Secure Funding Pty Ltd v Yiallourou [2025] NTSC 88

Competition and Consumer Act 2010 (Cth), sch 2, s 20.

Australian Securities and Investments Commission Act 2001 (Cth), ss 12CB, 12CC.

Law of Property Act 2000 (NT), s 89.

Supreme Court Rules 1987 (NT), rr 4.07, 45.05

Westpac Banking Corporation v Eres [2025] NTSC 46; Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42; Fancourt v Mercantile Credits Limited (1983) 154 CLR 87; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125; Shew & Ors v Police and Citizens Youth Club & Ors [2013] NTSC 15; Sportsbet Pty Ltd v Moraitis [2010] NTSC 24; Heller Financial Services v Solczaniuk [1989] NTSC 36; Stubbings v Jams 2 Pty Ltd [2022] HCA 6; Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392; Blomey v Ryan [1956] HCA 81; (1956) 99 CLR 362; Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1, referred to.

Secure Funding Pty Ltd v Yiallourou & Anor [2025] NTSC 88

• [1] The Plaintiff makes application by originating motion and summons dated 23 January 2025 to seek orders for possession in respect to two premises known as 145 and 155 Cox Peninsula Rd, Berry Springs in the Northern Territory of Australia ('the properties').
• [2] The Defendants oppose the application for possession on the basis that the Plaintiff had, in respect to the relevant transactions, engaged in unconscionable conduct (both at common law and under statute), which is further discussed below. The Plaintiff, in turn, has sought summary judgment.
• [3] The Plaintiff relies on the affidavits of Matthew Menzies promised 20 January 2025 and 27 June 2025, Maria Davis promised 7 April 2025 and Paul Hunt promised 26 June 2025. The Defendants rely on the affidavits of Peter Yiallourou promised 27 May 2025, Tony Shelling promised 27 May 2025 and Eric Withnall promised 19 June 2025. I take those affidavits as read, save for the limitation on Mr Menzies' affidavit promised 27 June 2025 at paragraphs 17 and 18, which are admitted on the basis that they are evidence of his review of the Plaintiff's files and what he saw on them.

• [4] The background to this proceeding is generally uncontested and is as set out below. The Defendants, who are brothers, along with another brother Tony, inherited the properties from their late father in or about 2004. The properties were, at the time, a mango farm and was previously a vegetable farm.[1] At that time, Tony had no interest in mango farming and was bought out by the Defendants in or about 2004. The Defendants obtained a loan from Westpac to do so. Following this, the Defendants started a new partnership in respect to the mango farm ('C Yiallourou and P Yiallourou'), trading under the business name of KA Yiallourou & Sons (which was their father's former business name).
• [5] In or about 2015, Westpac advised the Defendants that it no longer wished to provide them with finance and required them to obtain finance from another lender.[2] The Defendants were referred to Mr Hunt, a mortgage broker, to potentially assist them to get new finance. Why Westpac made the decision to cease business with the Defendants, and whether it became aware of some issue with their financial circumstances, is not clear. Mr Hunt assisted the Defendants to obtain alternative finance from Liberty Financial Pty Ltd, of which the Plaintiff is a subsidiary. That was in 2015. It is in this context, at that time, that the Defendants entered into a loan agreement with the Plaintiff, which was an interest-only low document commercial loan, for a period of three years for the amount of $330,000 at an interest rate of 7.7% per annum (with a default interest rate of 13.7% per annum). The loan is described in documentation as a "boost" and, in respect to that type of loan, the Defendants declared in the "boost product declaration" clause of the loan application that they expected to have liquid assets to repay the loan in full at the end of the loan term as they intended to sell the property or refinance the loan. Similarly, in that same clause, the Defendants declared that they would seek legal advice about the terms and conditions of the loan, and would obtain financial advice about the loan and its impact on their personal financial position(s).[3] The loan was secured by mortgages over the properties.[4] The Defendants declared, in the loan application, that the information provided, including by Mr Hunt, was true and correct and that they were aware that the Plaintiff would rely on that information. In 2018, the original 3-year loan expired and the Defendants sought to have it extended.[5] The Defendants requested an extension from the Plaintiff who, it appears, reluctantly granted a 12-month extension (2018-2019) and subsequently, two further 12-month extensions (i.e. 2019-2020 and 2020-2021).[6] In respect of the extensions, the interest rates for the loan remained the same or just lightly less than had been previously imposed.[7] The last loan agreement expired in July 2021. Since that date, the Defendants have defaulted on the loan and have been in default ever since.[8]
• [6] As noted above, the loan was a commercial loan taken in the context of the mango farming business partnership being run on the properties. There was evidence, however, that there were also two dwellings on the properties with the Defendants (and possibly their families) also living on the properties.[9] There is no allegation that the Plaintiff entered into the commercial loan agreement so as to avoid the protections or scrutiny from the National Consumer Credit Code ('the Code').[10]
• [7] In respect to the application for possession, each of the Defendants were the registered proprietors as tenants in common with half shares each in both properties. The Plaintiff holds registered mortgages over both properties, which are the security for the loan originally entered into between the Defendants and Plaintiff in 2015. The Defendants defaulted on their obligations under the loan agreement and the requisite default notices were served on them pursuant to the loan agreement and section 89 of the Law of Property Act 2000 (NT).[11] The default notices were not rectified, which then gave rise to the Plaintiff's right to apply for possession.[12] There is no issue arising in respect to the adequacy of the default notices, nor the Plaintiff's prima facie right to take enforcement action pursuant to the notices.
• [8] However, the Defendants seek to resist the possession application on the basis of a purported defence of unconscionable conduct by the Plaintiff.[13] In response, the Plaintiff has pressed for summary judgment on the basis that the Defendants' purported defence discloses no triable issue.[14] As is the case with possession matters, proceedings are commenced using the special procedure in Rule 45.05. There are consequently no pleadings or any other processes which would normally follow such as discovery.

