Plaintiff v First Defendant

1 By summons filed 28 February 2019, Westpac Banking Corporation ('the Plaintiff') sought summary judgment against Stephen Richard Hines ('the First Defendant') and Wattletree Management Pty Ltd ('the Second Defendant') (together 'the Defendants') pursuant to Rule 22.08(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('the Rules') and section 63 of the Civil Procedure Act 2010 (Vic) ('CPA').[1]

2 Specifically, the Plaintiff now seeks an order that the Plaintiff recover from the First Defendant possession of the land at Unit 801, 3 Chapel Mews, South Yarra, more particularly described as Lot 168 on Plan of Subdivision 422665R, contained in Certificate of Title Volume 10620 Folio 778 ('the Property').[2]

3 On 16 November 2017, the Plaintiff filed and served a statement of claim seeking possession of the Property and repayment of sums owed under guarantees given by the Defendants as security for loans given by the Plaintiff to Flush Fitness Pty Ltd ('Flush').

4 On 12 February 2018 the Defendants filed a joint defence ('Defence').

5 The First Defendant entered bankruptcy on 21 November 2018.[3] On 1 February 2019, I gave leave to the First Defendant to appear at the directions hearing on that day and made timetabling orders in respect of the Plaintiff's (then foreshadowed) application for summary judgment. I indicated at that hearing that the issue of the First Defendant's standing in respect of any such application would need to be addressed.[4]

6 Prior to that hearing, on 29 January 2019, the Official Trustee in the First Defendant's bankruptcy ('Trustee') advised the Plaintiff that he would not continue the First Defendant's defence or consent to or oppose the Plaintiff's application for summary judgment.[5]

7 On 28 February 2019, the Plaintiff filed its summons, which was returnable on 5 April 2019.

8 Prior to that hearing, the Court was informed that the First Defendant had lodged with the Australian Financial Complaints Authority ('AFCA') a complaint about the loans, guarantee and mortgage which lie at the heart of this dispute. In accordance with AFCA's rules, the Plaintiff was not able to take any further enforcement steps, including in this proceeding, until the conclusion of AFCA's processes. Consequently, the summons was adjourned on a number of occasions.

9 A directions hearing was listed for 24 July 2020 by which time the AFCA process had concluded. On that date, I made orders on the papers by consent between the Plaintiff and the First Defendant that:

(a) by 7 August 2020, the First Defendant file and serve an affidavit addressing the issue of his standing to oppose summary judgment and the basis of any opposition;

(b) by 28 August 2020, the Plaintiff file and serve any affidavits in reply;

(c) by 4 September 2020, the Plaintiff file and serve its outline of submissions in relation to the First Defendant's standing and the summons;

(d) by 11 September 2020, the First Defendant file and serve his submissions on standing and the summons;

(e) by 16 September 2020, the Plaintiff file any outline in reply; and

(f) the summons be listed for hearing on 23 September 2020.

10 The Second Defendant was deregistered on 11 April 2020, and took no part in the proceedings.[6]

11 The Plaintiff's application for summary judgment, and the question of the First Defendant's standing to continue his defence, were heard on 23 September 2020.

12 At the commencement of the hearing, the First Defendant sought an adjournment on the grounds that he had had only two business days to consider the Second Dichiera Affidavit (defined below) filed on behalf of the Plaintiff. This was a short affidavit updating the amount owed to the Plaintiff, which exhibited the bank statements for the two relevant accounts,[7] being some 113 pages. The First Defendant complained about the lateness of this affidavit and the volume of the exhibits. The Plaintiff opposed the application for an adjournment. For reasons given ex tempore at the hearing, and which I do not need to repeat here, I refused the adjournment application.

13 At the hearing, submissions were first made on the question of standing, and then on the summary judgment application.

14 In respect of its application for summary judgment, and on the question of the First Defendant's standing, the Plaintiff relied on:

(a) the Affidavit of Rita Dichiera sworn 1 March 2019, and exhibits thereto ('First Dichiera Affidavit'). Ms Dichiera is employed by the Plaintiff as a senior account manager in its credit restructuring department;

(b) the Supplementary Affidavit of Rita Dichiera sworn 18 September 2020, and exhibits thereto ('Second Dichiera Affidavit'); and

(c) the Plaintiff's written outline of submissions filed 4 September 2020 ('Plaintiff's Outline').

(a) his affidavit sworn 11 August 2020 ('Hines Affidavit'); and

(b) his written outline of submissions filed 12 September 2020 ('First Defendant's Outline').

16 The Defendants were represented at the time the defence was filed on 12 February 2018, but have not been represented in this proceeding since 26 September 2018. In particular, the Defendants have not been represented by solicitors in respect of the Plaintiff's application for summary judgment or on the question of standing raised by the First Defendant's bankruptcy.

