St George Bank Limited v Wright & Ors

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - IMPLIED TERMS - GENERALLY - where the plaintiff bank had entered into a contract of guarantee and indemnity with the defendants - where the loan facility under the facility agreement could not be drawn down in full because certain conditions relating to valuation and the sale of units in time had not been fulfilled - where the guarantee and indemnity was entered into in consideration of the bank "continuing to provide financial accommodation to the [principal debtor]" - whether this constitutes a condition that the bank would advance all monies to which the primary debtor was entitled under the facility agreement and if so whether this discharges the defendants from performance of the contract of guarantee and indemnity

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - OTHER MATTERS - where the contract of guarantee and indemnity provides that "[r]ights given to [the bank] under this guarantee and indemnity and [the guarantors'] liabilities under it are not affected ... by anything else that might otherwise affect them under law or otherwise, including the fact [the bank] var[ies] or replace[s] any arrangement under which the guaranteed money is expressed to be owing, such as by increasing the credit limit or extending the term" - whether the omission by the bank to provide the financial accommodation in full falls within this clause

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - IMPLIED TERMS - TERMS ESSENTIAL TO ENABLE PERFORMANCE - where the defendants submit that there are implied terms in the facility agreement under which the bank impliedly promised to follow normal banking procedures in relation to the facility, to make reasonable and prudent enquiries in relation to the offering of the facility and to act as a reasonable financier - whether these terms are necessary to give business efficacy to the agreement

CORPORATIONS - FINANCIAL SERVICES AND MARKETS - MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT - MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT - where the bank made no representation that it would provide whatever funding was required for certain purposes irrespective of the terms of its facility including the terms for loan to value ratios - whether the bank has engaged in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive in contravention of s 12DA of the ASIC Act 2001 (Cth)

CORPORATIONS - FINANCIAL SERVICES AND MARKETS - FINANCIAL SERVICES PROVIDERS - OTHER MATTERS - where the extent of the funds required was dependent on contingencies outside the bank's control - where there is no evidence that the principal debtor had relied on the bank's judgment - whether the bank has breached implied warranties contained in the ASIC Act 2001 (Cth) that the financial services be rendered with due care and skill and that the services be reasonably fit for the purpose for which the consumer had made known that the services were required

Australian Securities and Investments Commission Act 2001 (Cth), s 12BA, s 12BAB, s 12BAA, s 12BC, s 12CC, s 12CB, s 12DA, s 12ED, s 12GF, s 12GM

Australian Securities and Investments Commission Regulations 2001, reg 2B(1)(b)

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1986-1987) 162 CLR 549, cited

Arturi v Zupps Motors P/L [1980] FCA 164; (1980) 33 ALR 243, cited

Austral Pacific v Airservices Australia [2000] HCA 39; (2000) 203 CLR 136, cited

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, applied

Burton v Grey (1873) 8 Ch App 932, cited

National Bank of Nigeria Ltd v Awolesi [1964] 1 WLR 1311, cited

B D O'Donnell QC, with D de Jersey, for the plaintiff

P D Tucker for the second and third defendants by counterclaim

Archibald & Brown for the first to fifth defendants

Elliott & Harvey for the second and third defendants by counterclaim

[1] The plaintiff bank sues the defendants upon their guarantees of the borrowings of Ronbar Enterprises Pty Ltd ("Ronbar"). That company was effectively controlled by the first defendant, Mr Ron Wright. It borrowed from the bank to refinance and progress the development of its land at Miami on the Gold Coast, in a project called "Miami One". Ronbar defaulted in repaying and it was ordered to be wound up on 12 January 2009.

[2] The bank applies for summary judgment against each defendant in an amount of approximately $47 million. In essence, the defendants say that the bank did not lend enough money to Ronbar, as a result of which it could not complete the Miami One project and became unable to repay that which the bank did lend. Before going to the legal bases for that case it is necessary to summarise the facts of the transaction.

[3] At all relevant times, the Miami One project comprised four buildings used for shops and three buildings to be used for residential apartments and offices. The three residential buildings are described as buildings two, three and four. At the time of the making of the agreement between the bank and Ronbar in September 2007, building two was incomplete and Ronbar proposed to construct another residential apartment building, described as building one.

[4] Immediately prior to this transaction with the bank, the project was financed by Perpetual Nominees Limited, which was then owed about $20.8 million, and Elliott & Harvey Securities Limited ("EHS"), which was then owed about $38.4 million. EHS was a company associated with the law firm Elliott & Harvey, and Ronbar's relevant dealings with it were conducted with Mr Michael Harvey. According to Mr Wright's evidence, the EHS loan had fallen due for repayment on about 11 June 2007 and had been overdue since. Mr Harvey was telling Mr Wright that some investors in the EHS loan had been pressing for the return of their funds by the repayment of this loan.

[5] On 3 September 2007, EHS wrote to the directors of Ronbar offering a new loan. Ronbar and the defendants, as the proposed guarantors, countersigned that letter which then constituted the agreement between them for a new facility of $22.5 million. According to the letter the purposes of the loan were as follows:

The "new incoming first Mortgagee" became the plaintiff bank. The defendants' essential complaint is that the bank did not lend the $24.5 million which this letter anticipated.

[6] According to the EHS letter, a further $6.17 million had to be found from the "Borrower's own Resources". Ronbar had no such funds. According to Mr Wright's evidence, he had discussed that problem with Mr Harvey on 15 August 2007. At that stage, the titles to the proposed individual lots in each of residential buildings two, three and four had not issued. Mr Wright says that he and Mr Harvey then discussed borrowing from a "mezzanine funder" and that Mr Harvey assured him that Ronbar would be able to borrow that shortfall once the titles to the lots had issued.

[7] The bank offered finance by a letter to the directors of Ronbar dated 14 September 2007. That was countersigned by Ronbar and each of the defendants as proposed guarantors. The signature of each is dated 20 September 2007 and there is no evidence suggesting that they did not sign on that day. That is significant because of what passed between Ronbar and its broker on 18 and 19 September, as I will discuss. The agreement thereby concluded between the bank and Ronbar provided for a commercial bill facility of up to $48,610,500 to be provided in two tranches. The first tranche had an upper limit of $21,187,500 and was intended to pay out the Perpetual loan. The second tranche had an upper limit of $27,423,000 and was intended for payment to EHS and for other purposes associated with the project.

[8] The security to be provided to the bank included a first registered mortgage over the Miami One properties and first registered mortgages over three apartments in a building at Mermaid Beach called "La Sirena", which was the subject of a previous development by Ronbar.

