Portside Credit Finance Pty Ltd & Anor v Oreol Pty Ltd & Ors [2025] VCC 605

For the Plaintiffs/First and Second Defendants by Counterclaim

1. On 8 October 2021 the plaintiffs (Portside) loaned the sum of $1,237,500.00 to the defendants (collectively referred to as the Borrowers) for a term of 12 months. Interest was payable at 16.49%, decreasing to 8.49% per annum where monthly payments were made on time (the Loan).
2. The Loan was secured by a guarantee and indemnity from the second and third defendants (Mr Carney and Ms Olevsky). Mr Carney and Ms Olevsky are married with two children and reside at 11 Bowen Street, Richmond (Richmond Property).
3. The necessity and urgency for the Loan arose out of Mr Carney and Ms Olevsky having defaulted on several facilities unrelated to this proceeding in September 2021. Those facilities were with AMP Ltd (AMP) totalling around $3.1 million and with Archery Capital totalling around $1.1 million. At that time, the loan with AMP was under hardship arrangements, and Archery had extended the date for repayment to a hard deadline of 8 October 2021.
4. Mr Carney and Ms Olevsky, engaged a loan broker, Mr Nicholas Tamm of Dania Financial Services (Dania) to source a financier to refinance their facility with Archery. Mr Tamm approached Mr Miles Lackmann of Kingsley Finance (Kingsley) who, in turn, approached Portside on around 29 September 2021. Portside agreed to refinance Archery's facility. The turn-around of the Loan was fast, prompted by the hard deadline of 8 October 2021 imposed by Archery. On 4 October 2021, the Loan documents were provided to the Borrowers' solicitor, Mr Michael Barone, and on 6 October 2021, the Loan documents were executed. By 8 October 2021 the Loan was settled.
5. There were terms of the Loan, including that the Borrowers were required to provide a first ranking mortgage over the property at 122 Surrey Road North, South Yarra (South Yarra Property) and a second ranking mortgage (behind AMP) over the Richmond Property. Ms Olevsky is the sole proprietor of the Richmond Property while Mr Carney and Ms Olevsky are joint proprietors of the South Yarra Property. Portside's requirement that a mortgage be provided over the Richmond Property forms a part of the dispute between the parties.
6. There was a significant delay in obtaining registration of Portside's second ranking mortgage over the Richmond Property. It was not until 19 August 2022, some 10 months after the date of settlement, and 3 months after the first interest instalment repayment was due (following the 7 months' prepaid instalments), that Portside's solicitors successfully obtained registration of the mortgage over the property. This delay also forms part of the dispute between the parties.
7. Portside's claim is simple: that the Borrowers failed to repay the interest instalments due on 8 May 2022, 8 June 2022, 8 July 2022, 8 August 2022, and 8 September 2022. Portside also says that the Borrowers have failed to pay out the facility when it expired on 8 October 2022. Portside says that as a result, the Borrowers are in default of the Loan and the Guarantees and the mortgages over both properties. For that reason, Portside claims against the first defendant (Oreol) for debt under the Deed of Loan, and against Mr Carney and Ms Olevsky under the Guarantee and Indemnity. Portside also seek orders for possession and sale of the South Yarra and Richmond Properties.
8. Portside's total claim as at 28 April 2025 was $2,326,257.67.
9. The Borrowers do not dispute the existence and validity of the Loan nor the amount alleged. The Borrowers, by their counterclaim, do contend that Portside acted unconscionably in respect of both their entry into the Loan and what they term as "post-loan conduct", engaged in misleading and deceptive conduct, harassment and coercion and breach of an implied term.
10. The Borrowers also alleged against the solicitors of Portside (CK Legal) a breach of duty of care owed to the Borrowers, misleading and deceptive conduct and breaches of the consumer warranties implied by sch 2 of Competition and Consumer Law Act 2010 (Cth) (Australian Consumer Law). Ultimately, the counterclaim as between the Borrowers and CK Legal was settled on 25 March 2025 at mediation ordered following the first day of trial.
11. In order to ensure an efficient hearing of the trial, with the consent of the parties, I ordered the assessment and quantification of the Borrowers' loss pursuant to their set off and counterclaim to be split from the issues of liability and quantum on the claim and liability only on the counterclaim. If necessary, determination of the Borrower's entitlement to compensation, damages and the issue of mitigation of loss arising out of the counterclaim will be set down for determination at a later date.
12. By the conclusion of the hearing the Borrowers accepted the following matters:

(a) They had defaulted on their obligation to make payments on time each month from May 2022 to October 2022.

(b) As a consequence, the higher contractual rate of interest prevailed in respect of each monthly payment that had not been paid on time.

(c) They had not repaid the facility to Portside upon its expiry on 8 October 2022 and were thus in default.

(d) That from the facility's expiry, interest continued to accrue on the loan balance at the higher rate.

(e) Regardless of whether the 26 May 2022 Notice of Default was defective (as claimed by the Borrowers) they made no challenge to the validity of the Notices of Default served on 24 October 2022.

(f) As a consequence of these matters, save for the issues agitated on their counterclaim, Portside is entitled to orders against the defendants in respect of their indebtedness and for possession of the properties.

1. This leaves only the matters alleged by the Borrowers against Portside on their counterclaim to be determined.
2. For the reasons below, I have determined that the Borrowers have not succeeded on any of their claims in the counterclaim with the result that Portside is entitled to judgment for its claim and orders for possession of the Richmond and South Yarra Properties.

1. Portside (Portside Credit Finance and Portside CF Securities) runs a private lending business, often sourcing loans from loan brokers or introducers. These loan "referrers" often charge a fee. Mr Miles Lackmann of Kingsley Finance has introduced loans to Portside since 2021, charging a fee of 1.1% of the loan amount, plus a trailing commission of 25% of any higher interest recovered on the loan.

1. Mr Carney and Ms Olevsky are married with two children and live at the Richmond Property. Ms Olevsky is the sole director of Oreol, has been a chartered accountant for around 20 years and is currently a Principal at Deloitte Australia. Ms Olevsky was diagnosed with cancer in August 2018, which was in remission by mid-2020 or 2021. Ms Olevsky returned to work in around September 2021. Mr Carney is a consultant, having worked in IT for 40 years, and more recently in property development.

1. On 5 July 2012, Mr Carney and Ms Olevsky were registered as joint proprietors of the South Yarra Property.
2. Ms Olevsky is the sole registered proprietor of the Richmond Property.
3. On 14 July 2016, AMP registered a first ranking mortgage over the South Yarra and Richmond Properties to secure a loan advance of about $3.1 million. In September 2021, Mr Carney and Ms Olevsky's loan with AMP was in arrears and subject to hardship assistance. As at April 2023, the outstanding amount under the AMP loan was $3,062,809.22.
4. On 23 March 2018, Archery Capital Ltd and Cross Bow Investments Pty Ltd (Archery) registered second ranking mortgages over the South Yarra and Richmond Properties in relation to a loan advance totalling around $1.1 million.