17 There are principles which guide the hearing and determination of proceedings (including applications) which involve persons who are self-represented, which were recently summarised by Derham AsJ in Daher v Bell.[8] In that case, his Honour stated:[9]

It is the duty of the Court in relation to represented and unrepresented litigants alike to ensure that a hearing or trial is conducted fairly and in accordance with law. Procedural fairness is 'an essential attribute of a court's procedure'. What a judge must do to assist a litigant in person depends on the litigant, the nature of the case, and the litigant's intelligence and understanding of the case. The judge cannot be the advocate of the self-represented litigant, for the role of the judge is fundamentally different to that of an advocate. The judge must maintain the reality and appearance of judicial neutrality at all times and to all parties. The assistance must be proportionate in the circumstances - it must ensure a fair trial and not afford an advantage to the self-represented litigant.

In the decision of the Court of Appeal in Roberts v Harkness,[10] which was applied in Doughty-Cowell v Kyriazis,[11] the Court made it clear that a litigant must have a reasonable opportunity of presenting his case. What amounts to a reasonable opportunity of presenting a case depends on the circumstances of the case, including the nature of the decision to be made, the nature and complexity of the issues in dispute, the nature and complexity of the submissions which the party wishes to advance, the significance to that party of an adverse decision ('what is at stake') and the competing demands on the time and resources of the court or tribunal.[12]

18 I respectfully adopt his Honour's summary and have sought to apply these principles in this case.

19 In particular, throughout the proceedings and at the hearing of the Plaintiff's application for summary judgment I made efforts to clearly explain to the First Defendant the procedures and relevant tests required to establish standing and to resist summary judgment. I also sought to deal with the material on which the First Defendant relied with an eye to their contents, and without undue emphasis on their form. For example, most of the content of the Hines Affidavit was really submissions, and most of the content of the First Defendant's Outline was evidence. I have had regard to all of that content, and taken it into account, without regard to its form.

20 The Plaintiff noted the First Defendant's bankruptcy, and pointed to section 58(1)(a) of the Bankruptcy Act 1966 (Cth) ('Bankruptcy Act'). Section 58(1)(a) is in the following terms:

Vesting of property upon bankruptcy - general rule

(1) Subject to this Act, where a debtor becomes a bankrupt:

(a) the property of the bankrupt, not being after‑acquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee; and

21 The Plaintiff cited a number of cases for the proposition that, because of s 58(1)(a), a person in bankruptcy has no beneficial interest in the property vested in the Trustee, no interest in proceedings for possession of the property, and therefore no standing to be heard in relation to those proceedings.[13]

22 Further, the Plaintiff said that its position as a secured creditor is not affected by the vesting of the Property in the Trustee, by operation of s 58(5) Bankruptcy Act.

23 The Plaintiff appropriately acknowledged the exception identified by Dodds-Streeton J in Re-Engine Pty Ltd v Fergusson,[14] whereby the Court has a discretion to permit a bankrupt person without locus standi to give evidence in answer to allegations of personal misconduct and that, in the unusual circumstances of that case, it would promote the due administration of justice to permit the person to be heard.[15] However the Plaintiff said that no such allegation had been made against the First Defendant calling on him to answer personally, and that the rule in Re-Engine therefore does not apply. The Plaintiff said that the First Defendant's allegations against it, as outlined below at paragraph 57, certainly did not attract the exception. The Plaintiff said that there is no other basis to depart from the usual rule that a bankrupt person has no standing to contest proceedings in relation to property vested in the Trustee.

24 In respect of his standing, the First Defendant submitted that, although the Trustee did not wish to defend the proceeding or oppose an order for possession of the Property, the Trustee would not sensibly defend the proceeding as 'they have no vested interest in the outcome'. The First Defendant considered that he was the only party which has a 'vested interest' in the outcome of the case.

25 The First Defendant further submitted that his interest in any potential future surplus returned to him from the pool of assets in the Trustee following discharge of his bankruptcy was sufficient to grant him an interest in the Property and therefore standing in proceedings in respect of the Property.

26 The First Defendant also submitted that he voluntarily entered bankruptcy and was not 'made bankrupt' as stated in the Plaintiff's written outline of submissions.

27 The First Defendant's written outline of submissions also indicated that the First Defendant sought to rely on section 303 of the Bankruptcy Act as a basis for a power of 'the Court or the Registrar' to grant leave to 'any person aggrieved by or interested in' a matter to appear in a proceeding. I informed the First Defendant at the hearing that, without comment on the operation of s 303, the relevant Court is the Federal Court of Australia, and the relevant Registrar is the Registrar of that Court,[16] and the First Defendant did not press the point further.

28 The First Defendant also made a number of other submissions at this stage which did not go to the question of standing, and were instead attempts to make submissions against the Plaintiff's application for summary judgment. These will be dealt with below.

29 After hearing from the parties on the question of the First Defendant's standing, I ruled that the First Defendant had no standing to defend the proceeding or the summary judgment application, or to appear on the summary judgment application. I gave brief reasons for that ruling ex tempore, and indicated that I would include those reasons and expand upon them in a subsequent written ruling. I now do so.