[9] The amount of finance to be provided under each tranche was limited by certain agreed loan to value ratios ("LVRs"). The LVR for tranche 1 was 75 per cent of the value (excluding GST) of "the shopping centre held as security", which was the centre comprised of the four retail buildings in the Miami One project. According to a valuation which had been provided to the bank by Ronbar through its broker, Ashe Morgan Winthrop, on 16 August 2007, the shopping centre was worth $28.25 million. This explains the upper limit of $21,187,500 offered for tranche 1, which was 75 per cent of that value.

[10] The finance under tranche 2 was agreed as follows:

"Initial funding position is not to exceed 70% LVR based on the Valuation amount (ex. GST) of the residual residential unit and office unit stock held as security.

St George Bank is to collect 100% of Net Sale Proceeds which are to be applied as principal debt reduction against the loan.

The LVR position for Tranche 2 is to be reduced from unit sale proceeds to below 65% within 90 days of initial drawdown. If not achieved, the client is to make a principle [sic] reduction facility to reduce the LVR to below 65% within the following 7 days."

[11] It is common ground that "the residual residential unit and office unit stock" was constituted by buildings two, three and four in the residential/office part of the Miami One project together with the three apartments in "La Sirena". In its letter of 16 August 2007 to the bank, Ronbar's broker had referred to certain valuations of these properties as follows:

The total of these values was $39,176,364, of which 70 per cent was (to the nearest $1,000) $27,423,000, the upper limit of the finance offered under tranche 2. The valuations of the buildings in Miami One were on an "as if complete" basis. They were not upon an "as is" basis. The same valuers, Colliers International, assessed the "as is" value of building two at the date of these valuations (26 June 2007) at $11,250,000 (exclusive of GST). They explained that the "as if complete" valuations had been assessed as the market value of the proposed improvements "on the assumption that all construction had been satisfactorily completed in all respects at the date of this report". They noted that buildings three and four were "substantially completed with a range of concrete internal works still to be undertaken", which may explain why there were asked to value only building two on the "as is" basis.

[12] However, there was a subsequent valuation by Colliers which was dated 28 August 2007. This was of buildings two, three and four on an "as is" basis and if sold "in one line to an investor, with the apartments subsequently sold down on an individual basis". Colliers there wrote that:

"One Line sales typically result in a reduction in value of around 15% depending on the overall number of dwellings, product type together with the prevailing market conditions".

Accordingly, their opinion was that it was appropriate to discount their "as if complete" figures by 15 per cent so as to arrive at $26,669,909, and then to deduct the estimated costs to complete construction of $595,000, so as to arrive at a figure which they rounded to $26,100,000.

[13] It was this valuation upon which the bank says it acted in assessing how much should be advanced initially under tranche 2. Adding $26.1 million to the value of the three apartments in La Sirena ($7.8 million) resulted in a total of $33.9 million, of which 70 per cent was $23,730,000. The amount initially available to Ronbar was therefore insufficient to provide the $24.5 million to be repaid to EHS according to the EHS proposal.

[14] The Colliers letter of 28 August 2007 was addressed to Mr Kent of Ashe Morgan Winthrop and was said to be in response to his email of 23 August 2007 requesting an assessment on the "as is" and "in one line" bases. Ashe Morgan Winthrop had apparently been engaged by Ronbar in response to their letter to Ronbar of 12 June 2007, which is exhibited to Mr Wright's first affidavit. Absent any evidence to the contrary, it should be inferred that Ronbar was aware of the Colliers valuation of 28 August 2007. Mr Wright disputes the bank's case that it calculated the amount to be disbursed under the second tranche according to that valuation. But he does not appear to deny that he was aware of the valuation or that he then understood that the bank had received it. Nor did he question the reliance of a valuation on the "in one line" basis in the circumstance that the titles to be individual lots were yet to issue.

[15] On 18 September 2007, Mr Kent faxed to Mr Wright estimates of the likely disbursements under the bank's facility. This was four days after the bank's letter of offer but prior its being signed by Ronbar and the defendants on 20 September. Under the heading "Total Deal", he set out disbursements totalling the facility limit (for the two tranches) of $48,610,500, which included a disbursement to EHS of $24,636,848. There was then another set of disbursements under the heading "First Draw", which totalled $44,917,500. The difference was that the amount to be disbursed to EHS under the first draw was $20,943,648. If the amount of the first tranche according to the bank's letter of offer ($21,187,500) is subtracted from $44,917,500, the result is $23,730,000. It thereby appears that Mr Kent understood that the bank would advance initially $23,730,000 for the second tranche, which, as I have discussed, was the upper limit if calculated by using the Colliers valuation of 28 August. Whether Mr Wright did that calculation for himself upon receipt of this fax is not clear; nevertheless it was clear that the amount to be paid to EHS from the first draw would be well less than $24.5 million.

[16] On the following day, Mr Kent sent to Mr Wright another fax in which he set out similar but not identical figures. He advised that he had received a "cost to complete" (of the existing buildings) which had caused a revision of his estimates of the previous day. The total drawdown remained the agreed limit of $48,610,500, but of which $23,600,384 was estimated to go to EHS. His estimates for the first drawdown showed a total of $44,546,436, of which $19,536,320 would go to EHS. Whilst it is not so apparent that these estimates were based upon that amount for the second tranche of $23,730,000, the fax plainly represented that under the initial drawdown, the disbursement to EHS would be well short of $24.5 million.

[17] Accordingly, from the uncontroverted facts it appears that Ronbar and the defendants became bound only after advice that the finance immediately available would be insufficient to pay $20 million to EHS, let alone the $24.5 million according to the EHS proposal. Still the EHS refinancing could proceed, but most of the new finance from EHS would go to pay out the existing loan, with relatively little cash remaining to Ronbar. Mr Wright says that he believed that the bank was retaining something in excess of $4 million until titles to the lots in buildings two, three and four were issued. That was not precisely the case but his belief is explained by the fact that the "in one line" basis of valuation was apparently apt because the titles had not issued. But as the faxes from Mr Kent anticipated, there would be other disbursements to be made from the bank's finance apart from payments to EHS. In particular, Mr Kent referred to capitalised interest on the bank's facility of $1,620,000 and the costs to complete the existing buildings of $1,331,000.

