TSATSOULIS v WESTPAC

CASES CITED Strike Out Application: Dey v Victorian Railways Commissioners (1949) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and Webster & Anor v Lampard (1993) 177 CLR 598 applied.

Vicarious Liability: Munnings v Australian Government Solicitor (1994) 68 ALJR 169; Deatons Pty Limited v Flew (1949) 79 CLR 370 and Kooragang Investments Pty Limited v Richardson & Wrench Limited [1981] 2 NSWLR 1 at pp.7 and 8 applied.

Tort of Conspiracy: Clerk and Lindsell on Torts(17th Edition) 1995, at paragraph 23-77 Fleming "The Law of Torts" (9th Edition) (1994) p.175 Winfield and Jolowicz on Torts (14th Edition) (1994) p.359 Salmon and Heuston "Law of Torts" (21st Edition) (1996), at p.356 Volume 33 "The Laws Of Australia" sub-title 33.8 "Intentional Torts", paragraph 80 Marrinan v Bibart & Anor [1963] 1 QB 234 Lonrho Limited & Anor v Shell Petroleum Co Limited & Anor (No 2) [1982] AC 173 United States Surgical Corporation v Hospital Products International Pty Limited & Ors [1982] 2 NSWLR 766 Scottish Pacific Business Finance Pty Limited v Soundstage Australia Limited & Ors (Federal Court of Australia - French J - 14 May 1993 - unreported) Bullen and Leake and Jacob's "Precedents of Pleadings" at pp.221-222 Little v Law Institute of Victoria & Ors (No 3) [1990] VR 257 The Council of the City of the Gold Coast v Pioneer Concrete (Q'ld) Pty Limited & Ors (Federal Court of Australia - Drummond J - 26 June 1998 - unreported).

Contracts Review Act: Australian Bank Limited v Stokes & Anor (1985) 3 NSWLR 174

Discretion to Re-plead: Sialepis v Ironaid Pty Limited & Ors (Court of Appeal - 10 December 1997 - unreported) I N D E X

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

50033/1997 - TSATSOULIS & ANOR v WESTPAC BANKING CORPORATION & ORS

1 The plaintiffs, Mr George Tsatsoulis and his wife, Mrs Mary Tsatsoulis, for whom Mr A.S. Howen of Counsel appeared, are the parents of Mr Sam Tsatsoulis deceased, ("the deceased"), who died on 1 September 1994, and the joint executors of his estate. In that capacity they commenced these proceedings by a Summons issued on 19 February 1997 in which the first defendant was Westpac Banking Corporation, ("Westpac"), for which Mr P.J. Dowdy of Counsel appeared; the second defendant was Ironaid Pty Limited, which is now in liquidation, ("Ironaid"), for the liquidator of which Ms M.L. Kelly, Solicitor, appeared; the third, fourth and seventh defendants were respectively Mr John Niccolo Cosco, his wife, Mrs Kay Violet Cosco, and Trigamist Holdings Pty Limited, ("Trigamist"), for whom and which Mr M.K. Meek of Counsel appeared; the fifth defendant was an accountant, Mr J.J. Smiles, for whom Mr P.T. Russell of Counsel appeared; and the sixth defendant was a solicitor, who is no longer involved in the proceedings. 2 The deceased was the brother-in-law of Mr Harry Sialepis, who carried on various businesses basically involving real estate ownership and development, either personally or through corporate vehicles which, at least prima facie and for all practical purposes, he controlled. One was Sialepis Pty Limited. Mr Sialepis has been involved in lengthy and highly acrimonious litigation with his former wife in the Family Court of Australia concerning, in particular, a property settlement. He has been made bankrupt, although I was informed from the Bar table, without objection, that he may now have obtained a discharge. 3 The plaintiffs have experienced difficulties in formulating the case they seek to bring. It will be necessary to refer to the various allegations contained in the original Summons and amendments to it, which have ranged over forgery, bribery, fraudulent and corrupt conduct, unconscionability and conspiracy and to deal with them in more detail in tracing through the numerous amendments and the fate which has befallen them. I am presently concerned with an application by the plaintiffs for leave to rely on a Further Amended Summons, which was filed on 19 June 1998, the granting of which leave is opposed by the defendants. Before coming to that I shall trace what has occurred thus far. 4 On 7 March 1997 Giles CJCommD directed that an Amended Summons be filed and served within seven days and stood the proceedings over to 21 March 1997 for directions. He stated that on that date the Court should be told whether any of the defendants proposed "to make a strike out application". An Amended Summons was filed on 20 March 1997 and, on 21 March 1997, his Honour, in what he described as "the fairly unusual circumstances of this case" considered particulars were appropriate, and noted that there may be applications to strike out. He stood the proceedings over to 11 April 1997. The central allegation in that document was that the deceased's signature had been forged on certain mortgages given by him to Westpac. 