• [9] The principles in respect to ordering summary judgment are well established. As I have previously stated,[15] the starting position is that the power to summarily dismiss an action is an exercise of the Court's inherent jurisdiction in order to protect itself from an abuse of process.[16] On hearing the application, the Court may give judgment as is appropriate. That is, unless the defendant satisfies the Court of the claim, or part of the claim, there is a question that ought to be tried or there is some other reason to proceed to trial. The process is intended to apply only to cases where it is clear that there is no real question to be tried and where there can be no reasonable doubt that the plaintiff is entitled to judgment.[17] The power to order summary judgment must be exercised with exceptional caution[18] and will only be enlivened where the plaintiff's case is 'so clearly untenable that it could not possibly succeed'.[19] As Luppino M (as he then was) stated in Shew & Ors v Police and Citizens Youth Club & Ors:[20]

A defendant will be allowed to defend a case if there are facts which, if true, would constitute a defence to the plaintiff's claim. The Court is reluctant to try a case on affidavit where there are facts in dispute. An important issue is whether the defendant's account of the facts has sufficient prima facie plausibility to merit further investigation.

• [10] The purpose of the summary judgment process is to prevent a defendant, who has no defence, from defending an action merely to delay the plaintiff enforcing their rights. Summary judgment is unavailable where relevant facts are in dispute between the parties or some difficult question of law must be decided, and in such cases, the defendant is entitled to proceed to trial.[21]
• [11] Additionally, when a proceeding calls for discretionary relief, as is the case with applications for orders for possession, as Luppino M held in Shew:[22]

[t]o the extent that discretionary relief is sought, it may be inappropriate to grant that on a summary judgment application because all evidence may need to be heard before the Court can decide whether the grant of discretionary relief is appropriate.

• [12] The Defendants' resistance to the Plaintiff's application is founded on allegations of unconscionable conduct arising at both general law and statute. No defence has yet been filed, given the stage and type of proceeding. Any purported defence has therefore been gleaned from the evidence filed and the submissions made on behalf of the Defendants at the interlocutory hearing.

• [13] The principles underpinning the concept of unconscionability were recently restated by the High Court in Stubbings v Jams 2 Pty Ltd (footnotes omitted):[23]

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

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

• [14] Factual findings made at trial are important and they are used to distinguish unconscionable conduct from simply improvident transactions conducted in the ordinary and undistinguished course of business. As the High Court stated in Kakavas v Crown Melbourne Ltd:[24]

Equitable intervention does not relieve a plaintiff from the consequences of improvident transactions conducted in the ordinary and undistinguished course of a lawful business. A plaintiff who voluntarily engages in risky business has never been able to call upon equitable principles to be redeemed from the coming home of risks inherent in the business. The plaintiff must be able to point to conduct on the part of the defendant, beyond the ordinary conduct of the business, which makes it just to require the defendant to restore the plaintiff to his or her previous posit.

• [15] In terms of special disadvantage or weakness, one party must be at a special disability or serious disadvantage to the other of which unfair advantage might be taken. The factors which may be relevant cannot be listed comprehensively but may be of a great variety, including poverty or need of any kind, sickness, age, infirmity of body or mind, drunkenness, illiteracy, lack of education, lack of assistance or explanation where assistance or explanation is necessary and physical or emotional dependence.[25] There must also be exploitation of this weakness in a morally culpable manner. That can occur, in absence of any degree of equality between the parties, where the disability was sufficiently evident to the stronger party to make it prima facie unfair or unconscientious that it procures the weaker party's assent to the relevant transaction. Evidence of the disability can arise through actual knowledge, being aware of the possibility that the situation may exist or being aware of facts that would raise that possibility in the mind of any reasonable person. Where knowledge of such circumstances is shown, an onus is cast on the stronger party to show that the transaction was fair, just and reasonable. Where made out, unconscionable conduct empowers the Court to set aside the impugned contract.