1. On 18 August 2021, Mr Carney and Ms Olevsky engaged and instructed Mr Nicholas Tamm of Dania to act as their exclusive loan broker.
2. Through Dania, the Borrowers applied for a loan from Universal Finance on 24 September 2021 seeking a total of $1,237,500 for a term of 18 months.
3. The loan application referred to the Richmond Property as an asset belonging to the Borrowers. As part of the suite of documents prepared for the loan application, the Borrowers submitted a valuation of the Richmond Property. Portside says that the provision of this valuation made clear that the Borrowers were offering the Richmond Property as part of the security available to the proposed lender. It was the Borrowers' position that the Richmond Property was not offered by them as part of the securities available to secure the proposed loan. I reject the Borrowers' position for two reasons. First, the Richmond property was already secured to the Archery loan which was being refinanced by the proposed new facility. This fact would be known to any new lender who conducted a Title Search of the property. This makes it more likely that the proposed lender would require that property to be provided as security. Secondly, the Borrowers provided the valuation of the Richmond Property as part of the suite of documents submitted for the loan application to Universal Finance. It is difficult to understand why the Borrowers would have commissioned this valuation and submitted it to Universal Finance if it was not their intention to make the property available as security for the proposed loan.
4. The proposed loan from Universal Finance did not proceed.
5. On 24 September 2021, Mr Andrew Pickering of Universal Finance spoke to Miles Lackmann of Kingsley Finance to introduce the proposed loan to Kingsley Finance. Mr Pickering emailed the loan application and all supporting documents (including the Richmond Valuation) to Mr Lackmann. He then prepared an indicative letter of offer from Kingsley Finance, for a loan of $1,213,600 for a term of 18 months with an interest rate of 13.85% with a discount rate 5.85% "at all times whilst in good order" (First Indicative Letter of Offer). The primary security on the face of the document was a first registered mortgage over the South Yarra Property.
6. On 29 September 2021, Mr Lackmann emailed Ms Marisa Leone of Portside attaching the First Indicative Letter of Offer and other supporting documents, including a valuation for the Richmond Property. At trial, Mr Lackmann said that he believed he had discussed the loan at an earlier date, but could not recall exactly when.
7. On 29 September 2021, Ms Leone and Mr Lackmann discussed Portside's interest in the loan subject to due diligence. Mr Lackmann then prepared a further indicative letter of offer dated 29 September 2021 (Second Indicative Letter of Offer). The Second Indicative Letter of Offer provided an interest rate of 16.49% with a discount rate 8.49% "at all times whilst in good order". This indicative offer provided for the South Yarra Property alone as security for the loan.
8. On the same day, 29 September 2021, Mr Carney and Ms Olevsky signed the Second Indicative Letter of Offer.
9. I note that 29 September 2021 was a Wednesday.
10. Portside was aware that there was a hard deadline to settle the loan on 8 October 2021. That was the next Friday after the loan was first introduced to them on 29 September 2021. Ms Leone, Executive Director of Portside, gave evidence that in the ordinary course Portside would take about 2 weeks from loan introduction to settlement of a loan. In this period it would issue a Letter of Offer, conduct its due diligence on a loan proposal, and complete legal documentation leading to settlement. By reason of the short time frame available in this case, Ms Leone dispensed with the step of producing a Letter of Offer and collapsed the due diligence enquiries and the preparation of loan documents to occur simultaneously.
11. Portside engaged and instructed Elliot May Lawyers to prepare the loan documentation on 30 September 2021. On the evening of 30 September 2021, Elliot May Lawyers notified Portside that they would be unable to complete the documents within the required timeframe. During that evening, Ms Leone spoke to Mr Derrick Toh of CK Legal and engaged CK Legal to conduct due diligence and prepare loan documentation. This occurred on the Thursday evening.
12. Ms Leone gave evidence that in the course of assessing the loan proposal she was aware of the valuation of the Richmond Property. She also said that Portside's internal lending policy prevented her from lending on a loan to value ratio of 75% on a single security property. This meant that Portside's lending policy required the Borrowers to provide a second mortgage over the Richmond Property in order to qualify for the loan.
13. By Monday 4 October 2021, Portside had instructed CK Legal that Portside required a second mortgage to be provided over the Richmond Property as well as one over the South Yarra Property. After due diligence on 4 October 2021, Ms Ju Lee Seet of CK Legal emailed the loan documents to Mr Michael Barone, solicitor for the Borrowers, which included mortgage documentation over the South Yarra and Richmond Properties.
14. In response to this email, Mr Tamm wrote to Mr Pickering of Universal Finance in strong terms rejecting that the Borrowers would provide a mortgage over the Richmond Property. He said "As you know, our clients have never offered 11 Bowen [Richmond] as part of the agreed security and will not." Mr Pickering emailed Mr Lackmann, Ms Seet and Mr Derrick Toh of CK Legal, noting that the inclusion of a mortgage over the Richmond Property had not been previously discussed.
15. On 5 October 2021, in one of 5 telephone call between Mr Lackmann and Ms Leone, Ms Leone stated that Portside required the Richmond Mortgage given the high loan to value ratio of the loan, stating that it was a "non-negotiable". Mr Lackmann could not recall the conversations but believed that it was likely that he relayed this to Mr Pickering.
16. On 6 October 2021, Mr Carney and Ms Olevsky met with their solicitor, Mr Barone in relation to the execution of loan documentation. Mr Barone issued certificates of advice for each of Mr Carney and Ms Olevsky. The certificates of advice relevant to Ms Olevsky (as sole proprietor of the Richmond Property) clearly listed the discussion of a second ranking mortgage over the Richmond Property.
17. Also on 6 October 2021, the executed loan documents were provided to CK Legal and Portside, including the South Yarra Mortgage and the Richmond Mortgage.
18. I note that 4 October 2021 was a Monday. Therefore, by the close of business on that day, notwithstanding the intervention of the weekend on 2 and 3 October, loan documents were provided on Monday after the loan had been introduced on the prior Wednesday. That is, only 4 business days had elapsed between initial introduction of the loan and the conduct of due diligence and production of all loan and security documents. This short time frame is important, because one of the Borrowers' principal complaints is that they were unaware that Portside required a mortgage over the Richmond Property until the loan contracts were produced on 4 October 2021, and they therefore say that the mortgage was foisted upon them in a "take it or leave it" way. They say that the requirement for this mortgage was dropped in on them at the last moment. This is said to be one of the primary circumstances contributing to the statutory unconscionability claim.
19. At this point I can say that I consider the timing of the requirement to provide the Richmond Property as security to be unremarkable. This is because the time pressure on Portside to conduct due diligence and produce loan and security documents to enable settlement to occur on 8 October was a matter not of its own making at all. The short timeline was a consequence of Archery having imposed a hard deadline of 8 October 2021. Whether responsibility for that lies with the Borrowers or with Archery is not a matter I have to decide. That Portside was able to meet the short timeline meant that its communication of the requirement to provide the Richmond mortgage only came at the time the loan documents were provided to the Borrowers. This may have been unwelcome news to the Borrowers, however I cannot find that there was some misconduct by Portside in having done so. Indeed, having regard to the fact that the Borrowers provided a valuation of the Richmond Property to Dania, who provided it to prospective lenders meant that those prospective lenders must have regarded it as an available security. These facts, together with Portside's own lending guidelines, mean that its decision to require the Richmond Mortgage was not predatory, or contrary to ordinary and acceptable business values. It was simply the exercise of a commercial judgement as to what security it required in order to protect its capital that it was asked to provide by way of loan. The timing in which this was communicated to the Borrowers was merely the product of the short time between the introduction of the loan and the hard deadline to complete the loan.
20. Now the Borrowers are critical of the fact that in none of the indicative loan offers that they had received was the Richmond Property required as security. So much is true - but none of those indicative loan offers were issued by Portside. Portside had its own lending guidelines that in its own commercial judgement it considered prudent. Further, in cross-examination Mr Carney and Ms Olevsky both accepted that they understood these indicative letters of offer to be indicative only and not binding. As I have said above the communication of this requirement came within 4 business days of the introduction of the loan. I do not accept that the requirement to provide the Richmond mortgage was introduced improperly or with improper timing.
21. The Borrowers are also critical of the fact that Portside insisted on the provision of the Richmond mortgage. They say that it was presented as a "take it or leave it" proposition. While Portside did insist that it be provided I reject that this was somehow improper. As I say above, Portside had its own lending guidelines that it set at a level that it was prudentially comfortable with. Mr Bobko (Counsel for the Defendants) boldly submitted in answer to my question, that once the loan had been introduced, Portside was obliged to make the loan without requiring the Richmond Mortgage. In the absence of conduct which is contrary to accepted and acceptable commercial values such as to be unconscionable conduct contrary to statute, it cannot be that a lender is required to ignore its own lending guidelines so as to make a loan such as this.
22. I note that the Borrowers did not challenge Ms Leone on the basis that this lending guideline was somehow improper. They called no evidence to show that other lenders active in the same market as Portside did not have such a guideline. Nor did they provide evidence to demonstrate, for example, that the lender's risk was not materially enhanced by the requirement of this additional security.
23. The highest the submission rose was that Mr Bobko suggested that as Portside was intended to take a first mortgage over the South Yarra Property whereas Archery had a second mortgage over both the Richmond and the South Yarra Properties, the refinance was not intended to be like for like. While that might be so, if South Yarra was the only security property provided, it still fell outside of Portside's lending guidelines.
24. I also note 2 further matters. First, that the Borrowers had the opportunity to, and did, take legal advice about the inclusion of the Richmond Mortgage and the ramifications of doing so, and determined to proceed with the transaction anyway. I conclude that although they had preferred not to provide it, in their commercial judgment they were prepared to do so. Secondly, given the timing and the fact that they had already sought to obtain refinance from other lenders, no evidence was led that, had they known about the requirement for the Richmond mortgage prior to Monday 4 October 2021, this would have made any difference at all. Indeed, the evidence rather suggests that no other lenders were prepared to entertain this refinance at all.
25. For those reasons I reject the Borrowers' position that Portside's requirement that the Richmond mortgage be provided, and the timing of that requirement, was somehow improper.
26. On 8 October 2021, Settlement of the Deed of Loan took place, and Portside advanced $1,237,500.00 to Oreol, $1,105,000 of which was paid to Hall & Wilcox, the solicitors of Archery in discharge of the Archery mortgages over the Richmond and South Yarra Properties. Other amounts were paid to CK Legal and Hall & Wilcox relating to other disbursements.
27. Under the terms of the Deed of Loan, Oreol agreed to repay the facility in 12 months (that is, by 8 October 2022), with interest charged at 16.49%, reducible to 8.49% if all payments were made on time. The first instalment was due 7 months after the Commencement Date (that is, by 8 May 2022) after the prepaid component of interest was utilised.

1. On the Settlement Date, Portside's first ranking mortgage was successfully registered over the South Yarra Property.
2. CK Legal lodged Portside's application to register the second ranking Richmond Mortgage on 13 October 2021.
3. On 14 October 2021, the Land Titles Office (LTO) issued a Stopped Case Notice to CK Legal advising that the registration of the Richmond Mortgage would not proceed until two requisitions were complied with.
4. On 28 October 2021, Ms Seet of CK Legal discussed the Stopped Case Notice with the LTO. The LTO told Ms Seet that to comply with the Notice, the Richmond mortgage had to be amended by deleting references to the trust and off register documents.
5. Between 29 October and 4 November 2021, Archery, CK Legal, Mr Pickering, Mr Carney and Mr Tamm were in communications regarding the delay in the registration of the Richmond Mortgage.
6. On 4 November 2021, Mr Carney emailed Mr Toh requesting an update, stating that the five-week delay was "costing us thousands with AMP", that the defendants never offered the Richmond Mortgage, that it was "thrown in without our consent" and requesting a breakdown of CK Legal's fees.
7. On the same date, CK Legal amended the Richmond Mortgage and relodge it for registration on PEXA, and informed Mr Carney and Ms Olevsky that registration can take 7-10 business days to process.
8. On 15 November 2021, the LTO notified CK Legal that the application to lodge the Richmond Mortgage was again refused. On 19 November 2021, after conversations with LTO, CK Legal amended the Richmond Mortgage and re-lodged it for registration.
9. The LTO issued a Dealing Refusal Advice on 27 November 2021, stating that the certificate of title for the Richmond Property must be renominated and the mortgage must be re-executed. On 29 November 2021, CK Legal wrote to the LTO requesting that the notices issued and the refusal be reviewed.
10. On 6 December 2021, the LTO emailed CK Legal stating that the Stopped Case Notice "clearly mentioned that a wet signature will be required when relodging the withdrawn Electronic dealing", and that a certificate of title would need to be re-nominated.
11. On 10 December 2021, Ms Seet of CK Legal sent a request through PEXA to First Legal, solicitors for AMP, the first mortgagee of the Richmond Property, requesting that they re-nominate the certificate of title.
12. On 15 December 2021, the solicitors of AMP responded, stating that the matter was to be cancelled, and that CK Legal should contact AMP or the borrower directly.

