PERPETUAL TRUSTEE COMPANY LIMITED -v- NIKOLOFF [2020] WASC 389 (28 October 2020)

(a) the affidavit of Emma Louise Fielding, a legal administrative assistant employed by the firm Dentons (the firm representing the plaintiff), sworn on 9 December 2019;

(b) the affidavit of Shiraz Mohamed, Manager, Group Collections, employed by RESIMAC Limited (the mortgage manager for the plaintiff), sworn on 2 December 2019 (the first Mohamed affidavit); and

(c) the affidavit of Tamara Elise Strack, a solicitor employed by Dentons, sworn 16 December 2019.

1. The following further affidavits were also filed on behalf of the plaintiff:

(a) the affidavit of Shannon Jade Clohessy sworn 15 January 2020 (the first Clohessy affidavit);[1]

(b) the affidavit of Shannon Jade Clohessy sworn 20 January 2020 (the second Clohessy affidavit); and

(c) the affidavit of Shiraz Mohamed sworn 14 February 2020 (the second Mohamed affidavit).

1. An amended chamber summons for summary judgment was filed on 10 March 2020, by which the plaintiff seeks judgment on the defendant's counterclaim pursuant to the RSC O 16, in addition to judgment on the plaintiff's claim. A written outline of submissions in support of the amended application was also filed on behalf of the plaintiff on the same day.
2. On 5 February 2020, the defendant filed six affidavits sworn in opposition to the application. Each has a separate title, as follows: Banks Superior Power; No Loss; Unconscionable Interest Rate Increases; Misleading Information; Loan Agreement; and Unfair Treatment. The defendant's written outline of submissions was filed on 10 March 2020.

1. The principles with respect to the court's power to order summary judgment are well established and may be summarised as follows.
2. An application for summary judgment pursuant to the RSC O 14 r 1 must be supported by an affidavit verifying the facts on which the claim is based and stating that there is no defence to the claim.[2] A defendant may show cause against an application for summary judgment by affidavit or otherwise to the satisfaction of the court.[3]
3. Ordinarily, a party is not to be denied the opportunity to place their case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes.[4] Accordingly, summary judgment must be granted only in the clearest of cases, where there is a degree of certainty about the ultimate outcome of the proceeding if it went to trial.[5] Put another way, the power to order summary judgment will not be exercised unless it is clear that there is no question to be tried.[6]
4. The plaintiff, in bringing the summary judgment application, bears the legal onus of establishing that there is no real question to be tried. But, once the plaintiff has satisfied the requirements of the RSC O 14, it has a prima facie right to an order for summary judgment, and the evidentiary burden falls on the defendant to satisfy the court that there is a triable issue or an arguable defence.[7] To do so, it is necessary for the defendant, whether by affidavit or otherwise, to 'condescend upon particulars' and provide sufficient details of her defence.[8]
5. An application for summary judgment is to be determined on the basis that the version of facts put forward by the respondent to the application, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action.[9] The court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent.[10] If after argument there remains real uncertainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused.[11]
6. Although there is no express power in the RSC O 16 allowing a plaintiff to seek summary judgment against a defendant on a counterclaim, it has been accepted that the court has the power in its inherent jurisdiction.[12]
7. The parties were informed by the court that the amended application for summary judgment would be determined on the papers and the parties were given the opportunity to file supplementary submissions. The defendant elected to supplement her original submissions by an email communication to the court received on 1 April 2020 and copied to the plaintiff's representatives. The amended application has proceeded to be determined on the basis that the plaintiff relies on the affidavits filed in the proceeding in support of its applications pursuant to the RSC O 14 and O 16, and the defendant relies on the affidavits filed in the proceeding to show cause against such applications.

1. A statement of claim was filed on behalf of the plaintiff, in which the plaintiff claims that the defendant entered into a loan agreement on or about 6 January 2014, which was varied on or about 13 November 2014. The plaintiff says that it advanced to the defendant $760,000 (described as the loan amount), comprised of $170,000 on account number 521001555000113A (the first loan account), and $590,000 on account number 521001555000113C (the second loan account). Further, the plaintiff says that the defendant agreed to repay the loan amount to the plaintiff in accordance with the terms and conditions of the loan agreement.
2. The plaintiff contends that the defendant secured the repayment of the amount owing under the loan agreement by first registered mortgages in favour of the plaintiff over her properties at:

1. The plaintiff says that the loan agreement and the mortgages incorporated by reference the terms contained in:

(a) the plaintiff's Specialist Lending Loan Agreement General Terms dated May 2012 (General Terms); and

(b) the Memorandum of Common Provisions registered number L478490 (Memorandum of Provisions).

1. The plaintiff refers to and relies upon the Memorandum of Provisions, which states that:

(a) the defendant would be in default if she did not pay any of the amount owing under the loan agreement when it was due;

(b) if the defendant was in default, the plaintiff may issue the defendant with a notice specifying the default and providing a period of time within which the default may be rectified; and

(c) if a default is not rectified within the time specified in the notice the whole of the amount due under the loan agreement and the mortgages would become immediately due and payable and the plaintiff may sue the defendant for the amount owing and take possession of the mortgaged properties.

1. The plaintiff contends that the defendant defaulted on repayments due under the loan agreement and a default notice was issued on 3 May 2019, requiring repayment of the arrears. The defendant was given notice that she was in default, and that if the default was not rectified within the time specified in the notice, the whole of the amount owing pursuant to the loan agreement would become immediately due and payable and the plaintiff would commence enforcement proceedings.
2. The plaintiff pleads that the defendant failed to rectify the default within the time specified in the notice and the whole of the amount owing pursuant to the loan agreement is due and payable; and the plaintiff is entitled to possession of the mortgaged properties.

Does the plaintiff have a prima facie case for judgment against the defendant on the plaintiff's claim?

