Plaintiffs v Defendants

(i) the property located at 32 Merri Concourse, Campbellfield, Victoria (32 Merri Concourse), for a price less than $3,850,000 or otherwise without the express written consent of the plaintiffs; and

(ii) the property located at 34 Merri Concourse, Campbellfield, Victoria (34 Merri Concourse) for a price less than $4,150,000 or otherwise without the express written consent of the plaintiffs;

(b) in the event that 32 Merri Concourse and 34 Merri Concourse (together, the Properties) are sold in accordance with paragraph (a) above, the proceeds of sale are to be paid into Court, alternatively, into a joint account in the names of the parties with any withdrawals requiring the signature of all parties.

2 In their written submission, the plaintiffs amended their position in respect of the minimum 'reserve' sought for each of the Properties and set out in paragraph 1(a), by stating that 'the plaintiffs are willing to agree to a combined reserve price of $7,500,000'.

3 This proceeding is in its infancy. Whilst pleadings have closed, no orders have been made for the filing of evidence.

4 By writ and statement of claim dated 19 September 2025, the plaintiffs seek, inter alia, orders that:

(a) a loan agreement entered into by the second plaintiff (Yousha) and the fourth defendant (Salem King) on 29 April 2024 for the sum of $4,362,000 (Third Salem King Loan) is unenforceable in equity or pursuant to s 12CB of the Australian Securities and Investments Commission Act 2001 (ASIC Act) on the basis that it was procured by the unconscionable conduct of its agent(s), the first defendant (Mr Terziovski) and/or the second defendant (NJ Lawyers);

(b) seven cash loans made by the third defendant (NJ Capital) to Yousha, are unconscionable in equity or pursuant to s 12 CB of the ASIC Act (together, the NJ Capital Loans).

5 Mr Yousha is the sole director and secretary of each of the second to sixth plaintiffs. Yousha, the second plaintiff, is the relevant borrower under the Third Salem King Loan and the NJ Capital Loans. Mr Terziovski is a solicitor and the sole director and secretary of NJ Lawyers and NJ Capital.

6 It was common ground on the application that the Third Salem King Loan and the NJ Capital Loans were secured by the Properties. More specifically:

(a) the Third Salem King Loan was secured by registered mortgages over the Properties; and

(b) NJ Capital is an unregistered equitable mortgagee.

7 The Third Salem King Loan is also secured by guarantees from Mr Yousha, the third plaintiff (Yousha Holdings) and the fourth to sixth plaintiffs.

8 The NJ Capital Loans are also secured by a general security agreement with Yousha, Mr Yousha and Yousha Holdings and by guarantees from Mr Yousha and Yousha Holdings.

9 Written submissions, supported by extensive affidavit material was relied upon at the hearing of the application.[1] The application book spanned 7 hard copy volumes.

10 The factual chronology set out in these reasons is largely drawn from Mr Yousha's evidence. Mr Terziovski did not respond to every allegation in his evidence because it was not 'necessary' for the purpose of opposing the application, whilst observing the affidavit contained scandalous allegations.

11 Yousha became the registered proprietor of 32 Merri Concourse on 5 February 2020.

12 On 10 September 2020, Yousha signed a contract of sale as purchaser in respect of the land at 34 Merri Concourse (Contract of Sale).

13 Mr Yousha gave evidence that whilst he received an offer of finance from the Bank of Melbourne to finance the Contract of Sale, he became aware that GST in the sum of $170,000 was payable on settlement (the GST Shortfall). Mr Yousha stated that the Bank of Melbourne would not loan him any money for the GST Shortfall, and that he understood through his broker that no major lender would do so.

14 Mr Yousha deposed that he then made some telephone calls to friends and associates to see if he could get a loan in the amount of $170,000 to cover the GST Shortfall. One of his friends, Mr Dimitri Barbatouras put him in touch with a private lender he knew, Mr Terziovski.

15 In about August 2021, Mr Yousha met Mr Terziovski with Mr Barbatouras. Mr Yousha gave affidavit evidence that during that meeting, he told Mr Terziovski that he needed a loan of $170,000 to cover the GST Shortfall. Mr Yousha also told Mr Terziovski that he owned 32 Merri Concourse, which was then financed through National Australia Bank. According to Mr Yousha, Mr Terziovski said that he could refinance everything for Mr Yousha at an interest rate of 'only 0.5% more'. Mr Yousha gave evidence that given that the settlement date of 34 Merri Concourse was fast approaching, he felt that he had no option but to accept Mr Terziovski's offer.

16 On 24 August 2021 at 3:01pm, Mr Yousha received an offer of finance from Mr Terziovski.

17 Mr Yousha gave evidence that after he met Mr Terziovski, they began to attend parties together where alcohol, illicit drugs, strippers and escorts were present. Mr Yousha states that these parties would cost him or the person hosting the event between $6,000-$10,000 per event. Mr Yousha said that he often hosted these parties multiple times a week and that Mr Terziovski could see that he frequently took drugs at these parties and joined him on a number of occasions. Over the course of attending these parties together, Mr Yousha said that he and Mr Terziovski quickly developed a close personal association and friendship.

18 On 30 September 2021, Yousha entered into a loan agreement with Salem King for a period of 12 months (First Salem King Loan). The First Salem King Loan was secured by way of, amongst other things, first registered mortgages over 32 Merri Concourse and 34 Merri Concourse. The principal terms of the First Salem King Loan were admitted to include that:

(a) the principal sum of the loan was $3,600,000;

(b) the loan was to be repaid in full by 29 September 2022;

(c) the loan establishment fee was $79,200; and

(d) the interest rate was 7.5% per annum, being $22,500 per month.

