And
24(a) Where CC1's purported signature appeared on the documents, CC1 did not in fact sign the documents, nor direct or authorise the documents to be signed. Instead, CD3 or a person at the direction of CD3 forged CC1's signature on the documents in circumstances where CD3 knew that CC1 had not directed or authorised that the documents be signed for or on behalf of CC1."
10 Paragraph [35] of the FASC pleads:
"35. It was a term of the Azzopardi Mortgage that the amount secured by the Azzopardi Mortgage was all sums of money which may be for the time being owing or unpaid by the first defendant to the Azzopardis, for, in respect of, or arising out of, any transaction or thing done by the Azzopardis in the course of carrying on their business and includes the whole or any part of the sum of $350,000 comprising the "First Azzopardi Advance" and all moneys advanced, stamp duty payable on the Azzopardi Mortgage, charges, commissions and all costs and expenses in or for which the Azzopardis are or may become liable or may charge against the first defendant, all moneys paid by the Azzopardis to any person on behalf of the first defendant as a result of the breach or the non-observance by the first defendant of any provision of the Azzopardi Mortgage, all moneys due by the first defendant to Eclipse for management fees charged by that company in relation to any loan by the Azzopardis to the first defendant, a monthly administration fee payable to Eclipse for late payment of interest and interest on all moneys advanced by the Azzopardis to the first defendant.
11 Paragraph [19] of the FAD pleads:
19 In response to paragraph 35 of the FASOC, the first defendant:
(a) says the Azzopardi Mortgage was void or secures no money; and
(b) if the Azzopardi Mortgage was valid, admits that paragraph 1 of annexure "A" referred to in the mortgage was a term of the mortgage but says the Azzopardi Mortgage or terms of the Azzopardi Mortgage were unjust under the Contracts Review Act 1980 (NSW) for the reasons pleaded in paragraph 45 below.
12 Paragraph [52] of the FASC pleads:
"52 Pursuant to a variation of the Azzopardi Mortgage which occurred at or about the time of settlement of the Second Azzopardi Advance on or about 6 May 2004, the Second Azzopardi Advance was secured by the Azzopardi Mortgage (as so varied).
52A The Residential Investments Advance was secured by a second mortgage dated 6 May 2004 over the Property purportedly given by the first defendant to Residential Investments ("Residential Investments Mortgage").
52B It was a term of the Residential Investments Mortgage that the amount secured by the Residential Investments Mortgage was all sums of money which may be for the time being owing or unpaid by the first defendant to Residential Investments, for, in respect or, or arising out of, any transaction or thing done by Residential Investments in the course of carrying on its business and includes the whole or any part of the sum of $96,000 comprising the "Residential Investments Advance" and all including moneys advanced, stamp duty payable on the Residential Investments Mortgage, charges, commissions and all costs and expenses in or for which Residential Investments are or may become liable or may charge against the first defendant, all moneys paid by Residential Investments to any person on behalf of the first defendant as a result of the breach or the non-observance by the first defendant of any provision of the Residential Investments Mortgage, all moneys due by the first defendant to Eclipse for management fees charged by that company in relation to any loan by Residential Investments to the first defendant, a monthly administration fee payable to Eclipse for late payment of interest and interest on all moneys advanced by Residential Investments to the first defendant."
13 Paragraphs 24 and 25 of the FAD plead:
24 In response to paragraph 52 of the FASOC, the first defendant:
…
(b) says the Azzopardi Mortgage was void;
…
25 In response to paragraph 52A and 52B of the FASOC, the first defendant:
…
(c) says the Residential Investments Mortgage was void or secures no money;
(d) if the Residential Investments Mortgage was valid, admits that paragraph 1 of annexure "A" referred to in the mortgage was a term of the mortgage, but says the Residential Investments Mortgage or terms of the Residential Investments Mortgage were unjust under the Contracts Review Act 1980 (NSW) for the reasons pleaded in paragraph 45 below."
14 Paragraphs [45] to [48] of the FAD plead:
45 If the first defendant is found to be a party to or bound by any of the Azzopardi Mortgage or the Residential Investments Mortgage or any loan agreement associated with these mortgages, then each of the Azzopardi Mortgage, the Residential Investment Mortgage and/or the loan agreements was unjust (as this term is defined in the Contracts Review Act 1980 (NSW) and/or s 70 of the Code) in the circumstances relating to them at the time they were made.
Particulars
(a) The first defendant did not sign the Azzopardi Mortgage or the Residential Investments Mortgage, nor authorize the signing of the Azzopardi Mortgage or the Residential Investments Mortgage in his name or at all.
(b) The first defendant had no knowledge of the Azzopardi Mortgage and the Residential Investments Mortgage at the time they were signed.
(c) Apart from about $140,000 used by the first defendant to pay a debt to the New South Wales Crime Commission in August 2003, the first defendant received no benefit from, nor authorized nor was aware of, the funds advanced by the Azzopardis and Residential Investments.
(d) The Azzopardis and Residential Investments:
(i) did not require certification from a solicitor that the first defendant had received independent legal advice, verification of the first defendant's identity, or source financial documents from the first defendant to prove he had an ability to repay the advances; and
(ii) made no enquiries as to the purpose of the loans other than that the loans were for "investment".
These matters support findings that the Azzopardis and Residential Investments engaged in pure asset lending (see Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; and King Mortgages v Satchitanantham [2006] NSWSC 1303) and were careless in the protection of their own interests.
(e) Further particulars may be provided following review of documents obtained on discovery or under subpoena from the Azzopardis and their lawyer at the time, Blackshaw Lindsay.