1. By the affidavits filed in support of the application, the plaintiff has verified the facts on which the plaintiff's claim is based.
2. By the first Mohamed affidavit, Shiraz Mohamed deposed to having access to the books and records of the plaintiff with respect to the accounts of the defendant, which accounts are the subject of this proceeding. Shiraz Mohamed verified the contents of the statement of claim to be true and correct in every particular.[13]
3. Among other things, Shiraz Mohamad also deposed to:

(a) the plaintiff and the defendant having on or about 6 January 2014 entered into the loan agreement, which was varied in writing on or about 13 November 2014, and the plaintiff having advanced the loan amount to the defendant: par 4;

(b) the defendant having agreed to repay the loan amount to the plaintiff in accordance with the terms and conditions of the loan agreement: par 4(b);

(c) the defendant being the registered proprietor of the mortgaged properties, and the defendant having secured repayment of all money payable under the loan agreement by registered mortgages over the mortgaged properties: par 3 and par 4(c);

(d) the loan agreement and the mortgages had incorporated by reference the terms contained in the General Terms and the Memorandum of Common Provisions, respectively: par 5;

(e) the Memorandum of Common Provisions providing that:

(i) the defendant would be in default if she did not pay any of the amount owing under the loan agreement when it was due;

(ii) if the defendant was in default, the plaintiff may issue the defendant with a notice specifying the default, and providing a period of time within which the default may be rectified; and

(iii) if a default is not rectified within the time specified in the notice, the whole of the amount due under the loan agreement and the mortgages would become immediately due and payable and the plaintiff may sue the defendant for the amount owing and take possession of the mortgaged properties: par 6;

(f) as at 2 May 2019, the defendant had failed to pay to the plaintiff the sums of $876 in relation to the first loan account and $8750.54 in relation to the second loan account, when those sums were due and by those failures the defendant was in default under the loan agreement and the mortgages: par 7;

(g) by a notice of default dated 3 May 2019, the plaintiff had given notice to the defendant that she was in default and that if the default was not rectified within the time specified in the notice, the whole of the amount owing pursuant to the loan agreement would become immediately due and payable and the plaintiff would commence enforcement proceedings: par 8;

(h) the defendant's failure to rectify the default within the time specified in the notice: par 9; and

(i) the deponent's belief that the defendant has no defence to the action: par 1 and par 19.

1. I accept that for the purposes of the plaintiff's application for summary judgment, on the plaintiff's claim against the defendant, there is prima facie evidence that:

(a) as at 20 January 2020, in relation to the loan agreement, the amount of principal and interest in arrears was $42,627.86; the total amount outstanding was $805,234.66; and the amount outstanding increases at a daily rate of $154.87;[14] and

(b) pursuant to the terms of the loan agreement and the mortgages, there is a debt due and payable by the defendant to the plaintiff, and interest and costs continue to accrue.[15]

1. I am satisfied that the plaintiff has satisfied the preconditions for exercise of the power to order summary judgment on the plaintiff's claim against the defendant, and has established a prima facie entitlement to judgment on the claim. The affidavits relied upon do verify the essential elements of the cause of action on which the application for summary judgment is based.
2. Once the plaintiff has established a prima facie case, the evidentiary onus shifts to the defendant to demonstrate that there is an arguable defence or other reason for trial. To do so, it is necessary for the defendant, whether by affidavit or otherwise, to 'condescend upon particulars' and provide sufficient details of her defence.[16]

1. Given the defendant's lack of legal knowledge, some flexibility and allowance needs to be made when considering the papers filed in order to identify the true substance of the case which the defendant endeavours to present.[17]
2. The defendant filed six affidavits in opposition to the application. I have read each of the affidavits carefully and I accept that the plaintiff accurately characterised the matters presented by the defendant as raising four issues. First, that the loan was securitised by the plaintiff without notice to the defendant. Secondly, that the loan agreement is void for uncertainty by virtue of the terms concerning the variable interest rate. Thirdly, that the defendant entered into the loan agreement under the mistaken belief that the variable interest rate under the loan agreement would always align with the Reserve Bank of Australia (RBA) cash rate. Fourthly, that the plaintiff has engaged in unconscionable conduct in its dealings with the defendant.[18]
3. While the counterclaim filed by the defendant is not in a proper form, it traverses a sub‑set of the issues raised in the affidavits. By the counterclaim, the defendant makes an unquantified claim for damages and seeks unencumbered titles to the mortgaged properties.[19]

1. An application for summary judgment must be made within 21 days after appearance, or at any later time with the leave of the court.[20] The application was made on behalf of the plaintiff in relation to its claim against the defendant and the counterclaim outside of the prescribed period and leave is required.
2. It is well established that there are no set guidelines as when leave to apply for summary judgment out of time will be granted and the burden is on the applicant to show the delay is justifiable in all of the circumstances.[21]
3. The plaintiff contends, and I accept, that the delay in bringing the applications was not extensive.[22] The parties have not incurred any unnecessary expenses during the period of the delay, and the defendant has not identified any general or specific prejudice arising from the delay. In the circumstances, it is appropriate that leave be granted.

Is there is a question which ought to be tried?

1. An evidential burden is cast on the defendant to show why judgment ought not be given for the plaintiff on the plaintiff's claim. The defendant raises four issues and I address each in turn below. Consideration of the same issues informs the question of whether the plaintiff is entitled to judgment on the counterclaim.

1. The defendant complains that the loan was securitised by the plaintiff without notice to the defendant. In the affidavit of the defendant titled 'No loss', the defendant deposes to the plaintiff having '... said yes to the loan and then promptly on sold the loan'. The defendant complains that there was 'no mutual obligation to perform'.[23] The evidentiary foundation proffered for the complaint is the loan agreement. In this regard, the defendant makes the following assertion:

The Loan Agreement refers to 'mortgage pool 500' which indicates to me that they then on sold the loan, for a profit, through securitisation, before I even signed the loan agreement.