1. On 7 April 2022, Ms Leone emailed Mr Tamm, asserting that the Borrowers had not sought to actively address refinancing the loan facility particularly given the difficulties in registering the Richmond Mortgage. The email asserted that the loan was in default due to the non-registration of the Richmond Mortgage.
2. On 2 May 2022, Mr Carney emailed Ms Leone noting that interest was due on 8 May 2022, and requesting a 3 month extension of the pre-paid interest period at the non-default rate. The proposition contained in the email was non-sensical in that the "prepaid" period could not be "extended". The Borrowers submitted that it was a request to extend the expiry date of the facility for 3 months beyond the 8 October 2022 date. I do not read the proposal in that way.
3. On 4 May 2022, Ms Leone emailed Mr Carney, stating:

We have been corresponding with your broker for several months now to discuss a refinance of your facility since we have been unable to register the second mortgage over your Richmond property which forms an integral part of our security arrangements under our facility agreement with Oreol Pty Ltd IIOR and ATF Oreol Investment Trust (Borrower). This is a clear breach of the terms of our facility....Up until a couple of weeks ago, we were assured that a valuer had been appointed and you were working toward a refinance prior to the end of the minimum term period. We have remained patient and have not sought to enforce our rights while we have given you the time to work through a solution for the facility.

As you have noted, the minimum interest period will be ending on or around 8 May 2022. At this time, your facility is in default and interest of $17,005.31 for the month of May will be due on 8 May 2022, based on a facility amount of $1,237,500 and an interest rate of 16.49%pa. Furthermore, we will be commencing a process, at the Borrower's cost, of [forcibly] registering the second mortgage over the Richmond property. Any costs incurred will be added to and recovered upon repayment of your loan.

I understand that this outcome is disappointing. However the circumstances of the default mean there is little negotiation in this position at this time.

1. The effect of this email was the subject of much discussion and debate in the course of the trial. This is because the Borrowers rely upon it as one of the circumstances grounding their statutory unconscionability claim and as a representation that is said to have been misleading and deceptive. I will say more about this below.
2. On the same date, Mr Carney emailed Ms Leone stating that the Borrowers were only informed of the requirement for a second mortgage over the Richmond Property at the time that the Borrowers were required to execute the required loan documentation.
3. Mr Carney gave evidence at trial that the email from Ms Leone on 4 May 2022 triggered him to drink excessively from the date he received it and that he was "smashed" "all day every day for months". He gave this as his reason for not making the interest payment that was due on 8 May 2022.
4. Notwithstanding this evidence, on 5 May 2022, Mr Carney emailed Ms Leone as follows:

I met with my lawyer yesterday to discuss the matter.

I have no control over the banks. I can not force their hand. We did everything we were asked to do.

We should have a decision in VCAT next Thursday 12/5/22. This will enable us to decide what our next move will be.

All payments are up to date as of today. We are not in in default.

We want to pay the next payment at the agreed 8.49% interest rate on time.

Additionally, if you feel exposed, we are happy for you to take out a caveat on our Richmond property, this provides similar protection to a 2nd mortgage. All lending with AMP on the Richmond the property is up to date. Our loan was also based on a valuation 12 months ago, since then prices have sky rocketed, assuring there in no risk.

In the interest of incurring unnecessary costs and expenses from both our respective positions, I implore you to work with us.

My lawyer is also happy to discuss this matter with your legal team.

1. I have set out this email in full[1] because it demonstrates a lucidity of thought and composition that stands in stark contrast to Mr Carney's evidence that he was so inebriated for months because of the 4 May email from Ms Leone that he "was not in a fit state of mind" and "couldn't make good choices." He gave this as a reason for not making the 8 May interest payment that I am about to discuss. Having regard to the 5 May email, I am not prepared to accept that Mr Carney's state of mind was so affected at all times for months that he could not have made the 8 May interest payment.
2. On 8 May 2022, payment of interest was due, and no payment was made to Portside. At trial, Ms Olevsky gave evidence that the interest instalment at the lower rate had been budgeted for, but was not paid. She referred to Mr Carney's inebriated conduct at the time that the payment fell due, including that he was "throwing a roast around the kitchen, punching holes in the walls" and "running a car in a locked garage".
3. She accepted that she was in a position to have caused the payment of interest to be made on 8 May 2022, but did not do so.
4. On 9 May 2022, Portside issued an invoice of $17,000.32, that is, the interest at the higher rate of 16.49%. The Borrowers did not challenge this invoice given that the 8 May interest payment was not paid on time.
5. Between 16 May 2022 and 19 May 2022, Mr Carney and Ms Olevsky, and Mr Lackmann and Ms Leone attempted to contact one another in relation to the Loan.
6. On 19 May 2022, Ms Leone had a telephone call with Ms Olevsky, requesting payment of the interest instalment. This conversation was contentious in that Ms Olevsky asserted that Ms Leone threatened her saying that she would "destroy her". Ms Leone denied having said this.
7. I observed Ms Leone in the witness box. She presented as a professional woman carrying out her obligations to give evidence to the best of her ability. She was relatively dispassionate in giving her evidence. She was calm and careful. I saw nothing in the contemporaneous documents that suggested that she acted other than professionally. She was certainly firm in pressing Portside's commercial interests, but there was nothing in her correspondence that suggested that she used such threatening language.
8. As Ms Olevsky gave evidence it was plain that she was feeling under stress. I observed her to be at times angry and emotional. At times she was upset. She was a cooperative witness. She is also self-evidently an intelligent and experienced professional chartered accountant. I do note that she wrote an email to Tamm of Dania on 6 October 2021 in which she said "Please don't give them anything for Richmond unless they ask - I am still dirty about the second mortgage and additional running around..." which rather suggests that she could be angry and express that anger.
9. I note that neither Ms Olevsky nor Mr Carney wrote an email complaining about Ms Leone having said what they attributed to her.
10. Having regard to both accounts, the demeanour of the witnesses and the lack of any contemporaneous documentary support, I do not accept that Ms Leone said that she would destroy Ms Olevsky. I accept that, at the time of the conversation on 19 May 2022, Ms Olevsky was probably in a heightened emotional state, assuming that Mr Carney was acting as she said he was, and that she may have misconstrued what Ms Leone said in the phone conversation.
11. On 19 May 2022, Mr Carney sent a text message to Mr Lackmann stating:

Hi Miles. We've been playing telephone tag. I've instructed my lawyer to respond to Derek in regards to the default interest. As I advised Marisa, I can not force AMP. We borrowed 75% on a first mortgage, a 2 nd should have never been on the table and we told our broker that AMP wouldn't agree to a 2nd at the time. We can make the agreed interest payment. My wife is ill and we have a vcat decision coming in the next week that'll determine our course. Regards David"

1. Mr Lackmann forwarded this text message to Ms Leone, to which Ms Leone replied:

1. Mr Lackmann then replied to Ms Leone, stating that:

"Nothing has been 'agreed' on interest payments. I suspect he's referring to a payment commensurate with the lower rate. He seems to imply in his text that the default is caused by the 2nd not being registered. He hasn't acknowledged that his interest payment is seriously overdue."

1. By 26 May 2022, the Borrowers were yet to make any interest payments. On this date, Portside issued demands and default notices to Oreol, Mr Carney and Ms Olevsky (the May Default Notices), alleging that the Borrowers were in breach of the loan agreement by :

"(a) failing to provide the Mortgagee with a second ranking mortgage;

(b) failing to make the repayment required under the Facility Agreement, in the sum of the Arrears [defined as $17,005.32]. Consequently, the Lender requires immediate payment of the Arrears and the Enforcement Costs, being the sum of $17,995.32."

1. Ms Leone gave evidence at trial that she believed at the time that the failure to have obtained registration of the Richmond Mortgage was a valid default under the loan documents. Without waiving legal professional privilege, Ms Leone said that the notices were issued on the basis of legal advice provided to her.[2] Mr Toh, solicitor for Portside, who settled the May 2022 Default Notices, also gave evidence that he believed them to be valid. He asserted that the difficulties in obtaining registration of the Richmond mortgage engaged clause 8.1(7) of the Memorandum of Common Provisions of the Mortgages which was thereby an event of default by operation of clause 9.1(b) of the Deed of Loan.

(7) Anything happens which in the opinion of the Mortgagee adversely affects the Mortgagee's interest in the Mortgage, the value of the Land or the Mortgagee's ability to recover the Secured Money or the Mortgagor's ability to observe the Mortgagor's obligations under this Mortgage."

(b) there is a breach or default (other than by the Lender ) in the performance of any term, agreement, or condition contained in or implied by this document or any Transaction Document."

1. The issue of the May Default Notices and their reliance on the non-registration of the Richmond Mortgage is relied on by the Borrowers as one circumstance grounding their unconscionability claim and as a misrepresentation grounding their misleading and deceptive conduct claim.
2. I note that in this proceeding Portside did not rely on the non-registration of the Richmond Mortgage as an act of default giving rise to its claim for relief. Portside said that it did not do so, because it did not need to. Portside instead relied on the non-payment of interest from May to October 2022[3] and the failure to have paid out the facility at the expiration of its term as operative acts of default.
3. On 26 May 2022, about an hour and a half after the default notices were issued to the Borrowers, Mr Carney telephoned Mr Lackmann. In the pleadings there was a dispute about the substance of the conversation between Mr Carney and Mr Lackmann, however the issue resolved when Mr Carney gave evidence in the witness box about that conversation that largely concurred with that of Mr Lackmann.
4. On the same date, Mr Lackmann sent a text message to Ms Leone, saying:

"Hi Marisa, I briefly spoke to D Carney today. He started on about the second mortgage & I interrupted him and said some colour is better than no colour. He agreed to pay the lower rate of interest which is $8,775.31 subject to a discussion with his wife tonight. We have agreed to talk again tomorrow. I want to work him up to selling S Yarra. Shall report again after tomorrow's chat with him."