19 Mr Yousha deposed that on or before 30 September 2021, he received legal advice in relation to the offer of finance from Salem King. That legal advice was independent of Mr Terziovski and NJ Lawyers.

20 Mr Yousha gave written evidence that pursuant to the First Salem King Loan, the principal sum of the loan was $3,600,000 and was paid as follows:

(a) $1,707,608.18 was paid to the vendor of 34 Merri Concourse pursuant to the Contract of Sale;

(b) $1,718,394.47 was paid to National Australia Bank to pay out the loan from National Australia Bank which originally financed the purchase of 32 Merri Concourse;

(c) $79,200 was paid to NJ Lawyers in respect of an establishment fee;

(d) $3,850 was paid to NJ Lawyers in respect of legal fees; and

(e) $22,500 was paid to NJ Lawyers for the first month of interest.

21 The sums referred to in paragraphs 20(a) to (e) above total $3,531,552.65 which Mr Yousha states leaves the sum of $68,447.35 unaccounted for. Mr Yousha gave evidence that neither he nor Yousha received these funds and that he did not notice this discrepancy at the time.

22 On 30 September 2022, Yousha entered into a second loan agreement with Salem King in order to refinance the First Salem King Loan (Second Salem King Loan).

23 Mr Yousha deposed that pursuant to the Second Salem King Loan, the principal sum of the loan was $3,835,000 and was paid as follows:

(a) $2,839,676.17 was paid to pay out the First Salem King Loan;

(b) $84,370 was paid to NJ Lawyers in respect of an establishment fee;

(c) $3,850 was paid to NJ Lawyers in respect of legal fees; and

(d) $27,164.58 was paid to NJ Lawyers for the first month of interest.

24 The sums referred to paragraphs 23 (a) to (d) above total $2,955,060.75. This leaves the sum of $879,939.25, unaccounted for on Yousha's case. Mr Yousha gave evidence that neither he nor Yousha received these funds and that he did not notice this discrepancy at the time.

25 On 12 October 2022, Mr Yousha sent Mr Terziovski a text message asking for a private loan of $500,000. Mr Yousha gave evidence that after exchanging a series of text messages, Mr Terziovski agreed to loan him $880,000 in cash.

26 On or about 13 October 2022, Yousha entered into a loan agreement with NJ Capital (First NJ Capital Cash Loan) in the sum of $880,000. Key terms of the First NJ Capital Cash Loan were alleged to include:

(a) the principal sum of the loan was $880,000;

(b) the loan was to be repaid in full by 13 October 2023;

(c) the interest rate was 14% per annum; and

(d) the default interest rate was 28% per annum compounded monthly.

27 According to Mr Yousha, Mr Terziovski gave him a 'box full of cash in $100 and $50 notes'.

28 On or about 15 November 2022, Mr Yousha had a conversation with Mr Terziovski during which he said that a friend of his needed a private loan for $200,000. Mr Yousha states in evidence that Mr Terziovski said that he could make that loan in cash. The identity of the friend was not identified in the evidence.

29 Mr Yousha deposed that on 16 November 2022, he attended the offices of NJ Lawyers where he signed a loan agreement on behalf of Yousha for the sum of $200,000 (Second NJ Capital Cash Loan).

30 The terms of the Second NJ Capital Cash Loan were alleged to include:

(a) the loan was to be repaid in full by 15 November 2023;

(b) the interest rate was 14% per annum (being $2,333.33 per month) or at a rate of 28% if payment was not made on or before the due date for payment or an Event of Default was subsisting.

31 According to Mr Yousha, Mr Terziovski gave him the monies in $100 notes and $50 notes wrapped in black plastic. Conspicuously, given Mr Yousha details what happened to other loan monies, Mr Yousha does not explain what the $200,000 was used for and whether he was repaid by his friend.

32 In the course of oral argument, the position on the evidence as to the relationship between the Second NJ Capital Cash Loan and Mr Yousha's 'friend' was explained to be as follows by Counsel for the plaintiffs:

THE COURT: Yes, and so as I understand it on your case, Mr Yousha is borrowing $200,000 for a friend.

COUNSEL: Yes.

THE COURT: Securing that loan for the friend against his own - against his company's own properties.

COUNSEL: Yes.

THE COURT: What are the arrangements, according to the evidence, with the friend? Is it a loan? Is it a gift? What's the - - -

COUNSEL: There is no evidence.

THE COURT: Yes, thank you. So, for example, I don't know whether that $200,000 has been lent to the friend and repaid by the friend.

COUNSEL: No, and it might very well have been. But the fact is that Yousha is the one that's on the hook for it, not the friend.

THE COURT: Yes, although if it's a back to back loan, for example, the difficulty really is how do I conclude there has been any relevant loss occasioned by that loan on the evidence? In the sense that if Yousha has advanced the moneys and charged a higher interest rate on the on lending to the unidentified friend, and the unidentified friend has offered security or repaid it, what is the remedy that would arise in those circumstances?

Or assume that doesn't happen, where is the evidence to say, "I gave it to the friend and they have never paid me back, or I gave it as a gift".

COUNSEL: There is no evidence, Your Honour.

33 Mr Yousha deposed that on or about 6 December 2022, he asked Mr Terziovski for a loan for his friend Maytham in the sum of $500,000 and a loan for himself in the sum of $300,000. By text message on or about 12 December 2022, Mr Yousha asked if his loan could be increased to $400,000 in clear funds. According to Mr Yousha, Mr Terziovski agreed but said he would need interest brought up to date on the loans too.