• [16] Section 20 of the Australian Consumer Law[26] provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption, engage in conduct that is 'unconscionable'. However, in this proceeding the Defendants rely on s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) ('the ASIC Act'). That section relevantly provides:

(1) A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of financial services to a person; or

(b) the acquisition or possible acquisition of financial services from a person;

engage in conduct that is, in all the circumstances, unconscionable.

• [17] The non-exhaustive matters which 'set the framework for the values that lie behind the notion of conscience identified in s 12CB'[27] and which the Court may have regard for the purpose of determining whether a person has contravened s 12CB are set out in s 12CC of the ASIC Act. This includes:

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

(b) whether, as a result of conduct engaged in by the supplier, the service recipient 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 service recipient was able to understand any documents relating to the supply or possible supply of the financial services; and

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

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

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

(g) if the supplier is a corporation - the requirements of any applicable industry code (see subsection (3)); and

(h) the requirements of any other industry code (see subsection (3)), if the service recipient 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 service recipient:

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

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

(j) if there is a contract between the supplier and the service recipient for the supply of the financial services:

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

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

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

(iv) any conduct that the supplier or the service recipient 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 service recipient for the supply of the financial services; and

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

• [18] Under s 12CB of the ASIC Act, the prohibition extends to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct.[28] Additionally, the statutory conception of unconscionability is broader ranging than the equitable principles. Its assessment involves the evaluation of facts by reference to the values and norms recognised by the statute, and a normative standard of conscience which is permeated with accepted and acceptable community standards.[29] Notwithstanding an examination of the relevant statutory provisions by the High Court in Stubbings, this aspect of the law continues to develop. Various remedies exist under the ASIC Act including the ability to set aside contracts.[30]

• [19] The Plaintiff's evidence was given by Mr Menzies[31] and Mr Hunt[32]. The Defendants' evidence was given by the First Defendant[33] and Mr Schelling[34].

• [20] Mr Menzies is an Asset Realisation Officer employed by the Plaintiff. His evidence was essentially an account of his review of the business records of the Plaintiff as they pertained to the Defendants.
• [21] On 22 April 2015, Liberty Financial Pty Ltd (the parent company of the Plaintiff) received a new application for finance in relation to a commercial loan made by Paul Hunt on behalf of the Defendants.[35] Accompanying the loan application were Westpac bank statements from the Defendants' previous Westpac business loan for the period 31 October 2014 to 7 April 2015, and a business chequing account statement for the period May 2014 to May 2015. According to Mr Menzies, whilst the chequing account indicated some cheque dishonour and overdraught fees from time to time, the business loan statements demonstrated a perfect repayment history over the period.[36] I pause to note, as detailed above, that Westpac had refused to do further business with the Defendants. It is not apparent from Mr Menzies' evidence whether the Plaintiff made any enquiry, or was otherwise put on notice, as to why Westpac had decided to refuse to do business with the Defendants. The Defendants provided a signed "business purpose declaration" and "income declaration". At the time of the loan application, the loan-to-value ratio was 27%. It appears it was on those bases, and some other checks and documentation, that the loan application was assessed. By letter addressed to Mr Hunt dated 5 May 2015, the loan application was conditionally approved by the Plaintiff[37] and subsequently executed by the Defendants.[38]
• [22] The Plaintiff's records indicated that Mr Schelling (the Defendants' second mortgage broker, following Mr Hunt) first contacted the Plaintiff on 11 August 2021 and initially dealt with an employee of the Plaintiff, Peter Tran. Mr Menzies' interaction with Mr Schelling commenced on or around 17 August 2022 when he received a third-party authorisation (i.e. authorising the Plaintiff to communicate with a third party on behalf of the Defendants) from Mr Schelling.
• [23] On reviewing the Plaintiff's file, and on the basis of his personal involvement in working on the file, Mr Menzies deposed that it was not communicated to the Plaintiff that the Defendants had difficulties in reading or writing English, or that either had a physical or mental disability (including that the Second Defendant had a vision impairment). The contact logs annexed to Mr Menzies' affidavit (see below) disclose that an employee or employees of the Plaintiff spoke with the First Defendant (as well as his wife) on a number of occasions, but there is no record of any communication difficulty.[39]
• [24] Various business records were annexed to Mr Menzies' affidavit, including "contact logs" for the period April 2015 to October 2024. The contact logs would appear to be detailed running records of internal and external communication in respect to the Defendants' dealings with the Plaintiff, in the form of copies of emails and notes of phone conversations, and internal communications between the Plaintiff's staff. Those contact logs, qualified as they are in terms of the evidence of what the relevant parties were doing or knew at the time, are nonetheless insightful in terms of the dealings between the Plaintiff and the Defendants. The contact logs can be broken into three discrete periods: the initial loan period (between 22 April 2015 and 8 July 2018), the 12-month loan extensions granted in 2018, 2019 and 2020 (between July 2019 and July 2021) and the expiry of the loan period (July 2021 to July 2024). In summary, they disclose the following:

(i) The Plaintiff received the Defendants' loan application, the required supporting documentation, and paid a commission to the broker (presumably Mr Hunt)[40]. The contact logs note that certain credit checks may have been undertaken viz. "client Veda credit record is clear"[41]. A representative of the Plaintiff spoke with the First Defendant via telephone on 8 July 2015 confirming details of the loan, the payment schedule and that monthly payments of $2,147.50 were to start on 7 August 2015.[42]

(ii) The Plaintiff had decided not to roll the Defendants' loan over because 'the customer had indicated they were struggling with cash flow'.[43] A request for an extension was made by the Defendants, who were told that the Plaintiff was not prepared to roll over the loan to another product as they "were not happy with the conduct of the loan".[44] Recovery action was foreshadowed. Notwithstanding this, in July 2018 Mr Hunt appears to have convinced the Plaintiff to roll over the loan for another 12 months only. The Plaintiff noted that there would be no further extension and that the further loan extension was to give the Defendants time to get funding elsewhere. It seems that the Plaintiff was swayed by an indication that, in the last 12 months, there had only been one dishonour fee which was fixed up promptly and all other payments had been regular.[45] Mr Hunt is recorded as indicating that he would stress to the Defendants the need to make timely payments and of the Plaintiff's generous flexibility.[46] In or around April 2019, it appears further consideration was given to rolling the loan over for another year given the Defendants' "repayment history has not been perfect".[47] The Plaintiff had again determined not to roll the loan over for another year and would require repayment of the loan when it expired in July 2019.[48] That was communicated to the Defendants.[49] It would seem that there was significant communication between the Plaintiff and the First Defendant's wife (Georgia) during that period. There was also communication with the First Defendant (in April 2019) where he was informed of the same, and the Plaintiff was informed that the First Defendant would organise his refinance options and close the account prior to maturity (presumably before July 2019).[50] In or around May 2019, the First Defendant was attempting to convince the Plaintiff to consider rolling the loan over, which he was told was not going to happen.[51] Further attempts to roll over the loan continued into June 2019 (including Mr Hunt), with the Plaintiff rejecting the Defendants' request and advising that the Defendants should instead look to refinancing options. In or around June 2019, Mr Hunt emailed an employee of the Plaintiff indicating that he had exhausted all measures for the Defendants to refinance, that they are opposed to selling any part of security, and "most importantly have continued to consistently make their repayments within arrangements over the last 12 months".[52] Mr Hunt requested an extension of the loan for a further 12 months, "which will give them the necessary time to transition into regular employment with a view to then being in a position to refinance the loan elsewhere on a 'full doc' basis within that period".[53] It would appear that the Plaintiff reconsidered the Defendants' request and granted the roll over in July 2019.[54] Thereafter, certain hardship provisions applied due to COVID-19 in approximately May 2020. In or around July 2020, when the loan extension was due to expire, there were moves afoot to end the loan and implement a possible roll over. In or around August 2020, the Plaintiff emailed the First Defendant's wife indicating they would consider offering a 12 month roll over but needed to know why the Defendants were unable to pay out the loan as anticipated and, if rolled over, how they would pay it out in 12 months' time.[55] The First Defendant's wife requested more than 12 months, which was denied.[56] The Plaintiff queried the Defendants' exit strategy, noting that the loan had been rolled over twice already but were nonetheless agreeable to rolling it over one more time given the "current climate".[57] It was made clear to the Defendants that they need to make alternative arrangements before the loan matures again.[58]

(iii) In or around July 2021, the last extension expired. Mr Schelling was then the Defendants' mortgage broker, not Mr Hunt. Further communications ensued in regard to refinancing. A default letter was sent in August 2022, which appears to reference an agreement between the parties made on 19 January 2022 and a subsequent breach of that agreement.[59] The substance of that agreement is not made clear, though it may have related to the possible sale of one of the properties. Further correspondence with Mr Schelling followed, who was attempting to refinance the loan on the basis of changing it to a residential loan and using employment income of the Defendants (and First Defendant's wife).[60] Further attempts at combinations of refinancing amongst family members were being pursued up until October 2024, to no ultimate avail.