30 In Westpac v Webb, Digby J stated the effect of s 58(1)(a) of the Bankruptcy Act on a bankrupt person's standing as follows:[17]

The property of a bankrupt vests in his trustee and Webb, as a bankrupt, no longer has standing in legal proceedings, including in respect of that property.

31 In Rogers v Asset Loan Co Pty Ltd & Ors the Court was dealing with an application by a bankrupt for an interlocutory injunction to prevent a secured creditor exercising a power of sale in respect of real property. In the decision in that matter, Greenwood J stated:[18]

Mr Rogers attacks the exercise of the power of sale by the secured creditor[s] on the basis of a failure to comply with the requirements of s 84 of the Property Law Act 1974 (Qld). The interest of Mr Rogers in agitating that question is his interest as owner of the property the subject of the security. That interest has become vested in the trustee. It includes the rights, powers and capacities of the bankrupt in relation to that interest which, in turn, includes the right to agitate the question of whether the secured creditor has complied with the Property Law Act 1974 (Qld). I accept the submission that only the trustee can agitate that question and the trustee chooses not to do so.

32 The operation of section 58(1)(a) of the Bankruptcy Act is clear, and denies the First Defendant standing to be heard in this proceeding. This has been explained in numerous authorities over the years, including those referred to above and those to which the Court was taken by the Plaintiff. Upon the First Defendant's bankruptcy the Property vested in the Trustee. This includes any choses in action attaching to the Property, such as the right to defend the present proceeding. That the First Defendant entered bankruptcy voluntarily is irrelevant to the operation of section 58(1)(a) of the Bankruptcy Act.

33 It is clear that as the Property has vested in the Trustee, the First Defendant no longer has standing in these proceedings, including in respect of the Property. It is the Trustee who has standing to defend this proceeding, not the First Defendant. The Trustee has indicated that he neither consents to nor opposes the summary judgment application or an order being made that the Plaintiff recover possession of the Property.

34 The rule in Re-Engine does not apply in the present case. No allegation has been made against the First Defendant which requires him to answer personally, nor has the First Defendant sought to limit his submissions to such a matter. The First Defendant's various allegations against the Plaintiff are irrelevant to the rule in Re-Engine.

35 The First Defendant's contention that he is the only party with a 'vested interest' in the outcome of the proceeding appears to adopt a colloquial sense of the phrase 'vested interest'. The relevant legal interests in the Property and proceeding are vested in the Trustee, by operation of s 58(1)(a) of the Bankruptcy Act. I accept that the First Defendant considers that he has a great interest in the outcome of the proceeding, but that is not the kind of interest which is at the heart of whether he has standing to defend it. The matters that the First Defendant has raised in defence of the proceeding or this application are all matters which the Trustee can raise, not the First Defendant.

36 Further, I do not accept that the First Defendant's potential future interest in proceeds of the Property that may make up part of a surplus returned to him by the Trustee is sufficient to give the First Defendant standing. The First Defendant's submission in this respect directly conflicts with the operation of s 58(1)(a) of the Bankruptcy Act and the relevant authorities. Until such a time as any property is returned to the First Defendant, the property and related interests are vested in the Trustee and are not subject to any speculative future interest on the part of the First Defendant.

37 For these reasons, I consider that upon the First Defendant entering bankruptcy on 21 November 2018, the First Defendant ceased to have standing in this proceeding. Accordingly, my ruling in this regard was that the First Defendant lacks standing to defend the proceeding, including the summary judgment application.

38 I have previously summarised the principles applicable to summary judgment in Padella Pty Ltd v Elliott,[19] as adopted by Sloss J in Israfoods (2006) Ltd v J & D Consortium Pty Ltd.[20] For completeness I set these principles out below.

39 Section 61 of the CPA permits a plaintiff to make an application for summary judgment on the ground that the defendant's defence or part of that defence has no real prospect of success. Section 62 of the CPA permits a defendant to make an application for summary judgment on the grounds that the plaintiff's claim has no real prospects of success. Section 63 of the CPA provides (subject to s 64) that the Court may give summary judgment in a civil proceeding if it is satisfied that a claim, defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has 'no real prospect of success'.

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because -

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

41 The Court of Appeal has set out the test to be applied in this context in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd.[21] Upon the present state of authority:

(a) The test for summary judgment under s 63 of the [CPA] is whether the respondent to the application for summary judgment has a 'real' as opposed to a 'fanciful' chance of success;

(b) The test is to be applied by reference to its own language and without paraphrase or comparison with the 'hopeless' or 'bound to fail test' essayed in General Steel;

(c) It should be understood, however, that the test is to some degree a more liberal test than the 'hopeless' or 'bound to fail' test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(d) At the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

42 Section 7(1) of the CPA sets out its overarching purpose, being to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Section 9 of the CPA requires the Court to have regard to these purposes in making any order or giving any direction in a civil proceeding.

