Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : WESTPAC BANKING CORPORATION LTD -v- McLEAN [2011] WASC 2

Appeal - Summary judgment application by bank - Alleged alteration of loan application - Allegation unsupported by admissible evidence - No evidence that bank was involved - Summary judgment entered - No error revealed

McLean and Permanent Custodians Ltd [2010] WASAT 127

Miles v Bull [1969] 1 QB 258

1 REASONS OF THE COURT: After the oral hearing, the court dismissed the appeal with reasons to be published later. These are the reasons.

2 The appellant, Ms McLean, appeals against a judgment of Kenneth Martin J dated 19 November 2010 whereby Ms McLean was ordered to deliver up possession of her property at Unit 1, 180 Kent Street, Busselton, to the respondent and to pay the respondent's costs.

3 The appellant applied for a loan of $320,000 from the respondent's predecessor in title, St George Bank Ltd (the bank). The application was in writing and dated 18 December 2007. Ms McLean in one of her affidavits, deposed that the loan application form was filled in by a 'loan introducer'. The information in the loan application form stated that the loan was for 'investment' purposes, namely to 'purchase vacant land to be developed for residential investments'. The appellant signed the form three times on the last two pages. One signature was under a declaration that the loan was used 'wholly or predominantly' for 'business or investment purposes'. Another signature was under a declaration that;

The information in this application and the financial information supporting it are in all respects correct and complete to the best of my knowledge and belief. I acknowledge that the Bank will rely on this information in deciding whether to lend to me.

4 Ms McLean then received an offer from the bank dated 30 January 2008 which read:

We offer to lend you the loan amount on the terms and conditions set out in this Offer and the separate Residential Loan Agreement General Terms and Conditions booklet.

This was signed by an officer of the bank. The offer was accepted by Ms McLean who signed under the part of the form which read in part that she acknowledged by signing the document that she declared that 'all the information you have given us is accurate and not misleading and you are aware that we are relying on it'. A mortgage was then signed by the appellant on 8 February 2008 and this was registered at Landgate on 12 February 2008. The mortgage incorporated a 'memorandum' of terms. The sum of $320,000 was then advanced by the bank to Ms McLean.

5 In 2009, Ms McLean defaulted in paying moneys due under the loan agreement. A default notice dated 15 October 2009 was served on Ms McLean, allowing time for the default to be corrected. Ms McLean failed to correct the default. As a result, the bank, under the terms of the memorandum, was entitled to possession.

6 On 10 December 2009, the bank issued a writ seeking possession. A memorandum of appearance was entered by Ms McLean and on 25 January 2010, the bank applied for summary judgment under O 14. On 1 March 2010, the respondent became the successor in title to the bank.

7 There was then a long delay while Ms McLean applied to the State Administrative Tribunal (SAT) contending that the lending arrangements were governed by the Consumer Credit (Western Australia) Act 1996 (WA) and that pursuant to that legislation, the loan arrangements should be adjusted by varying the mortgage or even discharging it because of alleged unconscionable conduct by the bank.

8 At the end of the proceedings in SAT which, as Kenneth Martin J said, 'occupied a major part of 2010 (J [35])', the President, Chaney J, held that the Consumer Credit Act (Western Australia) Act did not apply to the mortgage or the loan agreement. As a result, Ms McLean's application to SAT was dismissed: see McLean and Permanent Custodians Ltd [2010] WASAT 127.

9 The application for summary judgment was then brought on for hearing. The respondent's claim was verified by affidavit as required by O 14.

10 Ms McLean filed three affidavits. Ms McLean did not dispute the evidence that she applied for the loan, signed the loan application form, signed the loan agreement, signed the mortgage, was advanced $320,000, defaulted and did not remedy the default.

11 Apparently thinking it would help her resist the bank's claim, Ms McLean contended that certain information provided in her loan application was false. Ms McLean deposed that the misrepresentations were that the loan was for investment purposes, and that her income was $450,000. Ms McLean deposed that, in truth, the loan was not for business purposes because she intended acquiring the unit to use as a holiday house and that her income was only around $60,000 not $450,000. Ms McLean impliedly blamed the loan introducer, who Ms McLean said, filled in the loan application form. Ms McLean implied in her affidavits, but does not expressly depose, that after Ms McLean had signed the form containing the correct information, the loan introducer inserted some new pages containing the alleged false information. The affidavit was then offered in support of the unmeritorious submission that misrepresentations had been made to the bank by the loan introducer which raised a triable issue or warranted investigation at trial. The allegation, which amounted to an allegation of fraudulent alteration of the loan application, was supported by inadmissible secondary evidence. The best evidence about the document which Ms McLean said she faxed to the loan introducer, was the loan application document itself. If evidence had been led that the original could not be found after due search, then secondary evidence may have been admissible for what it was worth. However, no evidence was led that the document had been searched for and not found.