(ii) Mr Hunt's Evidence

• [25] Mr Hunt is the Director of Huntingbats Pty Ltd trading as Darwin Home Loans, formerly trading as Darwin Home Loans and Darwin Commercial Loans.
• [26] In or around 2015, the Defendants were referred to Mr Hunt by a representative of Westpac. This was because Westpac held a registered mortgage over the Defendants' properties and had given them notice that they did not intend renewing the business loan held by them.
• [27] Mr Hunt met with the Defendants on two or three occasions to discuss the loan and their finance options generally. On at least one of those occasions, he told the Defendants that they did not have the lending profile to borrow the amounts to pay off the Westpac loan from mainstream lending institutions. That was because the financial performance of the Defendants' mango farming operations at the two properties was not sufficiently profitable to get a standard loan from an alternate bank. However, their loan-to-value ratio on the properties was strong. Mr Hunt discussed the possibility of selling one of the properties to repay the loan and fund the other property. This was as opposed to taking on a non-conforming loan with higher interest rates. The Defendants told Mr Hunt that they were reluctant to do this as each was living on each property. Accordingly, Mr Hunt was instructed to secure a non-conforming loan that was manageable and could later be refinanced on the proviso that the profitability of the mango business would improve along with any capital growth in the properties.
• [28] A number of specialised lenders were considered. However, most had postcode restrictions which meant they would not lend money against properties in Berry Springs. Liberty Financial was selected as the most suitable lender. Mr Hunt assisted the Defendants with making the application to the Plaintiff, which was a subsidiary of Liberty Financial. The product which was offered came with a higher interest rate than mainstream loans, which reflected the risk profile of the borrowers.
• [29] Mr Hunt was aware of the Second Defendant's vision impairment and observed that he would need to place his face close to a document to sign it in order to see where he was signing.
• [30] Both Defendants signed the relevant loan documents and Mr Hunt verbally reviewed the loan documents with both of them. There was no difficulty with communication in English with the Defendants. Mr Hunt had a very frank and honest conversation with the Defendants about what a non-conforming loan meant for them, being an interest-only facility with a specialised lender intending to give them time to improve their lending profile and refinance their loan with a more favourable rate and terms. In Mr Hunt's opinion, the Defendants were clearly aware of the ramifications of the loan terms they were signing.
• [31] In 2018, 2019 and 2020, Mr Hunt assisted the Defendants in negotiating extensions of their loans for an additional 12 months. At the time of the extensions, their financial position was unchanged. As a result, no efforts were made to refinance with another lender. On each renewal, Mr Hunt advised the Defendants that they would need to lodge a tax return which demonstrated a profitable mango orchard if they were to secure a normal loan with other lenders.
• [32] Mr Hunt's role as the Defendants' broker concluded once the final loan extension expired in 2021 and there was nothing further he could assist them with.

• [33] The First Defendant was born in 1965 and his brother, the Second Defendant, was born in 1961. They both moved to Australia with their family in 1961. The First Defendant left school when he was 16, and he struggles with complex English words but speaks it well enough to get by in jobs and in conversation. The Second Defendant has had problems with his eyesight and by 2015, was mostly blind (95%) and walked with a cane. The Second Defendant speaks better English than the First Defendant but cannot read due to his eyesight.
• [34] The Defendants' father died without a will in 2002. The Defendants, along with another brother, inherited the properties including the mango farm. The Defendants bought out their other brother using a loan from Westpac in 2004. The farm usually did not make a profit: from the years 2015-2023, it rarely made a profit (financial returns show the farm only made a profit in 3 years, namely 2015, 2016 and 2018).[61] During the COVID-19 pandemic, labour was scarce, the mango trees were not maintained, and crop yields were down. By the end of 2024, it became pointless to continue the mango farm and subsequently the Defendants gave up farming.
• [35] The First Defendant has had a limited earning capacity since 1985, gaining some work as a block layer in 2000 and performing odd jobs in and around Berry Springs. The Second Defendant has been on a disability pension since 2004 and does not work. The First Defendant's evidence was that he never earned enough money to service the loan repayments and would rely on his wife's income as a childcare worker to do so. The First Defendant also deposes as to various mental health issues since his mother's death in about 2007.
• [36] In respect to the loan from the Plaintiff, the First Defendant says that in 2015, Westpac told the Defendants that they no longer wanted to do business with them and instead referred them to Mr Hunt. The Defendants met with Mr Hunt on a number of occasions in respect to gaining alternate finance. The First Defendant deposes that Mr Hunt did not explain the impact of the terms of the loan in 2015, and that he thought it was "just another bank loan".[62] The only thing that he thought was different was the short length of the loan and that Mr Hunt told them there was no other option for securing finance. In 2018, the First Defendant says that the Defendants enquired about the short length of the 12-month extensions but were told by Mr Hunt that was just the way it was and that although requests for extensions were passed on to the Plaintiff, they were refused. The First Defendant deposed that in order to get the loan and extensions, he needed to provide financial information to Mr Hunt.[63] The First Defendant deposes to not having asked for or being offered independent legal advice in respect to the loans, and that if he had been offered independent advice, he would have obtained it. Further, the First Defendant deposes that had Mr Hunt explained in 2015 how badly the loan would affect their finances, the Defendants would have sold off one of the blocks or made other arrangements instead of entering into the loan.