1. In the affidavit titled 'Misleading information', the defendant says:[24]

The loan agreement is not valid. There was a misrepresentation of fact which led me to an incorrect assumption on which I signed the contract; believing that Perpetual Trustee Company actually loaned its own money or assets, including money or assets that that it may have borrowed from another institution. I did not have full disclosure that the loan was sold before I signed the loan agreement.

...

Perpetual Trustee Company has on sold the loan through securitization and yet did not let the borrower know. Other organisations that on sell a client's portfolio must let them know, i.e. Property Managers must let owners know when they have sold their rent roll. Finance Brokers must let us know that they will be earning commission and yet lending institutions do not let us know that when they will no longer hold our loans.

The loans are no longer on their balance sheets.

1. I accept that there is no evidence of securitisation in this case, there is mere assertion by the defendant. In any event, the asserted 'securitisation defence' is doomed to fail. Securitisation would not provide the defendant with a viable defence to the plaintiff's claim, nor counterclaim, for the reasons set out in Westpac Banking Corporation v McLean.[25]
2. The plaintiff notes that it appears that the defendant not only contends that there has been a securitisation which invalidates the loan agreement and mortgages, but also that there has been a lack of notice of securitisation which invalidates the loan agreement and mortgages. In this regard, to the extent that the defendant asserts that it is the lack of notice of any securitisation that invalidates the loan agreement and mortgages, I accept that:

(a) the terms of the loan agreement and mortgages provide that the plaintiff can assign or otherwise deal with its rights in any way and there is no requirement in the loan agreement or mortgage for notice of any assignment to be given to the defendant; and

(b) if there had been an assignment of rights by the plaintiff, until such time that a notice is given to the defendant under the Property Law Act 1969 (WA) s 20, the legal right to sue for and recover the debt remains with the plaintiff as the registered mortgagee.[26]

1. The defendant complains that the loan agreement lacks certainty and it appears that she challenges the enforceability of the loan agreement and the mortgages on this basis. The complaint is articulated in the defendant's affidavit titled 'Unconscionable interest rate increases' in the following terms.[27]

Perpetual Trustee Company Limited is a corporation and the main function of a corporation is to make profit. When I signed the loan agreement it was under the belief that the interest rate is varied in relation to the RBA cash rate which reflects the economy; I did not think I was signing an open contract that allowed the bank to charge me whatever interest they wanted at their discretion. How does that give me any certainty - indeed the contract is no longer valid. In addition, 4.84% on $760,000 is the same if the RBA rate is 10% or 1%; the profit to the Company does not change. However, because they have the superior-power they arbitrarily increase interest rates, thus increasing profit margins at the expense of their customers. Forcing me, unfairly, into a position of not being able to pay the exaggerated interest rates. Had interest been calculated correctly my account is in good standing. Indeed, I have months of prepaid interest. In the, present day scenario, the performance of the contract is extremely difficult and costly by virtue of events occurring after the contract was formed.

1. In the counterclaim, the defendant complains that the plaintiff has unfettered discretion in relation to the rate of interest that is applied. The issue is also addressed in the defendant's submissions at page 3.

1. The loan agreement provides for a split of the loan amount into portions and, in relation to the calculation of the per annum rate of interest, the application of the variable rate option.[28]
2. The General Terms, which terms are incorporated by reference in the loan agreement, set out the defendant's obligation to pay interest and prescribe the per annum rate of interest payable by the defendant under the variable rate option. The relevant terms are reproduced at sch A to these reasons.
3. At par 23 of the plaintiff's submissions, the plaintiff conveniently summarised these terms. As noted by the plaintiff, cl 8.1 provides the defendant must pay interest on the 'balance owing on the loan account', or sub-accounts where the loan is split, calculated daily at the 'annual percentage rate'.[29]
4. Part 9 concerns interest rates and cl 9 concerns interest rates under the variable rate option. As noted by the plaintiff, when a borrower has a 'Alt Doc loan', whenever the loan or a portion of it is under the variable rate option, cl 9.1 provides that the 'annual percentage rate' is the 'specialist lending variable rate' most recently notified to the borrower.[30]
5. Clause 9.2 provides that the plaintiff may change the 'annual percentage rate' at any time.[31]
6. The term 'specialist lending variable rate' is defined in cl 34 to mean the rate the plaintiff publishes from time to time as the plaintiff's advertised 'specialist lending variable rate' or a name the plaintiff substitutes for that name.[32]
7. The plaintiff further notes that cl 30 concerns written notice of changes to variable rates.[33]

1. As recently observed by Martin J in Teng v Clark [No 2],[34] principles of Australian contract law concerning uncertainty of contract are reasonably settled, however, there are somewhat fine distinctions as to ways a contract may be said to fail for uncertainty (either as to a lack of intention to contract or, the lack of certainty, or sufficiency in the settled upon contractual terms). His Honour's summary of the relevant principles is reproduced below, and I respectfully adopt the same.
   1. The principles as to uncertainty were set out by Ipp J in Anaconda Nickel v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 [21] - [33]. As his Honour noted at [23] '[I]t is not possible to divorce issues of completeness and uncertainty from the intention to contract'.
   2. However, as to a distinction in the doctrine of uncertainty, McLure JA (as her Honour then was) observed in Australian Goldfields NL (in liq) v North Australian Diamonds NL [2009] WASCA 98; (2009) 40 WAR 191 [6]:

There are two limbs to the uncertainty doctrine. A contract (or a term thereof) is void for uncertainty if (1) all the essential and critical terms of the bargain have not been agreed upon or (2) the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 436 - 437; Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101. Under the first limb, the contract is incomplete. Under the second limb, the court is unable to attribute a meaning to the language used by the parties. I refer to the latter as linguistic uncertainty. Both limbs apply only to essential terms.