1. On 27 May 2022, Mr Carney telephoned Mr Lackmann and indicated that a payment would be made.
2. On 27 May 2022, in an email to Mr Carney and Ms Leone, Mr Lackman wrote:

Hi Dave [Carney], Thanks for your time on the phone today. As mentioned the amount referred to above and discussed on the phone is $8,755.31.

Hopefully, this amount will be paid on Monday or Tuesday or next week as you suggested.

1. On 1 June 2022, the Borrowers paid $8,755.31 to Portside. Portside submit, and the Borrowers accept, that there was no agreement that the Borrowers would be permitted to make the May payment at the lower rate notwithstanding that it was not made on time.
2. On 8 June 2022, the June interest instalment fell due to Portside under the Deed of Loan. It is accepted that no payment was made.
3. On the same date, Portside filed a Writ and Statement of Claim, commencing this proceeding.
4. On 16 June 2022, the Borrowers paid to Portside a sum of $8,755.31. Portside submit, and the Borrowers accept, that there was no agreement that the Borrowers would be permitted to make the June payment at the lower rate notwithstanding that it was not made on time.
5. On 8 July 2022, the July interest instalment was due to Portside under the Deed of Loan. No such payment was made.
6. On 8 August 2022, the August interest instalment was due to Portside under the Deed of Loan. No such payment was made.
7. On 17 August 2022, default judgment was entered against Oreol, Mr Carney and Ms Olevsky in this proceeding.
8. On 19 August 2022, AMP nominated the certificate of title for the Richmond Property in PEXA, and as a result, Portside successfully registered the Richmond Mortgage.
9. On 8 September 2022, the September interest instalment was due to Portside under the Deed of Loan. No such payment was made.
10. The Repayment Date under the Deed of Loan fell on 8 October 2022. The loan was not repaid.
11. On 20 October 2022, the default judgments entered against Oreol, Mr Carney and Ms Olevsky were set aside.

1. The Borrowers failed to make interest payments falling due between 8 July 2022 and 8 October 2022. This is accepted by the Borrowers.
2. The loan and the accrued interest became due and payable on 8 October 2022 under the term of the loan.
3. On 24 October 2022, CK Legal issued further default notices to the Borrowers, asserting that "[t]he Borrower is in default under the Facility Agreement and Mortgage by failing to repay the Amount Owing under the Facility Agreement by the Due Date (Default)".

1. The plaintiffs called the following witnesses at trial:

(a) Mr Miles Charles Lackmann, director of Kingsley Finance;

(b) Ms Marisa Leone, director of Portside; and

(c) Mr Derrick Ki-Jinn Toh, director of Capstone Koroneos Legal.

1. The defendants called the following witnesses at trial:

(a) Mr David James Carney, co-guarantor of Oreol;

(b) Ms Irena Olevsky, sole director and co-guarantor of Oreol; and

1. The parties agreed to refine the list of issues for determination during the course of trial. The final version of the list appears as Annexure A to these Reasons.

1. It will be apparent from the Reasons below that I have not found it necessary to answer all of the above issues in quite the form set out. For one thing, it will be recalled that the question of relief on the counterclaim has not been the subject of this trial. It will be apparent from these reasons how I have dealt with each of those issues.

1. In his written closing submissions,[4] Mr Bobko contended that the default notices issued by Portside on 26 May 2022 (May Default Notice) were invalid. He argued that the notice was predicated on an alleged default that did not in fact exist, namely, the Borrowers' failure to register the second Richmond mortgage. According to Mr Bobko, any contractual obligation in respect of the second mortgage was fulfilled by the Borrowers and the delay in the registration was due to extraneous factors over which they had no control.
2. However, having regard to the concessions made by the Borrowers (as set out in paragraphs 12(a)-(d) above) the issue of the validity of the May Default Notices has become otiose. Most notably, the defendants expressly accepted the validity of the default notice served on 24 October 2022 (October Default Notice) and further noted that at the time the May Default Notices were served, the Borrowers were in default for failure to pay interest by the required date.
3. As the October Default Notices are unchallenged by the Borrowers, they therefore stand as a valid basis for Portside to exercise its enforcement rights.
4. In particular, the acceptance of the validity of the October Default Notices enlivens Portside's power of sale under sections 76 and 77 of the Transfer of Land Act 1958 (Vic), irrespective of any alleged deficiency in the May Default Notices.
5. It is therefore unnecessary for me to decide this issue.
6. Any remaining relevance of the May Default Notices is confined solely to the defendants' counterclaim.

Issue 2 - Liability under the Deed of Loan, Guarantee and Indemnity

1. Portside's case on this issue was simple. Mr Miller submitted that the Borrowers are liable to pay the principal amount of $1,237,500, interest at the late payment rate of 16.39% from 8 May 2022 onwards, and all enforcement costs on a full indemnity basis.
2. Mr Bobko accepted that the Borrowers continue to be in breach of the Loan. However he says that the Borrowers failed to make the repayment of interest instalments as a result of the legal proceedings commenced against them. He says that their attention and, I infer, funds were utilised in funding these proceedings rather than servicing the loan. I note that he also contends that the commencement of these legal proceedings was another act grounding the Borrowers' counterclaim.
3. Setting aside any relief that might be available to the Borrowers under their counterclaim (including their unconscionable conduct claim) I do not really understand how Mr Bobko's submission impacts the issue of liability of the defendants under the loan, guarantee and indemnity. It does not appear to do so.
4. At the hearing of closing submissions Portside provided to the Court an updated Statement of Account which included debit entries for interest at the higher rate from 8 May 2022 and enforcement costs on an indemnity basis. It also contained credit entries for such payments as were received. The total claimed indebtedness as at 28 April 2025 was $2,326,257.67.
5. Mr Bobko made no submissions in respect of this document, save to say that he submitted that if he succeeded on his counterclaim interest for the period May to October 2022 should be accrued at the lower rate.
6. On that basis, save for the counterclaim issue, each of the defendants is liable to Portside in the sum of $2,326,257.67.

Issue 3 - Entitlement to possession of the properties

1. As discussed above, on the basis of the defendants' admissions in paragraph 12(a) - (d) above, Portside is entitled to enforce the Richmond and South Yarra Mortgages.
2. Mr Bobko submits that the determination of this issue turns on Portside's conduct from about 29 September 2021 until the present. He submits that Portside's entitlement to the Richmond Property should be barred by virtue of its "admitted inclusion without notice and in circumstances where the defendants were faced with a take it or leave it proposition."[5]
3. I understand these submissions to be in support of the counterclaim.
4. Save for the issues that arise on the defendants' counterclaim, Portside is entitled to orders for possession of both the Richmond and South Yarra Properties.

1. The Borrowers say that Portside acted unconscionably in contravention of s 21 of the Australian Consumer Law (ACL) and/or s 12CB or 12CA of the Australian Securities And Investments Commission Act 2001 (Cth) (ASIC Act) at two stages of the Loan. First, prior to the Borrowers' entry into the Loan and secondly, its subsequent dealings (by itself of by its agents CK Legal), following the settlement of the Loan. I will deal with each in turn in due course.
2. The Borrowers further claim that there were terms of the Loan and Guarantee which were unconscionable within the meaning of sections 12CB and 12CC of the ASIC Act, although Mr Bobko did not seem to press this claim.

Legal Principles applicable to statutory unconscionability

1. The parties were in significant agreement as to the legal principles applicable to statutory unconscionability claims, whether under s 21 of the ACL or ss 12CB o 12CA of the ASIC Act.
2. Mr Bobko submitted that for conduct to contravene the relevant statutes it must be behaviour which falls outside of societal norms, behaviour which warrants condemnation as conduct offending conscience,[6] a breach of normative standards which have permeated community standards.[7] He notes that the courts have distinguished statutory unconscionability from its equitable cousin, noting that some of the integers, such as the requirement of a "special disadvantage" in equitable unconscionability, are not required in the statutory context.[8]
3. Mr Miller (counsel for Portside) did not disagree with this statement of the law in substance. He relied on the following passage from Productivity Partners v ACCC[9] (per Gageler CJ and Jagot J) in drawing out the principles.

"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."

1. I take particular note of their Honours' invocation that, when considering an alleged breach of a statutory unconscionability provision, courts are required to consider such of the factors set out in s 22 of the ACL (and by analogy s 12CC of the ASIC Act) as appear to be applicable to the particular circumstances of the case. The court's function is to determine whether in all the circumstances the conduct concerned transgresses "a normative standard of conscience which is permeated with accepted and acceptable community standards" and is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience".
2. Mr Miller also submitted that while exploitation of a special disadvantage is often present, the existence of a special disadvantage is not a prerequisite to contravention of statutory unconscionability provisions.
3. For completeness I set out below the factors set out in s 22 of the ACL to which I may have regard in considering the issue:

S 22(1) [Relevant matters in determining whether supplier has contravened s 21]

Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a) the relative strengths of the bargaining positions of the supplier and the customer; and

(b) whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c) whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e) the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f) the extent to which the supplier's conduct towards the customer was consistent with the supplier's conduct in similar transactions between the supplier and other like customers; and

(g) the requirements of any applicable industry code; and

(h) the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i) the extent to which the supplier unreasonably failed to disclose to the customer:

(i) any intended conduct of the supplier that might affect the interests of the customer; and

(ii) any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j) if there is a contract between the supplier and the customer for the supply of the goods or services:

(i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii) the terms and conditions of the contract; and

(iii) the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv) any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l) the extent to which the supplier and the customer acted in good faith.