• [37] Mr Schelling gave evidence that he was a retired mortgage broker and had been approached by the Defendants in 2021 in respect to their financial situation. He deposed that on his observations, the Second Defendant appeared blind when they met in 2021. He deposes that in June 2021 he communicated with Mr Menzies on behalf of the Defendants on about 8 or 9 occasions. He communicated primarily with the First Defendant, who he says appeared to have some difficulty with English, but was capable of basic communication. His evidence was to the effect of attempting to assist the Defendants to gain alternate finance after the expiry of the last loan extension. That is, in or around June 2021-onwards. He proffered various opinions as to his view on the nature of the original arrangement which the Defendants had entered into with the Plaintiff and was critical of the Plaintiff's conduct.[64]

The Defendants' Submissions

• [38] In short, the Defendants' purported defence to the Plaintiff's application for possession is that the loan (including its extensions) was procured by the unconscionable conduct of Plaintiff. Therefore, the loan is liable to be set aside with flow on consequences for the mortgage secured by the loan and the possession application.
• [39] In respect to the basis for the claim of unconscionable conduct, the Defendants pointed to a number of factors which, they said, would give rise to a finding of the existence of a special disadvantage. It was submitted that the First Defendant has a substantial and obvious difficulty in communicating in English, especially in a business context. He speaks English as a second language and has a limited vocabulary, particularly in relation to legal and business matters. It was submitted that he suffers from an apparent chronic major depressive disorder and is incapable of instructing a solicitor without the assistance of others. The First Defendant has been unemployed for many years, including throughout the term of the loan agreements, except for work associated with the many farming businesses within the Berry Springs area.
• [40] In respect to the Second Defendant, it was submitted that he had limited capacity to communicate in English, had severely impaired vision to the point where he is considered legally blind, was reliant on a carer, requires a cane to walk and lives on a disability pension.
• [41] Notwithstanding the above, there were no express submissions on any other aspects of the naivety of the Defendants in terms of business dealings in general.
• [42] The Defendants submitted that the mango farm business only returned a meagre profit in its best years and operated at a loss nearly every year since 2015. It was submitted that the Defendants were "unbankable" in 2015 and have remained so to date. Further, it was submitted they were frequently late with their payments of instalments and defaulted dozens of times over the course of the agreements. The Defendants submitted that the Plaintiff was kept aware of the Defendants' ongoing financial difficulties because the First Defendant's wife would regularly contact the Plaintiff's staff to inform them of anticipated delays in payments of instalments and the reasons why.
• [43] It was submitted that the Plaintiff knew or ought to have known that:

(i) the loan agreement was severely improvident for the Defendants given their bleak financial circumstances and the harsh terms of the loan agreement;

(ii) the Defendants were especially vulnerable because of their poverty, infirmity and lack of literacy;

(iii) the Defendants never had a real hope of paying back the loan in the timeframes required over the course of the various loan agreements;

(iv) the Covid-19 pandemic made the operation of the mango farming business all but impossible; and

(v) even before COVID-19, the mango farming business presented no real prospect of adequately servicing the loan.

• [44] As a result, it was submitted that the loan agreement was procured by unconscionable conduct (at common law and/or statute) and was unenforceable for that reason.
• [45] In submissions, the Defendants pointed to a number of matters which were triable issues of fact and not appropriate to be dealt with by way of summary judgment. These included:

(i) Whether the Plaintiff was aware, or was put on reasonable notice, that the Defendants were suffering from a disadvantage;

(ii) Whether the Plaintiff should have taken steps to make themselves aware of the disadvantage; and

(iii) The effect of any waiver of independent legal advice by the Defendants, or the circumstance in which a decision was made not to seek it.