1. Towards contractual uncertainty, her Honour also noted in First Trade Consulting Pty Ltd v GRD Kirfield Ltd [2006] WASCA 175 [56] - [57] that a contract can be uncertain in a variety of ways, including by the contract being vague, ambiguous, contradictory, meaningless or incomplete.
2. As observed by Martin J, where requisite intention is found, and the issue is whether there is uncertainty as to terms warranting voiding the contract, the principles to be applied are as follows.
   1. ... Menzies J in Thorby v Goldberg [1964] HCA 41; (1964) 112 CLR 597, 607 cited with approval the observations of Sugerman J in the Full Court of the Supreme Court of New South Wales below (more recently was also cited with approval in this court by Buss JA (as his Honour then was) in Australian Goldfields NL at [139]):

It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention.

1. A mere omission of a term will not itself lead to a contract being rendered uncertain and therefore void. It is only in a situation where an essential term is omitted that the effect on the contract will for it to be found uncertain (Anaconda Nickel [29] and Australian Goldfields NL [140])
2. Furthermore, when looking at terms of a contract, the ambiguity of a term does not necessarily equate to a conclusion of legal uncertainty. In Anaconda Nickel, Ipp J outlined the approach to be taken as being that expressed by Barwick CJ in Upper Hunter County District Council v Australia Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429, 436 - 437:

But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. ... So long as the language employed by the parties, to use Lord Wright's words in G Scammell & Nephew Ltd v Ouston [1941] AC 251 is not 'so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention', the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved. (Emphasis of Martin J.)

1. In other words, simply because there may be a level of disagreement as to the interpretation of a term within a contract, does not mean that there is legal uncertainty resulting in the avoiding of that contract. As Gibbs CJ said in Meehan v Jones [1982] HCA 52; (1982) 149 CLR 571, 578 '[i]t is only if the court is unable to put any definite meaning on the contract that it can be said to be uncertain'.
2. Of course, in undertaking an inquiry as to uncertainty, a court should, if possible, adopt a construction that would uphold the validity of a contract. Or, as Kirby P (as his Honour then was) observed in Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) BPR 14,551, 14,570 'courts should be the upholders of bargains and not their destroyers'.
3. There are a number of decisions which consider interest rate clauses in loan agreements and uncertainty.[35]
4. In Kabwand Pty Ltd v National Australia Bank Ltd, the Full Court of the Federal Court considered whether an interest clause in a loan contract in the following terms was void for uncertainty:

Interest shall initially be calculated at the rate set out in Item 3 in the Schedule but the Bank may at any time hereafter at its sole discretion vary either by way of increase or decrease the said rate of interest conforming with general movements in the Bank's interest rates without any obligation on the Bank to notify you of such variation.

1. The Full Court of the Federal Court identified from the submissions made three distinct principles concerning uncertainty and its effects. First, that it is beyond dispute that if parties to a contract do not agree upon a fundamental term there will be no contract at all. Secondly, that it is an objection to a contract if one party is left to choose whether that party will perform it. Thirdly, that there can be no concluded bargain if a vital matter has been left to the determination of one of the parties.[36]
2. In Kabwand, whether interest was, in the context of a loan, a vital matter, was not debated. The issue raised was whether the right to interest infringed the third principle. In this regard, it was held that:[37]

Whatever may be the case where a loan agreement provides that the lender may select any interest rate it pleases, the present case is not that case. Here the rate of increase or decrease of interest must conform to the general rates of interest charged to customers of the bank, that is to say there is an objective market standard to be applied at all times. In these circumstances we do not think that it can be said that any of the three principles sought to be applied have application. As the trial judge said, and we agree, the present clauses as to interest are 'not to be construed as giving to the cross-claimant a power at large. A borrower may challenge any increase on the basis that it has been fixed otherwise than in conformity with the general movements referred to'.

Accordingly the clause in our opinion is not void for uncertainty and the appellants' argument as to the cross-claim must fail.

1. In contrast, in Cross v National Australia Bank Limited,[38] Drummond J held a provision in the lease, which empowered the lessor (which was a bank) to recover interest from the lessee on any arrears of rental and on the accelerated future rentals from the due dates until payment 'at such rate as is determined by the bank from time to time' - it not being suggested that this could be read as a reference even to the bank's own benchmark rate -was void and illusory, but severable.
2. In Perpetual Nominees Ltd v Parist Holdings Pty Ltd, Brereton J observed that the decisions of Kabwand and Cross, among others, establish that while determination of the price or payment under a contract may be left to the party entitled to receive the price or payment, that will be so only where there are criteria - either express, or such implied criteria as 'fair and reasonable' - by which that party's decision can be tested, and that where an express formula is provided, there is no room to imply criteria such as 'fair and reasonable'. His Honour observed that in Kabwand there were such criteria; in Cross there were not.[39]
3. In Perpetual Nominees Ltd v Parist Holdings Pty Ltd, provision for the payment of interest was by reference to a Benchmark Rate, which was defined to mean:[40]

the rate is determined by the lender on 1 December 2004 and then as redetermined by the lender quarterly on or about the first business days of January, April, July and October in each year. The lender will (but without having any obligations to do so) when determining and redetermining the Bench Mark Rate refer to the level at which 90 day bank bill products have been trading by the major Australian trading banks rounded up to the nearest five basis points. (Emphasis added)

1. It was argued that there was no valid provision for the determination of the Benchmark Rate, on the basis that the definition set out above left the fixing of a substantial obligation under the contract entirely to the discretion of one of the parties.[41]
2. Brereton J concluded that the provision must be read as leaving the Benchmark Rate to be determined by the lender without any constraint or reference criteria, such that it was distinguished from the case of Kabwand and bought it within the judgment of Drummond J in Cross.[42] Accordingly, the clause was void and furthermore, it was not open to substitute a 'fair and reasonable rate'.
3. Following Cross, Breneton J determined that the void provision was severable, leaving the other components of the equation intact, so that there remained the obligation to pay interest at the margin rate.

