. In this case, the transactions included tripartite dealings between the NAB (the supplier) the borrowers (the customers) and the guarantors. For example, under the CI market facility guarantee, the benefit of the transaction and the supply of the services, was to the debtor (CI). The guarantors were merely volunteers.
5. The tripartite nature of the dealings, however, is of no consequence for the purposes of s.8 of the FTA, provided that the supplier's conduct, in taking the guarantee, is conduct "in connection with the supply" of services to the debtor "of a kind ordinarily used for personal, household or domestic purposes."
6. In relation to the CI facility, the NAB took the guarantee from Donco Iloski, Liljana Iloska and Robert Iloski in connection with a business loan granted to an investment company (CI). The nature of CI's business was never explained. Both parties referred to CI as an investment company or as an investment holding company. On that evidence, and, having regard to the authority cited in paragraph 134 above, I cannot be satisfied that the CI guarantee transaction falls within the "consumer test" imposed by s. 8 of the FTA.
7. The term "unconscionable" is not defined in the FTA or ACL, however, the courts have determined that unconscionable conduct will arise where there is serious misconduct, being conduct that is so against good conscience, that it warrants intervention by a court.
8. To meet this standard, it is not enough for the impugned conduct to be merely "unfair", "unjust" or "unreasonable". Nor is it enough for the transaction to be grossly one-sided. The use by a party of its stronger bargaining power to achieve an unfair or one-sided advantage does not, by itself, lead to a finding of unconscionable conduct. Driving a hard bargain has never been proscribed under either the unwritten law of unconscionable dealing or the statutory law. The courts have observed that commercial conduct of this type is simply capitalism in action.[103]
9. On frequent occasions, the courts have held that, for conduct to be deemed "unconscionable", the conduct must contain a necessary and distinguishing feature, namely, the taint of "moral obliquy". In Attorney-General (NSW) v World Best Holdings Pty Ltd,[104] Speigelman CJ went so far as to hold that the doctrine of unconscionability required a "high level of moral obliquy". His Honour observed that, if the concept of unconscionability

were to be applied as if it were equivalent to what was 'fair' and 'just' it would not be "a doctrine of occasional application, when the circumstances are highly unethical, it would be transformed into the first and easiest port of call when any dispute ... arose.

1. The standard set by Speigelman CJ was accepted by Gageler J in Pacaccio v ANZ Banking Group Ltd.[105]
2. While several authorities have criticised the use of the concept of "moral obliquy" as a necessary requirement,[106] the Victorian Court of Appeal has held that unconscionable conduct, under both the unwritten law and the statutory form, must, necessarily, involve this element.[107]
3. Generally, in order for conduct to be actionable as unconscionable under the unwritten law, two criteria must be met, namely:-[108]
   1. the plaintiff must be under some form of special disability or be placed in some special position of disadvantage; and
   2. the defendant must have taken unconscientious advantage of that disability or disadvantage.
4. The disability or disadvantage may be constitutional (that is, inherent), stemming from any particular infirmity or combination of infirmities or weaknesses suffered by a party, such as "poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary".[109]
5. The special disadvantage may also be situational, "deriving from particular features of a relationship between actors in the transaction such as the emotional dependence of one on the other".[110]
6. A person will be under a "special disability" or "special disadvantage" if there are circumstances seriously affecting the ability of that person to make a judgment in his or her best interests. The qualifying word "special" is intended to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make that judgment.[111]
7. The statutory form of unconscionable conduct does not necessarily require a finding of special disability or disadvantage. In ACCC v Lux Distributors Pty Ltd,[112] the Full Federal Court did not seek to identify whether elderly consumers suffered from any special disadvantage, vis a vis high-pressure, door-to-door salesmen. The Full Federal Court instead evaluated the conduct of the salesmen by reference to societal norms. The Court determined that, in determining whether the conduct contravened the statutory concept of unconscionability, it was necessary for the Court to evaluate the facts of the case before it by reference to "a normative standard of conscience" which is "permeated with accepted and acceptable community values".[113]