34 On 13 December 2022, Mr Yousha attended the offices of NJ Lawyers where he signed a loan agreement on behalf of Yousha for the sum of $415,000 (Third NJ Capital Cash Loan) and Mr Terziovski gave him the loan monies in $100 notes and $50 notes wrapped in black plastic.

35 The terms of the Third NJ Capital Cash Loan were alleged to include:

(a) the loan was to be repaid in full by 13 December 2023;

(b) the interest rate was 14% per annum (being $4,841.66 per month) or at a rate of 28% if payment was not made on or before the due date for payment or an Event of Default was subsisting.

36 Between 18 January 2023 and 14 March 2023, Mr Terziovski and Mr Yousha exchanged a series of text messages relating to Yousha falling behind on payments of interest. In the last text message in that series on 14 March 2023, Mr Terziovski agreed to loan Mr Yousha $440,000 but said, 'First Advance: $200,000 on 14 March 2020 [sic]. Balance held for interest payments'.

37 On 14 March 2023, Mr Yousha attended the offices of NJ Lawyers where he signed a loan agreement on behalf of Yousha for the sum of $440,000 (Fourth NJ Capital Cash Loan) and Mr Terziovski gave him the loan monies in $100 notes and $50 notes wrapped in black plastic.

38 The terms of the Fourth NJ Capital Cash Loan were alleged to include:

(a) the loan was to be repaid in full by 13 September 2024;

(b) the interest rate was 14% per annum, being $5,133.33 monthly;

(c) the default interest rate was 28% per annum compounded monthly;

(d) six months of interest was to be pre-paid in advance and was included in the principal sum of the loan.

39 Mr Yousha gave written evidence that prior to entering into the Fourth NJ Capital Cash Loan:

(a) Mr Terziovski knew that $200,000 was being used to make payments of interest on previous loans;

(b) Mr Terziovski did not ask and Mr Yousha did not tell Mr Terziovski the purpose of the balance of the loan;

(c) Mr Terziovski did not ask Mr Yousha for any updated financial information; and

(d) Mr Yousha did not receive any legal advice before entering into the loan.

40 On 3 May 2023, Mr Yousha sent a text message to Mr Terziovski to the effect that his friend Zak required a cash loan of $200,000.

41 On 3 May 2023, Mr Yousha attended the offices of NJ Lawyers where he signed a loan agreement on behalf of Yousha for the sum of $400,000 (Fifth NJ Capital Cash Loan) and Mr Terziovski gave him the loan monies in $100 notes and $50 notes wrapped in black plastic.

42 The terms of the Fifth NJ Capital Cash Loan were alleged to include:

(a) the loan was to be repaid in full by 2 May 2024;

(b) the interest rate was 14% per annum, being $4,666.66 per month save for the first two months in respect of which interest would be $8,000 per month pre-paid in advance and included in the principal sum of the loan;

(c) the default interest rate was 24% per annum compounded monthly.

43 Mr Yousha deposed to the fact that upon receiving the Fifth NJ Capital Loan monies in cash, he immediately handed $200,000 back to Mr Terziovski to pay interest on the previous loans he had taken out. Mr Yousha gave evidence that prior to entering the Fifth NJ Capital Cash Loan:

(a) Mr Terziovski did not ask him for any updated financial information; and

(b) Mr Yousha did not receive any legal advice before entering into the loan.

44 Mr Yousha did not give evidence as to what happened to the balance of the $200,000 including whether it was given or loaned to Zak and, if loaned, whether it had been repaid.

45 Between 16 May 2023 and 24 May 2023, Mr Terziovski and Mr Yousha exchanged a series of text messages the effect of which was that Mr Yousha requested a cash loan for $500,000 and Mr Terziovski said that he could provide him with a loan for $300,000.

46 On 29 May 2023, Mr Yousha attended the offices of NJ Lawyers where he signed a loan agreement on behalf of Yousha for the sum of $300,000 (Sixth NJ Capital Cash Loan) and Mr Terziovski gave him the loan monies in $100 notes and $50 notes wrapped in black plastic.

47 Mr Yousha gave evidence that he used all or the majority of these loan monies to make payments of interest on previous loans.

48 The terms of the Sixth NJ Capital Cash Loan were alleged to include the following:

(a) the loan was to be repaid in full by 23 May 2024;

(b) the interest rate was 14% per annum, being $3,500 per month; and

(c) the default interest rate was 28% per annum compounded monthly.

49 Mr Yousha gave evidence that prior to entering the Sixth NJ Capital Cash Loan:

(a) Mr Terziovski did not ask him for any updated financial information; and

(b) Mr Yousha did not receive any legal advice before entering into the loan.

50 On or about 28 May 2023, Mr Yousha asked Mr Terziovski for a cash loan of $200,000.

51 On 5 June 2023, Mr Yousha attended the offices of NJ Lawyers where he said he signed a loan agreement on behalf of Yousha for the sum of $200,000 (Seventh NJ Capital Loan) and Mr Terziovski gave him the loan monies in $100 notes and $50 notes wrapped in black plastic.

52 Mr Yousha states that he used all or the majority of these loan monies to make payments of interest on previous loans.

53 The terms of the Seventh NJ Capital Cash Loan were alleged to include the following:

(a) the loan was to be repaid in full by 4 June 2024;

(b) the interest rate was 14% per annum, being $2,333.33 per month; and

(c) the default interest rate was 28% per annum compounded monthly.