1. The defendant's complaint that the terms of the loan agreement is uncertain and is therefore invalid because it allowed the plaintiff to charge her 'whatever interest they wanted at their discretion' is properly understood as being a complaint as to a lack of certainty, or sufficiency in the settled upon contractual terms, rather than a lack of intention to contract. In this case, the issue raised by the defendant enlivens consideration of whether there has been an infringement of the third principle, since this is not a case in which the parties have not agreed on a fundamental term, nor is it a case in which one party has been left to choose whether it will perform the contract. On a plain reading of the terms of the loan agreement, it cannot be said that the language is so obscure and so incapable of any definite or precise meaning that the court is unable to a tribute to the parties any particular contractual intention.[43]
2. Under the loan agreement, while the plaintiff may change the 'annual percentage rate' at any time, the 'annual percentage rate' is not a rate that may be determined by the plaintiff with unfettered discretion. The 'annual percentage rate' at any time for the loan is the 'specialist lending variable rate', being a rate published from time to time as the plaintiff's advertised 'specialist lending variable rate', or a name the plaintiff substitutes for that name. The 'specialist lending variable rate' does not apply solely to the loan in question but all customers of the plaintiff taking a loan of the same kind and so, to adopt the language of Kabwand at [50382], this clause requires the interest rate to 'conform to the general rates of interest charged to customers of the bank, that is to say there is an objective market standard to be applied at all times'.[44]
3. In this case, as in Kabwand, borrowers under a specialist lending variable rate 'may challenge any increase in the rate of interest applied on the basis that it has been fixed otherwise than in conformity with the general movements referred to'. It follows that it is not arguable that the provisions of the loan agreement as to interest are void for uncertainty.[45] In light of the authorities, there is no need to consider whether it is arguable that the interest provision is not severable from the contract.
4. I accept the plaintiff's submission that the terms of the loan agreement in this case are comparable to the terms that were considered in Kabwand and Lomas, and distinguishable from the term that was considered in Parist.
5. If after considering the issue raised by the defendant there remains real uncertainty as to the plaintiff's right to judgment without further investigation of the facts, summary judgment must be refused. However, for the reasons set out above, I am satisfied that there is no real question to be tried in relation to the interest rate applicable under the loan agreement and the question of uncertainty.

1. The defendant says that she entered into the loan agreement under the mistaken belief that the variable interest rate under the loan agreement would always align with the RBA cash rate. She says that:[46]

... When I signed the loan agreement it was under the belief that the interest rate is varied in relation to the RBA cash rate which reflects the economy; I did not think I was signing an open contract that allowed the bank to charge me whatever interest they wanted at their discretion. ...

1. As observed on behalf of the plaintiff, the defendant has stated that her belief regarding the link between a variable interest rate and the RBA cash rate arose from her dealings with a lending manager for St George in 1998;[47] but the defendant makes no contention that she was told by the plaintiff that the interest rate under the loan agreement would be tied to the RBA cash rate or that the plaintiff was aware of the defendant's mistaken belief.
2. Further, the defendant deposes to having read the note contained in the financial information table of the loan agreement, which states that the specialist lending variable rate may be changed without the defendant's consent, but that she interpreted this note to have been included 'so that the bank is able to adjust the variable interest rate up or down in line with the RBA rate'.[48]
3. There is no evidence that the defendant queried the meaning of the note with the plaintiff or informed that plaintiff of her interpretation of the note.
4. I accept the plaintiff's submission that there is nothing in the wording of the note, or on a plain reading of the loan agreement a whole, that is capable of giving rise to the interpretation suggested by the defendant.
5. I accept the plaintiff's submission that the terms of the loan agreement with respect to the interest rate, and the plaintiff's rights to vary the interest rate, are clear on the face of the documents signed by the defendant. There is no representation in these documents that the variable interest rate under the loan agreement would align with the RBA cash rate.
6. I accept the plaintiff's submission that any defence based on the defendant's misunderstanding of the terms of the loan agreement with respect to the variable interest rate must fail as there is no allegation that the plaintiff itself engaged in any specific conduct that could amount to a misrepresentation as to the variable interest rate, or that the plaintiff caused, contributed to, or was aware of the defendant's mistaken belief. As to the third issue raised, there remains no uncertainty as to the plaintiff's right to judgment without further investigation of the facts.

1. There are assertions of unconscionable conduct on the part of the plaintiff in the affidavits filed on behalf of the defendant in opposition to the application, and also in the counterclaim.
2. Significant allowance has been made when considering the papers filed on behalf of the defendant. The identification of the true substance of the case which is sought to be presented by the defendant has required a careful analysis of the papers filed. Having had regard to the nature of matters raised by the defendant, I analyse below the defendant's case to ascertain whether the defendant has an arguable defence or counterclaim based on unconscionable conduct in equity, and further or alternatively, based on statutory unconscionable conduct.