The Applicants' Allegations of Unconscionable Dealing

1. The Applicants' contention that the NAB engaged in unconscionable conduct is based primarily on allegations set out in the preamble to the Further Amended Points of Claim. These allegations are that the NAB engaged in fraud, misleading and deceptive conduct and breached section 119 of the Transfer of Land Act 1958. The Applicants contend that such conduct - "Ought to constitute unconscionable conduct, of the highest form".
2. I have already found that none of these allegations have been sustained [see paragraphs 85 to 121 (inclusive) above]. By reason of those findings, I conclude that the Applicants have failed to establish that the conduct of the NAB, in the registration of the CBA discharge, the registration of the Greenvale mortgage, the production of the certificate of title, or in any other dealings with Title Office documents, was attended by illegality or tainted by conduct which could be judged as being offensive to good conscience.
3. There remains an allegation in the Applicants' pleadings that Donco and Liljana "have minimum skill and knowledge of the English language". This might have been intended as an allegation of an element of unconscionable conduct in that the First and Second Named Applicants were allegedly under a special disability.[114] This statement might also have contained an implicit contention that the NAB knew or ought to have known of that disability and that it had taken unconscionable advantage.
4. Mr Robert Iloski also alleged, during the course of the hearing, that CMS owned no assets and was financially unstable at the time of the relevant transactions. If that allegation is true and, if the other Applicants did not have knowledge of these matters, then those other Applicants might arguably have been at a disadvantage in assessing the risk when entering into the various interlocking securities.
5. This latter allegation did not appear in the Applicants' Further Amended Points of Claim and no evidence was adduced to support this assertion.
6. Similarly, no evidence was adduced by the Applicants to support the assertions that Donco Iloski and Liljana Iloska were unable to comprehend the documents and/or the risks of the transaction. What limited evidence there was suggested that they were by no means innocent novices when it came to transactions of this character or complexity.
7. The chronology of their dealings up to the date of the NAB Greenvale mortgage is as follows:-[115]
   • - In October 1992, Donco and Liljana granted a mortgage over the Greenvale property to the CBA to secure a loan of $55,000.
   • - In July 1998, they executed a mortgage over their Thomastown property to the CBA.
   • - In December 1999, they secured a loan of $200,000 from the CBA to assist them to purchase a commercial property. The loan was secured by a registered mortgage over the Thomastown property and a registered mortgage over the commercial property being Lot 281 Merola Way, Campbellfield.
   • - In January 2004, they executed a second mortgage over their Thomastown property in favour of the CBA.
   • - In July 2001, they increased their loan with the CBA to a limit of $216,500.
   • - On 15 October 2006, they entered into a loan agreement with Perpetual Trustees (Vic.) Ltd for a loan facility of $256,000. Security for the loan was a first registered mortgage over their Thomastown property.
   • - Pursuant to a discharge authority submitted to the CBA on or about 25 October 2006, Donco and Liljana asked the CBA to discharge its mortgage over the Greenvale property.
   • - In or about November 2006, Donco and Liljana discharged the two mortgages granted to the CBA over the Thomastown property.
   • - In November 2006, they acquired a further loan from Perpetual Trustees Ltd in the sum of $51,752.06.
8. In addition to this experience, I note that Donco Iloski and Liljana Iloska had the benefit of several people who could act as interpreters for them.[116] Given these matters and the absence of any specific evidence on their language skills, I cannot conclude that the Donco and Liljana, were disabled or disadvantaged to the point that they were unable to make a judgment as to their own best interests.
9. Additionally, no evidence was adduced that the NAB was aware of these alleged disabilities and, by reason of such knowledge, took unconscionable advantage of the Applicants. Mere indifference to these factors by the NAB would not be sufficient. In Kakavas v Crown Melbourne Ltd,[117] the High Court concluded that:

Equitable intervention to deprive a party of the benefit of its bargain on the basis that it was procured by unfair exploitation of the weakness of the other party requires proof of a predatory state of mind. Heedlessness of, or indifference to, the best interests of the other party is not sufficient for this purpose.