5 On 11 April 1997 he extended the time for answering particulars, and made orders in relation to any application to strike out the Amended Summons. 6 The matter came before him on 9 May 1997 when he granted leave to file a Notice of Discontinuance against the sixth defendant, thus removing him from the proceedings, and stood the motion to strike out the Amended Summons over to 23 May 1997. On that day his Honour heard the motion and, on 4 June 1997, he dismissed it on the basis that the plaintiffs had pleaded a "triable" case, and stood the proceedings over for directions on 6 June 1997. On that day he directed the second to seventh defendants to file and serve Defences by 20 June 1997, gave further directions and stood the proceedings over to 5 September 1997. On 5 September 1997 he gave directions, which accommodated the holding of a mediation between the parties, and stood the proceedings over until 3 October 1997. 7 On 3 October 1997 the proceedings came before me and, in a short judgment, I noted that a matter central to the plaintiffs' case was an allegation of forgery against the first defendant. I referred to the plaintiffs' having retained a handwriting expert to consider whether the documents upon which Westpac relied "in truth bear the signature of" the deceased. I was informed that his report had not been completed, and I stood the proceedings over to 10 October 1997 to enable that to be done. By that time Ironaid was in liquidation and I granted leave to the plaintiffs to file an application to proceed against it. That has not happened. 8 On 10 October 1997 the matter was before Giles CJCommD and he granted leave to the plaintiffs to file in Court a Notice of Motion returnable instanter seeking leave to further amend the Amended Summons. By this time it was apparent that the allegation of forgery could not be maintained. He stood the motion over to 24 October 1997 and gave directions for the parties to indicate their attitude. On that date the matter was stood over to 7 November 1997, when it was stood over to 5 December 1997 "to enable the parties to consider the resolution of the matter". 9 A Further Amended Summons was apparently filed on or about 13 October 1997, followed by a Further Amended Summons filed on 15 October 1997. A Further Amended Summons was filed on 5 November 1997 and, on 12 December 1997, the matter came before me when I granted the plaintiffs leave, if so advised, to file and serve a Draft Further Amended Summons by 4 pm on Wednesday, 4 February 1998. I made it clear that that was not to be taken as in any way suggesting that I would ultimately grant leave to file the document in those terms, and I directed that that version of the Summons be made returnable on Friday, 6 February 1998, and that in the event of the defendants objecting to the granting of the amendments notice thereof be given by 4pm on Thursday, 5 February 1998. 10 On 6 and 13 February 1998 I was informed that the proceedings and proceedings between Mr Sialepis and his former wife were moving towards a settlement and I stood them over until 20 February 1998 to enable that, if it was to occur, to be finalised. 11 On 28 February 1998 the proceedings came before me again when the solicitors, who had acted for Mr and Mrs Tsatsoulis to that time, advised that their instructions had been withdrawn both in relation to Mr and Mrs Tsatsoulis and Mrs Sialepis. In those circumstances I stood the proceedings over to 3 April 1998 to enable the plaintiffs to obtain other legal advice. On that day Mr Howen appeared, for the first time, on behalf of the plaintiffs. He sought a further adjournment. I did not grant the adjournment he sought but stood the proceedings over to 17 April 1998 on which date I received no helpful information as to what the plaintiffs proposed to do in the light of the various difficulties apparently confronting them, which are recorded in the transcript. I also gave directions by consent and in due course heard an application to dismiss the Amended Summons filed on 20 March 1997, which, notwithstanding the various amendments made, remained the one on which the plaintiffs relied. I concluded that it should be dismissed and I granted the plaintiffs leave to file and serve a Further Amended Summons, if so advised, by 4 pm on Friday, 19 June 1998. I delivered my reasons for judgment on 27 May 1998. 