43 An application made pursuant to s 61 of the CPA is to be made in accordance with Part 2 of Order 22.[22]

(1) An application shall be made by summons supported by an affidavit -

(a) verifying the facts on which the claim or the part of the claim to which the application relates is based; and

(b) stating that in the belief of the deponent the defence to the claim or the defence to the relevant part of the claim -

(i) has no real prospect of success; or

(ii) has no real prospect of success except as to the amount of the claim or as to the amount of the relevant part of the claim.

(2) Where a statement in a document tends to establish a fact within paragraph (1) and at the trial of the proceeding the document would be admissible by or under the Evidence (Miscellaneous Provisions) Act 1958, the Evidence Act 2008 or any other Act to verify the fact, the affidavit under paragraph (1) may set forth the statement.

(3) An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out and, having regard to all the circumstances, the Court considers that the statement ought to be permitted.

(4) The plaintiff shall serve the summons and a copy of the affidavit or affidavits and of any exhibit referred to in the affidavit or affidavits on the defendant not less than 14 days before the day for hearing named in the summons.

(1) The defendant may show cause against the application by affidavit or otherwise to the satisfaction of the Court.

(2) An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out.

(3) Unless the Court otherwise orders, the defendant shall serve a copy of any affidavit and of any exhibit referred to in the affidavit or affidavits on the plaintiff not less than three days before the day for hearing named in the summons.

46 The requirements set out in Rules 22.04 and 22.05 were considered by the Court of Appeal in Daniel Simon Hausman and Lance Vincent Hodgkinson v Abigroup Contractors Pty Ltd.[23] Of the equivalent of what is now Rule 22.04 in relation to the affidavit in support of summary judgment, the Court of Appeal stated that what 'must be verified are the facts necessary to establish a good cause of action'.[24] Once the plaintiff has established the elements of its cause of action, there is 'something akin' to a shifting of the evidential burden to the defendant.[25]

47 Of the equivalent of what is now Rule 22.05, the Court of the Appeal stated the following:[26]

1. The defendant must satisfy the Court that, in respect of the claim to which the application for judgment relates, a question ought to be tried, or there ought for some other reason to be a trial of that claim. The Court, if so satisfied, will give the defendant leave to defend and the proceeding will continue to trial in the ordinary way. The Court will normally require an affidavit by, or on behalf of, the defendant before it will be satisfied that the defendant is entitled to leave to defend. The standard of diligence required of the defendant in preparing a case in opposition to the application, especially if under pressure of time, is perhaps not as high as that required in preparing for trial.
2. Nonetheless, the defendant is required to use reasonable diligence to put before the Court, albeit in a summary form, all the evidence relied on in the defence. In that regard, it would generally be regarded as an injustice to the plaintiff to introduce for the first time, on appeal, evidence which was readily available for the hearing of the application, but was not produced. An affidavit filed by the defendant may contain a statement of fact based on information and belief.
3. The authorities suggest that an affidavit in opposition to an application for summary judgment must provide sufficient particulars to enable the defence case to be properly understood. A bald denial that the defendant is indebted to the plaintiff will not suffice. The affidavit should, so far as practicable, deal specifically with the plaintiff's claim and the facts set out in the supporting affidavit to establish that claim. It should state clearly and concisely what the defence is, and identify the facts relied upon in support of that defence.

48 The Court of Appeal's statement of the principles in Hausman v Abigroup, extracted in paragraph 44, above remain good law since the advent[27]f the CPA.27

49 The Court of Appeal also stated in Hausman v Abigroup that:[28]

A judge faced with an application for summary judgment should not be required to trawl through the defendant's material in an effort to see where there can be constructed from that material an answer to the plaintiff's claim. It must be for the defendant to point to some material, whether legal or factual, that provides an arguable response to that claim. That is so even if it is the plaintiff who must ultimately discharge the burden of persuading the judge that there is no issue that warrants trial, and that summary judgment should therefore be granted.

50 Although the First Defendant does not have standing to continue his defence, it remains for the Plaintiff to establish the elements of its cause of action. Following this, I will have regard to the Defence and the material relied upon by the First Defendant to consider whether the First Defendant has a real prospect of success in its defence. I consider it appropriate to do so, since the test for summary judgment is that the Defence has no real prospect of success.