1. Finally, if either Donco Iloski or Liljana Iloska were under any special disability (which I do not accept), then that disadvantage was, in the final resort, overcome by the fact that they each received independent legal advice.
2. Under the unwritten law, the provision of independent advice has long been considered highly significant in assessing whether unconscionable conduct has occurred. [118] While it is not listed as a factor under the FTA s. 8(2), that omission means little, as the list of relevant factors under sub-section (2) is not intended to be exhaustive.[119]
3. The provision of independent legal advice is significant in two ways: -
   • firstly, the provision of such advice will operate to exclude the inference that a special disability was influential in the weaker party's decision; and
   • secondly, the provision of independent advice will negate the suggestion that the stronger party took unconscionable advantage of the other party's vulnerability by demonstrating that the stronger party reasonably believed that the weaker party had in fact obtained adequate independent advice. Even if the advice to the weaker party had not, in fact, been adequate, the stronger party's reasonable belief to the contrary would mean that its consummation of the transaction could not be deemed unconscionable.
4. In Micarone v Perpetual Trustees[120] the South Australian Court of Appeal reviewed a long list of authorities to explain the impact which independent legal advice has on the assessment of unconscionable conduct. The Court observed that:

"It is not unconscionable for a lender to enforce the financial obligations of a loan agreement if the borrower has received competent independent and disinterested advice: Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395; Banco Exterior Internacional v Mann [1995] 1 All ER 936; Yerkey v Jones (1939) 63 CLR at 685-686 per Dixon J. If the lender is provided with a certificate from a solicitor stating that the debtor has been independently advised, the lender is entitled to rely upon it. In the absence of actual knowledge to the contrary, the lender is entitled to assume that the solicitor has acted competently and has given proper advice: Bank of Baroda v Shah [1988] 3 All ER 24; Bank of Baroda v Rayarel [1995[ 2 FLR (UK) 376; [1995] HLR 387; Massey v Midland Bank plc [1995] 1 All ER 929; Banco Exterior Internacional SA v Mann; Barclays Bank v Thomson [1997] 4 All ER 816; Royal Bank of Scotland v Etridge (No 2) [1998] 4 All ER 705; St George Bank Ltd v Dunstan (unreported, Supreme Court Vic, Hayne J, 10 November 1994); National Mutual Trustees Ltd v Dedrion Pty Ltd (unreported, Supreme Court, Vic, Hayne J, 18 August 1997). The lender may rely on the certificates even if, unknown to it, the advice given by the solicitor is not competent or is given in an inappropriate manner, say, where a guarantor is advised in the presence of the borrower_; Massey v Midland Bank plc_."

1. In relation to the guarantee provided to the NAB by Robert and Donco Iloski and Liljana Iloska, a solicitor in the employ of Kenyons Lawyers and acting on behalf of the Applicants,[121] provided the NAB with certificates with respect to the execution of the guarantee by each of the guarantors. In each of these certificates the solicitor stated as follows:-[122]

I certify that I am a legal practitioner instructed and employed by this guarantor independently of NAB.

I certify that I explained the effect of this guarantee and indemnity to the guarantor who appeared to be aware of and to understand the nature and effect of the obligations of the guarantor under this guarantee and indemnity and executed it in my presence.

1. The details set out in the three certificates were also confirmed by a letter sent by Kenyons Lawyers to Mr Robert Iloski on 1 September 2010. This letter said in part:[123]

Thank you for attending our office on the 31st August 2010 with your parents and the opportunity to be of assistance.

We confirm that following a lengthy conference with our Zena Yassine, she provided to you a certificate confirming that she explained to you both the general nature and effects of the below listed documents and the consequences that flow in the event of a borrower's default:

• Deed of guarantee and indemnity.
• Mortgage of Land and which mortgage included your parent's property as a secured property.
• Declaration of Guarantor.
• Statutory Declaration.