12 In that judgment I noted that the detailed history, which I recited, showed that thus far the plaintiffs had been guilty of substantial and unexplained delay in pursuing the proceedings and, in so far as they had prosecuted them by alleging forgery, they were doing so either on a totally untenable basis or pursuant to a totally unacceptable Summons, namely that which I gave them limited leave to file on 12 December 1997. The consequence of that order, against which there was no application for leave to appeal, was that there was no originating process on foot on the basis of which the plaintiffs had leave to proceed. 13 I concluded that it was inappropriate to allow a case based on forgery to go forward and, accordingly, I struck out the Amended Summons. I then considered whether I should dismiss the proceedings and refuse leave to re-plead, which was the position for which the defendants urged. I decided, in the exercise of my discretion, not to take that course but to grant leave to re-plead and I made the order to which I have referred. However, my reasons made plain that the plaintiffs could not expect further indulgences from this Court if they failed to plead a tenable case. 14 On 3 July 1998 I made orders by consent granting the defendants leave to request any further particulars, and I stood the proceedings and a Notice of Motion for their dismissal over, by consent, until 17 July 1998. On that date I ordered the plaintiffs to answer the outstanding request for particulars made on behalf of Mr and Mrs Cosco and Trigamist, directed that the Notices of Motion for dismissal stand over to 7 August 1998 and gave certain further directions. 15 On 14 August 1998 I gave further directions and specially fixed for hearing the defendants' Notices of Motion for summary disposal on 30 November 1998 for a period of three days. The delay between 14 August 1998 and 30 November 1998 was occasioned, essentially, because of the difficulty in finding a date suitable to Mr Howen. In the course of a judgment I wrote on 14 August 1998 I said:- "In the ordinary course of things however, the matter could have been heard either to-day or in the reasonably near future. However, Mr Howen of Counsel, who has been retained on behalf of the plaintiffs for some little time, is to commence a lengthy criminal trial in September and the parties, if I may say so, sensibly agree that it would be consistent with the general interests of justice to accommodate that particular commitment of Mr Howen so that he would be able to remain in the matter and in consequence, the work which he has done in preparing the matter, would not be lost to Mr and Mrs Tsatsoulis." 16 Notwithstanding the assistance afforded by the Court to meet the convenience of the plaintiffs and their counsel, the unfortunate history continued and, on 27 November 1998, I vacated the hearing date of 30 November 1998, essentially because of Mr Howen's unavailability. On 11 December 1998, with the consent of all parties and their legal representatives, I specially fixed the hearing to commence on Wednesday, 24 February 1999. 17 On 24 February 1999 there was no appearance by Mr Howen at 10 am and, ultimately he appeared at about 10.20 am and informed me that he was part heard before Studdert J. His instructing solicitor, Mr Vouroudis, had told me that Mr Howen was detained elsewhere, but he was present at all times. I have set forth what transpired in a judgment I wrote on that day declining any further adjournment, particularly in the light of the fact that all parties had furnished written submissions to Mr Howen to which they proposed to speak and as I was able to accommodate hearing Mr Howen's submissions thereon on 25 February 1999. Mr Howen had failed to furnish any written submissions in response. I was able to take this course as Mr Vouroudis was in Court at all times that submissions were made. The submissions did not deviate in any material respect from what the legal representatives for the various defendants had written. The only written submissions missing, as at 24 February 1999, were those of Mr Howen. Once the application for the adjournment was refused there was no objection to the moving parties making their submissions and Mr Vouroudis handling the matter in his absence and to the extent to which I have referred. On 25 February 1999 Mr Howen handed up written submissions and addressed me in relation to them and the submissions made on behalf of the defendants. 