1. To establish in equity that the plaintiff acted unconscionably, the defendant must prove: first, that the defendant suffered from a special disadvantage (or special disability) which seriously affected her ability to make a judgment as to her own best interests; and secondly, that the plaintiff unconscientiously took advantage of that special disadvantage. The second element generally requires that the plaintiff knew or ought to have known of the existence and effect of the special disadvantage.[49]
2. Assuming as I must that the defendant's evidence is accepted at trial, in my view, unconscionable conduct in equity is not arguable.
3. The adjective 'special' emphasises that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his or own her own best interests. In this case, there is no evidence that the defendant was under a special disadvantage at the time of entry into the loan agreement. In the affidavits sworn by the defendant, the defendant describes her occupation as 'accountant'. The defendant was not a volunteer to the transaction. There is no evidence before the court that the defendant was unable to judge for herself, or to conserve her own interests.
4. From a careful reading of the papers filed by the defendant, two potential factors may be discerned as grounding the claim that there has been unconscionable conduct in equity: a perceived inequality of bargaining power; and the defendant's mistaken belief in relation to the manner in which interest would be calculated.
5. As to the perceived inequality of bargaining power, the defendant complains that 'the clauses forming the agreement I had to sign, gave no equality to borrower and are all in favour of the lender hence taking away all rights from the borrower...' The context can be discerned from the defendant's evidence that she 'was already committed to a project and needed to re-finance these properties...'.[50] However, it is well established that a perceived difference in bargaining position is insufficient of itself to give rise to special disadvantage.[51]
6. As to the defendant's mistaken belief about the calculation of interest on the loan, I find that it is not arguable that the defendant's mistaken belief seriously affected her ability to make a judgment as to her best interests in the manner required to place her in a position of special disadvantage.[52] There is no evidence of any curtailment on the defendant's ability to seek advice, or to have clarified with the plaintiff the accuracy of her assumptions as to the application of the RBA cash rate to the calculation of the specialist lending variable rate.
7. However, even if the defendant's mistaken belief, as expressed, was sufficient to constitute a special disadvantage at the time of entry into the loan agreement, there is no evidence that it was sufficiently evident to the plaintiff. There is no evidence that the plaintiff knew facts which would raise the possibility of a special disadvantage in the mind of a reasonable person.
8. It cannot be argued on the evidence filed that there was conduct on the part of the plaintiff which was harsh or oppressive in that it involved taking advantage of a special disability or disadvantage of the defendant.
9. In these circumstances, I do not consider it arguable that the defendant was under a special disability in dealing with the plaintiff with the consequence that there was an absence of any reasonable degree of equality between them; or if she was under such a special disability, that special disability was sufficiently evident to the plaintiff to make it prima facie unfair or unconscionable for the plaintiff to accept or retain the benefit of the loan agreement and the mortgages in the circumstances in which the agreements were procured and accepted; or that the plaintiff has taken unfair or unconscientious advantage of the defendant in any way.
10. Accordingly, I am satisfied that the defendant does not have an arguable defence or counterclaim based on unconscionable conduct in equity.

1. The provisions of Part 2 Division 2 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), apply to the provision of a financial product and financial services. Section 12CB prohibits unconscionable conduct in connection with financial services. Accordingly, I have analysed the allegations made by the defendant as allegations of unconscionable conduct contrary to the ASIC Act s 12CB, in addition to equity. In so doing, I have had regard to the matters raised in s 12CC, to the extent they are relevant.
2. The principles that apply to statutory unconscionability have been widely discussed.[53] As submitted on behalf of the plaintiff, unconscionability requires conduct that is objectively characterised as 'unconscionable' according to the ordinary meaning of the term, being 'conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct offensive to conscience'.[54] Unconscionability does not involve an idiosyncratic determination of what is 'fair' and 'just' in a particular case.[55]
3. I accept the plaintiff's submission that on the reading of the defendant's affidavits, it can be discerned that the defendant is claiming that the plaintiff's conduct was unconscionable by virtue of the following:[56]

(b) the defendant was unable to negotiate the terms of the loan agreement;

(c) the plaintiff exercising its contractual right to increase the interest rate charged under the loan agreement;

(d) the plaintiff not changing the interest rate charged under the loan agreement in line with the RBA cash rate;

(e) the defendant's mistaken belief regarding changes to the variable interest rate; and

(f) the plaintiff requiring the defendant to comply with conditions before it would agree to discharge its mortgage at a shortfall.

1. The power to order summary judgment must be exercised with great care. The defendant is not represented. She has not had the benefit of legal assistance in the expression of defences and counterclaim.
2. While the scope of s 12CB is not entirely settled,[57] I am satisfied that the defendant does not have an arguable defence or counterclaim based on statutory unconscionable conduct. For the reasons set out below, I do not consider that there is any triable issue as to whether the plaintiff has engaged in conduct objectively characterised as 'unconscionable'.
3. In this case:

(a) there is evidence of the perception held by the defendant of an inequality of bargaining power. There is no evidence of the relative strengths of the bargaining positions of the parties at the time the defendant entered into the loan agreement and mortgages, nor of actual inequality;

(b) there is no evidence that the bargain struck between the plaintiff and the defendant was procured by the plaintiff's unfair exploitation of the weakness of the defendant;

(c) there is no evidence of the terms under which the defendant could have acquired identical or equivalent financial services from a lender other than the plaintiff, or indeed whether such services were available to the defendant;

(d) there is no evidence that the defendant sought to negotiate the terms of the loan agreement and mortgages, and was refused by the plaintiff;

(e) the defendant had voluntarily entered into a loan agreement with a variable interest rate;

(f) there is no evidence that the plaintiff misled the defendant regarding the variable interest rate under the loan agreement;

(g) for the purpose of this application, it is accepted that the defendant held a mistaken belief regarding the variable interest rate under the loan agreement. However, the defendant is an accountant. There is no evidence that the defendant was not able to understand the terms of the loan agreement or mortgages, and there is no evidence that the plaintiff caused or contributed to, or knew or ought to have known about, the defendant's mistaken belief; and

(h) changes to the interest rate applicable under the loan agreement were made in accordance with the plaintiff's express contractual rights. There is no evidence to suggest that the changes to the specialist lending variable rate were applied exclusively to the loan agreement held by the defendant, and were not also applied to other borrowers who had borrowed money under the variable rate option.