46 The first defendant seeks relief under s 9 of the Contracts Review Act and/or s 71 of the Code to avoid an unjust agreement; or
a) voiding the Azzopardi Mortgage and the residential Investments Mortgage and any associated loan agreement; or
b) such other orders as the Court may think fit.
47 The plaintiff's conduct in seeking the relief it seeks in the FASC against the first defendant is unconscionable within the meaning of ss 51AB or 51AC of the Trade Practices Act 1974 (Cth) or ss 12CB of 12CC of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act");
…
48 The first defendant seeks relief under s 87 of the Trades Practices Act or s 12GM of the ASIC Act .
…"
15 So far as the Azzopardi mortgage and the Residential Investments mortgage are concerned, Mr Richards pleads that if the Azzopardi mortgage and/or the Residential Investments mortgage are valid, he admits that annexure "A" referred to in the mortgage was a term of the mortgage but he says that the mortgages were unjust under the Contracts Review Act and/or the Consumer Credit Code.
16 Counsel for Mr Richards submitted that par [45] is intended to plead defences against Perpetual Trustees should a finding be made that Mr Richards authorised the signing of the loan agreements and the mortgages on his behalf.
17 Mr Richards has filed an amended cross claim (ACC) against Shane Moran, Pacific Partners Pty Limited, Graham Kent Stuart also known as Graham Stuart Fowler, Sydney Thomas Finnie also known as Sydney James Carrington, Judith Anne Finnie and the Registrar General of New South Wales. The first cross defendant is a solicitor. The claim against the Registrar General relates to the fidelity fund - s 129(1)(b) and or (e) of the Real Property Act 1900: par [79]- par [80] ACC.
18 Broadly speaking, in relation to the transactions, Mr Richards alleges that where his signature appeared on the documents, he did not in fact sign the documents, nor direct nor authorise the documents to be signed. Instead, he alleges that either Graham Stuart or a person at the direction of Graham Stuart forged his signature.
19 Depending on the factual findings made, it may ultimately be held that Mr Richards did give instructions to sign the documents on his behalf. Hence, at trial a finding may be made that Mr Richards did authorise the signing of his signature on the documents or alternatively even that the signature is actually that of Mr Richards. If any of these findings are made, Mr Richards may argue that the provisions of the Contracts Review Act and the Consumer Credit Code are applicable.
20 Certainly if the signature on the mortgages are forgeries, it is my view that it is clear that at least the Contracts Review Act does not apply; Permanent Trustee Co Ltd v Frazis [1999] NSWSC 319 at [17]. If a finding is made that Mr Richards never entered into the mortgage transactions, that is that he never entered into the contract, then he cannot at the same time argue that the contracts were unjust. So far as the mortgages are concerned s 19(1) of the Contracts Review Act specifically states that the Act does not apply to a contract constituted by a land instrument that is registered under the Real Property Act.
21 So far as paragraphs [47] and [48] of the FAD are concerned, I stated at [68] of my earlier decision:
"68 The impugned conduct, according to paragraph [47] of the FAD, is " The plaintiff's conduct in seeking the relief it seeks in the FASC against the first defendant ". Perpetual Trustees submitted that the impugned conduct complained of is specifically excluded from all of the relevant statutory provisions. Each provision provides that the institution of legal proceedings in relation to the relevant supply of services cannot be taken to constitute engaging in unconscionable conduct - see ss 51AB(3) and 51AC(5) of the Trade Practices Act (Cth) and ss 12CB(3) and 12CC(4) of the ASIC Act (Cth) . The unconscionable conduct can be related to the loan agreements, not the taking of legal proceedings - see s 51AB(2). Once again, this relief covers discretionary matters and should be determined at trial. …"
22 In my view it is not clear to this Court that the pleading of unconscionable conduct is hopeless.
23 Where there are disputed facts, and here there is a complex factual web, it is only when the factual findings are actually made that it becomes clear whether these defences apply. I endorse the comments of Rogers J in Commercial Banking Co of Sydney Ltd v Pollard (1983) 1 NSWLR 74 at 80 where his Honour stated that it is generally inappropriate to determine a defence which raises the Contracts Review Act on an application for summary judgment. Hence, in my view, it cannot be said that the pleadings in paragraphs [18(c)], [19(a)], [19(b)], [24(b)], [25(c)], [25(d)] and [45], [46], [47] and [48] of the further amended defence are hopeless. They should be permitted to go to trial.
24 Perpetual Trustees submitted that they were entitled to a Bullock order and that any order for costs will be apparently unenforceable in the light of s 47 of the Legal Aid Commission Act. Section 47 is not of relevance here because it relates to payments of costs made against a legally assisted person. While costs are discretionary, costs normally follow the event. That is, Mr Richards should be entitled to a costs order in his favour. So far as the Bullock order is concerned (see Bullock v London General Omnibus Co [1907] 1 KB 264), the Azzopardis, as fourth defendant, were successful in their motion. The plaintiff's claim was dismissed as against the fourth defendant. Hence, the plaintiff was unsuccessful in its case against the fourth defendant. The plaintiff was also unsuccessful against the first defendant. The plaintiff may be asserting that it should receive a costs award in its favour against Mr Richards because it was unsuccessful against the Azzopardis but may have a successful claim against Mr Richards. But this depends on the final outcome at trial. As the determination as between the plaintiff and Mr Richards was the plaintiff's unsuccessful interlocutory motion, I decline to make a Bullock order.
25 I make the usual order as to costs. So far as paragraph 2 of the plaintiff's amended notice of motion filed 1 February 2008 is concerned and the amended notice of motion filed 29 August 2008, the plaintiff is to pay the first defendant's costs as agreed or assessed.