[18] There were further conditions of the bank's offer which resulted in other monies being withheld from the first drawdown which occurred on or about 27 September 2007. The amounts then disbursed by the bank were as follows:

Interest and charges to Perpetual Nominees $ 149,796.76

Legal fees for solicitors for Perpetual Nominees $ 1,732.50

Payment of rates to Gold Coast City Council $ 48,480.26

Payment of legal fees to solicitors for Ronbar $ 14,250.00

[19] The balance of tranche 1 was paid to Ronbar by the bank on 30 October 2007. The defendants make no complaint as to tranche 1. Apart from the amount paid to EHS, the amounts which were disbursed under the second tranche were substantially in accord with Mr Kent's estimates of 19 September.

[20] The bank's case is that it was entitled to withhold from the initial payment under the second tranche, which according to the LVR was to be no more than $23,730,000, further sums totalling $4,530,000 as follows. The first was an amount for the cost to complete building two. For this the bank retained $1,265,000. It was a term of the bank's facility that a quantity surveyor was to confirm the cost to complete "on all buildings" prior to settlement and that the bank might retain sufficient funds to meet this amount together with GST and a contingency sum equivalent to 10 per cent of the amount. It is to be noted that the amount actually retained was less than that which had been estimated by Mr Kent in his fax of 19 September. The amount retained was paid by the bank to the builder by various payments in the period 4 October to 12 December 2007. There could be no complaint as to this retention and nor does there appear to be any in the defendants' case.

[21] A further condition of the bank's facility, condition 3(d), was that there be "5 arm's length presale contracts for a minimum of $3,200,000 (excluding GST) with 10% deposits held". At the time of the bank's offer, there were but three such contracts (for units 309, 401 and 404) and a further contract under which a deposit of less than three per cent had been paid (unit 204). Accordingly, this would have entitled the bank to decline to advance any money. Mr Wright says that he discussed this problem with Mr Harvey, who said that it could be overcome by Mr Harvey's arranging for another two contract documents to be signed. One was in the form of a contract of sale to a company called EHS Properties Pty Ltd, which signed by its attorney who was Mr Harvey's son. The other contract was signed by a party which, according to Mr Wright's evidence, was associated with the builder of the project. Each form of contract was dated 25 September 2007. According to an email from Mr Kent to bank officers of that date, each of these contracts was said to be secured by a deposit of $1,000. A further difficulty for Ronbar was that the contract for unit 404 was conditional upon the purchaser making an unconditional contract for the sale of another property.

[22] The defendants do not seem to argue that Ronbar had complied with the requirement for five sales and nor does it appear that they said otherwise at the time. According to the evidence of the bank's Mr Cameron, a compromise was reached in his discussions with Mr Kent, whereby the bank would withhold $1,655,000 from the initial drawdown until the requisite numbers of contracts was achieved. There is no evidence to contradict that evidence which is consistent with the contemporaneous documents where the amount of $1,655,000 has an obvious explanation. In Mr Kent's email of 25 September 2007 to officers of the bank, the prices under the two contracts which did meet the condition (units 309 and 401) totalled $1,545,000. The difference between that amount and the required total of $3,200,000 was $1,655,000.

[23] The third amount withheld was $1,610,000 which was for interest. Another term of the bank's facility was that there be:

"10. Confirmation (copy of the approval letter) that Elliott Harvey Securities has approved funding for the construction of the final residential building. Approved facility must provide sufficient interest capitalisation allowance to cover payment of interest on the residual debt after settlement of St George's facilities and on any borrowings for the construction of the final residential building."

The bank's case is that the second sentence within that condition entitled the bank to retain this amount as the estimated interest under its facility. Although that was not challenged in the defendants' argument, the bank's position in this respect appears to be at least questionable. The better view is that the "approved facility" referred to in its second sentence is the facility as approved by EHS which is referred to in its first sentence. It would be unusual to insert an entitlement to withhold interest for the bank's facility within this condition. The apparent intention was to require that another facility contain a certain term. The "allowance" was to "cover payment of interest on the residual debt after settlement of St George's facilities", meaning the remaining debt to EHS after the partial repayment from the bank's advance, and on the borrowings from EHS for building one.

[24] In my view the retention of an amount towards the interest on the bank's facility is not demonstrated to be in accordance with the terms of that facility. However, some further facts about this retention should be noted. The first is that, assuming the second sentence of condition 10 referred to the EHS funding, the bank did not receive a copy of a letter which complied with that condition. In this respect there is an issue as to whether the bank received a copy of the letter from EHS of 3 September 2007. The bank's evidence is that it did not receive that letter. The defendants do not accept that to be the case, and wish to pursue that point with the benefit of disclosure. But if, as the defendants would seek to establish, the bank did have a copy of the letter of 3 September 2007, the letter would have demonstrated that the "funding for the construction of the final residential building" (building one) had not been approved by EHS in an amount sufficient for that purpose, but that instead some $6.17 million would have to be found from the borrower's own funds. Alternatively, there is the bank's evidence that it received instead a copy of a letter from EHS to Mr Kent dated 12 September 2007 which was as follows:

"We confirm that Elliott Harvey Securities Ltd ("EHS") has approved a replacement facility to the existing loan in the amount of $22,500,000.00.

(a) fund the pay out of the balance of the existing facility after an incoming advance of $24,500,000.00;

(b) cover the construction costs for completion of Building One including Council Guarantees, Performance, Bonds, etc.;

(c) Cover other outstanding completion costs.

An offer letter in those terms has been furnished to and accepted by Ronbar Enterprises Pty Ltd.

The advance is, of course, conditional upon satisfaction of conditions precedent including the satisfactory incoming mortgagee's advance."

That letter did not satisfy condition 10 of the bank's facility because it provided no indication of any "interest capitalisation allowance" provided by the EHS facility. And in truth, the EHS facility did not provide sufficient for both the construction of building one and the interest on the EHS borrowings. Upon either case then, condition 10 was not satisfied and the bank was not obliged to provide any finance. Nevertheless, it is clear that the bank did so according to an agreement between the bank through its solicitor, Mr McPherson and Mr Kent representing Ronbar. On 26 September 2007, Mr Kent sent an email to Mr McPherson setting out his understanding of the distribution of funds upon the first drawdown. That provided for "Cap Interest" of $1,620,000. As I have mentioned, this was the same amount which Mr Kent had told Mr Wright, in his faxes of 18 and 19 September, would be the amount retained for what he there described as "RES [residential] Cap [capitalised] Interest".

[25] After the initial drawdown on 27 September 2007, the bank disbursed further sums as follows:

Total disbursements after first drawdown $5,184,530.85

Consequently the total of the disbursements by the bank was that sum together with $19,200,000, a total of $24,384,350.

[26] The payment of $731,000 on 2 October 2007 resulted from the contract for unit 404 becoming unconditional. The amount was the price under that contract. So once it became a complying contract under condition 3(d), the amount withheld under this condition was reduced accordingly.