54 Mr Yousha gave evidence that prior to entering the Seventh NJ Capital Cash Loan:

(a) Mr Terziovski did not ask him for any updated financial information; and

(b) Mr Yousha did not receive any legal advice before entering into the loan.

55 On 9 October 2023, Yousha was in default of the Second Salem King Loan and received a notice of default.

56 On 31 October 2023, Yousha received a further notice of default in relation to the Second Salem King Loan.

57 Mr Yousha deposed that between 9 January 2024 and 26 April 2024, Mr Terziovski and he exchanged a series of text messages in relation to overdue payments of interest on loans including the Second Salem King Loan and the refinancing of that loan. In summary, Mr Yousha says he was seeking to refinance all loans with Adelaide Bank so that he could reduce the interest rates payable on the loans. However, this refinance did not proceed.

58 On 29 April 2024, Yousha entered into the Third Salem King Loan with Salem King in order to refinance the Second Salem King Loan. Mr Yousha gave evidence and the plaintiffs pleaded that Yousha received independent legal advice in respect of the Third Salem King Loan. However, Mr Yousha felt that he had no choice but to enter into the Third Salem King Loan.

59 Pursuant to the Third Salem King Loan, the principal sum was $4,362,000. According to Mr Yousha, having 'now closely reviewed the Third Salem King Loan', the principal sum of $4,362,000 was paid as follows:

(a) $3,835,000 was paid to Salem King to pay out the Second Salem King Loan;

(b) $95,964 was paid to NJ Lawyers in respect of an establishment fee;

(c) $4,400 was paid to NJ Lawyers in respect of legal fees; and

(d) $38,167.50 was paid to NJ Lawyers for the first month of interest.

60 The sums from paragraphs 59 (a) to (d) above total $3,973,531 .50. On Yousha's case this leaves the sum of $388,468.50 unaccounted for.

61 On 31 January 2023, an amended planning permit was issued by Hume City Council in respect of the site located at 34 Merri Concourse Road for, amongst other things, the development of warehouses and a self-storage facility.

62 On 28 June 2024, development plans for the Properties were endorsed by Hume City Council.

63 On 27 November 2024, Opes Permits Pty Ltd, a building surveyor issued a building permit to Buildex Pty Ltd (Buildex) for a proposed 60 unit self-storage facility and the construction of warehouses, offices and a carpark at the Properties. The total cost of the building work set out on the building permit was $13.2 million.

64 On 25 January 2025, the 'Yousha Family Trust' (of which Yousha is the trustee) was recorded as entering into a medium works commercial building contract with Buildex in respect of the site at the Properties with a contract sum of $12,225,244.20 (exclusive of GST) and a practical completion timeline of 104 weeks from the commencement date of the contract.

65 The Third Salem King Loan was not repaid on 29 April 2025. Instead, on 30 April 2025, Yousha pre-paid default interest for the 29 April 2025 to 28 May 2025 period. This was the last payment made by Yousha to Salem King.

66 As at 8 November 2025, Yousha was alleged to be indebted to Salem King in the amount of $4,848,896.15. As at 10 November 2025, NJ Capital was alleged to be owed, in respect of the seven pleaded cash loans and one additional loan $3,973,927.91.

67 On 11 July 2025, NJ Lawyers served, on behalf of Salem King, a notice of default on Yousha which demanded immediate payment of the outstanding sum under the Third Salem King Loan and put Yousha on notice that if it failed to pay within 31 days, Salem King would enforce its legal and equitable rights under the relevant registered mortgages, including by immediately exercising its power of sale under s 77 of the Transfer of Land Act 1958 (Vic).

68 Yousha failed to remedy the default, and as a result, on 13 August 2025, Salem King took possession of the Properties. Shortly thereafter, the Properties were listed with Salem King's appointed selling agents, Colliers, to elicit expressions of interest.

69 The evidence as to the value of the Properties includes the following:

(a) The exclusive sales authority that Salem King entered into with Colliers estimated the combined selling price of the Properties to be between $6,826,975 and $7,487,650.

(b) On 12 September 2025, Avi Rangpuri of Biggin Scott appraised the value of the properties to be $3,850,000 in respect of 32 Merri Concourse and $4,150,000 in respect of 34 Merri Concourse, a total of $8 million.

(c) Colliers selling agent, Mr Purcell, has indicated that one party, namely Winslow, has confirmed interest in the Properties at 'circa $600/sqm' and arrangements are being made for soil testing to occur before any offer is made. An offer of $600/sqm would, on the evidence, equate to a potential purchase price of $5,286,000.

(d) On 20 October 2025, Salem King obtained a valuation report from Ned Greenhill, a practising certified valuer and director of Atlas Valuations (Melbourne) Pty Ltd, trading as Ray White (Valuations). Mr Greenhill assessed the combined market value of the Merri Concourse Properties to be $6,800,000 (exclusive of GST).

70 There is no suggestion on the evidence that the Properties will be the subject of sale imminently.

71 On 7 November 2025, Salem King's solicitors ordered land tax certificates for the Merri Concourse Properties. Those certificates reveal that the outstanding liability is $197,289.70. Rates notices dated 6 November 2025 reveal an outstanding liability to Hume City Council of $61,691.32 The total liability of $258,981.02 erodes the equity in the Properties, and as a result will reduce any net proceeds available for distribution to repay Salem King's debt.

72 As I have identified, the application for interlocutory injunctive relief was made pursuant to r 38.01 of the Supreme Court (General Civil Procedure) Rules 2025 (Vic).