We confirm our advice that the guarantee and indemnity you have provided encumbers your parents' property ...

1. Paragraph 34 of the Applicants' Further Amended Points of Claim acknowledges that the solicitor insisted that Robert Iloski not be in the same room as Donco and Liljana when the lawyer advised his parents of the nature and effect of the security documents.
2. On this evidence, I find that Donco Iloski and Liljana Iloska received independent advice in relation to the security documents. There is no reason to doubt that this advice was competent. The surrounding circumstances indicate that the Applicants' solicitor was both cautious and procedurally thorough. That being so, I find that the Applicants have not established that either Donco or Liljana were under any special disadvantage in their dealings with the NAB.
3. I further find that, in any event, the NAB was entitled to rely upon the certificates provided by the solicitor acting for the Iloski family and was further entitled to assume that the independent legal advice was competently given. That being so, I find that the Applicants have also failed to establish that the NAB took unconscionable advantage of any special disability.
4. More fundamentally, I find that there is nothing in the circumstances of this case that would indicate other than that each of the Applicants entered into these transactions with their eyes wide open and with a full understanding of what they were doing. The NAB's commercial accommodation of the Applicants' requests for loans, of itself, cannot amount to unconscionable conduct. On the facts, I can see no evidence that the NAB's conduct was attended by any moral fault, lack of moral responsibility or a breach of any of the normative standards of commercial conduct.
5. For the reasons set out in paragraph 137 and paragraphs 148 to 166 (inclusive) above, I reject the contention that the NAB acted unconscionably towards any of the Applicants in relation to the provision of the home loan, the CI facility or the related securities. I dismiss this claim.

Allegations of Unconscionable Conduct in the Enforcement of the Securities

1. The Applicants alleged that the NAB acted unlawfully in the enforcement of its securities because:

1. the Applicants had never given up possession of the Greenvale property;[124] and 2. the NAB had not obtained a court order for possession of the property and had no lawful right to sell the property;[125] and

1. the Applicants had discharged the home loan mortgage by paying the sum of $200,000 to the NAB on 16 May 2014, prior to the mortgagees' auction.[126]
2. The Property Law Act 1958 (Vic) s.101 confers a statutory power of sale on mortgagees. This power is also contained in the mortgage document. There are, however, certain legal steps that a mortgagee must follow in the enforcement of the security. The TLA sets out the requirements for the exercise of this power.[127] Essentially, the mortgagee must issue the mortgagor with a default notice and, if the default is not remedied within the required time, obtain possession of the real property.
3. The default notice, in turn, must meet some general requirements. For instance, the default notice must be clear, accurate and unambiguous so that the defaulting mortgagor may fully understand the nature of the default and what actions are required. The mortgagor must also be given the opportunity to remedy the default within a specified time.
4. When the mortgaged property is unoccupied, the mortgagee may obtain possession by simply entering and securing the property, there is no requirement for the mortgagee to obtain an order for possession from a court before doing so. I note that the NAB obtained possession of the Greenvale property in this manner (see paragraphs 173 to 179, below).
5. On the evidence, I am satisfied that default notices, pursuant to s.76 of the TLA were served upon the Applicants. I am further satisfied that these notices complied with the requirements set out under the TLA.[128] At no time did the Applicants or the lawyers acting on their behalf take any issue with validity or service of the default notices.
6. I accept the evidence of the NAB that its agent took possession of the Greenvale property on 1 August 2013. At that time the agent found that the property was a vacant building site. From the weathered appearance of the partially built structures, the agent concluded that no building work had been conducted on the site for some considerable time. There was no sign of habitation at the site. The Possession Report states in part:

I attended the property on the 1st August 2013 and took possession of the property on behalf of the Bank