[27] The disbursement of $703,350.85 was authorised by a letter dated

15 November 2007 signed by the third defendant as a director of Ronbar. This amount, as with the disbursement on 2 October 2007, was paid to EHS. Mr Wright's evidence is that these disbursements were made without authority. That is clearly incorrect. It is disproved by the evidence of that letter from the third defendant and, in relation to the other disbursement, by evidence of an authorisation from Mr Kent in his email to the bank of 1 October 2007. The amount of $703,350.85 was that which had to be paid to the Gold Coast City Council for a head works bond, as appears from a letter from EHS to the bank dated 9 November 2007.[1] Mr Wright's claim then that these two disbursements were part of some arrangement between the bank and EHS in disregard of the interests of Ronbar is without substance.

[28] Next there was the disbursement of $1,950,000 made on 24 January 2008. Mr Wright says that he believes "that this amount was the first part of the $5M in funds retained by St George at settlement of the facility on 27 September 2007" and that it was retained pursuant to some agreement between the bank and EHS which was made without reference to Ronbar.[2] Again however, the facts are clear from the contemporaneous documents, and Mr Wright is mistaken. The explanation for this payment appears from documents exhibited to Mr Wright's first affidavit. There is a letter of 12 March 2008 from EHS to Mr Kent,[3] an email from Mr Kent in reply dated 17 March 2008,[4] and a copy of a fax from Mr Kent to Mr Wright dated 23 January 2008.[5] By that fax, Mr Kent asked Mr Wright for authority from Ronbar for the release of $1,950,000 to be deposited to an account of EHS, and Mr Wright and the third defendant signed that fax as requested. This was, of course, the day prior to the disbursement. As the March correspondence demonstrates, the bank was prepared to disburse $1.95 million on the issue of titles from the separate lots in buildings two, three and four and once more contracts for the sale of units were made. In his email Mr Kent wrote:

"On registered titles being legally created, St George released $1.95M to EHS on instruction from Ronbar Enterprises with $1.743M retained to be drawn in line with ongoing sales and maintaining St George's LVR at 65%. The $1.95M released reflected the critical condition subsequent of St George's facility that the debt be reduced to an LVR of 65% within three months of the initial settlement in September.

At this release of $1.95M, the three settlements of lots 203, 210 and 402 were reflected in determining what could be released."

The valuation on the "sold in one line" basis was apt until separate titles issued for these buildings. At that point, the "as if complete" valuations were more relevant, building two having been completed by then. Accordingly, the LVR was affected by the use of the higher valuations. But it was also affected by the fact that three months had passed from the initial drawdown, so that according to the terms of the facility, the LVR had become 65 per cent. This meant that more funds could be paid by the bank, but only, at that point, $1.95 million.

[29] Mr Wright's affidavit refers to this part of the letter from EHS to Mr Kent of 12 March 2008:

"We refer to the above and to the settlement that took place in respect of 50 lots (all apartments in buildings 2, 3 and 4 plus Titles to 8 commercial offices).

Lot 101 (the Title to the rooftop above Coles) was released to our company and our first registered mortgage is now in place.

At settlement St George Bank requested that they retain the amount of $1.95M to be released to EHS as Sale contracts were entered into, as distinct from settlement of sales. EHS agreed to this request and settlement then took place.

Since that time four (4) sale contacts have been settled, details of which are set out below:

Lot Sale Price Amount received by St George on Settlement

Mr Wright says that this letter shows that there was some agreement between the

"at settlement of the St George facility (which was settled on 27 September 2007) [that] St George would retain the amount of $1,950,000.00 to be released to EHS as sale contracts were entered into..."

"This agreement was never disclosed, documented or agreed to by Ronbar and has only become apparent to Ronbar after receiving a copy of [this] correspondence..."

"Obviously, Ronbar had been lied to by both St George and EHS as both parties as well as Ronbar had agreed that the only retention would be $4M and it would be disbursed on registration of the lots referred to above. The amount of $1.95M was never disclosed and Ronbar would never have entered into the mortgage with St George if it had been told that the $4M would not be forthcoming."[6]

[30] However, the "settlement" referred to in this letter of 12 March 2008 was not the initial drawdown upon the bank's facility. Rather, it is clear enough that it was the issue of the individual titles to buildings two, three and four. As was set out in the letter from EHS to Ronbar of 3 September 2007, the security to be granted to EHS included a first mortgage over the land for the proposed residential building one (which was then described as proposed volumetric plan lot 102 on SP204285[7]). This was referred to in the bank's facility letter, which provided that the bank should have the first mortgage on lot 101 on survey plan 193610 (which was the land the subject of the residential and office buildings) but that:

"Once lot 101 on survey plan 193610 has been subdivided into a lot 102 (the development lot) and other residential lots, [the bank] will release our mortgage over the development lot [the land for the proposed building one]."

Thus in the EHS letter of 12 March 2008, the title which "was released to our company" was the title to that development lot, upon which EHS then took its first mortgage. This was made possible by the "settlement that took place in respect of 50 lots (all apartments in buildings two, three and four plus Titles to eight commercial offices)" as it was described in the letter. In other words "the settlement" was not the first drawdown on the bank's facility but it was the dealing between the bank and EHS consequent upon the issuing of the separate titles. Mr Wright's suspicion that there had been some agreement between the bank and EHS whereby the bank would withhold a further $1.95 million from the first drawdown is misconceived.

[31] The next disbursement of $285,000 is also explained by Mr Kent's email of 17 March 2008. It resulted from the settlement of the sale of Lot 404. Exhibited to an affidavit of Mr Cameron of the bank is a fax from Mr Kent to Mr Wright dated 4 March 2008 which was countersigned by Mr Wright and the third defendant on behalf of Ronbar to authorise the release of this $285,000 to EHS.

[32] The payment of $250,000 was similarly authorised, by Mr Wright and the fourth defendant countersigning a fax from Mr Kent to Mr Wright dated 30 April 2008. Again that was an authority for the payment to be made to EHS.

[33] Mr Kent's email of 17 March 2008 also said this:

"... with the release of the amount of $285,000, the remaining amount available for drawing is $1.458million.

... with the release of the amount of $285,000, the LVR for St George is approximately 65% (by my calculations there is a difference of $147.09 in this regard). As explained to you, the LVR includes all interest capitalisation for the facility as if fully drawn. On this basis my calculation of this debt position is security value of $36,581,364 with debt at $23,777,740 (including the capitalised interest)."