73 The applicable legal principles are well established. These principles were articulated by the High Court in Australian Broadcasting Corporation v O'Neill.[2] The test was more recently summarised by O'Bryan J in Squirrel Limited v Cadmon Advisory Pty Ltd[3] as follows:

The test for an interlocutory injunction was stated by the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 per Gleeson CJ and Crennan J at [19] and Gummow and Hayne JJ at [65]-[72]. There are two principal questions. The first is whether the plaintiff has made out a prima facie case in the sense that, if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be entitled to relief. The second is whether the inconvenience or injury which the plaintiff would be likely to suffer were an injunction refused outweighs or is outweighed by the injury which the defendant would suffer were an injunction granted. The Court explained that the phrase "prima facie case" does not mean that the plaintiff must show that it is more probable than not that at trial it would succeed. It is enough that the plaintiff shows a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. The requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.

74 The applicable principles are not separate and independent of each other but must be examined together.[4] Thus, a doubtful claim which satisfies the 'prima facie case' or 'serious question to be tried' threshold may still attract interlocutory relief if there is a significant balance of convenience in favour of it.[5]

75 As the Court of Appeal has observed,[6] ultimately the court should take the course that appears to carry the lower risk of injustice if it should turn out to be wrong, in the sense of granting an injunction to a party who fails to establish the asserted right at trial or failing to grant an injunction to a party who succeeds at trial.

76 The rule in Inglis v Commonwealth Trading Bank of Australia[7] is also relevant to the balance of convenience in this case.[8] Inglis provides a general rule that an injunction to restrain the exercise by a mortgagee of powers given by a mortgage will not be granted until the amount of the mortgage debt, if it is not in dispute, or the amount claimed by the mortgagee, if the amount is disputed, be paid into Court.[9] In Inglis Walsh J stated:[10]

A general rule has long been established, in relation to applications to restrain the exercise by a mortgagee of powers given by a mortgage and in particular the exercise of a power of sale, that such an injunction will not be granted unless the amount of the mortgage debt, if this not be in dispute, be paid or unless, if the amount be disputed, the amount claimed by the mortgagee be paid into court.

...

In my opinion, the authorities which I have been able to examine establish that for the purposes of the application of the general rule to which I have referred, nothing short of actual payment is regarded as sufficient to extinguish a mortgage debt. If the debt has not been actually paid, the Court will not, at any rate as a general rule, interfere to deprive the mortgagee of the benefit of his security, except upon terms that an equivalent safeguard is provided to him, by means of the plaintiff bringing in an amount sufficient to meet what is claimed by the mortgagee to be due.

77 Whilst this is not an application to restrain Salem King from exercising the power of sale conferred by the mortgages, it is by its terms, an application to fetter Salem King by mandating that a reserve for each sale be set by the Court or that the consent of the mortgagor be otherwise obtained before any sale. The principles in Inglis therefore remain applicable because the plaintiffs are seeking to deprive Salem King of the full benefit of its security.

78 The plaintiffs' claims in the proceeding are based on statutory and equitable unconscionability. In advancing argument on the substantive legal content of those claims, the parties focussed on the decision of the High Court in Stubbings v Jams 2 Pty Ltd.[11]

79 With respect to unconscionability in equity, in oral submissions, the plaintiffs emphasised the following passage of the judgment of Kiefel CJ, Keane and Gleeson J in Stubbings:[12]

In Kakavas v Crown Melbourne Ltd, this Court said: [E]quitable intervention does not relieve a plaintiff from the consequences of improvident transactions conducted in the ordinary and undistinguished course of a lawful business. A plaintiff who voluntarily engages in risky business has never been able to call upon equitable principles to be redeemed from the coming home of risks inherent in the business. The plaintiff must be able to point to conduct on the part of the defendant, beyond the ordinary conduct of the business, which makes it just to require the defendant to restore the plaintiff to his or her previous position.

In Commercial Bank of Australia Ltd v Amadio, this Court held that unconscionability involves: a relationship that places one party at a "special disadvantage" vis-à-vis the other; knowledge of that special disadvantage by the stronger party; and unconscientious exploitation by the stronger party of the weaker party's disadvantage. But these considerations should not be understood as if they were to be addressed separately as if they were separate elements of a cause of action in tort. As Dixon CJ, McTiernan and Kitto JJ said in Jenyns v Public Curator (Qld), in a passage approved by this Court in Kakavas and Thorne v Kennedy, the application of the equitable principles relating to unconscionable conduct:

"calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [vulnerable party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case'." (Citation omitted.)

80 The content of the legal enquiry in claims for statutory unconscionability received little attention in the course of the application. Those claims are made pursuant to s 12CB of the ASIC Act, which necessarily invites consideration of the factors set out in s 12CC of the ASIC Act. In explaining the role of the statutory equivalent to s 12CC of the ASIC Act under the Schedule 2 of the Competition and Consumer Act (2010) (Australian Consumer Law), Gageler CJ and Jagot J stated as follows in Productivity Partners Pty Ltd v Australian Competition and Consumer Commission:[13]

That the presence or absence of each matter in s 22(1) is not a mandatory relevant consideration to be weighed by a court in every case, irrespective of the circumstances, does not mean that the required evaluation involves nothing more than, as the College put it, an "instinctive reaction that the legislation sought to avoid". The normative standard set by s 21(1) is tethered to the statutory language of "unconscionability". While that term is not defined in the legislation and, in its statutory conception, is "more broad-ranging than the equitable principles", it expresses "a normative standard of conscience which is permeated with accepted and acceptable community standards", and conduct is not to be denounced by a court as unconscionable unless it is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience". The items listed in s 22(1)(a)-(l) are matters that the legislation requires to be considered, in the overall evaluation of the totality of the circumstances to be undertaken for the purpose of s 21(1), if and to the extent those matters are applicable. This is why both "close attention to the statute and the values derived from it, as well as from the unwritten law" and "close consideration of the facts" are necessary.