The property comprises a partly completed residential development secured by temporary fencing. I wired together panels of the temporary fencing that had separated and chained and padlocked the entrance panels. A possession notice was posted at the front entrance.[129]

1. The NAB's agent appears to have inspected the property thoroughly. The agent took numerous photographs before repairing the security fence, posting a possession notice and padlocking the gate.
2. The NAB's agent had previously visited the Greenvale property on 25 July 2013. On that prior occasion, the agent had also found the property to be unoccupied.[130]
3. The details in the agent's reports conflicted with the evidence given by Mr Robert Iloski. He said that the Applicants had never given up possession of the site. He said that he lived in one of the cellars and was there every day up to 7:00 pm at night. He said that he was living at the site on 1 August 2013. He said that he would certainly have seen anyone who had entered the property on that date.
4. Mr Iloski was shown the agent's report. Mr Iloski said that the photographs that appeared in the report had actually been taken by him. He could not explain how they came to be in the possession of the agent.
5. Earlier in his evidence,[131] he had said that the Applicants had first learned that the NAB intended to exercise its power of sale when his father, Donco, drove past the property one day and noticed that a "For Sale" sign had been erected.
6. This evidence only confirms my view that Mr Robert Iloski is an unreliable witness. I do not believe that he was living in a cellar at the Greenvale property at this time. It is inconsistent with his prior statement that his father was the first to notice that a "For Sale" sign had been erected. Neither he nor the other Applicants nor their lawyers had ever suggested that the NAB had not obtained lawful possession of the property or that it was not lawfully entitled to exercise its power of sale. I note that when this latter proposition was put to Mr Robert Iloski, that was one of several instances where he declined to give a responsive answer.[132]
7. Mr Iloski's evidence is refuted by other contemporaneous details. I note that the Applicants' lawyer requested that the auction be postponed so that the Applicants might pay out the combined home loan and CI facility liabilities. The Applicants were certainly not in possession of the Greenvale property and the property was subsequently auctioned without any interference by the Applicants. The NAB was not required to make any demands upon the Applicants to deliver up possession of the Greenvale property.
8. Furthermore, the Applicants must have known that the payment of $200,000 would not discharge the Greenvale mortgage. The default notices and, more particularly, the correspondence between the parties' lawyers makes this clear.[133] The lawyers acting for the Applicants made repeated proposals, on their clients' behalf, to pay out the remaining liability to avoid the auction sale. These proposals would not have been made unless the Applicants fully appreciated that the mortgage had not been discharged by the payment of $200,000 on 17 May 2014.
9. Finally, I note that there was no suggestion, either before or after the sale of the Greenvale property, that the NAB had acted unlawfully, at least not until the commencement of this proceeding in 2017.
10. By reason of the matters set out above, I find that none of the Applicants' allegations set forth in paragraph 167 (above) have been made out. That being so, I also find that there is nothing to suggest that the NAB had engaged in unconscionable conduct in relation to enforcement of its securities, including the sale of the Greenvale property.

1. The Applicants alleged that the NAB had improperly called-up the home loan mortgage because they had not defaulted on the home loan.
2. I reject this allegation. A simple reading of the security documents makes it clear that the liquidation of CMS constituted a default both under the home loan and CI's business loan.
3. Under the guarantee provided by Donco Iloski and Liljana Iloska, the Greenvale property became security for the CI business loan. The default under the home loan permitted the NAB to enforce its rights under both the home loan and the business loan (CI facility).
4. This seems to have been accepted by the Applicants. They contested the "default" on more fundamental bases. The allegations contained in the Further Amended Points of Claim, on this point, were twofold. The Applicants:
   • firstly, "denied that the home building loan had a corporate guarantor named Creatd Motor Sports Pty Ltd guaranteeing the home building loan";[134] or, in the alternative
   • said that "even if CMS was a guarantor ...., such a guarantee is invalid and unlawful because":
     • it was a director related transaction;
     • it would be a voidable transaction;
     • it would constitute an insolvent transaction; and
     • it was unlawful for CMS to guarantee a family member.[135]
5. In relation to the first limb of this claim, Mr Robert Iloski gave evidence as follows:[136]