[34] Mr Kent's calculation of the "security value of $36,581,364 can be seen to have been upon this basis: from the "as if complete" values totalling $39,176,364[8] he subtracted the Colliers valuations for the four units the sales of which had settled by then (lots 203, 210, 402 and 404), which had valuations totalling $2,595,000. On that basis, as Mr Kent effectively said, the maximum debt was $23,777,887, so that all but about $147 of the permitted debt had been drawn. Of course more than this amount had been disbursed, but Mr Kent has obviously allowed also for the bank's receipts from settled sales.

[35] Mr Kent's email of 17 March 2008 is shown as copied to an email address which, as appears from other documents,[9] is an address of someone at Ronbar and apparently the third defendant. It must be inferred that the email of 17 March 2008 was copied to Ronbar.

[36] In all of this there is nothing which provides support for the defendants' case that they were entitled to further finance at this point and as Mr Kent's email illustrated, the amount able to be drawn down by Ronbar under this LVR of 65% varied as sales of units were settled, because whilst the bank's receipt of the net proceeds of sale decreased the debt, the disposition of the unit decreased the value of the available security.

[37] In short the agreed facility limit for tranche 2 of $27,423,000 was never able to be drawn essentially because of three factors. The first was that the value of the security was upon the "in one line" basis until separate titles for the lots issued. The second was that the required number of sales was not made until months after the initial drawdown. The third was that by the time the titles issued and further contracts were made, the agreed LVR had become 65 per cent, because more than three months had passed from the initial drawdown.

[38] Counsel for the defendants argued that there is an issue to be tried concerning a suggested waiver by the bank of the requirement for the LVR not to exceed 65 per cent. Neither that case nor a similar case of a variation to the facility agreement is suggested by the Defence. But it is said to be supported by para 416 of Mr Wright's long affidavit, where he there refers to a meeting which he says took place about two weeks after the issue of the separate titles. It was a meeting between Mr Kent, Mr Morely and Mr Cameron of the bank and Mr Wright and his daughter, the fourth defendant. Mr Wright's evidence is that he "set out the problems we were having in the market place due to the change in economic conditions", to which Mr Cameron said that this was a "common problem". The fourth defendant outlined her plan for the marketing of the units, such as by reducing prices and increasing the agents' commission. The bank's representatives are said to have been

"both sympathetic to our request and ... cognisant of the fact that all the parties involved could not have complied with the conditions as set out in the St George letter of offer because of the late registration of the BUP."

Mr Wright's evidence is that Mr Cameron then said "it was time to move on" and asked Ronbar's representatives to provide the bank with monthly reports setting out the sales for the month and other information as to the marketing. Mr Wright says that at this meeting he

"decided not to raise the issue of the retention [meaning the sum of approximately $4 million which he understood was retained from the initial drawdown pending the issue of the individual titles] as it was better left in the hands of Mr Harvey from a legal perspective."

[39] That evidence does not raise an issue as to whether the bank became disentitled to apply the LVR of 65 per cent. Nothing is attributed to the bank's officers which could constitute a waiver or agreed variation, and the absence of any discussion as to the "retention" seems difficult to reconcile with the defendants' argument.

[40] In summary, there is but one respect in which there is an issue as to whether the bank provided the finance according to the terms of its facility agreement. That matter is the retention for interest on the bank's facility. Otherwise the amounts which were withheld from the initial drawdown were either according to the facility agreement or to what the documentary evidence demonstrates was the agreement at the time. The amount withheld because of the absence of the required five contracts of sale was effectively disbursed for the most part by 15 November 2007, and certainly by 24 January 2008. The defendants have not sought to prove, by evidence of the contracts which Ronbar made for the sale of units, that any retention should have been released earlier. Nor have the defendants otherwise raised a case to the effect that the finance which was provided at any time was less than the limit according to the agreed LVRs. Rather, their case disregards the LVRs and proceeds upon a premise that Ronbar was entitled to drawdown as much as $27.423 million, at least once the individual titles had issued.

[41] I go then to the legal arguments for the defendants as to why they are not liable at all to the bank. There is no issue as to the fact of their signing the agreement on which the bank sues. It provides for both a guarantee and indemnity. The guarantee is pursuant to cl 2.1 which is as follows:

"2.1 You unconditionally and irrevocably guarantee payment to us of the guaranteed money. If the customer does not pay the guaranteed money on time and in accordance with any arrangement under which it is expressed to be owing, then you agree to pay the guaranteed money to us on demand from us (whether or not we have made demand on the customer)."

The indemnity is pursuant to cl 3.1 and 3.2 as follows:

"3.1 You unconditionally and irrevocably idemnify us against, and you must therefore pay us on demand for, liability, loss of costs we suffer or incur if:

(a) the customer does not, is not obliged to, or is unable to, pay us the guaranteed money in accordance with any arrangement under which it is expressed to be owing; or

(b) you are not obliged to pay us an amount under clause 2; or

(c) we are obliged, or we agree, to pay an amount to a trustee in bankruptcy or liquidator (or a bankrupt person or insolvent company) in connection with a payment by you or the customer. (For example, we may have to, or may agree to, pay interest on the amount.)

You as principal debtor agree to pay us on demand a sum equal to the amount of any such liability, loss or costs.

3.2 The indemnity in clause 3.1 and the other indemnities in this guarantee and indemnity are continuing obligations, independent of your other obligations under this guarantee and indemnity. They continue even after those other obligations end. It is not necessary for us to incur expense or make payment before enforcing a right of indemnity conferred by this guarantee and indemnity."

"1. This guarantee and indemnity is entered into in consideration of us providing or continuing to provide financial accommodation to the customer or not immediately enforcing rights against the customer at your request."

The defendants say that the bank did not provide the financial accommodation to the customer which is referred to in that clause. Contrary to the submission for the bank, in my view the defendants have pleaded a case to the effect that it was a condition of their guarantees that the bank would advance all monies to which Ronbar was entitled under the facility agreement. If cl 1.1 is to be construed as a promise by the bank to the defendants to provide that finance, then subject to a term about to be mentioned, the defendants could say that they were entitled to be discharged from performance of their guarantee and indemnity upon a breach of that condition: Ankar Pty Ltd v National Westminster Finance (Australia) Ltd.[10] Alternatively, if there was no promise by the bank to the defendants to provide the finance according to the facility agreement but the guarantees were provided contingently upon the provision of that finance, again subject again to that other term the defendants might be discharged upon the non-fulfilment of that condition: Burton v Grey;[11] National Bank of Nigeria Ltd v Awolesi.[12] And without the benefit of argument which referred to authority on the point, I would not accept in this application the bank's further contention that these principles are inapplicable because here there is an agreement by way of an indemnity as well as a guarantee.