1. Section 12CC of the ASIC Act has a substantially similar list of factors relevant to the supply or possible supply of financial services.

1. Mr Bobko did not tie his submissions to any of the factors set out under s 22(1) of the ACL. Rather his submissions focused on what he said was the "late inclusion" by Portside of the requirement that the Borrowers provide a mortgage over the Richmond Property when this had not been sought before. He said that when his client's pushed back on that requirement, Portside had insisted that it be provided. Mr Bobko cast this as a "take it or leave it" proposition, which, I interpolate, perhaps enlivens the factor in s 22(1)(j)(i) of the ACL. He submitted that as Portside was aware of the time constraints on the Borrowers imposed by Archery, this presented as an opportunity to force the Borrowers into providing the Richmond mortgage, which opportunity Portside took. For those reasons Mr Bobko submits that Portside took the Richmond Mortgage "in circumstances which, when viewed objectively, were wholly unconscionable".[10]
2. I reject that submission. As I have indicated above, the time pressure that did exist was not imposed by Portside. It existed as a consequence of whatever was the state of the relationship between the Borrowers and Archery (noting that the facility with Archery was in default and probably had been for some time). Portside turned around the loan request in a very short time. It conducted its due diligence at the same time as it prepared loan documents. In my view, this was not done, as suggested by Mr Bobko, so that the Richmond Mortgage could be surreptitiously dropped in on the Borrowers at the last moment. In my view it was done so as to be able to meet the hard deadline that Archery had imposed. Portside provided the loan documents within 4 business days punctuated by a weekend. Portside notified the Borrowers of the requirement of the Richmond Mortgage in a reasonable space of time. That this ran hard up against the Borrowers' time constraints is not the fault of Portside. Portside's requirement that the Richmond Mortgage be provided was a consequence its lending guidelines that I infer were the product of its commercial judgement as to the level of risk it was prepared to take. There is no evidence of the guidelines being predatory in nature or anything other than the ordinary exercise of sound commercial judgement by Portside. The Borrowers were both intelligent people experienced in taking loans and granting securities. They had the benefit of their own legal advice, which they took. The legal advice was given after the requirement for the Richmond Mortgage was known. In the end, it seems to me that the Borrowers entered into this loan and granted the securities, with their eyes open, and taking on the commercial risk that they were prepared to. Had they not have been prepared to do so, they were in no worse position. They were already in default to Archery which had security over both the South Yarra and the Richmond Properties. Had they not wished to enter the Portside loan, they could have approached Archery for further time. Alternatively they could have sold the development property at South Yarra. They did none of this.
3. Mr Bobko referred to Mr Carney's evidence that had the Borrowers been aware of the requirement of the Richmond Mortgage earlier, they would have looked for alternative financing. I do not consider this prospect to have been realistic. No evidence was submitted as to that counterfactual. No evidence was led to establish that there was another lender prepared to make this loan on the terms that they wished. Indeed, the evidence that there is suggests that the refinance had already been put to a number of lenders without success.
4. Mr Bobko also referred to Portside's awareness that due to Ms Olevsky's significant health issues, Mr Carney had failed to organise the refinance of the Archery facility. His submissions did not seem to focus on Ms Olevsky's health as an issue in the unconscionability mix. Indeed, the evidence was that Ms Olevsky was in remission at the time of entry into the loan, and that she was back working at Deloitte by then. I do not consider Ms Olevsky's health to be factor on the unconscionability claim.
5. I note that Agreed Issue 5 (e) concerns the assertion that the Borrowers could not service the loan at the higher interest rate and could only do so at the lower rate (assuming that they paid interest instalments on time). In Mr Bobko's DCS at [32] the Borrowers appear to have abandoned any reliance on this issue. I will not deal with it further.
6. Turning to the factors in s 22(1) which I consider relevant.

(a) As to subparagraph (1)(a): I do not consider there to have been a significant gap in the bargaining power of the Borrowers compared to Portside. I say this because the Borrowers had engaged their own loan broker to act for them, who was in a position to know and understand the landscape of lending in this part of the market. They also had their own lawyer to advise them as to legal risks associated with the particular requirements of this lender. While the pressure of time placed by Archery imposed bargaining limitations on them, they did have options such as further negotiating with Archery, or selling one of the security properties to pay out Archery. It was always within their power not to accept the terms offered by Portside. In this way it is my view that, although Portside had a stronger bargaining position than the Borrowers, that relative differential was not a significant factor in the question of whether the conduct of Portside overall was unconscionable.

(b) As to subparagraph (b): the only complaint made at this juncture is that Portside required the Richmond Mortgage as security for the loan. As I have explained above, I consider that requirement to have been a product of Portside's lending guidelines and to have been in the legitimate exercise of Portside's commercial judgment. I do not consider this factor to have been made out.

(c) Subparagraph (d): I do not consider that Portside's requirement that the Richmond Mortgage be provided as security to have been procured by any undue influence or pressure. As I have said, the requirement was a matter that followed from Portside's lending guidelines that I consider to have been reasonable. The timing of the notification of the requirement was also reasonable given the very tight time frame available to Portside to assess the loan and prepare documentation.

(d) As to subparagraph (j)(i): I have dealt with this at paragraph ‎131 to ‎133 above.

(e) As to subparagraph (j)(iii): I will turn to the post-contractual conduct shortly, but for the reasons I set out below, I do not consider that any conduct by Portside after the contract was entered into contributed to the taking of the Richmond Mortgage being found to have been unconscionable.

(f) As to subparagraph (l): For the reasons above, I do not consider Portside's requirement for the Richmond Mortgage to have been done otherwise than in good faith.

1. Having regard to all of the circumstances of the case, I do not consider that Portside's requirement for the Richmond Mortgage to have been provided as security for the loan, and the circumstances in which it was taken, to have been conduct that was "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience."

1. Mr Bobko relied on a number of matters as conduct by Portside after the loan was entered into that contravened the statutory unconscionability provisions.
2. First, he relied on the fact that Portside's solicitors failed to effect registration of the mortgage over the Richmond Property for a substantial period of time.
3. While that is so, the evidence reveals the reason to have been that they experienced difficulties with satisfying certain requisitions from the Land Title Office. This was compounded by the first mortgagee, AMP, being less than cooperative in nominating the Title to the property when Portside was in a position to register the mortgage. This was eventually resolved only after Portside's solicitors threatened to commence proceedings to compel AMP to nominate the title.
4. The significance of this delay in registering this mortgage is that it ultimately led Ms Leone to assert in the 4 May 2022 email to Mr Carney that the non-registration of the mortgage was an event of default giving rise to the obligation to pay the May interest instalment at the higher rate.
5. Mr Bobko submits that the issue of the non-registration of the Richmond Mortgage was merely a pretext used by Ms Leone to manufacture a non-existent default to force the Borrowers to "refinance the Portside facility during the prepaid period [and before the end of the term]" and to set in motion "means by which Portside could obtain possession and sell South Yarra".[11]
6. I note that at no point in his cross-examination of Ms Leone did Mr Bobko put that case to her. He cross-examined her about the pressure she applied on the Borrowers to effect a refinance, but I understood this to be a refinance to exit the Portside loan at the end of its term. I did not understand him to be putting to her that she was pressuring the Borrowers to exit the facility prior to the end of the facility's term. Whether anything turns on the failure to have put this case to her, I do not consider that this was borne out by the evidence. Ms Leone's evidence was that she wanted to ensure that the Borrowers would be able to exit the facility. She did not indicate that she wanted this to occur early. I understood her to be seeking to ensure that the exit was effected at end of the loan term on 8 October 2022.
7. It must be noted that the Portside facility was for a 12 month term. The exit strategy that the Borrowers had advised Portside at the time of entry into the loan was that they would refinance or sell the South Yarra Property. The facility had a 7 month prepaid interest component. As a result, by May 2022 the Borrowers were required to be making interest payments.
8. Armed with the knowledge of the manner in which the loan had been entered by the Borrowers - that is, at the very last moment and when they were already in default to Archery - Ms Leone was concerned to ensure that the Borrowers acted upon their exit strategy early and in sufficient time that would provide Portside with an exit of the facility.
9. Between January to April/May 2022, Ms Leone corresponded with Mr Tamm, the Borrowers' broker, to satisfy herself that the exit strategy was being acted upon. This included her email to him on 7 April 2022 which in terms was seeking evidence that the Borrowers were pursuing a refinance.
10. Mr Bobko submitted that Ms Leone's communications with Mr Tamm and the Borrowers in this period was an attempt to force them to refinance and exit the facility before the end of its term. As I have indicated above, I reject this construction.
11. By May 2022 it became apparent to Ms Leone that the Borrowers had not listed the property for sale, nor were they actively seeking refinance. She received the 2 May 2022 email from Mr Carney seeking to extend the prepaid interest provision for a further 3 months at the lower rate. This was nonsensical and elicited her 4 May email in response.
12. I have already referred above to Ms Leone's evidence that she believed that the non-registration of the Richmond Mortgage was an event of default and that this belief was based on legal advice. Mr Toh, the solicitor from CKL who acted for Portside gave evidence that this was his belief and, I infer was the advice that he gave to Ms Leone.
13. The significance of this is that, regardless of whether the advice was right or wrong, Ms Leone acted on the basis that her lawyer had advised that the facility was in default on 4 May 2022. This is not conduct that is so far outside of the normative values of commercial conduct that it would be a factor contributing to an unconscionability finding.
14. It is also the case that the Borrowers had their own lawyers throughout this period and it was open to them to take legal advice about whether they were or were not in default. Indeed in the 5 May 2022 email Mr Carney told Ms Leone that "I met with my lawyer yesterday to discuss the matter." Taking that statement on face value, I can and do infer that the Borrowers took their own advice on the matter and were thus in a position to inform themselves as to whether they were or were not in default on this account. If this is so, then Portside's assertion that the failure to have registered the Richmond mortgage was an event of default cannot have been an operative circumstance in the landscape of conduct contributing to what is alleged to have been Portside's unconscionable conduct. Even if the Borrowers had not in fact taken legal advice as the email suggests, there was nothing preventing them having done so.
15. However the matter goes beyond that. On 5 May 2022 Mr Carney responded to the 4 May 2022 email in no uncertain terms rejecting Portside's position that the Borrowers had failed to do everything required of them to assist in the registration of the Richmond Mortgage. He also said "We are not in default". He advised that the Borrowers wanted to make the 8 May 2022 payment on time and at the lower rate. It is open to me to conclude that Mr Carney's statement that the Borrowers were not in default was based on legal advice. But even if it was not, it was his firm view that the Borrowers were not in default as had been asserted by Ms Leone. If that is so, then assessing those circumstances objectively and considering what was reasonably to be understood by the Borrowers by the assertion by Ms Leone that they were in default, I do not consider this to be an operative matter contributing to what is alleged to be Portside's unconscionable conduct.
16. Notwithstanding Mr Carney's assertion, the 8 May 2022 payment was not made. The result was that this was an event of default and the Borrowers became liable to pay interest at the higher rate and enforcement options became available to Portside.
17. Based on Mr Carney's evidence that Ms Leone's email of 4 May 2022 "changed everything", Mr Bobko inferentially submitted that the cause of Mr Carney's drinking should be laid at Portside's feet. Thus, it was submitted that it was Portside's misconduct that led to the Borrowers failing to make the 8 May 2022 payment. I reject this submission. The Borrowers were in a position to make that payment at the lower rate on time. They did not accept that they were in default and thus that they were obliged to make the 8 May 2022 payment at the higher rate. In Mr Carney's 5 May 2022 email they said as much to Ms Leone. Mr Carney's drinking was his own doing and Ms Olevsky's failure to have made the payment on 8 May 2022 was not satisfactorily explained.
18. Mr Bobko relied on the conversation between Ms Leone and Ms Olevsky on 26 May 2022 as a further integer into the unconscionability claim. I have dealt with this conversation at paragraphs ‎72 to ‎76 above. I do not accept that this was an operative circumstance going to the unconscionability claim.
19. Mr Bobko's overarching submission was the Ms Leone set on a path of asserting that the failure to have registered the Richmond mortgage was an event of default and that she would not deviate from it. He says that this demonstrates that Portside was intent on realising its securities.
20. I reject this submission. From 8 May 2022, the Borrowers were in default in having failed to make the interest payment on time. They were therefore obliged to pay interest at the higher rate. They did not do so at any time after that.
21. Portside issued the 26 May 2022 default notices, as they were permitted to do.
22. The Borrowers did not remedy that default set out in those default notices.
23. In light of this failure to remedy the default, Portside commenced this proceeding.
24. Now Mr Bobko submitted that the commencement of this proceeding built, as he alleges it was on Portside's alleged improper conduct as set out above, was itself an integer of the alleged unconscionable conduct.
25. As is apparent, I have largely rejected the Borrowers' allegations that the conduct relied upon each constitute constituent elements going together to ground the claim of unconscionability.
26. It follows that I reject that Portside taking enforcement action, including issuing this proceeding, was in any way improper.