(a) the First Defendant is the sole director of the Second Defendant. The First Defendant was also the sole director of Flush (which entity was the trustee for Flush Fitness Business Trust (ABN 28 852 910 646) up until Flush was placed into liquidation on 12 May 2017;

(b) by letter of offer dated 6 May 2016 and letter of variation of offer dated 1 July 2016 ('the letters of offer'), the Plaintiff (in the name of St George Bank) entered into two agreements for Invoice Discounting Plus Facilities ('IDP Facilities') with Flush.[29] The First IDP Facility had a limit of $9,500,000.00.[30] The Second IDP Facility had a limit of $500,000.00.[31] Both IDP Facilities were executed by the Plaintiff, Flush, and the First Defendant as guarantor in his own capacity and as director of the Second Defendant (which was also a guarantor).[32] Both IDP facilities were comprised of the letters of offer and the Plaintiff's General Standard Terms dated May 2014;[33]

(c) by the letters of offer referred to in the preceding sub-paragraph executed by the same parties, a further facility was provided by the Plaintiff (in the name of BankSA) to Flush, with a limit of $3,500,000.00 ('the Multi Option Facility');[34]

(d) the terms of the Facilities were varied by letters dated 1 July 2016 in respect of each of the First IDP Facility, the Second IDP Facility and the Multi Option Facility, including by extending the expiry date in each respect to 31 July 2016;[35]

(e) the IDP Facilities and Multi Option Facilities (together, 'the Facilities') were secured in the following ways:

(i) a guarantee and indemnity given by the Defendants in favour of the Plaintiff, dated on or about 26 October 2010, limited to an amount of $1,500,000.000 together with interest, fees, costs and other expenses ('the Guarantee'); [36]

(ii) extensions of Guarantee executed by each of the Defendants extending the term of the Guarantee and increasing the limit of the Guarantee, including an Extension of Guarantee dated 6 May 2016 showing an increase in the limit of the Guarantee to $14,511,000.00 ('the Extension of Guarantee');[37] and

(iii) a first registered mortgage given by the First Defendant in favour of the plaintiff over the Property, dated 30 May 2016 ('the Mortgage').[38]

(f) the Facilities required repayment of the money owed by 31 July 2016.[39] Further, the General Standard Terms incorporated into the Facilities provide that 'the sum of the total amount owing for all facilities are payable on demand' upon default.[40] As is common, a default is defined in the General Standard Terms to include failure to pay on time any amount payable, and the insolvency of the debtor or a guarantor;[41]

(g) the sums owed under the Facilities were not repaid by 31 July 2016, and the Facilities expired. Further, on 12 May 2017, Flush was placed into liquidation;[42]

(h) on 13 June 2017, the Plaintiff issued a Notice of Default and Demand to Flush for the aggregate sum of $8,079,129.00 due and payable to the Plaintiff under the Facilities. Flush failed to comply with this notice;[43]

(i) on 19 July 2017 the Plaintiff separately issued a Demand and Notice to Pay to the First and Second Defendant, pursuant to the Facilities and the Guarantee, demanding payment within 14 days. The First and Second Defendant both failed to comply with the demand;[44] and

(j) on 5 September 2017 the Plaintiff issued a further Demand and Notice to pay to the First Defendant, pursuant to the Facilities, Guarantee, Mortgage, and s 76 of the Transfer of Land Act 1958 (Vic) requiring payment of the sum of $7,734,688.00 then owing within 31 days and duly notifying the First Defendant that the Plaintiff may exercise its mortgagee's power of sale upon a failure to pay.[45]

52 On the basis of these matters, the Plaintiff submitted that it has an immediate entitlement to possession of the Property pursuant to section 77 of the Transfer of Land Act 1958 (Vic) and clause 20.3(b) of the memorandum of common provisions to the Mortgage.[46]

53 The Plaintiff relied on a certificate of indebtedness, and the Second Dichiera Affidavit which exhibited updated evidence of the debt owing under the Facilities.[47] However, the Plaintiff submitted that it suffices on an application for possession by a mortgagee that there is an amount owing and the amount in fact owed, as certified, is immaterial.

54 In relation to the above matters, in their Defence, the Defendants admitted:

(a) the First Defendant's execution of the relevant documents, including the Facilities, the Guarantee, the Extension to the Guarantee, and the Mortgage;[48]

(b) the service of the notice of default and demand on Flush on 13 June 2017;[49]

(c) the service of the demand and notice to pay on the Defendants on 19 July 2017, and that neither Defendant paid the Plaintiff the amount stated in the demand and notice to pay;[50] and

(d) the service of the further demand and notice to pay, including notice under section 76 Transfer of Land Act 1958 (Vic), on 5 September 2017; and that the First Defendant did not pay the Plaintiff the amount stated in the demand and notice to pay.[51]

55 The Defendants disputed the incorporation of the Guarantee into the Extension of Guarantee. The Defendant submitted that the Extension of Guarantee did not specify the guarantee that was being extended, and referred to a Letter of Offer dated 6 May 2016 'attached at Annexure A' without attaching any document at Annexure A or specifying which of the two Letters of Offer of that date was referred to. The Defendants pleaded that there was no reference to the Letters of Variation dated 1 July 2016.[52]

56 The Defendants disputed various aspects of the operation of the Facilities, the Guarantee, the Extension to the Guarantee, and the Mortgage. The Defendants did not admit Flush's default,[53] and denied that either Defendant was obliged to pay the Plaintiff pursuant to the demands and notices to pay issued by the Plaintiff.[54]

57 Further, the Defendants made allegations of misleading or deceptive conduct under s 18 of the Australian Consumer Law, contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) ('ACL'), and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) ('ASIC Act'). The Defendants alleged that:

(a) on 13 October 2016 Ms Dichiera told the First Defendant that Flush should not and cannot make payment of debts due to AMEX and the Australian Tax Office ('ATO') as doing so would lead to Flush entering liquidation, and AMEX and ATO receiving no payment. This was said to lead to a risk that the First Defendant would be exposed to risk of a directors' penalty notice under Division 269 of Schedule 1 of the Taxation Administration Act 1953 (Cth) or to appoint administrators or wind up Flush. Ms Dichiera was said to be under a duty to advise the First Defendant of this risk, or there was a reasonable expectation by the First Defendant that Ms Dichiera would advise him. By failing to advise him, Ms Dichiera and the Plaintiff are said to have engaged in misleading or deceptive conduct, in respect of which the First Defendant suffered loss or damage ('the AMEX and tax payment issue');[55] and

(b) on or about 7 September 2016, Flush's then chief financial officer Howard Toomey informed an officer of the Plaintiff, Silv Tarca, that Mr Toomey had not informed the First Defendant about Flush's overpayment of GST in New Zealand. This was said to be a significant financial issue for Flush. It was said that Mr Tarca was under a duty to inform the First Defendant, or there was a reasonable expectation by the First Defendant that he would be informed, about this significant financial issue. By failing to inform him, Mr Tarca and the Plaintiff are said to have engaged in misleading or deceptive conduct, in respect of which the First Defendant suffered loss or damage ('the GST issue').[56]

58 In both cases, the Defendants pleaded a set off of the loss or damage caused by the alleged misleading or deceptive conduct against their liability to the Plaintiff, and/or that the Court should make an order under s 12GM of the ASIC Act varying or limiting the enforceability of the Guarantee.[57]

59 The First Defendant made further written and oral submissions in respect of the Plaintiff's summons of 28 February 2019. Although I have concluded that the First Defendant did not have standing to make these submissions, in case I am wrong about standing I will address these further submissions, which were that:

(a) the case of Lysaght, as relied upon by the Plaintiff, is not relevant;[58]

(b) full legal argument should be made before a 'Magistrate of the Supreme Court of Victoria' and not at a directions hearing;[59]

(c) at the conclusion of the AFCA complaints process, AFCA concluded with the view that the case be dealt should be dealt with by the Supreme Court of Victoria;[60]

(d) the Plaintiff has not established the exact value of the debt, and in particular has not accounted for any payments made by Flush's liquidator to the Plaintiff or that the value of the debt exceeds the value of the Property;[61]

(e) the Defence was prepared by Johnson Winter & Slattery and cannot be dismissed as being frivolous, vexatious, an abuse of process or unsupported by evidence;[62]

(f) the Plaintiff had refused to provide minutes of a phone call in which the 'guarantee against the property' (presumably, the Mortgage) was obtained;[63]

(g) the loss or damage suffered due to the AMEX and tax payment issue caused the failure of Flush and consequential loss or damage;

(h) the GST issue caused the Defendants loss and damage; and

(i) further emails between Mr Toomey and Mr Tarca contained information about plans of a 'hostile takeover' of Flush by Mr Toomey, which Mr Tarca ought to have informed the First Defendant about.

60 In respect of the incorporation of the Guarantee by the Extension of Guarantee, the Plaintiff submitted that the Plaintiff and Defendants had only entered into one guarantee, being the Guarantee of October 2010, such that references to 'the existing guarantee' in the Extension of Guarantee must by necessity be references to the Guarantee. The Plaintiff submitted that this is confirmed by the reference to the 'Letters of Offer of 6 May 2016' in the variation letters dated 1 July 2016, and that it is not necessary for the Extension of Guarantee to make reference to variations or extensions of these primary agreements.

61 Further, the Plaintiff submitted that the proper construction of the Guarantee is as an 'all moneys guarantee'. Clause 3.1(a) of the Guarantee provides that the First Defendant guarantees punctual payment of the 'Guaranteed Moneys', which is defined broadly in clause 1.1 to include 'all moneys and damages which now or in the future are owing (whether actually or contingently)' by Flush to the Plaintiff.[64] The Plaintiff submitted that this construction meant that any vitiation of the Extension of Guarantee was moot, since the First Defendant was liable for all money owed.

62 The Plaintiff referred to the history of the Facilities to Flush, the Guarantee and the Extensions of Guarantee. Essentially, the Facilities were for a limited term, commencing in 2010, which were effectively "rolled over" from time to time. The Guarantee was also extended on each of those occasions, including by increasing the limit of moneys guaranteed.[65]

63 The Plaintiff also submitted that, in any event, the limit on liability under the Guarantee was not to the point since an order for possession is available in relation to a debt of any amount.