[43] However, by cl 8.1 of the guarantee and indemnity it was provided as follows:

"8.1 Rights given to us under this guarantee and indemnity and your liabilities under it are not affected by any act or omission by us or by anything else that might otherwise affect them under law or otherwise, including:

(a) the fact that we vary or replace any arrangement under which the guaranteed money is expressed to be owing, such as by increasing the credit limit or extending the term; or

(b) the fact that we release the customer or give them a concession, such as more time to pay; or..."

The parties have thereby agreed that an omission by the bank to provide the financial accommodation in full and according to the facility agreement with Ronbar will not affect the bank's rights under the guarantee and indemnity, and nor would those rights be affected by some variation of that agreement between or some concession given to it. The submissions by the defendants made no attempt to address the impact of cl 8.1.

[44] The defendants argue that they were parties to the agreement with Ronbar because by the guarantee and indemnity, it was agreed that they would be liable as principal debtors. But in my view, it does not immediately follow that they were entitled to enforce the bank's obligations under the facility agreement, if that was not the case because of cl 1.1 of the guarantee and indemnity. However, that question need not be resolved because of the impact of cl 8.1.

[45] The defendants argued that there was implied terms of the bank's facility agreement which in turn were enforceable by the guarantors. These are the terms pleaded in para 6 of the Defence, under which it is said that the bank impliedly promised:

"(a) to follow normal banking procedures in relation to the St Geroge facility;

(b) to make reasonable and prudent enquiries in relation to the offering of the St George facility;

The case here seems to be that these terms were implied in fact, that is to say that they were necessary in order to give business efficacy to the contract. However, the terms would not satisfy the requirements for implication according to BP Refinery (Westernport) Pty Ltd v Shire of Hastings.[13] None of the terms was necessary to give business efficacy to the agreement and none is so obvious that "it goes without saying". Moreover, the term in (b) would appear to affect conduct which necessarily preceded the making of the contract. And if such terms were to be implied, it could not be said that the bank's obligations under them were to override the specific provisions for the LVRs and the other terms upon which the bank acted. In other words, its obligation to follow normal procedures or to act reasonably necessarily would be subject to its right to withhold funds according to those terms. Otherwise the implication of the terms would meet the further difficulty that they would contradict express terms. And again, the defendants' argument did not address the effect of cl 8.1.

[46] The remaining arguments for the defendants are upon provisions of the Australian Securities and Investments Commission Act 2001 (Cth) ("the Act"). I will mention first s 12CC of the Act, which had been raised by the defendants before being abandoned after the hearing by its supplementary written submissions. The defendants now concede that s 12CC was in terms at the relevant time which made it inapplicable to the supply or acquisition of financial services above a certain price, and that the price of a service comprising or including a loan or loan facility was taken to include "the capital value of the loan or loan facility".[14] The result is that the defendants' pleaded case that the bank's conduct was, in all the circumstances, unconscionable contrary to s 12CC need not be considered. The defendants pleaded a case of unconscionable conduct under s 12CB. However, that is applicable only where the relevant financial services were of a kind ordinarily acquired for personal, domestic or household use. At the hearing it was conceded that this section could not apply.

[47] The defendants argued that there is a case to be tried as to s 12DA of the Act, which provides that a person must not, in trade or commerce, engage in conduct in relation to financial services, that is misleading or deceptive or is likely to mislead or deceive. For the bank it is asserted that s 12DA was inapplicable in the same way as was s 12CC. But that is not explained and cannot be accepted. Section 12CC did not apply because of the then limitations expressed within that section. Those limitations did not and do not affect the operation of s 12DA.

[48] The term "financial service" has the meaning given by s 12BAB.[15] A person provides a financial service where that person deals in a financial product, which includes "issuing a financial product".[16] A "financial product" is defined by s 12BAA to include "a credit facility (within the meaning of the regulations)".[17] The regulations define a credit facility to include a facility known as a bill facility.[18] Accordingly, s 12DA applied in the present context.

[49] The defendants' case is that they were misled as to the amount which would be paid to EHS by the bank. The argument starts from the point that the bank offered tranche 2 in the sum of $27.423 million with knowledge that EHS was requiring the sum of $24.5 million "to pay out the existing facility, complete building one and cover outstanding completion costs". As already discussed, there is an issue as to whether the bank received a copy of the EHS letter of offer of 3 September 2007. Clearly the bank did have a copy of the letter from EHS to Mr Kent dated 12 September 2007. At least from that letter the bank was aware of the proposal that there be "an incoming advance of $24,500,000" which, together with the EHS "replacement facility to the existing loan in the amount of $22,500,000", would "fund the pay out of the balance of the existing facility". For the purposes of this application, it should be assumed that the bank also had a copy of the letter of 3 September 2007.

[50] The first difficulty for this case comes from the faxes sent by Mr Kent to Mr Wright on 18 and 19 September 2007. Because these were sent prior to the acceptance of the bank's offer by signatures of Ronbar and the defendants on 20 September 2007, it is plain that Mr Wright and Ronbar knew within a week of the bank's offer and prior to its acceptance that the initial payment to EHS would likely be less than $20 million. Absent any other evidence, it would be inferred that other guarantors were so aware. No other defendant has sworn an affidavit, and the case sought to be raised by the defendants is in reliance upon Mr Wright's evidence. The defendants' case is that they would not have gone ahead because Mr Wright would not have done so. But this contemporaneous documentary evidence, which is indeed exhibited to Mr Wright's affidavit, demonstrates otherwise. And the effect of his affidavit is that he knew that about $4,000,000 was being retained from the initial drawdown, but that he believed that this would be disbursed as soon as the separate titles issued. So upon that evidence, the defendants went ahead with the knowledge that the construction of building one would be delayed pending the issue of those titles, quite apart from the availability or otherwise of what Mr Harvey had referred to as the proposed mezzanine funding.

[51] However, the evidence raises no arguable case that the bank represented, upon the issue of the titles, that it would pay the difference between $24.5 million and its initial payment to EHS. At its highest, the defendants' case could be only that the bank represented that it would make disbursements according to its letter of offer and the agreement it reached immediately before 27 September 2007 in relation to the retention of monies for the non-fulfilment of condition 3(d). The defendants' case raises no evidence of something said or written on behalf of the bank to the effect that the bank would provide whatever funding was required to construct building one, or that it would pay in all $24.5 million to EHS, irrespective of the terms of its facility and in particular the terms for the LVRs.