• [46] The Plaintiff submitted that any purported defence of unconscionable conduct, either at equity or statute, would not succeed and that the application for possession should be determined summarily. The reasons why were put on several basis, which included:

(a) The Defendants obtaining of finance after Westpac's refusal was a matter of necessity, and not where they were foolish, gullible or greedy and were not as a result of being victimised;

(b) Acting out of necessity, the Defendants approached the Plaintiff for lending;

(c) The Defendants' loan was facilitated through an independent mortgage broker, Mr Hunt. The loan was not facilitated through a solicitor or agent of the Plaintiff who played a central role in the system of conduct that facilitated the loans and who deliberately avoided interaction with the Defendants designed to prevent them acquiring knowledge of their financial and personal circumstances, which could have exposed the transactions to equitable or statutory challenges;

(d) The Defendants were not volunteers guaranteeing the loan for the benefit of someone else;

(e) Mr Hunt advised the Defendants that they did not have the lending power to borrow the amount owed to Westpac and advised that one option was to consider selling one of the properties to repay the loan and to retain the other property debt free. This was as opposed to taking a non-conforming loan at a higher interest rate. The Defendants chose not to accept that advice and instructed Mr Hunt to secure a non-conforming loan that was manageable and could later be refinanced on the proviso that the profitability of the mango business would improve, along with any capital growth in the properties. As a result, the Plaintiff was selected as the lender;

(f) The Plaintiff rejects the characterisation of the loan agreement as a "pure asset loan" given by a "lender of last resort". The relevant properties consisted of operational mango farms from which income could be derived and from which the Defendants' intended to derive income. Additionally, and in any event, it was submitted that asset-based lending is not of itself unconscionable and there needs to be some other factor that makes the conduct of the lender morally repugnant. There was no other such factor, particularly given the independent role played by Mr Hunt;

(g) Mr Hunt verbally reviewed the loan documentation with the Defendants and had no difficulty communicating with them in English. It was submitted that the Defendants knew exactly what type of loan they were agreeing to and knowing that they had the option of selling one of the properties to discharge the loan;

(h) The Defendants, on their loan application, requested the Plaintiff to assess the application without conventional evidence of their business income, declared that they expected to have liquid assets to repay the loan as they intended to sell the property or refinance, they had been advised to obtain legal and financial advice prior to signing any loan or mortgage, and they had carefully considered their capacity to meet the proposed loan repayments and confirmed they could afford the repayments. It was submitted that those declarations, along with the Westpac bank statements indicating a perfect repayment history, did not suggest morally repugnant conduct by the Plaintiff;

(i) At the time of the application and loan agreement, the Plaintiff was not aware of any physical or mental disability of the Defendants such that the Plaintiff denied that there was any such disadvantage or that it took advantage of the same;

(j) Following the original loan, the Defendants were successful in extending the loan agreement with the Plaintiff and did not raise any concern about their lack of understanding of the terms of the loan. It was submitted that this was suggestive of their awareness of the terms of the loan and the situation which the Defendants were in at the time of entering into the loans; and

(k) The Plaintiff's conduct was not unconscionable in terms of s 12CB of the ASIC Act. The arrangement was at arms' length through an experienced independent intermediary. The loan-to-value ratio was 27%, meaning the loan was adequately secured and of low risk from the lender's perspective. There was no evidence of unfair tactics, unnecessary conditions or bad faith.

• [47] In summary, it was submitted that the Defendants' purported defence raised no triable issue of unconscionability and did not satisfy the elements of unconscionable conduct at either general law or under the ASIC Act. Accordingly, it was submitted that the application for summary judgment should be granted and the orders made for possession.

• [48] The Defendants' purported defence is that there was unconscionable conduct by the Plaintiff.
• [49] The Defendants allege that the Plaintiff knew or ought to have known (or was wilfully blind to) their circumstances. Namely, that the loan was severely improvident given the financial circumstances of the Defendants and the Defendants had no hope of paying back the loan, that Westpac had refused to continue their previous loan, that the mango farm was not sufficiently profitable and that the Defendants had certain physical and mental disabilities which made them vulnerable. By entering into the loan and extending it, it is alleged that the Plaintiff unconscionably exploited the Defendants' vulnerability.
• [50] As noted above, the power to order summary judgment must be exercised with exceptional caution and it will only be enlivened where the relevant party's case is "so clearly untenable that it could not possibly succeed". The Court will be reluctant to try a case on affidavit evidence alone, particularly where there are facts in dispute. Additionally, in the context of claims of unconscionable conduct and as stated in Stubbings, 'the application of the equitable principles relating to unconscionable conduct ... calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [vulnerable party].'[65] In this instance, where there is an absence of pleadings and on the limited evidence which has not had the benefit of being properly tested, summary judgment is not appropriate for the determination of this matter. Whilst there is some force in the submissions made by the Plaintiff and the facts of this matter as disclosed to date can be distinguished from the conduct which arose in Stubbings, there are a number of triable facts and issues in dispute which need to be resolved. I am not satisfied that the Defendants' case is so clearly untenable that it could not possibly succeed.
• [51] For those reasons the Plaintiff's application for summary judgment should be refused. The matter should instead proceed by way of pleadings, further affidavit evidence and a hearing. Given the orders I propose to make, and that the proceeding has been commenced under Rule 45.05 by originating motion, it is not appropriate to continue to use an expedited procedure. I would order that the proceeding continue as if commenced by writ under Rule 4.07. I will hear the parties further as to the appropriate programming orders in respect to pleadings and other relevant processes. In respect to the costs of this application, they should be in the cause unless any party wishes to submit otherwise and in which case, I will allow 14 days for any written submissions.