81 In the aforementioned passage, their Honours expressly cited the judgment of Gordon J in Stubbings. In Stubbings, her Honour explained the relevant enquiry under s 12CB of the ASIC Act as follows:[14]

Section 12CB of the ASIC Act, like equity, requires a focus on all the circumstances. The court must take into account each of the considerations identified in s 12CC if and to the extent that they apply in the circumstances. The considerations listed in s 12CC are non-exhaustive, but they provide "express guidance as to the norms and values that are relevant to inform the meaning of unconscionability and its practical application". They assist in "setting a framework for the values that lie behind the notion of conscience identified in s 12CB". "The assessment of whether conduct is unconscionable within the meaning of s 12CB involves the evaluation of facts by reference to the values and norms recognised by the statute, and thus, as it has been said, a normative standard of conscience which is permeated with accepted and acceptable community standards. It is by reference to those generally accepted standards and community values that each matter must be judged".

Put in different terms, the s 12CC considerations assist in evaluating whether the conduct in question is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience". A court should take the serious step of denouncing conduct as unconscionable only when it is satisfied that the conduct is "offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society".

82 The summons must be dismissed for the following reasons.

83 First, it ought to be recognised that the focus of the relief sought is as against Salem King. Salem King is seeking to exercise rights as mortgagee in possession of the Properties by reason of Yousha's default under the Third Salem King Loan. The immediate focus of the analysis must therefore be - what is the strength of the 'serious question' as against Salem King?

84 Having regard to the way in which the case is presently advanced, a serious question exists as against Salem King, albeit not a particularly strong one.

85 The pleaded claim against Salem King is relevantly framed as follows:

143. By reason of the facts pleaded from paragraphs 141 to 142 above:

(a) Salem King took deliberate steps to avoid discovering the truth about the financial position of Yousha before entering into the Third Salem King Loan.

(b) Salem King, through its agent(s) Mr Terziovski and/or NJ Lawyers, knew or ought to have known that the Third Salem King Loan was a risky and dangerous undertaking for Yousha.

(c) Salem King, through its agent(s) Mr Terziovski and/or NJ Lawyers, knew or ought to have known that Yousha was in a position of special disadvantage because it was borrowing money to pay interest on previous loans.

(d) Notwithstanding (a) to (c) above, Salem King entered into the Third Salem King Loan because it stood to profit by way of the interest rate of 10.5% and the default interest rate of 21% which were secured by way of first registered mortgages on 32 Merri Concourse and 34 Merri Concourse.

144. By reason of the facts pleaded at paragraph 143 above, by entering into the Third Salem King Loan, Salem King has engaged in conduct that is unconscionable in equity and pursuant to section 12CB of the Australian Securities and Investments Commission Act 2001 (Cth).

86 The first observation to make about the pleaded claim is that the 'special disadvantage' said to exist is that Yousha was borrowing money to pay interest on previous loans. The special disadvantage is not pleaded as expansively as the oral submission made by Counsel for the plaintiffs to the effect that:

So, to the extent that special disadvantage is a necessary element, we say that the special disadvantage was Mr Yousha's propensity to seek loans for improvident purposes, including to make interest payments on previous loans, and to facilitate a lifestyle of parties multiple times per week, where alcohol, illicit drugs, strippers and escorts are present, and which cost between $6000 to $10,000 per event, and which Mr Terziovski knew about and attended.

87 In any event, on the available material, I do not consider that the pleaded or alleged 'special disadvantage' presently gives rise to a compellingly strong case of unconscionability in equity. As the High Court, stated in Kakavas v Crown Melbourne Ltd:[15]

Essential to the principle stated by both Mason J and Deane J in Amadio is that there should be an unconscientious taking advantage by one party of some disabling condition or circumstance that seriously affects the ability of the other party to make a rational judgment as to his or her own best interests. It may well be that an unconscientious taking of advantage will not always be manifest in a demonstrated inequality of bargaining power or in a demonstrated inadequacy in the consideration moving from the stronger party to the weaker; but the abiding rationale of the principle is to ensure that it is fair, just and reasonable for the stronger party to retain the benefit of the impugned transaction.

88 In the present case, the 'disabling condition or circumstance' that seriously affected the ability of Mr Yousha (and therefore Yousha) to make a rational judgment as to their own best interests, has not been pleaded or established with sufficient clarity to give rise to a conclusion that the case in equity is sufficiently strong to warrant the grant of interlocutory relief. Focussing only on the pleaded claim, the fact that Yousha was borrowing money to pay interest on previous loans does not, on its own, establish a disabling condition or circumstance.

89 Turning to the claim of statutory unconscionability, whilst the factors set out in s 12CC of the ASIC Act are non-exhaustive, the pleaded claim is largely, if not completely, untethered to those criteria. As I have assayed, the evidence discloses that Yousha appears to have been planning for and progressing the undertaking of a substantial development on the Properties and received legal advice on each of the Salem King Loans. Yousha may have been borrowing improvidently and Mr Yousha may have been living improvidently, but I am not presently satisfied that Salem King's pleaded conduct establishes a sufficiently strong basis for concluding that Salem King's conduct will ultimately be denounced as 'outside societal norms of acceptable commercial behaviours [so] as to warrant condemnation as conduct that is offensive to conscience'[16] and that therefore interlocutory relief should now be granted.