1. At par 18 of the defendant's affidavit titled 'Misleading information', the defendant says that the plaintiff required the defendant to comply with conditions before it would agree to discharge its mortgage at a shortfall. In this regard, the defendant's evidence is that the plaintiff sought a signed acknowledgment of debt owed by the defendant. In circumstances deposed to, where the known shortfall was acknowledged by the defendant, it is not arguable that the plaintiff's request was unconscionable. Furthermore, I accept the plaintiff's submission that there is no basis for the proposition advanced by the defendant that the plaintiff, as a non‑bank lender, is obliged to change its interest rates in line with the RBA cash rate, and that it is unconscionable for it not to do so.
2. This is not a matter where the affidavit material filed discloses conflicts of fact which depend to any degree upon the resolution of issues of credibility of witnesses. Rather, this is a matter where the affidavit material does not support a conclusion that there is a triable issue or an arguable defence. It is not apparent how the defendant could establish at trial that the conduct of the plaintiff had fallen below acceptable norms, standards or values such as to warrant being determined to be unconscionable, or that the conduct offended basic notions of good conscience and fair play. Accordingly, I do not consider that the defendant has an arguable defence or counterclaim based on a contravention of the ASIC Act s 12CB.

1. For completeness, I note that the defendant's papers raised a number of allegations in addition to those matters addressed above. By way of example, the defendant deposes as follows:[58]

The Banks are keeping property prices artificially low as they knock back loan applications saying the price of the property is too high, they will not sign off on the loan. They are in the position to set market value. Hence the Banks are making it difficult to refinance out of a bad loan.

...

The Banks have absolute control over borrowers and hold us to ransom by causing situations that are extremely difficult to maintain.

1. The complaints additional to those expressly addressed above are properly characterised as generalised complaints, unsupported by evidence or particulars. Even allowing the defendant the flexibility which I am required to as a litigant in person, I am not satisfied that any of the additional complaints are sufficient to demonstrate any defence or other reason for trial.[59]

1. In all of the circumstances, I am satisfied that the defendant has no defence to the claim and that the plaintiff is entitled to judgment on the plaintiff's claim against the defendant. As to the counterclaim, I am also satisfied that the plaintiff has a good defence on the merits and that judgment should be entered for the plaintiff against the defendant on the counterclaim. The affidavits relied upon by the defendant in opposition to the applications fail to show cause against the orders sought.
2. It is appropriate that the plaintiff recover its costs of the application, the action and the counterclaim, including any reserved costs, to be taxed if not agreed.
3. I will hear from the parties as to the form of orders.

Sch A - The relevant provisions of the loan agreement concerning interest

These meanings apply in this agreement:

annual percentage rate means a per annum rate of interest.

specialist lending variable rate means the rate we publish from time to time as our advertised 'specialist lending variable rate' or a name we substitute for that name.

Obligation to pay

8.1 You must pay us interest charges for each day on the balance owing on your loan account, or if the loan is split, each balance owing on the sub-account, for the end of that day. Interest charges are calculated daily at the annual percentage rate applying to the relevant amount for that day on the basis of a 365 day year (including in a leap year). If you have an offset portion which has a positive balance recorded against it, the recorded positive balance of that offset portion will be offset against the balance of one or more portions under a variable rate option so as to reduce the balance owing on the sub-account for the purposes of the interest calculation on that portion or portions.

Interest rates

Variable rate

9.1 If you have a Alt Doc loan, whenever the loan or a portion of it is under the variable rate option, the annual percentage rate at any time for the loan is the specialist lending variable rate most recently notified to you (see clause 30 below).

...

Changing the rate

9.2 Whenever an amount is under the variable rate option, we may change the annual percentage rate which applies to that amount at any time. Therefore, if your loan or a portion of it starts under the variable rate option, the annual percentage rate shown in the Details is the rate applying at the disclosure date and is only a guide - the actual rate may have changed by the settlement date.

We notify you in writing (which may be by advertisement in the banking section of the Australian Financial Review newspaper) on or before the date of any increase in the specialist lending variable rate. We notify you of a reduction in the specialist lending variable rate in the next statement of account sent to you.

You can also find out the specialist lending variable rate at any time by contacting the originator.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] A further affidavit of SJ Clohessy was filed in the proceeding on 16 December 2019. The affidavit concerned the service of the writ of summons and order for substituted service on the defendant.

[4] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57].

[5] Mavaddat v HSBC Bank Australia Ltd [No 2] [2016] WASCA 94 [59]; Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 [24], [53] - [55]; Bastitstatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Agar v Hyde [57]. See also Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24] cited in Deputy Commissioner of Taxation v Lafferty [2017] WASC 257 [53]

[6] Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99.

[7] Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110; see also Bankwest (A Division of Commonwealth Bank of Australia) v Mann [2015] WASC 187 [46]; HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153 [24]; GEL Custodians Pty Ltd v Dewar [2014] WASC 177 [25]; Wright v Wright [2002] WASC 30 [19]; Morgan v Pallister [2004] WASC 188 [4] cited in Deputy Commissioner of Taxation v Lafferty [54].

[8] Moscow v Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (113), citing Wallingford v Mutual Society (1880) 5 App Cas 685, 704 cited in Deputy Commissioner of Taxation v Lafferty [54].

[9] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608; RGH Mortgage Corporation Ltd v Schafer [2014] WASC 297.

[10] Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28]; Eng Mee Yong v Letchumanan [1980] AC 331, 341.

[11] Ansearch Ltd v Wavtech Pty Ltd [28]; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VicLawRp 15; [1947] VLR 332, 335.

[12] Lexis Nexis, Civil Procedure Western Australia, Vol 1 (looseleaf as at November 2019) 'Order 16' at [16.1.2]; citing Helmers v Como [2014] WASC 394; BC 201409064 [43], WA Country Buildings Pty Ltd v Premium Coastal Propoerty Pty Ltd [2012] WASC 236; BC201204792 [1] - [10].