1. he could not remember signing the CMS guarantee; 2. the signature on the guarantee was his signature but the execution page could have been substituted from another document. The signature "could have been the signature for the overdraft account";

1. he never mentioned any issue with the CMS guarantee to his solicitors when the NAB was marketing the Greenvale property for sale; and

1. it was "highly unconscionable" for the NAB to take a guarantee from CMS because the "company stood to gain no benefit whatsoever from the home loan".
2. I find that it is far more likely than not, that Mr Iloski did execute the CMS guarantee. He admitted that the guarantee contained his signature. I reject his speculation that the execution clause could have been substituted from another document. The execution clause is clearly that of the guarantee and indemnity document, a fact corroborated by the page numbering.
3. Furthermore, I note that neither the Applicants nor their lawyers ever alleged that the home loan had been called up improperly prior to the sale of the Greenvale property or that the guarantee was manufactured. As noted in paragraph 180 above, the Applicants' conduct after paying the $200,000 on 17 May 2014, also demonstrates that they and their lawyers understood that the Greenvale mortgage secured the CI facility.
4. As for the second limb of the Applicants' allegation, I consider that this allegation is misconceived. I find that the provisions of the Corporations Act 2001 (C'th) dealing with related party transactions, insolvent trading and voidable transactions, have no application to the grant of the CMS guarantee.
5. For the reasons stated above, I dismiss this claim.

1. The Applicants seek an order requiring the Registrar of Titles to restore Donco Iloski and Liljana Iloska as the registered proprietors of the Greenvale property. For the reasons stated above, I find that no cause of action has been established to warrant the grant of this or any other relief.
2. For the sake of completeness, I would also observe that this relief was not, in any event, open to the Tribunal. This is so because the Registrar of Titles is not a party to this proceeding. Furthermore, the Greenvale property was sold to a Mr Bchinnati and then on-sold to a Mr Daniel. Neither of these purchasers are parties to the proceeding. Finally, I note that the County Court has already determined that Mr Daniel is entitled to possession of the Greenvale property as against the Applicants.[137]
3. In relation to the claim for compensation of $3M, I note that no evidence was adduced by the Applicants to support this sum.

[1] Applicants' Tribunal Book, Vol. 2 pp 466-470

[2] Further Amended Points of Claim p 2 & paragraphs 20 & 46

[6] Ibid, see Particulars under paragraph 48

[16] Further Amended Points of Claim para. 89 (b) and page 3; and see also the Applicants' Quantification of Claim contained in the Applicants' Tribunal Book, Vol. 2 pp. 562-571.

[17] Exhibit R2, County Court Judgment in CI-16-02416 para.3; Applicants' Tribunal Book, Vol. 1 Chronology (Applicants Chronology) p.1

[18] Applicants' Tribunal Book, Vol. 1 p 25

[21] Further Amended Points of Claim para. S & D; Applicants' Tribunal Book, Vol. 1, New Homes Contract pp 67 - 104

[22] Applicants' Tribunal Book Vol 1, pp. 139-142; Affidavit of Ross McNaughton (RMcN) para. 14

[23] RMcN para. 15; Applicants' Chronology p. 2

[26] Letter from Kenyons Lawyers dated 1 September 2010

[28] Applicants' Chronology p. 3; RMcN para. 23

[32] Applicants' Chronology p. 3; RMcN para. 26

[34] Further Amended Points of Claim para. 57, 58 & 59

[36] Applicants' Chronology p.3; RMcN para. 23

[42] The Applicants claim that Boutique Lawyers were engaged in November 2013 - Applicants' Chronology p. 3

[44] Tatjana is the wife of Daniel Iloski - Further Amended Points of Claim paragraph 9 & 12