90 Finally, in examining the strength of the serious question advanced, I note that:

(a) whilst the plaintiffs submitted that that they did not accept that Salem King was validly in possession, they make no claim (whether by statement of claim or in the interlocutory summons) seeking to restrain Salem King from taking steps as the mortgagee in possession; and

(b) whilst there is a potential serious question as to whether there was a discrepancy between the sums that ought to have been advanced by Salem King and the sums that were in fact advanced, those discrepancies are not relied upon in the pleading as a basis upon which relief independent of the unconscionability allegations ought to be granted - moreover, having regard to the disputed sums involved, there is no basis on which it can be contended that the existence of this dispute over quantum ought properly fetter Salem King's sale of the Properties.

91 Second, even if the plaintiffs did seek to restrain Salem King from taking steps to sell the Properties as mortgagee in possession, they were unwilling or unable to make payment of the alleged debt to Salem King. As I have identified already, the principle in Inglis has application in the present context, as the plaintiffs are seeking to fetter the exercise of the power of sale by imposing a reserve price and/or the requirement of their written consent on the sale of the Properties.

92 As the learned authors of Injunctions: Law and Practice observe[17], '[t]he benefit of having security for a debt would be greatly diminished if the fact that a debtor has raised claims for damages against a mortgagee were allowed to prevent any enforcement of the security until after the litigation of those claims had been completed'.

93 Whilst I recognise that there are cases in which a relaxation of the Inglis principle is appropriate,[18] the following statement of Pincus J in Mainbanner Pty Ltd v Dadincroft Pty Ltd,[19] is readily applicable to the present claims of unconscionability.

In my opinion, it would, in general, not be correct to exercise that discretion in favour of an applicant in a case such as this, merely on its being shown that there is a prospect, however modest, of success on an allegation of oral misrepresentation. If that were so, the rule would be, in effect, reversed, and would be that where misrepresentation is alleged in such a way that one could not deny the seriousness of the question to be tried, and the applicant claims rescission, prima facie the contract the mortgagor and mortgagee have made must be suspended.

It seems that the adoption of any such principle would be, in the long run, pernicious, because it would tend to destroy or weaken people's confidence in such bargains and in the rights of holders of security.

94 Third, no authority or doctrinal foundation was advanced to support a contention that the mortgagor can impose a selling price or reserve on a mortgagee acting in possession. The imposition of such a requirement is unnecessary having regard to the content of Salem King's legal obligations. As a mortgagee in possession, Salem King must act in good faith and have regard to the interests of the mortgagor in exercising its power of sale.[20] Salem King is obliged to try and get the best price for the Properties.[21]

95 I am not satisfied that the claims as against Salem King give rise to a sufficiently strong 'serious question' to fetter its rights as mortgagee in possession in the manner contended for and therefore deprive it of the ability to apply the sale proceeds to the alleged debt. This is fortified by the absence of authority to support the imposition of a 'reserve' and the legal protections I have just referred to.

96 Fourth, the plaintiffs have no significant assets and any undertaking as to damages may be worthless. No security capable of supporting the undertaking was identified or proffered by the plaintiffs other than the Properties themselves. In those circumstances, the imposition of a reserve price on the sale of the Properties or the payment into Court of any sale proceeds creates the following difficulties:

(a) If the sale proceeds are paid into Court, interest will continue to accrue on the Third Salem King Loan. Having regard to the stage of the proceeding and the business of the Court, the trial of the proceeding is at least 12 months away. This creates the very real risk that the sale proceeds from the Properties are insufficient to discharge any ultimate indebtedness to Salem King. During the application, Salem King handed up an aide memoire illustrating that after 12 months the sum that would be allegedly owed to Salem King would be in excess of what would be available from any net sale proceeds (if one assumes a net price of $5.5m[22]) even if Salem King's enforcement costs are not taken into account. There is an appreciable risk that the Properties are in, and of themselves, insufficient security for the undertaking.

(b) The reserve price may well preclude Salem King from generating sale proceeds from the sale of the Properties prior to trial. At present, the evidence discloses that the interested party, Winslow, is making offers at a price well below the reserve contended for by the plaintiffs. If Salem King is prevented from selling the Properties by the operation of a mandated 'reserve' until trial, it may lose potential buyers such as Winslow along with the opportunity to defray Yousha's indebtedness. If that reserve is only removed following trial, there is a meaningful risk that the 'damage' caused by the imposition of the reserve would not be recoverable as the sale proceeds would be exhausted by the then existing debt under the Third Salem King Loan. Moreover, questions as to the priority of Salem King's entitlement pursuant to the undertaking as to damages over NJ Capital's equitable interest may also have to be considered.

97 Fifth, interest is accumulating and there appears to be little prospect it can be paid. Taking a step which may have the effect of restraining a sale, such as by the imposition of a reserve, could substantially worsen Yousha's position. This weighs against an injunction being grated.[23]

98 Sixth, Yousha has not paid any part of the principal under the Third Salem King Loan and is not paying interest. Failure to pay principal weighs against relief.[24] So too does the failure to make interest payments. In Wernard Electrics Pty Ltd v Hatmax Mortgage Management Ltd,[25] after it was held that the mortgagor had 'just got over the barrier so far as prima face case is concerned', the Court then addressed where the balance of convenience lay and noted that the borrower had not paid interest for about nine months. Young J noted that:[26]

[e]quity is loath to restrain mortgagee sales because experience has shown that, although the mortgagor always does intend to refinance, the number of occasions when this has actually happened is relatively few. Equity is particularly loath to interfere when the sale is a day or so's time away and there has been plenty of time to approach the Court before the time the Court is actually approached. Equity is also loath to intervene where there has not been a current payment of interest because, even if a mortgagor does have difficulties with illiquidity, at least it should be able to service the current interest. All those factors tell against granting an injunction in the instant case.