• [52] I therefore make the following orders:
  1. The Plaintiff's application for summary judgment is dismissed.
  2. The parties have 14 days from the date of this judgment, subject to the abridgement of time provided in Rule 3.04, to make any written submissions in respect to costs and, if they do so, the issue will be determined on the papers. Otherwise, costs of and incidental to this application are to be costs in the cause.
  3. Pursuant to Rule 4.07, the proceeding is to continue as if it had been commenced by writ.
  4. At a date convenient to the parties, the proceeding is to be listed for a Directions Hearing for the purpose of further programming orders.

[1] Affidavit of Peter Yiallourou promised 27 May 2025 at [8] ('First Defendant's Affidavit').

[2] First Defendant's Affidavit at [22].

[3] Affidavit of Matthew Menzies promised 27 June 2025 at Annexure C, p 125 ('Menzies' Second Affidavit').

[5] Affidavit of Matthew Menzies promised 23 January 2025 at Annexures C, D and E ('Menzies' First Affidavit').

[6] Extensions were actioned by way of variation to the original loan agreement, essentially extending the term by 12-months and varying the interest rate.

[7] See Annexures C, D and E of Menzies' First Affidavit.

[9] Menzies' Second Affidavit at Annexure G, p 184.

[10] It is understood that the prior loan from Westpac was a commercial loan and that, as part of the assessment process, the Plaintiff required satisfactory evidence that the Westpac loan was for a commercial purpose. See Menzies' Second Affidavit at Annexure G, p 211. There was, however, a suggestion at hearing by Counsel for the Defendants that "the framing of the loan as commercial was a conceit". See Transcript of 10 July 2025 at p 18.

[13] Defendants' Outline of Submissions filed 9 May 2025 at [14].

[14] Plaintiff's Outline of Submissions filed 9 July 2025 at [4].

[15] See Westpac Banking Corporation v Eres [2025] NTSC 46 at [18].

[16] Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42.

[17] Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 at 99.

[18] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 130.

[19] Outback Civil Pty Ltd & Anor v Francis [2011] NTCA 3 at [10].

[20] [2013] NTSC 15 ('Shew') at [9], citing Sportsbet Pty Ltd v Moraitis [2010] NTSC 24 per Southwood J.

[21] Heller Financial Services v Solczaniuk [1989] NTSC 36 at [9].

[23] [2022] HCA 6 at [39] ('Stubbings').

[24] [2013] HCA 25; (2013) 250 CLR 392 at 401‑402.

[25] See Blomey v Ryan [1956] HCA 81; (1956) 99 CLR 362 at 405.

[26] Competition and Consumer Act 2010 (Cth), Sch 2, s 20.

[27] Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 60 ('Kobelt').

[28] Stubbings per Gordon J at [55].

[29] Ibid at [57] citing Kobelt at [93].

[31] Menzies' First and Second Affidavits.

[32] Affidavit of Paul Hunt promised 26 June 2025.

[34] Affidavit of Tony Schelling promised 27 May 2025 ('Schelling affidavit').

[35] Menzies' Second Affidavit at Annexure C, p 125.

[36] Menzies' Second Affidavit at Annexure D, [8]. The Westpac business loan statement shows 12 fortnightly payments of $800 against the loan totalling $9,600, with interest amounts of $7,896.84 over the period and one cash withdrawal of $2,238.34.

[37] Menzies' Second Affidavit at Annexure E.

[39] For example, see Menzies' Second Affidavit at Annexure G, pp 197-198, 210.

[40] Menzies' Second Affidavit at Annexure G, p 211.

[41] Ibid at p 212. It is understood that Veda, at the time, was a commercial provider of credit information.

[61] First Defendant's Affidavit at Annexure PY1, pp 9-113.

[63] Email dated 19 July 2020 annexed as PY2 to First Defendant's Affidavit. It would appear this was a request for documentation for the final 12-month loan extension. The request was for the First Defendant's wife's payslips from her employer, the First Defendant's payslips, Centrelink advice/letter, copies of bank statements from the Defendants and the First Defendant's wife.

[64] Schelling affidavit at [14].