[52] If the bank was not entitled to withhold interest for its facility, even the defendants could not complain they were misled or deceived because they went ahead expecting that $1,620,000 would be retained, that being the amount identified in Mr Kent's faxes of 18 and 19 September. In any case the defendants do not appear to make this complaint.

[53] In the supplementary written submissions for the defendants, it is suggested that the plaintiff, by its solicitors Gadens Lawyers, represented that EHS was to receive $19,522,070.11 and then a further amount of $4,064,064 on "release of the titles". That is said to have been represented by Gadens on 26 September 2007 and the submission refers to Exhibit RJW99 to Mr Wright's first affidavit. That exhibit contains a sequence of three emails. The first is from Mr McPherson of Gadens to Mr Kent at 11.27am on 26 September. This cannot be the document relied upon, because Mr McPherson set out some of those disbursements in the initial drawdown but against that to be made to EHS he wrote "$TBA". Next is an email of that day from Mr Kent to Mr McPherson (copied to two people at the bank), which set out Mr Kent's "understanding of what funds will be distributed including St George controlled distributions". For tranche 2, Mr Kent referred to disbursements to EHS as follows:

The third in the sequence is an email from Mr McPherson to the solicitor acting for Ronbar, and copied to Mr Kent. It advised that he would be drawing certain cheques "with St George to deal with the rest" and that the cheque in favour of EHS would be in the amount of $19,522,070.11. His email said nothing as to another payment to EHS on "release of the titles". So the defendants' argument wrongly attributes to the bank's lawyers what was said by Mr Kent in his email. It is not argued that there was some representation on behalf of the bank by Mr McPherson or someone else on the bank's behalf not responding specifically to Mr Kent's suggestion that that further sum would be paid on release of the titles. But such an argument would have no substance. The parties went on to agree as to what would be withheld from the initial drawdown, and those matters (such as the retention for condition 3(d)) would obviously affect the amount available to be paid to EHS "on release of titles".

[54] There is a further argument for the defendants based upon s 12ED of the Act, by which in every contract for the supply of financial services by a person to a "consumer in the course of a business", there are implied warranties that the services will be rendered with due care and skill[19], and that if the consumer has made known the particular purpose for which the services are required, or the result the services are to achieve, that the services will be reasonably fit for that purpose or should be "of such a nature and quality that they might reasonably be expected to achieve that result[20]". It is apparently conceded by the bank that Ronbar was a "consumer" because it was a "small business" employing less than 20 people.[21]

[55] This case was not pleaded and was developed by the defendants only in the course of oral submissions (there being no written outline of the defendants' case). As developed in the defendants' written submissions after the hearing, the case is that the plaintiff knew that the purpose or intended result of its facility was:

"to refinance the existing EHS facility by providing funding in the amount of $24.5 million, to complete construction of building one being the Ronbar (and thereby the defendants') "exit strategy" to the entire project, and to cover other outstanding completion costs."

So in essence the proposed case is that there was an implied warranty that enough money would be provided by the bank to pay for those things. Put another way, it is that the bank impliedly warranted that the bank's performance of its contract would provide sufficient funds for those purposes. But the extent of the funds required was dependent upon circumstances outside the bank's control, and in particular the timing of the registration of the plans of subdivision and the consequential issuing of separate titles and the success or otherwise of Ronbar in the marketing of the units. It was also dependent upon the availability of other funds from sources apart from the bank. Those matters indicate the artificiality of the argument.

[56] According to s 12ED(2), such a warranty is not implied if the circumstances show that the consumer does not rely, or that it is unreasonable for the consumer to rely, on the financier's skill or judgment. There is no evidence to indicate that Ronbar relied upon the bank as making a judgment about the adequacy of the amount of the finance to be provided by the bank. The evidence demonstrates otherwise. Ronbar knew what was likely to be available from the bank before it became bound to the bank. It knew the terms of the proposed facility, from which it knew or should have known that further drawdowns would be limited according to those terms, particularly the terms for the LVRs. There is nothing to indicate that the dealings between Ronbar and the bank were such as to give rise to the extraordinary circumstance that Ronbar would be relying upon the bank to assess whether Ronbar would be able to afford to complete the Miami One project.

[57] Nor is there a serious case that there was a breach of the implied warranty that the "financial services", the bill facility, be rendered with "due care and skill". The suggested case here is effectively the same as that discussed in the preceding paragraph: it is that due care and skill required that the bill facility agreement be performed not according to its terms, but so as to provide to Ronbar as much money as is now said to have been required to complete the project.

[58] In any case, these are warranties to be implied as terms of the contract for the bank's supply of financial services to Ronbar. The financial service provided was a bill facility, and it was Ronbar which was the consumer. The consequence of a breach of such a warranty would be that the bank would be liable to Ronbar for damages for breach of warranty. But that would not affect the defendants' liability, because cl 9(a) of the guarantee provides that a guarantor is not to reduce its liability under the guarantee and indemnity by claiming that the guarantor, "the customer" (Ronbar) or any other person has a right of set-off or counterclaim against the bank.

[59] A breach of the warranty implied by s 12ED would not be compensable by an award of damages under s 12GF or attract the power to make other orders under s 12GM, because it would not involve a contravention of a provision of Division 2 of Part 2 of the Act. Rather it would constitute a breach of contract.[22]

[60] For the same reason, the pleaded case that the bank owed a common law duty of care to each guarantor to follow normal banking procedures, to make reasonable and prudent enquiries and to act as a reasonable and prudent financier[23] has no prospect of success in reducing the guarantors' liability. In any case, there is no evidence of facts which would warrant the imposition of the alleged duty of care. The evidence is that the defendants and Ronbar were able to make their own assessment of the adequacy of this facility, having regard to its unambiguous terms and to their knowledge of their own circumstances and the progress of the Miami One development. Nor could it be seriously suggested that they relied upon the bank in this respect.

[61] It follows that the defendants have no real prospect of successfully defending the plaintiff's claim and there is no need for a trial of the claim. It was urged that the defendants should have the opportunity to uncover something by the process of disclosure of documents. However, this seems to be in the hope that something will be disclosed which will identify a defence not presently formulated, because those defences which have been pleaded or argued have no real prospects and could not be improved by disclosure.

[62] It should be noted that another pleaded matter was abandoned at the hearing, which was a contention that the bank is responsible for the receivers' sales of the La Sirena apartments at an alleged under value. Accordingly, that need not be considered.