18 I am now concerned with whether the sixth pleading filed on behalf of the plaintiffs should be struck out. I have, however, recited the history of the matter to show that the delay since 19 February 1997, a period now in excess of two years, has been occasioned solely by the failure of the plaintiffs to plead their case properly and by the indulgences they and their legal representatives have sought from and been granted by the Court. The Basic Facts 19 The proceedings arise out of certain basic and apparently undisputed facts. The Nature of Dispute in the Further Amended Summons filed on 19 June 1998 stated:- "1. The plaintiffs are the executors of the estate of the late Mr Sam Tsatsoulis (the 'deceased'). The deceased was a tenant-in-common with Mr Harry Sialepis in an investment property in Newcastle. Mr Harry Sialepis also (sic) a registered proprietor as tenant-in-common with Mr Geoff Thibou of property at Rutherford. The deceased agreed to purchase Mr Thibou's half interest in the Rutherford property. The deceased agreed with Mr Sialepis to increase the partnership borrowings from the First Defendant to about $400,000 in order to purchase the half share and further develop the commercial property. Mortgages were granted to the first defendant in respect of both properties to secure the borrowings." 20 None of these matters are in issue and, in fact, are relied upon by the defendants to show that the deceased agreed with Mr Sialepis to enter into commercial arrangements and to increase the partnership borrowings from Westpac to about $400,000 for business purposes. 21 In paragraph 2 it is stated:- "The two properties also became security for various advances and loan facilities for the benefit of Mr Sialepis and his companies. The deceased and Mr Harry Sialepis maintained a partnership bank account with the first defendant." 22 Neither of these matters are in issue and, in paragraph 3, it is stated:- "The plaintiffs allege that the deceased did not consent to nor had knowledge of these properties being used as security for advances and loan facilities largely for the benefit of Mr Harry Sialepis. The extent of these advances and loan facilities was in excess of $6 million." 23 It is not in issue that the mortgages over the Newcastle and Rutherford properties extended to cover those advances. However, there is no evidence that either Westpac or the assignees of the mortgages granted by the deceased to it, namely Ironaid and after it went into liquidation, Trigamist, have ever sought to recover from the deceased or his estate any amount in excess of $400,000, together with interest thereon and costs. Accordingly, although the mortgages granted covered the indebtedness of Mr Sialepis the only attempt to recover money, albeit not, so far as I am aware, by way of curial proceedings, from the deceased or his estate is to the extent of the money which, conformably with paragraph 1 of the Nature of Dispute, the deceased agreed to borrow. 24 In paragraph 4 it is alleged that through "a corrupt relationship between Mr Sialepis and an officer or officers of the first defendant, the approval and payment of various loans were facilitated by Mr Kay and the first defendant". 25 Mr Kay was an officer of Westpac and, as will be seen, it is alleged that he and others entered into a conspiratorial agreement to, in effect, cause the deceased to execute a mortgage or mortgages in circumstances where either the contents of the documents were not known to him, or where the document or documents contained a number of blanks, which enabled them to be "fraudulently manipulated" to bring about a result different from that intended by the deceased. It will be appreciated immediately that these are two quite separate allegations. In paragraph 4 of the Nature of Dispute it is also stated that secret commissions or bribes were paid to Mr Kay and that he received non-cash benefits from Mr Sialepis. It is asserted in paragraph 5 that Westpac "through" Mr Kay facilitated the withdrawal of $100,000 from the partnership account in favour of Mr Sialepis, although it was conceded by Mr Howen that the Further Amended Summons made no claim for any relief in respect of that amount, and although certain amendments were foreshadowed none was made to accommodate any order in relation to that amount, or the basis on which such an order should be made. 26 In paragraph 7 it is asserted that Mr Sialepis and his company defaulted in their obligations to Westpac as a result of which it called upon the properties, which secured the loans from it, including the properties in which the deceased was a registered proprietor as tenant-in-common, in March 1995. It is not subsequently pleaded however that by virtue of that conduct the deceased suffered any loss, although it should be noted that in paragraph 6 it was pleaded that:- "The said properties were income earning and the rental income was sufficient to cover repayments to the first defendant." 