99 Thus, having regard to the strength of the serious question presented, the balance of convenience weighs firmly in favour of refusing the grant of the injunctive relief sought.

100 The analysis above focuses, as I have identified, on the claims against Salem King. The facts and circumstances in which the NJ Capital Loans were advanced to Yousha are highly unusual. However, Salem King is the registered first ranking mortgagee and NJ Capital holds an unregistered equitable mortgage. Having regard to the absence of any imminent sale of the property, the size of the alleged debt owed to Salem King and the interest that is accruing on that debt, and the unpaid charges, there is every prospect that NJ Capital may not be entitled to any or any substantial part of the sale proceeds of the Properties. Whether more targeted interlocutory relief is appropriate as against NJ Capital, pending the trial of the proceeding, is more properly assessed once a contract of sale for the Properties has been executed, the date of settlement is known, and the likely surplus (if any) following the discharge of the alleged debt to Salem King is identified. For that reason, it is not necessary for me to making any specific findings regarding the strength of the case against NJ Capital. Moreover, it would be premature for me to make findings as to the balance of convenience in respect of any restraint affecting NJ Capital.

101 This was endorsed in oral argument by Senior Counsel, acting for, inter alios, NJ Capital:

THE COURT: ...It seems to me that there's a very real possibility that the sale of the property, when it occurs, means that all of the surplus goes to Mr Monichino's client and none of it goes to your client.

COUNSEL: Indeed.

THE COURT: Why oughtn't I assess the position vis a vis your client once the position is actually crystalised and known, that is, whether it has any interest in this controversy on an interlocutory basis.

COUNSEL: That's a good idea.

102 I will dismiss the summons and hear the parties on costs and any incidental orders.

103 I will also hear the plaintiffs on what, if any, incidental orders are sought or required in order to ensure that they are kept informed with respect to the sale of the Properties in a timely way.

YOUSHA PTY LTD (ACN 617 042 636) ATF YOUSHA FAMILY TRUST

[1] The plaintiffs relied on: the affidavit of Randi Yousha dated 29 September 2025; the affidavit of Omar Seoud dated 8 October 2025; and, the second affidavit of Randi Yousha dated 24 November 2025. The first to third defendants relied on the affidavit of Nikola Terziovski dated 12 November 2025; the fourth defendant relied on the affidavit of Vincent Michael Lopes dated 8 November 2025; the affidavit of George Loupos dated 11 November 2025; the affidavit of Robert Findlay dated 11 November 2025; and the second affidavit of Vincent Michael Lopes dated 21 November 2025.

[2] [2006] HCA 46; (2006) 227 CLR 57, 68 [19] (Gleeson CJ and Crennan J) and 81-84 [65]-[72] (Gummow and Hayne JJ with whom Gleeson CJ and Crennan J agreed).

[3] [2019] FCA 1006, [38].

[4] Nicholas John Holdings Pty Ltd v Australia & New Zealand Banking Group Ltd [1992] VicRp 98; [1992] 2 VR 715, 723.

[5] Bullock v Federated Furnishing Trades Society of Australasia [1985] FCA 19; (1985) 5 FCR 464, 472.

[6] Bradto Pty Ltd v State of Victoria [2006] VSCA 89; (2006) 15 VR 65, 73 [35] (Maxwell P and Charles JA).

[7] [1972] HCA 74; (1972) 126 CLR 161 (Inglis).

[8] Tabet v Commonwealth Bank of Australia [2008] VSCA 197, [30] (per Dodds-Streeton JA with whom Vickery AJA agreed).

[9] Inglis 164 (Walsh J), 169 (Barwick CJ) with whom Menzies and Gibbs JJ agreed.

[11] [2022] HCA 6; (2022) 276 CLR 1 (Stubbings).

[13] [2024] HCA 27; (2024) 98 ALJR 1021, 1036 [60] (Productivity Partners). Citations omitted. Emphasis added.

[14] Stubbings [57]-[58] (citations omitted). The cited passage was referred to with approval by Gageler CJ and Jagot J in Productivity Partners 1036 [60].

[15] [2013] HCA 25; (2013) 250 CLR 392, 425 [118].

[16] Productivity Partners 1036 [60].

[17] Jacobs, McCarthy & Neggo, Thompson Reuters, Injunctions: Law and Practice (last review 30 January 2024) [6.200].

[18] Town & Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540, 545 (Davies, Gummow and Lee JJ).

[19] [1988] ATPR 40-896, 49,633.

[20] MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116, 144-145 [100].

[21] Vasiliou v Westpac Banking Corporation [2007] VSCA 113; (2007) 19 VR 229, 242 [63].

[22] A figure greater than the Winslow expression of interest.

[23] Emmanuel Orchards Pty Ltd v National Australia Bank Ltd (2003) 231 LSJS 118; [2003] SASC 368, 10 [42] (Bleby J).

[24] Tekinvest Pty Ltd v Lazarom [2004] NSWSC 940, [29] (Palmer J).

[25] (NSWSC, Young J, 3186 of 1994, 27 July 1994).