12 Counsel for Ms McLean, in written submissions, proceeded by assuming that the loan introducer was Ms McLean's agent (AB 11). Ms McLean's counsel did not seek to argue that the agent was the agent of the bank but, in oral submissions, vaguely asserted that it was a possibility. There is no evidence that the bank was a knowing participant in the alleged alteration of the document. It is also worth noting that the undisputed evidence was that the property was in fact used for business purposes and not as a holiday home. It was rented out by the appellant to a tenant who occupied the unit.

13 Kenneth Martin J was satisfied that there was no triable issue or other reason why there should be a trial and that summary judgment should be entered. Judgment was entered accordingly.

Ground 1

The Learned Judge erred in fact and law by not applying the correct principles concerning the TPA and by holding that the Loan Application did not warrant investigation using court processes.

Ground 2

The Learned Judge erred in law and fact in holding that Ms McLean signing the loan agreement avoided the effect of the statements in the Loan Application for the purposes of the TPA, when Ms McLean did not know that the information she supplied to the finance broker had been changed in the Loan Application.

Ground 3

The Learned Judge erred in law by holding that the delays caused by determining whether or not the SAT was the appropriate forum to determine this dispute was a factor in favour of granting summary judgment, and not applying principles relevant to unrepresented litigants when it was clear that Ms McLean was an unrepresented litigant for significant periods during CIV 3080 of 2010. Further, the Learned Judge erred in fact in holding that there was no evidence supporting Ms McLean's assertion that the Loan Application was false.

15 The written submissions reveal that this ground is directed to a part of Kenneth Martin J's reasons where reference was made to the alleged misrepresentations made to the bank. His Honour said:

Most of the so-called arguable representations look (if made) to me to be representations made towards influencing and harming the lender, that is, upon St George Bank by reference to statements concerning the defendant's exaggerated employment status and a falsely stated higher income. Therefore, to the extent that such representations might be argued to have any adverse causative outcomes, in terms of damage to the defendant, they rather look, if anything, on my assessment, to be causatively directed towards potentially harming the plaintiff, by misleadingly influencing it into advancing the loan to Ms McLean, by reference to her satisfying lending criteria - that the plaintiff would apply in assessing her loan application. So there are, in any event, conceptual causative obstacles for the defendant, in her resistance arguments based upon asserted misrepresentations.

Finally, it seems to me overall, that if there has been a scenario of deceit or misleading and deceptive conduct as arising between the broker ... and Ms McLean, that she holds remedies in that respect, as against the broker, that are not closed off to her by the success of the plaintiff on this application for summary judgment [82] - [83].

16 Ms McLean's written submissions settled by her counsel read as follows (the name of the loan introducer has been deleted because of the unproven allegations made against her):

1. [The loan introducer] engaged in conduct in breach of section 52(1) of the TPA, further or alternatively section 51AC(1) or section 51AC(2) of the TPA, by:
   1. Making statements in the Loan Application concerning Ms McLean which were false, inaccurate or otherwise exaggerated Ms McLean's ability to repay the loans and which Ms McLean did not consent to be made in the Loan Application;
   2. Further or alternatively, produced a composite document by attaching the signature pages from a document Ms McLean signed to a document that [the loan introducer] largely filled in herself;
2. [The loan introducer's] statements in the Loan Application either misled or deceived St George or were likely to mislead or deceive St George; and

1. Consequently, St George in effect mis-sold a financial product to Ms McLean, causing Ms McLean loss and damage.

1. Consequently, Ms McLean is entitled to remedies under the TPA.

1. As regards the Learned Judge's statement that the composite Loan Application is wholly equivocal, it is submitted that this is an error of fact for two reasons. First, the composite document is not equivocal: it is clear that someone took the signature pages from one document and attached it to a second document. This suggests that the first document contained different information than the second document. This, along with Ms McLean's evidence that the second document contains incorrect information, should have raised concerns about what was in the original document from which the signature pages were taken sufficient to warrant the issue to be investigated following the principle in Miles stated above.
2. Second, conduct that ultimately amounts to misleading or deceptive conduct or fraud may well be based on evidence that initially appears equivocal. For example, the signature that does not look quite right or the ledger that does not quite add up may appear equivocal, but in fact could be tell-tale indicators of something far more serious that should be investigated. In this case, the evidence suggests two documents have been 'chopped and changed' to create another document. Once again, this is an issue that a defendant should be entitled to investigate following the principle in Miles stated above.
3. As regards remedies, if Ms McLean was allowed to proceed by way of defence, counterclaim or third party proceedings against [the loan introducer], then she could under sections 82(1) and 87 of the TPA, obtain remedies such as damages, declarations and voiding part or whole of the loan agreement for breaches of section 51AC(1) or section 51AC(2), further or alternatively, section 52(1) of the TPA.