[45] Further Amended Points of Claim para. 72 to 75 (inclusive) & R2

[47] RMcN para.57; Applicants' Chronology asserts that the payment was made on 16 May 2014 - see p. 4

[51] Applicants Tribunal Book Vol 1, p.20 Letter from ASIC to K&L Gates dated 3 July 2015; ASIC search pp. 27-32

[53] Respondent's Tribunal Book pp 984-986

[54] Respondent's Tribunal Book, Vol p. 286

[55] Credit Contract General Terms, Respondent's Tribunal Book, Vol. 3, p. 301

[56] Business Letter of Offer from the NAB to CI dated 30 August 2010, Respondent's Tribunal Book, Vol. 3, p. 367 - 395

[57] Transcript, 3 June 2019, p. 21, lines 1-10

[58] Ibid, lines 14-21 and lines 32-41

[60] Transcript, 3 June 2019, p. 30, lines 9-11

[67] RMcN affidavit para. 19 and Respondents Tribunal Book p.204

[68] Letter from NAB to the director of CI, dated 14 September 2010. See Respondent's Tribunal Book, Vol 3, pp. 526, 527

[80] Respondent's tribunal Book, Vol. 3 pp 814 & 815

[81] See paragraph 161 below and exhibit R1

[86] See Transcript, 3 June 2019, pp. 110, 112 113, 119, 121, 122

[87] See Further Amended Points of Claim paras. 46, 47 & 48.

[88] See Rejfek v McElroy [1965] HCA 46; (1966) 112 CLR 517

[89] See Further Amended Particulars of Claim paras. 46 & 47

[90] Transcript of Mr R. Iloski's evidence pp. 42-43

[91] [2018] VCC 144 at [3] to [14]

[94] Transcript, 3 June 19 p. 42, lines 20 - 33

[95] Affidavit of Robert Iloski sworn 30 May 2019 at p. 3, Q.4

[96] See paragraphs 77 to 83 (inclusive) above.

[97] See Pollara v Mohammed [2015] VCAT 1748; Nellaton Pty Ltd v Donawa Pty Ltd [2009] VCAT 828

[98] Russian Commercial & Industrial Bank v British Bank of Foreign Trade Ltd [1921] 2 AC 438

[99] See Cousins (Director of Consumer Affairs Victoria v Merringtons [2007] VSC 542, per Hansen J; and Noone (Director of Consumer Affairs Victoria) v Mericka [2012] VSC 101, per Sifris J; and Director of Consumer Affairs Victoria v Scully & Ors [2012] VSC 556 per Hargrave J at [16] & [17]

[101] See ACL s.2(1) - definition of services; also note that the expressions "engaging in conduct" and "conduct" are defined widely under the ACL s. 2(2)

[102] Begbie v State Bank of NSW Ltd (1994) ATPR 41-620

[103] Paciocco v Australia & New Zealand Banking Group Ltd (2016) 258 CLR525; (2016) 90 ALJR 835; [2016] HCA 28 particularly at [293] - [294] where Keane J observed that, "while a disparity in bargaining power may be necessary to attract the operation of the provision, the mere existence of a disparity is not sufficient to do so" and that the relevant provisions do not "proscribe the existence of a disparity in bargaining power as opposed to the manner of its exercise".

[104] [2005] NSWCA 261; (2005) 63 NSWLR 557 at [121]

[105] Paciocco v Australia & New Zealand Banking Group Ltd (2016) 90 ALJR 835; [2016] HCA 28 at [188]

[106] See PT Ltd v Spuds Surf Chatswood Ltd [2013] NSWCA 446; Canon Australia Pty Ltd v Patton [2007] NSWCA 246; (2007) 244 ALR 759; Pacaccio v ANZ Banking Group Ltd [2015] FCAFC 50 per Allsop CJ at [262]

[107] Director of Consumer Affairs Victoria v Scully (2013) 303 ALR 168; [2013] VSCA 292 at [22]; and see also A v B1 (No. 2) (2012)

[108] ACCC v Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 197 ALR 153 at 156 [5]

[109] Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 at 405 per Fullager J.