64 In relation to the matters raised in the Defence, the Plaintiff submitted that:

(a) there is no evidence for the AMEX and tax payment issue;[66]

(b) the evidence relied on regarding the GST issue shows unilateral conduct of Mr Toomey with no evidence of involvement or misconduct by Mr Tarca; that Mr Tarca and the Plaintiff did not owe the First Defendant any obligation to provide financial information in relation to his own business or any duty to inform him of Mr Toomey's emails; and that in any case the First Defendant was in fact aware of the GST overpayment;[67]

(c) even if there was a claim in these respects, the proper party to claim any relief against Mr Toomey is Flush's liquidator on behalf of Flush;

(d) minutes of the phone call in which the Mortgage was discussed were submitted to AFCA, and in any case the validity and execution of the Guarantee was not properly disputed; and

(e) AFCA's conclusion that the matter be dealt with by the Supreme Court was a recommendation relating to the nature of the complaint, and makes no comment on the merits of the case.

65 The Plaintiff has satisfied me that the evidence and submissions put by it, as outlined at paragraphs 51 to 53 of these reasons, establish its cause of action. On evaluation of the evidence, it is clear that the Facilities were duly executed and that money is owed to the Plaintiff under the Facilities; that the First Defendant executed the Guarantee and the Mortgage securing the money owed under the Facilities; that there were a number of defaults; and that Flush and the Defendants did not comply with the notices and demands properly issued by the Plaintiff pursuant to the Guarantee, Mortgage and section 76 of the Transfer of Land Act 1958 (Cth). On this basis, the Plaintiff has established that it has an immediate right to possession of the Property.

66 I accept that the Plaintiff's right to possession does not depend on the debt claimed having a particular value, or a value exceeding the value of the Property.[68] For this reason it is not necessary for me to examine the parties' arguments on the Extension of Guarantee in detail. However, I agree with the Plaintiff that on the evidence before me the reference to 'the existing guarantee' in the Extension of Guarantee, and the reference to the Letters of 6 May 2016, clearly show the parties' intention that the Extension of Guarantee incorporate and refer to the Guarantee.

67 I do not accept the Plaintiff's submission that because the Guarantee is an "all moneys guarantee" then the issues raised in respect of the most recent Extension of Guarantee are moot, since I do not accept that a limit on the guaranteed amount is displaced by the expression "all moneys". However, nothing turns on this. Even if there was some difficulty with the Plaintiff relying on the Extension of Guarantee dated 6 May 2016, I do not see how that would prevent the Plaintiff from relying on the previous extension to the guaranteed amount.

68 In any event, I accept the Plaintiff's submission that since it is seeking orders for possession and not judgment for a monetary amount, all that is required is that there is an amount owing which is secured by the Mortgage, which there clearly is.

69 The Plaintiff has also satisfied me that the First Defendant's defence has no real prospects of success. In the first place, the First Defendant's lack of standing to continue the defence and the Trustee's indication that they would not defend the proceeding are fatal to the prospects of the First Defendant's success. However, I see no real prospect of success in the Defence as pleaded nor, if I am wrong about the First Defendant's standing, the further submissions of the First Defendant.

70 The First Defendant's disputes about the operation of the Facilities, Guarantee and Mortgage appeared to have little to do with the Plaintiff's right to possession of the Property. Moreover, the First Defendant has provided no evidence against the Plaintiff's case regarding the relevant agreements except flat denials. The First Defendant's submission that minutes of the phone call on which the Mortgage was executed were not provided is not substantiated, and in any case cannot, and is not properly pleaded to, vitiate the effect of the Mortgage which was in evidence.

71 The First Defendant is incorrect about the applicability of the test for summary judgment set out in Lysaght, and about my power to grant summary judgment following the hearing on 23 September 2020. That hearing was not a directions hearing, but was a hearing of the Plaintiff's application for summary judgment, which I heard on referral under the Rules.

72 The conclusion of the AFCA member in relation to the First Defendant's complaint was not in evidence before me. However, AFCA has no power to conclude that a matter must proceed to trial or to exclude the jurisdiction of the Supreme Court to grant summary judgment pursuant to Rule 22.08(b) of the Rules and s 63 of the CPA.

73 The preparation of the Defence by a law firm is irrelevant to whether it discloses a defence with a real prospect of success.

74 The evidence relied on by the First Defendant to support the AMEX and tax issue and the GST issue is scant and does not come close to establishing the allegations of misleading or deceptive conduct under s 12DA of the ASIC Act or, if it applies, s 18 of the ACL. I accept the denial by Ms Dichiera, on oath, that she gave the First Defendant the advice relating to the AMEX and tax payment issue.[69] I also accept that the emails said by the First Defendant to evidence the GST issue do no such thing, and there is no evidence that the Plaintiff owed the First Defendant or Flush a relevant duty to provide information about GST overpayment by Flush.

75 The First Defendant's allegations extended to accusations that officers of the Plaintiff knew of an attempted 'hostile takeover' of Flush. These allegations are unsubstantiated and incapable of giving rise to a defence that has any real prospect of success.