1. In concluding this part of the analysis, I remind myself that I am to take into account all of the circumstances concerned together in determining whether Portside's conduct so offends commercial conscience that it should be considered to be unconscionable.
2. It is my view that, having regard to the entirety of the pre-loan and post-loan conduct alleged, Portside's conduct in taking the loan and its securities and in its post-loan dealings with the Borrowers does not offend commercial conscience as to be considered unconscionable.
3. Under those circumstances, the Borrowers' counterclaim that Portside's conduct was contrary to s 21 of the ACL and s 12CB of the ASIC Act must fail.
4. For the same reasons, its claim under s 12CA of the ASIC Act, that the conduct was unconscionable within the meaning of the unwritten law must fail.

Issue 6 - Misleading and Deceptive Conduct by Portside

1. The Borrowers pleaded that Portside made a raft of representations contrary to a number of statutory provisions that were misleading or deceptive in trade or commerce in the provision of financial services. In his DCS Mr Bobko relied principally on sections 12DA, 12DB and 12DF of the ASIC Act.
2. Those sections provide that a person must not in trade or commerce:

(a) engage in conduct which is misleading or deceptive or likely to mislead or deceive in relation to financial services (s12DA);

(b) make false or misleading representations in connection with the supply or promotion by any means of the supply of financial services (s12DB);

(c) engage in conduct that is liable to mislead the public as to the nature, characteristics, the suitability for their purpose or the quantity of any financial service (s12DF).

1. At the hearing of the parties' oral closing submissions, Mr Bobko narrowed the conduct the Borrowers relied upon as constituting the representations relied upon under this claim.
2. The two representations that were ultimately pressed were as follows:

(a) that as of 4 May 2022, the Loan Facility Agreement was in default (paragraph 55 (d) of the Further Amended Defence and Counterclaim filed 31 March 2025 (FADC));

(b) the defendants were liable to pay the May Repayment Instalment at the higher interest rate in the sum of $17,005.31 (paragraph 55 (e) of the FADC)

1. I will deal with these claims shortly as they both must fail.
2. As to the first of those, Mr Bobko submits that Portside's statement in the 4 May 2022 email that the facility was in default because the Richmond mortgage had not been registered "was the catalyst for nearly all of the issues arising out of this Loan agreement." He continued, "But for this misrepresentation, it was Carney and Olevsky's evidence that they had and would have paid the interest instalments at the lower amount for the balance of the facility and re-financed in October 2022 at the conclusion of the 12 months."
3. I understand this submission to be an articulation of the reliance that must be demonstrated in order to succeed on a claim for loss and damage suffered by the Borrowers under, for example, s 12GF or 12GM of the ASIC Act.[12] Section 12GF relevantly provides that a person who suffers loss and damage by the conduct of another person that contravenes a relevant provision of the ASIC Act including s 12DA, 12DB or 12DF, may recover the amount of the loss and damage by action against the person concerned.
4. The italicised words make clear that the alleged misrepresentation must have been relied on by the Borrowers in such a way as to have caused them loss and damage.
5. As I discussed above, Mr Carney made clear in his 5 May 2022 email that he rejected Portside's position that as at 4 May 2022, the facility was in default. So much so that he said that he intended to pay the May instalment when it was due at the lower rate.
6. He therefore cannot be seen to have relied on the representation at all.
7. That he did not pay the instalment when it was due was not because he was misled by the representation alleged, but rather because he was "smashed" and Ms Olevsky took no steps herself to make the payment.
8. On this basis alone this claim must fail.
9. However, Mr Miller also submitted that the representation was not a representation of fact at all but was rather a representation of an opinion about the proper legal characterisation of the state of affairs that pertained to the Loan agreement. That is, that it was in default for non-registration of the Richmond mortgage.
10. He submitted, relying on Australian Securities and Investments Commission v Retail Employees Superannuation Pty Ltd [2024] FCA 1081 (ASIC v REST) that in cases where alleged misleading and deceptive conduct concerns a statement of opinion, such a statement cannot be regarded as misleading or deceptive merely because it turns out to be incorrect: at [860].
11. In such cases, a statement of opinion will only be misleading or deceptive if it is not expressed honestly or if such an honest belief is not reasonably capable of being held or the maker did not have a reasonable basis for belief in the opinion: at [861].
12. Beach J held at [865] - [867] that in such cases the plaintiff carries the onus of proving:

(a) that there was a relevant implied representation, such as that the opinion was reasonably capable of being held or that it had a reasonable basis; and

(b) that the opinion did not have a reasonable basis or was not reasonably capable of being held.

1. Now Mr Bobko did not make any substantive submissions on these points, much less grapple with the proper characterisation of the alleged representation as a representation of a matter of fact as opposed to a matter of opinion, and the different considerations that arise in each case.
2. It is clear enough that the representation that the loan facility was in default because of the failure of the registration of the Richmond mortgage, was a matter of placing a legal characterisation on the facts at hand. Legal characterisation is quintessentially a matter of opinion. Reasonable minds might differ about the proper legal characterisation of the facts that occurred. And in this case the opinion communicated was that the facility was in default for the reason given. So much must be characterised as a representation of Ms Leone's legal opinion. It is also clear that Ms Leone's communication carried with it the implied representation that her opinion had a reasonable basis or was reasonably and honestly held. In the context of a communication such as the 4 May 2022 email, such an implication is easily drawn.
3. Where the issue of reasonable grounds arises, such as where there is an implied representation in connection with a statement of opinion, the ultimate question is whether there are facts which are sufficient to induce that state of mind in a reasonable person: ASIC v REST at [872] - [873].
4. Where a corporation relies on advice or information from a trusted source, that advice may provide reasonable grounds for the making of the representation: ASIC v REST at [876].
5. The evidence canvassed at paragraph ‎81 above was that Ms Leone wrote the 4 May 2022 email containing the assertion that the facility was in default because the Richmond mortgage had not been registered, in the belief that this was correct and that her belief was based on legal advice that she had sought and received.
6. This is enough to make good that, even if the opinion was wrong, as she had taken legal advice on the issue which she accepted and believed, that she had reasonable grounds for expressing that opinion.
7. The evidence went one step further. Portside called the solicitor, Mr Toh, who gave the advice to Ms Leone and he expressed the view in evidence that he considered that the Borrowers were in default as set out in paragraph ‎81 above.
8. Having taken Mr Toh's advice, which she accepted and believed, I must find that Ms Leone had a reasonable basis for expressing the opinion that the facility was in default because of the non-registration of the Richmond mortgage. Even if that opinion turned out to be wrong (about which I do not need to make any finding) it was not was not misleading or deceptive.
9. Turning to the second of the alleged representations, I note its terms are "the defendants were liable to pay the May Repayment Instalment at the higher interest rate in the sum of $17,005.31".
10. This alleged representation suffers the same characterisation issue that I have just discussed. On the assumption that the pleader intended to rely on the 4 May 2022 email from Ms Leone, the statement that the higher rate of interest was applicable in May 2022 is similarly the expression of an opinion as to the legal effect of the facts at hand. For the same reasons as I have just discussed, Ms Leone had a reasonable basis to honestly believe that the facility was in default such that the higher rate of interest applied. Under those circumstances the representation was not misleading and deceptive.
11. For the same reasons as for the prior representation, I also would conclude that the Borrowers did not rely on the representation in any event.
12. The Borrowers' claims for misleading and deceptive conduct must fail.