[63] At the commencement of the hearing of this application, counsel for the defendants sought an adjournment, which I refused saying that I would provide reasons, if necessary, within this judgment. The first matter advanced for that application for an adjournment was that the plaintiff had not made disclosure. From what I have just said, it will appear that disclosure could not improve the defendants' prospects. However, when refusing the adjournment, I considered that the absence of disclosure by the plaintiff would not unfairly prejudice the defendants within this application, because if it were a case where disclosure might assist the defendants' prospects, that would lead to the refusal of summary judgment. I thought it preferable then to hear submissions on the application for summary judgment to decide whether this was such a case. The adjournment was also sought upon

the basis of the late provision of affidavits by the plaintiff. They are the

affidavits sworn by Mr Cameron on 25 and 28 August 2009, by Mr McPherson on 25 August 2009 and by Ms Ahern on 28 August 2009. The last of those affidavits is not presently relevant because it does not go to the merits of the claim or the defences but only to correspondence between solicitors as to the availability of documents and as to what had happened at earlier directions hearings.

[64] The affidavits of Mr Cameron and Mr McPherson were certainly material. But I concluded that the hearing of the summary judgment application should proceed with the question of leave to rely upon those affidavits being reserved to this judgment. As is clear from the above, I have seen fit to consider them. There is no unfairness to the defendants from that because any significant evidence within the affidavits should have come as no surprise to them. Further, the affidavits of Mr Cameron and Mr McPherson sworn on 25 August were served on 26 August, and having regard to their content, the defendants had ample opportunity to respond to them. And the affidavit of Mr Cameron sworn on 28 August went to but two matters. One was an up to date statement of the amount of debt and the other was to exhibit a letter from the lawyers acting for the purchaser of lot 404, to show that the bank was advised only on the afternoon of 27 September 2007 that that sale had become unconditional. Neither of those things could be controversial.

[65] The affidavit of Mr Cameron sworn on 25 August was significant by proving the documents which evidenced the authorities given to the bank to make the various disbursements which were made after the initial drawdown. Those authorities were in the form of letters or faxes from Ronbar, and signed on its behalf in some cases by Mr Wright and in others by another of the defendants. There could not have been a controversy as to those documents. As discussed, Mr Wright asserted in his affidavit that the disbursements of $731,000 and $703,350.85 were not authorised. But an adjournment could not have assisted the defendants with that contention. That affidavit of Mr Cameron also proved the bank's receipt of the fax of 12 September 2007 from EHS to Mr Kent. But that was not adverse to the defendants' case, and in this judgment I have assumed that the bank could also be shown to have had the letter of 3 September 2007.

[66] Mr McPherson's affidavit was relevant in exhibiting copies of exchanges between his firm and the defendants' solicitors and their broker in the period leading up to the initial drawdown. But none of that could have surprised the defendants and nor was it explained how an adjournment might have provided them with an opportunity for affecting the impact of that evidence.

[67] The adjournment was also sought on the basis of an imminent meeting of creditors of Ronbar to consider a deed of company arrangement. It was suggested that the present application should be adjourned until after that meeting, to allow for the prospect that Ronbar would seek to be joined in these proceedings to make a claim against the bank which would in some way assist the guarantors. I was not persuaded to adjourn the application for that reason. I thought the application for summary judgment should be argued, so that it could be seen whether the potential joinder of Ronbar could make a difference if the bank had otherwise established its case under r 292. Now with the benefit of the arguments on the application for judgment, it is my view that the joinder of Ronbar could not assist the guarantors to defend the bank's claim.

[68] The outcome is that the bank will have judgment against each of the defendants. There is a further affidavit according to which the amount of the debt as at today's date is $47,763,997.46 and there will be judgment in that sum. The defendants made no submission at the hearing or before today as to the quantum of the debt. But they now say that they are disadvantaged in addressing this question because they do not have access to the bank's documents. By cl 58 of the Standard Terms of the facility, it is provided that a certificate from the bank about an amount payable is sufficient evidence unless it is proved to be incorrect. The further affidavit constitutes such a certificate and the contrary was not argued. There is an affidavit now from the defendants' solicitor which exhibits newspaper cuttings referring to recent sales by the receivers. It is suggested that these sales have not been taken into account. It is also suggested now that sales of the units in La Sirena were not taken into account in the certificates within Mr Cameron's affidavits which were read at the hearing. However that is disproved by a further affidavit sworn today on behalf of the bank. The result is that the contrary of the current certificate is not proved and nor have the defendants shown any real prospect of disproving it or that there is a need for a trial of that question.

[69] There was an alternative application to strike out parts of the Defence and the entirety of the counterclaim. The parties agreed that it should await the outcome of the application for summary judgment. It appears to follow from this judgment that the counterclaim against the bank should be struck out. But I will hear the parties before doing so. There is also a counterclaim against EHS and Mr Harvey. At the hearing, counsel appeared for those parties and made effectively an oral application to strike out the counterclaim against them. I refused to then hear that application because notice had not been provided to the defendants.

[1] Exhibit RJW-103 to the affidavit of Mr Wright sworn 30 July 2009.

[2] Paragraphs 505 and 508 to the affidavit of Mr Wright sworn 30 July 2009.

[3] Exhibit RJW87 to the affidavit of Mr Wright sworn 30 July 2009.

[4] Exhibit RJW87A to the affidavit of Mr Wright sworn 30 July 2009.

[5] Exhibit RJW104 to the affidavit of Mr Wright sworn 30 July 2009.

[6] Paragraph 415 of the affidavit of Mr Wright sworn 30 July 2009.

[7] Paragraph 314 of the affidavit of Mr Wright sworn 30 July 2009.

[9] For example those that are JW 94 to Mr Wright's affidavit sworn 30 July 2009.

[10] [1987] HCA 15; (1986-1987) 162 CLR 549.

[11] (1873) 8 Ch App 932.

[12] [1964] 1 WLR 1311.

[14] The then terms of s 12CC(h), (9) and 10(e). The limit was $3,000,000 increased to $10,000,000 on 25 September 2007 by Act No. 159 of 2007. The limit was repealed on 22 November 2008 by Act No. 116 of 2008.

[18] Australian Securities and Investments Commission Regulations 2001, reg 2B(1)(b).

[21] See the definition of consumer in s 12BC.

[22] Cf. in relation to equivalent provisions under the Trade Practices Act 1974 (Cth) Arturi v Zupps Motors P/L [1980] FCA 164; (1980) 33 ALR 243 at 246 (Brennan J) and Austral Pacific v Airservices Australia [2000] HCA 39; (2000) 203 CLR 136 at 141 (Gleeson CJ, Gummow and Hayne JJ).