18 The oral submissions did not improve on the written submissions. They invite the court to speculate about the possibility of serious misconduct by other parties in the absence of any or any cogent evidence pointing in that direction in circumstances where Ms McLean has not been forthcoming in her affidavit in disclosing information which would be highly relevant to the alleged misconduct she now imputes to others. Counsel for Ms McLean submitted that 'people' might be concerned about the effect of two fax numbers appearing on two pages in the loan application but was not able to explain how any triable issue arose as a result (ts 11). There is no merit in the written or oral submissions.

19 Allegations (unsupported by evidence) that false representations were made by the loan introducer, to the bank, provide no arguable defence and give rise to no issue or question which ought to be tried. They provide no 'other reason' why there should be a trial (see: O 14 r 3(1) and Miles v Bull [1969] 1 QB 258). No error is revealed by this ground.

20 The trial judge in the course of his reasons said (at [74]):

Second, the relevance of a 2007 document needs to be measured against the overall strength of the plaintiff's case, grounded upon a different and unimpugned loan agreement of 1 February 2008, in which there is found the express declaration made by Ms McLean, as to all information stated therein, being confirmed by her as continuing to be correct.

21 Ms McLean's written submissions contend that this statement by Kenneth Martin J contains an error 'in both law and fact'. The written submissions state:

As far as Ms McLean knew, St George had made the loan on the basis of the information that Ms McLean had provided to [the loan introducer] (but which in fact had not been submitted to St George).

From the foregoing, the provisions of the documents comprising the loan that St George made to Ms McLean did not have the effect of avoiding [the loan introducer's] breach of section 52(1) of the TPA.

22 The point made in the trial judge's observations is not, with respect, entirely clear, if Ms McLean's contention was that misrepresentations in the '2007 document' induced the making of the loan agreement. However, the judge's observation on this point does not affect the judge's correct conclusion that no triable issue was raised and that judgment should be entered for the respondent. The reasons for this are given in relation to ground 1.

23 No error justifying the setting aside of the judgment is revealed by this ground.

A judge in civil proceedings should be limited to that necessary to diminish, as far as possible, the disadvantage that an unrepresented litigant ordinarily suffers when faced by a lawyer, and to prevent destruction from the traps that the adversary procedure offers to the unwary and untutored.

A court should be careful to examine what is put to it by a party in person to ensure that the litigant has not, because of the lack of legal skill, failed to claim rights or to put forward arguments which the litigant might otherwise have done.

25 At the hearing of the summary judgment application, Ms McLean was represented by a lawyer. She had been represented by another lawyer for several months during the proceedings. It seems that at times Ms McLean was unrepresented. However, she was granted great indulgence by the court which deferred the respondent's application for judgment to allow Ms McLean to pursue her futile application to SAT. Generalised references to the role of a judge when faced with an unrepresented litigant with no allegation that the litigant was in any way disadvantaged are pointless. No error has been demonstrated.

26 The appellant also refers to [79] of Kenneth Martin J's reasons which read:

Furthermore, it is also a relevant consideration that the defendant's arguments that further enquiries be allowed under the forensic process associated with a trial, are made in circumstances where there would appear to be a concerning degree of evolution in Ms McLean's position as regards this 2007 facsimile document - ranging between her bland defence of January 2010, to a position (expressed in November 2010), where she seeks to portray the December 2007 facsimile document as a complete falsity, and indeed a document of the plaintiff. No evidence supports those bare and late contentions.

27 Counsel for the appellant's written submissions read:

1. With respect, the Learned Judge's finding in Westpac at [79] that no evidence supports Ms McLean's bare and late assertions that the Loan Application was a falsity was an error of fact. This is because:
   1. Ms McLean deposes to the errors in the Loan Application (see paragraph 12 of these submissions).
   2. Falsity can be inferred from the evidence that the Loan Application appears to be a composite document.

28 By [79] his Honour was alluding to the fact that the appellant did not produce the copy document she allegedly sent to her agent and to the fact that there was no evidence that the bank was a participant, knowingly or otherwise, in making the alleged changes to the loan application. This aspect of ground 3 has no merit.

29 None of the grounds have merit. As a result, the appeal was dismissed.