1. The Borrowers alleged that the conduct of Portside both at the time of entry into the loan and in respect of the post-loan conduct was in contravention of s 12DJ of the ASIC Act.
2. Section 12 DJ provides that a person contravenes that section if they use physical force or undue harassment or coercion in connection with the supply or possible supply of financial services.
3. The Borrowers did not allege that Portside used physical force in relation to the Loan. They alleged that Portside used "coercion" or "undue harassment."
4. In Australian Securities and Investments Commission v Select AFSL Pty Ltd (No.2)[13] Abraham J canvassed the meaning of "coercion". By reference to authorities, her Honour noted that coercion carries with it the connotation of force or compulsion or threats of force or compulsion negating choice or freedom to act. That is, that the relevant conduct must be in the in the nature of the use of force or compulsion that negates a party's freedom to act.[14]
5. As is apparent, the alleged coercion or compulsion or threats of those things must have the effect of negating the party's freedom to act.
6. Whether the conduct constitutes coercion is a matter of overall impression and evaluative judgment.[15]
7. The Borrowers submitted that Portside's conduct leading up to the entry into the loan constituted relevant coercion such that it negated their freedom to act. Specifically they placed emphasis on Portside's requirement that the Richmond property be provided as security for the loan and the timing of this requirement.[16]
8. I have already made findings that I do not consider Portside's requirement for the Richmond mortgage or the timing of that requirement to have been in any way improper.[17] For the same reasons I do not consider that Portside's conduct exhibited the relevant force or compulsion or threat of force such as to have negated the Borrowers' freedom to enter into the loan and to provide the Richmond property as security. I note here that the Borrowers had the opportunity to take legal advice from the solicitor of their choice and in fact did so, before they entered into the loan. They had a commercial choice to enter into this loan and provide the security that accorded with Portside's lending guidelines or not to do so. They chose to do so rather than to deal further with their then lender, Archery, with the possibility that it would then enforce its securities. Their free will was not negated by any conduct of Portside.
9. Although the Borrowers' submissions were somewhat unfocussed, I understood them to also submit that Portside's post-loan conduct that I have also canvassed above constituted the use of undue harassment.[18]
10. Abraham J in Select AFSL noted that the authorities indicate that undue harassment may be less serious than coercion but can be conduct which tends to intimidate, embarrass, ridicule, shame or otherwise distress the targeted person. Whether it is "undue" will turn on whether the communications, often frequent, are calculated to intimidate or demoralise, tire out or exhaust and will vary depending on the circumstances.[19]
11. Her Honour noted the decision of Australian Competition and Consumer Commission v Panthera[20] where the debt collector defendant was found to have engaged in undue harassment by making false or misleading statements to consumers, continuing to pursue individuals after they disputed liability including where the defendant knew the customers were not liable and pursuing customers over weeks, months and years.[21]
12. Mr Bobko relied on a number of matters which he submitted together constituted Portside's conduct as the use of undue harassment. He summarised the Borrowers' position as follows:

Oreol submits in looking at the Loan's history holistically; commencing with the imposition of the Richmond mortgage; CKL's failure in registering it and rejecting Oreol's concerns in November 2021; the exertion of continuing pressure on Tamm in the period February 2022 culminating in the email of 7 April 2022, attempting to force Oreol to refinance (despite being in their pre-paid window); the allegation of default arising from the non registration of Richmond; Portside's reticence to discuss the facility with Carney in early-May 2022; the issuing of default notices (arguably containing a non-default); instituting proceedings; entry of and opposition to setting aside the default judgments; and subsequent prosecution shows a pattern of behaviour which may be likened to an attempt to demoralise and tire out the defendants, with the ultimate aim of having them capitulate and offer up the South Yarra property to Portside. Oreol submits that in the context and circumstances, Portsides' conduct amounts to undue harassment.

1. I reject that submission. None of those matters, taken separately or together constitute conduct that was of a nature that was calculated or had the effect to demoralise the Borrowers or tire them out so as to have caused them to capitulate to the claims made in the proceeding.
2. I will deal with each of the matters relied on in turn.
3. I have dealt with the taking of the Richmond mortgage above. Nothing in Portside's conduct in this regard can be characterised as the use of undue harassment.
4. The failure to have registered the Richmond mortgage was not an intentional or calculated step. Portside's solicitors experienced difficulties in obtaining registration - but this was adequately explained and the registration was ultimately obtained.
5. I do not accept that Portside rejected the Borrower's concerns in November 2021. When the Borrowers pressed Portside about the non-registration of the Richmond mortgage, CKL wrote to them pointing out that they were doing what they could to effect the registration. I do not see how this conduct can be characterised as the use of undue harassment.
6. I have made findings above about the reliance by Ms Leone on the non-registration of the mortgage as an event of default. I found that her reliance was made in the honest and reasonably held belief, based on legal advice, that this was an event of default. The Borrowers had their own lawyers, and as I found above, appear to have taken legal advice. In the 5 May 2022 email Mr Carney rejected that this was a matter that the Borrowers could be held accountable for and he rejected that the Borrowers were in default. I also note here, that by 8 May 2022, the facility was unequivocally in default for non-payment of the May instalment and a notice of default was given partly on that account on 26 May 2022. Having regard to all of those circumstances I do not accept that the Portside's reliance on the non-registration of the Richmond mortgage as an event of default was conduct "which tends to intimidate, embarrass, ridicule, shame or otherwise distress the targeted person."
7. I have already rejected the proposition that Portside exerted pressure on the Borrowers to refinance the facility prior to the end of the term. Rather, Portside was attempting to ensure that the Borrowers were taking steps to put themselves in a position to repay the loan to Portside. This was in the context of the Borrowers evidently changing their asserted position that the exit would be by way of refinance or sale of the security property to one where they would do neither of these things. I do not regard Ms Leone's contacts with the Borrowers' broker, Mr Tamm, to have been harassing or coercing. I also note that he was an experienced finance broker who stood between Portside and the Borrowers. In this way the Borrowers were insulated from Portside's conduct (even if it were unduly harassing which I expressly find that it was not).
8. To the extent that Mr Bobko relies upon the "Portside's reticence to discuss the facility with Carney in early-May 2022", this is a mischaracterisation of the evidence. In the email exchanges between Mr Carney and Ms Leone, Mr Carney offered for Ms Leone to discuss the matter with the Borrowers' solicitor. Ms Leone gave evidence that she telephoned Mr Da Gama but never received a response from him. I reject that this can constitute undue harassment.
9. I have dealt with Portside's service of the May Default Notices above. By the time it was issued, the Borrowers were in default in not having paid the May instalment at all. The default notice was correctly issued in that respect (even on the assumption that it was not correct in relying on the non-registration of the Richmond mortgage as an event of default). This conduct is not undue harassment.
10. The remaining matters relied upon concern the institution of these proceedings and events during the course of them. None of these matters, in my view, constitute undue harassment.
11. I remind myself that I am to evaluate all of the conduct relied upon by the Borrowers together to determine whether it "tend[ed] to intimidate, embarrass, ridicule, shame or otherwise distress the targeted person".
12. Portside had loaned the Borrowers $1.2 million for a limited period of 12 months on the security of the South Yarra and Richmond properties. The Borrowers fell into default when the May 2022 interest instalment was not paid. Portside was concerned to ensure that its loan would be paid out when due in October 2022. It took steps to try to ensure that the Borrowers were in a position to do so. Ultimately it served default notices and commenced and prosecuted legal proceedings.
13. I do not consider that the conduct "tend[ed] to intimidate, embarrass, ridicule, shame or otherwise distress the [Borrowers]". I also do not consider that the conduct was "calculated to intimidate or demoralise, tire out or exhaust" the Borrowers into "offering up the South Yarra property to Portside."
14. The Borrowers' claim based on s 12DJ of the ASIC Act must fail.

