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Judgment 1Nibar Investments Pty Limited seeks summary judgment in respect of a loan of some $160,000 made to Antique & Auto Investments Pty Limited, which is secured by a second mortgage held over a property at Palm Beach which is owned by Robert James Wallace, the sole director and shareholder of the company, which has its principal place of business at the property. Mr Wallace guaranteed the repayment of the loan. There is no issue between the parties that the loan went into default and was not repaid when it fell due in July 2012. 2There is no defence filed in relation to the amended statement of claim filed in June 2012, but the earlier defence raises a number of allegations, which it was accepted for Nibar Investments were relevant to consider on this application, even though some of them clearly ought to be pursued by way of cross-claim. 3They were firstly, that while a declaration was given that the funds advanced to Antique & Auto Investments Pty Limited were to be used for business purposes, it was known to Nibar Investments that they were to be used for domestic purposes, that is, for renovations to the Palm Beach property which Mr Wallace owns. In the circumstances it was obliged to serve a notice under s 80 of the Consumer Credit (New South Wales) Code, but had failed to do so (see now s 88 of the National Credit Code and Credit (Commonwealth Powers) Act 2010). 4Secondly, that Nibar Investments claim was estopped, because its agent had given a written representation in April 2011 that it would advance a loan of $350,000, for a term of 12 months, but after valuation of the property in May, it was prepared only to advance $160,000. Its agent later represented that additional sums to a total of $350,000 would be advanced, during the term of the loan, subject to revaluation of the property, as renovations advanced. In October 2011, a revaluation was requested. Later in October the plaintiff advised it had no further funds to advance. In March 2012, there were still no further funds available. In the result, the defendants had changed their position in reliance on the representations. 5Thirdly, in the alternative, in the circumstances the defendants were entitled to equitable set off by reason of misleading and deceptive conduct in breach of s 52 of the Trade Practices Act 1974 (Cth). The representation that the defendants could increase the loan facility by an additional amount of $190,000 was misleading and deceptive. Fourthly, that the defendants were entitled to relief under s 87 of the Trade Practices Act (Cth). 6What the defence does not suggest is what damages have been suffered. To the contrary, it suggests that the loan was applied to the benefit of Mr Wallace, when used to fund renovations to the property. 7In respect of the failure to give a s 80 notice, the plaintiff's reliance on what was decided in Monas v Perpetual Trustees Victoria Limited [2011] NSWCA 417, appears sound. There it was concluded that Davies J's conclusions in Bank of Queensland Ltd v Dutta [2010] NSWSC 574, were correct. Davies J had to consider an argument that a s 80 notice which did not mention subsequent defaults was not valid. His Honour said that proceedings in disregard of s 80 could not be regarded as a nullity; that s 80(4)(c) could authorise the credit provider to begin enforcement proceedings; that s 170 of the Code provided that "a credit contract, mortgage or guarantee or any other contract is not illegal, void or unenforceable because of a contravention of this Code unless this Code contains an express provision to that effect," ; that the proceedings were not a nullity; and that s 80 did not require that they be dismissed. At [146] his Honour said: "All that s 80 does is to provide a penalty for commencing the proceedings without serving a notice. It contains no express provision that the credit contract or mortgage is unenforceable." 8In Monas it was accepted at [44] that 'proceedings commenced in breach of s 80 involve at worst an irregularity.' It follows that the failure to give a s 80 notice, if it is established that the Code applied to the loan, will not provide a defence to the claim. 9That it is likely that such a claim will be established, is difficult to see, given that the loan was not made to Mr Wallace, but to Antique & Auto Investments Pty Limited. The loan was used to fund renovations to the property which Mr Wallace owns and where he resides and where the company conducts its business. Those circumstances do not necessarily make the business purpose declaration given false, nor do they readily appear to bring the loan within the reach of the Consumer Credit Code. 10It is also difficult to see that the complaints made in relation to the failure to lend a further $190,000 provide a defence, by way of any estoppel. The original written representation as to a loan to Antique & Auto Investments Pty Limited of $350,000 or 70% of valuation depended on valuation of the property which was to secure the loan. The valuation obtained was inadequate, with the result that only $160,000 was offered. The alleged oral representation of further loans depended on re-valuation of the property. While the defence alleges that the plaintiff later had no further funds to lend, it does not claim that during the term of the loan there were revaluations which would have supported further borrowings. 11A change of position, in this case Antique & Auto Investments Pty Limited's entry into the loan, induced by a representation, in this case the advance of further loans, will only give rise to an estoppel, if a detriment flowed from the reliance on the representation which was later departed from (see Grundt v Great Boulders Pty Gold Mines Ltd [1937] HCA 58; (1938) 59 CLR 641 at 674). The defence does not plead such a detriment. 12Given that it is claimed that Antique & Auto Investments Pty Limited used the money to fund the renovation of Mr Wallace's property, which secured the loan, that detriment resulted from entry into the mortgage and guarantee, is not readily apparent. Such damage is also an essential element of a claim under the Trade Practices Act (Cth) (and its successor) 13Mr Wallace appeared unrepresented. He explained that the incentive for entering the loan was the promise of extra funds being forthcoming once the renovations had advanced. The renovations had to cease when further funds were not available. Damages resulted because it took longer then to complete the renovations and because he had to undertake work himself, rather than using professionals, so that in the result, the property had not realised its full potential. 14Mr Wallace also explained how he relied on the National Consumer Credit Code, given that the directors of Nibar Investments Pty Limited were always aware that he intended to use the loan to fund his home renovations. 15Mr Wallace has taken some legal advice and sought the opportunity to amend his pleadings and to bring a cross-claim, in circumstances where the property is due to be auctioned on 1 November. On his case that would not only maximise the return achieved on the sale of the property, but would also provide the best evidence of its value in the marketplace, a critical issue to the matters over which the parties would join issue in the proceedings. 16Such leave was opposed by Nibar Investments, even though it accepted that its original pleadings had been deficient. It argued that there had been ample opportunity for the defendants to amend their defence, after the amended statement of claim was filed in June. 17In determining the contest between the parties the test which must be considered is that discussed in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125. The defendants' pleadings are admittedly deficient, but Nibar Investments has the onus of establishing that their claims are so obviously untenable that they cannot possibly succeed; that they are manifestly groundless and do not admit of argument. Also to be considered is the requirements of the Civil Procedure Act 2005, which by s 56 obliges the Court in exercising its discretions to have regard to the overriding purpose, the just, quick and cheap resolution of the real issues in the proceedings. In this case what they are is probably not identified by the defence, but may be specified by a properly pleaded defence and cross-claim. 18The considerations raised by s 57 as to the objects of case management also arise for consideration, as do the provisions of s 60 as to proportionality of costs. The Court must seek to act in accordance with the dictates of justice (s 58). 19It seems to me, on balance and not without some hesitation, particularly having in mind the General Steel test, while the defence and proposed cross-claim do not appear to have strong foundations, they are not claims which can properly be considered to be so obviously untenable that they cannot possibly succeed; that they are manifestly groundless and do not admit of argument. 20In the result the defendants should, in my view, be given a final opportunity to amend their pleadings, but that in the circumstances the price of that indulgence must be that they pay the costs of the motion. 21Given what lies between the parties, I also make the obvious observation that it would be very much in their interests to promptly attempt to resolve what lies between them by way of sensible discussions. I urge the parties to pursue such discussions with some alacrity.