76 For these reasons, I consider that the Plaintiff has established its cause of action and I am satisfied that there is no real prospect of success in the defence. Accordingly, summary judgment for the Plaintiff for possession of the Property will be entered.

77 The proceeding will be listed for 6 November 2020 for the making of final orders.

[1] By order made on the Court's own motion, the summons was referred to me, pursuant to r 84.04 of the Rules, for hearing and determination.

[2] The Plaintiff's summons sought the further order that the Second Defendant pay the Plaintiff the sum of $7,734,898.00. As is outlined below, the Second Defendant was deregistered on 11 April 2020, so this relief was not sought at the return of the summons.

[3] Affidavit of Rita Dichiera sworn 1 March 2019 [41]; Exhibit RD-30.

[4] Order of Judicial Registrar Matthews, 1 February 2019, 'Other matters' [A] - [B].

[6] Order of Judicial Registrar Matthews, 24 July 2020, 'Other Matters' [A].

[7] One for the period up to 15 September 2020, the other for the period up to 30 June 2020.

[8] [2020] VSC 346.

[9] Daher v Bell [2020] VSC 346, [8]-[9].

[10] (2018) 57 VR 334 ('Roberts').

[11] [2018] VSCA 216 [63]-[64].

[13] Farrow Mortgage Services Pty Ltd v Winfield [1992] 2 Qd R 282, 285; Bendigo Bank Ltd v Demaria [2001] VSC 218, [18]; National Australia Bank v Strik [2009] NSWSC 184, [9]-[10]; National Australia Bank Limited v Darroch; National Australia Bank Limited v Bhatti [2010] NSWSC 1202, [5] to [8].

[14] [2007] VSC 57; (2007) 209 FLR 1 ('Re-Engine').

[16] Section 4 and Part III, Division 2 Bankruptcy Act 1966 (Cth).

[17] Westpac v Webb [2019] VSC 180, [20]-[21], citations omitted.

[18] [2006] FCA 434, [52].

[19] [2018] VSC 301, [19]-[28].

[20] [2019] VSC 323, [41].

[21] [2013] VSCA 158; (2013) 42 VR 27, 40 [35] ('Lysaght') (citations omitted).

[23] (2009) 29 VR 213; [2009] VSCA 288 ('Hausman v Abigroup').

[25] See footnote 13 in the reasons of the Court of Appeal in Hausman v Abigroup, where it was stated: 'Whether there is in fact such a burden upon a plaintiff, once the prerequisites for summary judgment have been satisfied, is a difficult question. Rule [22.05] requires a defendant, who is the subject of an application, in proper form, for summary judgment, to "show cause" why such judgment should not be granted. It may be that this imposes upon a defendant an evidential burden, or something akin thereto'.

[26] Hausman v Abigroup, [63]-[65] (citations omitted).

[27] Innovateq Australia Pty Ltd and Anor v Barnes and Ors [2016] VSC 618, [11] (Ierodiaconou AsJ), referring to Capital One Securities Pty Ltd v Soda Kids Holdings Pty Ltd [2012] VSC 163 and to Portbury Development Pty Ltd v Ottedin Investments Pty Ltd and Ors [2012] VSC 490.

[29] First Dichiera Affidavit, [8]; Exhibit RD-3, RD-4.

[30] First Dichiera Affidavit, [8]; Exhibit RD-3.

[31] First Dichiera Affidavit, [8]; Exhibit RD-6.

[32] First Dichiera Affidavit, [8]; Exhibit RD-3, RD-4.

[33] First Dichiera Affidavit, [9]; Exhibits RD-3, RD-4.

[34] First Dichiera Affidavit, [18] - [20; Exhibit RD-6.

[35] First Dichiera Affidavit, [8]-[13], [18]-[25].

[36] First Dichiera Affidavit, [28]; Exhibit RD-8.

[37] First Dichiera Affidavit, [28]; Exhibit RD-8.

[38] First Dichiera Affidavit, [28]; Exhibit RD-9, RD-10.

[39] First Dichiera Affidavit, [29]; Exhibit RD-3, RD-4, RD-6.

[40] Cl 7.1(b) General Standard Terms of May 2014, Exhibit RD-4.

[41] Cl 28(a) and (f) General Standard Terms of May 2014, Exhibit RD-4.

[42] First Dichiera Affidavit, [29]; Exhibit RD-11.

[43] First Dichiera Affidavit, [34]; Exhibit RD-12.

[44] First Dichiera Affidavit, [34]; Exhibits RD-13, RD-14.

[45] First Dichiera Affidavit, [34]; Exhibit RD-15

[63] First Defendant's Outline, [11].

[66] Ms Dichiera deposes that she gave no such advice as alleged in paragraph 28(b) of the Defence: First Dichiera Affidavit, [38].

[67] First Dichiera Affidavit, [40]; Exhibits RD-27, RD-28 and RD-29.

[68] Section 77 Transfer of Land Act 1958 (Vic); cl 20.3(b) Memorandum of Common Provisions, Exhibit RD-10.