1. The Borrowers allege that the loan agreement was subject to implied terms including a duty to co-operate, act in good faith and act reasonably. Mr Bobko relies on KTD v Indox Investments Pty Ltd [2018] NSWDC 158 at [16]; Postorino v Encryption Technologies Corporation Pty Ltd [2015] FCCA 1634 at [102]- [111]. These are not the only authorities that touch on the issue.
2. There is ample authority for the proposition that parties to a contract are under an implied duty to cooperate so as to ensure that each party is able to enjoy the benefit of the contract to which they have both subscribed. The duty was recognised as far back as 1881 in McKay v Dick.[22] The High Court endorsed the existence of this duty in Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd.[23]
3. The Borrowers relied on the events in early May 2022 as evidence that Portside did not cooperate with the Borrowers in that period. I reject this submission. In that period the Borrowers had shifted their position on exiting the Portside loan from refinancing with another lender or sale of the South Yarra property, to holding and continuing to redevelop the South Yarra property. Mr Carney gave evidence that his intention then was hopefully to obtain a positive decision on their development application at VCAT and then to sell units off the plan and in this way to continue with the development. This needs to be measured against Mr Carney's 2 May 2022 email in which he requested a 3 month extension of the pre-paid interest period at the non-default rate. The actual meaning of this email is obscure. However what was clear was that the Borrowers gave no comfort to Portside about their ability to repay their loan to Portside when it fell due. As it happened, 6 days later the Borrowers failed to make the May interest payment at the lower rate. They did not remedy this by making the payment between 8 May and 26 May 2022. It was only on 26 May 2022 that Portside served default notices. In this way it can be seen that Portside actually gave the Borrowers 18 days grace before serving a default notice.
4. In the period following the service of the May Default Notice and the commencement of this proceeding on 8 June 2022, the Borrowers did not present to Portside any proposal to remedy their default or to exit the facility at the end of its term.
5. The duty to cooperate falls on both parties to ensure that each of them obtains the benefit of the contracted bargain. It is not one sided, as the Borrowers' submissions seem to imply. Portside agreed to loan its capital to the Borrowers for 12 months and for repayment after that time. They also contracted to receive regular payments of interest at the lower rate if paid on time and if not at the higher rate.
6. The Borrowers were in breach from 8 May 2022 and have remained in breach ever since. They made no proposal to repay the capital sum to Portside with arrears.
7. In framing this claim as Portside having breached its duty to cooperate with the Borrowers, it begs the question - cooperate in what way? No satisfactory answer is posed by the Borrowers' submissions.
8. I do not accept that under those circumstances Portside was in breach of its duty to cooperate with the Borrowers.
9. As to the alleged implied terms imposing a duty to act in good faith and a duty to act reasonably, the Borrowers acknowledge that the implication of such terms is unsettled in Australia. They submit that such terms must be implied on an ad hoc basis if they satisfy the test set out in BP Refinery (Westernport) v Hastings Shire Council.[24] That test sets out five conditions necessary to support an ad-hoc implication of a contractual term. They are:

(a) The term must be reasonable and equitable;

(b) The term must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;

(c) The term must be so obvious that 'it goes without saying';

(d) The term must be capable of clear expression; and

(e) The term must not contradict any express term of the contract.

1. The Borrowers' submissions did not condescend to analyse the Loan Agreement by reference to the five part test. They make no attempt to demonstrate that each of the alleged implied terms satisfies each of the 5 limbs of the test. Under those circumstances I cannot be satisfied that those terms are to be implied into the Loan Agreement.
2. Given that finding, I do not intend to determine whether the matters the Borrowers rely on as breaches of those terms are made out. This is because it would involve consideration of the terms of the Loan agreement that may in fact conflict with the alleged implied terms.
3. With that in mind, I am content to note that I have rejected the allegation that Portside breached its duty to cooperate with the Borrowers so as to enable them to have the benefit of the bargain that they struck. To the extent that the Borrowers' submissions make the same general complaints in respect of the alleged duty to act reasonably and in good faith, I would likely have found that Portside's conduct was not in breach of those terms.

1. In conclusion, I have found that none of the Borrowers' defences have been made out and Portside is entitled to orders on its money claim and for possession of the South Yarra and Richmond properties.
2. The parties should submit a Minute of Orders that reflect these reasons within 7 days of today's date. I will hear the parties as to costs on a date that my chambers will notify.

1. Were the Default Notices and Demands issued to Oreol, Olevsky and Carney on 26 May 2022 invalid (specifically as a result of the inclusion of the allegation of default arising from the non-registration of the Richmond Mortgage)?

Issue 2 - Liability under the Deed of Loan, Guarantee and Indemnity

1. What (if any) amount is Oreol liable to re-pay to Portside under the Deed of Loan in addition to the Facility Amount of $1,237,500.00?
2. What (if any) amount are David Carney and Irena Olevsky liable to re-pay to Portside under the Guarantee and Indemnity dated 6 October 2021 (Guarantee and Indemnity) in addition to the Facility Amount of $1,237,500.00?

Issue 3 - Entitlement to possession of the properties

1. Is Portside entitled to possession and sale of the South Yarra Property under the South Yarra Mortgage and the Richmond Property under the Richmond Property Mortgage?

1. In or about early October 2021, did Oreol, Irena Olevsky and David Carney tell Portside that they:

(a) Required the loan urgently to refinance an existing loan with a separate lender;

(b) Were desperately in need to re-finance and were disadvantaged by such;

(c) Did not want to provide a second ranking mortgage over the Richmond Property as part of the Deed of Loan;

(d) Only agreed to the Richmond Mortgage when it was made an essential requirement of obtaining the loan;

(e) Could not service the loan at the higher interest rate under any circumstances;

(f) Would seek to refinance the loan either prior to or upon completion of the pre-paid interest period in about May 2022; and

(g) Irena Olevsky had been diagnosed with cancer;

1. Did Portside know, or ought it to have known, that Oreol, Irena Olevsky and David Carney could not service the loan at the higher interest rate and were seeking to refinance in or around May 2022?
2. Did the Deed of Loan and the Guarantee contains terms that were unconscionable within the meaning of ss 12CB and 12CC of the ASIC Act 2001 (Cth)?
3. If yes to 5, 6 and / or 7 did Portside engage in unconscionable conduct for the purposes of s 21 of the Australian Consumer Law and or s 12CB and 12CA of the ASIC Act 2001 (Cth) (ASIC Act) by entering into the Deed of Loan?

1. Between about 4 May 2022 and 8 June 2022, did Portside engage in unconscionable conduct for the purposes of s 21 of the Australian Consumer Law and or s 12CB and 12CA of the ASIC Act 2001 (Cth) (ASIC Act) by commencing and maintaining the proceedings alleging the matters set out in the Statement of Claim dated 8 June 2022 and the Amended Statement of Claim dated 3 November 2022, in circumstances where:

(a) Marisa Leone, a director of Portside, sent an email to David Carney on 4 May 2022 stating among other things that the Deed of Loan was in default, the Defendants were liable to pay the May Instalment at the higher interest rate in the sum of $17,005.31;

(b) The Defendants did all necessary things to enable registration of the Richmond Mortgage;

(c) Portside issued the Demands to Oreol, Irena Olevsky and David Carney on 26 May 2022;

(d) On 8 June 2022, Portside commenced the proceeding by filing the Writ and Statement of Claim in circumstances where a payment of $8,755.31 was made on 1 June 2022;

(e) The Defendants relied on Portside to comply with Portside's obligations under the Deed of Loan, register the Richmond Mortgage, and honour the Alleged May Instalment Agreement;

(f) The Defendants were at a disadvantage.

1. If yes to 8, or 9, are the Defendants entitled to relief under s 243 of the Australian Consumer Law or s 12GM of the ASIC Act?

Issue 6 - Misleading or Defective [sic] Conduct by Portside

1. From about 7 October 2021 onwards, did Portside represent to the Defendants that:

(a) CKL would finalise settlement and register the South Yarra and Richmond Mortgages;

(b) CKL were unable to provide an itemised bill to the Defendants;

(c) CKL were aware of issues with the Richmond Mortgage and were rectifying them with the Registrar of Titles;

(d) As at 4 May 2022, the Deed of Loan was in default;

(e) The Defendants were liable to pay the May Instalment at the higher interest rate in the sum of $17,005.31;

(f) The purported default of the Deed of Loan would be rectified by payment of $8,755.31 on or about 1 June 2022;

(g) By virtue of the May 2022 default, Portside was entitled to possession of the South Yarra Property.

1. If yes to 11, did Portside engage in misleading or deceptive conduct under s 18 of the Australian Consumer Law by making the Representation as to Current Matters?
2. If yes to 12, are the Defendants entitled to relief under s 243 and/or 236 of the Australian Consumer Law or s 12GM of the ASIC Act?

1. Did Portside subject the Defendants to undue harassment and / or coercive behaviour under s 12DJ of the ASIC Act.
2. If yes to 14, are the Defendants entitled to relief under s 12GM of the ASIC Act?

1. Was there an implied term under the Deed of Loan that Portside was required to act reasonably, act in good faith and to co-operate, and if so, did Portside breach the implied term?

(a) If yes to 16, are the Defendants entitled to damages?

I certify that these 59 pages are a true copy of the judgment of His Honour Judge Wise delivered on DATE.

[1] In this regard I also note the text message sent by Mr Carney on 19 May 2022, which is similarly lucid : see paragraph ‎77 below.

[2] The Borrowers did not challenge the purported maintenance by Ms Leone of legal professional privilege.

[3] Save for 2 payments at the lower rate on 1 June and 16 June 2022.

[6] Productivity Partners Pty Ltd v Australian Competition and Consumer Commission [2024] HCA 27; 98 ALJR 1021 at [60], [101] and [289].

[7] Stubbings v Jams 2 Pty Ltd (2022) CLR 1; [2022] HCA 6 at [56] - [57] as cited in Productivity Partners Pty Ltd v ACCC [2024] HCA 27; 98 ALJR 1021 at [60].

[8] Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40 at [4].

[12] While the trial was conducted on the basis that the issue of liability only is to be heard prior to any question of quantum on the counterclaim, to the extent that Mr Bobko and Mr Miller have made submissions on the point I will make findings on it.

[13] [2022] FCA 786.

[14] Select AFSL at [285] - [286], quoting Hill J in Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; (2001) 114 FCR 472 at [60] and Griffiths J in Australian Competition and Consumer Commission v ACM Group Ltd (No 2) [2018] FCA 1115 (ACM18 (No 2)) at [266].

[17] See paragraphs ‎39 to ‎45 above.

[20] [2020] FCA 340.

[22] (1881) App Cas 251.

[23] [1979] HCA 51; (1979) 144 CLR 596.