[13] First Mohamed affidavit par 1 and par 2.

[15] Second Mohamed affidavit 'SM1' and 'SM2'.

[16] Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd.

[17] Tobin v Dodd [2004] WASCA 288 [14] - [18], cited in Perpetual Trustees Victoria Ltd v Burns [2015] WASC 234 [7].

[19] See also the defendant's submissions at page 12.

[21] Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki SMI (Unreported, WASC, Library No 920512, 12 October 1992) (Adams M).

[22] Plaintiff's submissions pars 13 - 14.

[23] Defendant's affidavit 'No loss' par 4.

[24] Defendant's affidavit 'Misleading information' pars 4, 19 and 20.

[25] Westpac Banking Corporation v McLean [2012] WASC 182, [86] - [99]; McLean v Westpac Banking Corporation [2012] WASCA 152 [27] - [31]. See also St George Bank v Hammer (No.2) [2015] NSWSC 953 [34]; Westpac Banking Corporation v Mason [2011] NSWSC 1241; and National Australia Bank v Norman [2012] VSC 14; and Westpac Banking Corporation v Davey [2016] WASC 316 [34].

[26] Plaintiff's submissions par 21, referring to the first Mohamed affidavit at 'SM3', page 50 cl 28; 'SM4' page 75 cl 17.1.

[27] Defendant's affidavit 'Unconscionable interest rate increases' par 10.

[28] Plaintiff's submissions par 23(b), referring to the first Mohamed affidavit at 'SM3', pages 8 - 9, being the Specialist Lending Loan Agreement Details, particularly the financial information table contained therein.

[29] Plaintiff's submissions par 23(a), referring to the first Mohamed affidavit at 'SM3', page 42.

[30] Plaintiff's submissions par 23(b), referring to the first Mohamed affidavit at 'SM3', page 42. See also the financial information table at page 9 under the heading 'Annual percentage rate'.

[31] Plaintiff's submissions par 23(c), referring to the first Mohamed affidavit at 'SM3', page 43. See also the financial information table note at page 16.

[32] Plaintiff's submissions par 23(d), referring to the first Mohamed affidavit at 'SM3', page 53.

[33] Plaintiff's submissions par 23(e), referring to the first Mohamed affidavit at 'SM3', page 51.

[34] Teng v Clark [No 2] [2020] WASC 217 [32].

[35] They include Kabwand Pty Ltd v National Australia Bank Ltd [1989] FCA 195, (1989) ATPR 41-950; Perpetual Nominees Ltd v Parist Holdings Pty Ltd [2005] NSWSC 1345; Australia and New Zealand Banking Group Ltd v Fink [2013] NSWSC 1781; and Westpac Banking Corporation v Lomas [2014] QSC 117.

[38] Cross v National Australia Bank Limited (FCA, 29 April 1994, unreported), as noted in Perpetual Nominees Ltd v Parist Holdings Pty Ltd [31].

[39] Perpetual Nominees Ltd v Parist Holdings Pty Ltd [32].

[40] Perpetual Nominees Ltd v Parist Holdings Pty Ltd [25].

[41] Perpetual Nominees Ltd v Parist Holdings Pty Ltd [26].

[42] Perpetual Nominees Ltd v Parist Holdings Pty Ltd [33].

[43] Scammell & Nephew Ltd v Ouston [1941] AC 251 at 268; Meehan v Jones [1982] HCA 52; (1981-2) 149 CLR 571 at 587, cited in the plaintiff's submissions at par 25.

[44] As Kabwand was applied in Australia and New Zealand Banking Group Limited v Fink [23].

[45] As Kabwand was applied in Australia and New Zealand Banking Group Limited v Fink [23]. See also Westpac Banking Corporation v Lomas [27].

[46] Defendant's affidavit 'Unconscionable interest rate increases' par 10.

[47] Plaintiff's submissions par 38, referring to the Defendant's affidavit 'Unconscionable interest rate increases' par 2.

[48] Defendant's affidavit 'Unconscionable interest rate increases' par 8.

[49] Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85, [38], [64]; and Karavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 [14] - [20]; [122] - 124], endorsed by the plurality in Thorne [37]. See also Commonwealth Bank of Australia v Dinh [No 2] [2019] WASC 456 [679] ft 574.

[50] Defendant's affidavit 'Misleading information' par 9.

[51] Kakavas v Crown Melbourne Ltd [161]; Commercial Bank v Amadio (462); ACCC v C G Berbatis Holdings [2003] HCA 18; (2003) 214 CLR 51 [14].

[52] Plaintiff's submissions par 63(b).

[53] Including in Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10 [355]- [363]; Perpetual Trustee Company Limited v Burniston [No 2] [2012] WASC 383 [323]-[324]; Permanent Custodians Ltd v Shannon [No 2] [2018] WASC 295 [226]; Mastronardo v Commonwealth Bank of Australia [2018] NSWCA 136.

[54] Australian Securities Investments Commission v Kobelt [2019] HCA 18 per Gageler J at [92] referring to Paciocco v Australia and New Zealand Banking Group (2016) 258 CLR 525.

[55] Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15; (2018) 356 ALR 440 [186].

[57] See ASIC v Kobelt [48] ‑ [50] (Kiefel CJ and Bell J), [82] ‑ [93] (Gageler J), [118] ‑ [123] (Keane J), [144], [232] ‑ [234] (Nettle & Gordon JJ), [295] (Edelman J), as observed in Commonwealth Bank of Australia v Dinh [No 2] [682].

[58] Defendant's affidavit 'Banks superior power' pars 7 and 9.

[59] Brisbane Unit Development Corp Pty Ltd v Robertson [1932] 2 Qd R 105, 109; Costa v St George Bank [2013] WASCA 137 [12], as cited in the plaintiff's submissions at par 9.