[110] ACCC v Samton Holdings (2002)189 ALR 76 at 92 per Gray, French and Stone JJ

[111] ACCC v Berbatis [2003] HCA 18; (2003) 197 ALR 153

[112] [2013] FCAFC 90 at [68] per Allsop CJ, Jacobson and Gordon JJ; see also ACCC v ACN 117 372 915 Pty Ltd (in liq) [2015] ATPR 42-498; [2015] FCA 368 (North J) in which it was found that the conduct of a business which prescribed medications for the treatment of male sexual dysfunction over the telephone involved the use of unfair sales tactics and contravened the ACL s. 21. This decision was affirmed in NRM Corp. v ACCC [2016] FCAFC (Flick, Murphy and Griffiths JJ).

[113] See also ACCC v National Exchange Pty Ltd [2005] FCAFC 226

[115] See CBA v Liljana & Anor [2018] VCC 144 at [3] - [13] inclusive

[116] See Rozenblit v Vainer & Vainer [2019] VSC 316 at [107] per Sifris J

[117] [2013] HCA 25; (2013) 298 ALR 35 at 68[161]

[118] See Fry v Lane (1888) 40 Ch D 312 at 322 where Kay J observed - "...where a purchase is made from a poor and ignorant man at a considerable undervalue, the vendor having no independent advice, a Court of Equity will set aside the transaction". See also Harrison v National Bank of Australasia Ltd (1928) 23 Tas LR 1 at 8 per Crisp J; Sinclair v Elderton [1900] NSWLawRp 103; (1900) 21 LR (NSW) Eq 21 at 28 per Simpson CJ; and the Contracts Review Act 1980 (NSW) s. 9(2)(h) which permits a court, when assessing whether a contract is unjust to take into account, - "whether or not and when independent legal or other expert advice was obtained by the party seeking relief under the Act."

[119] Body Bronze International Pty Ltd v Fehcorp Pty Ltd [2011] VSCA 196 per Macaulay AJA at [76] with Harper and Hansen JJA, agreeing.

[120] (1999) SASR; and see also M. Sneddon, "Unfair Conduct in Taking Guarantees and the Role of Independent Advice" [1990] UNSWLawJl 12; (1990) 13 University of New South Wales Law Journal 302, and Harrison v National Bank of Australasia Ltd (1928) 23 Tas LR 1; Collier v Moreland Finance Corp (Vic) Pty Ltd (1989) 6 BPR 13,337(NSWCA) and more recently, Murphy v Overton Investments Pty Ltd [2001] FCA 500; (2001) 182 ALR 138

[121] Kenyons, Lawyers directly accounted to Robert Iloski for their services. See Applicants' Tribunal Book, Vol 2, p. 414

[122] Respondent's Tribunal Book pp. 404, 405 & 406

[123] Applicants' Tribunal Book, p. 414;

[124] Further Amended Pints of Claim paragraph 83

[125] Further Amended Points of Claim paragraphs 81 & 82

[126] Further Amended Points of Claim paragraphs 79 & 80

[128] See Applicants' Tribunal Book, Vol. 2 pp 425-457

[129] Respondent's Tribunal Book, Vol. 2, p. 815

[130] Occupancy Report by Mortgagee Services Pty Ltd, 25 July 2013, Respondents Tribunal Book Vol. 3, p. 814

[131] Transcript, 3 June 2019 p. 21, lines 35-41

[133] See the Applicants' Tribunal Book, Vol. 2 letter from K&L Gates to Boutique Lawyers dated 23 October 2013 and reply letter dated 25 October 2013, pp 524 & 525 and exhibit R4

[134] Further Amended Points of Claim, paragraph 63

[136] Transcript, 3 June 2019, page 46, line 45 to page 47 line 38

[137] See Applicants' Tribunal Book, Vol. 2 Tab 32, County Court Order.