27 However, the point is that there is no allegation that had the securities not been called up and had the rental income been sufficient to cover repayments the Newcastle and Rutherford properties would have been retained profitably for the deceased. The particulars of "lost opportunity of the use of the capital asset and rental income" assert:- "The deceased and then the Plaintiffs have lost the opportunity to among other possibilities to maintain sufficient equity in the half share in the said properties so that the interest could have been retained to be sold at a later time with a capital gain and until such time the deceased and the Plaintiffs could have received the benefit of the rental income generated by the said properties. The opportunity was gained on registration of the deceased's interest as a tenant-in-common and was lost on execution of the fraudulently procured loan documents and mortgage. ………… ………… If the deceased had sold his interest he could have made a capital gain. If the deceased had the opportunity of keeping his interest he would have received the benefit of the rental income and the taxation benefits of a negatively geared interest in property." There is no pleading as to any damage. I am prepared to assume, for present purposes, that this is the damage allegedly sustained by the plaintiffs. There is a claim for an accounting of rental income. There is also a concession that the relief the plaintiffs seek is subject to the payment of $230,000 together with interest thereon. 28 It is now necessary to appreciate the involvement of the other defendants. It is convenient to do so by reference to the remaining paragraphs of the Nature of Dispute:- "8. The third, fourth and fifth defendants having actual knowledge of the corrupt relationship between Mr Harry Sialepis and Mr Greg Kay, conspired with officers of the first defendant and others to corruptly facilitate the assignment of the debts due to the first defendants (sic). The debts and securities supporting the debts were assigned to the second defendant for about $4 million. This was a discount of approximately $10 million. 9. As a result of the debt portfolio being assigned to the second defendant, the second defendant took possession of the properties securing the loans, including those in which the deceased was a registered proprietor. The second defendant also took the benefit of the rental income generated by the properties. 10. After the appointment of a liquidator to the second defendant in October 1996, the debt portfolio was assigned to the seventh defendant. The third and fourth defendants were directors and shareholders in both the second and seventh defendants. The seventh defendant also took the benefit of rental income generated by the properties. 11. Neither the first, second or (sic) seventh defendants have (sic) accounted to the deceased or the estate for the rental income or benefits received from the said properties." 29 Accordingly the allegations are that Westpac assigned to Ironaid the various debts and securities it held and, after the appointment of the liquidator to Ironaid, the debts and securities were assigned to Trigamist. The claim is in respect of the non provision of the rental income or benefits received from the properties. 30 However, it is necessary to note the relief which is sought. The first paragraph seeks an order pursuant to s.87(2) of the Trade Practices Act or, alternatively, s.7 of the Contracts Review Act that subject to the plaintiffs repaying to Westpac the aggregate of $130,000, $30,000, $25,000, and $45,000 together with interest thereon from various specified dates on the amounts, mortgage registered number 1565318 given by Mr Sialepis and the deceased to Westpac, in so far as it concerns the deceased's half interest, be set aside. 31 An order is then sought that the assignment of that mortgage by Westpac to Ironaid be declared void and to have conferred no entitlement on Ironaid and/or Trigamist in so far as the deceased's one half share is concerned. 32 Orders are also sought that Ironaid and Trigamist account to the plaintiffs for the net proceeds of one half of all rental income or other benefits obtained pursuant to the assignment and transfer and for an order for damages against Westpac, Mr and Mrs Cosco and Mr Smiles. Alternate relief is also sought. It is against this background that it is necessary to look at the proposed pleading, which was further amended and added to in a document Mr Howen handed up on 25 February 1999. The Present Applications 33 The defendants seek orders pursuant to Part 13 rule 5 that the proposed Further Amended Summons be dismissed, and pursuant to Part 15 rule 26 that it be struck out. Orders are also sought pursuant to Part 5 rule 12 and Part 33 rule 6 that it be dismissed. 34 Part 5 rule 12 and Part 33 rule 6 are concerned with the dismissal for want of prosecution. For present purposes I find it better to deal, at least in the first instance, with the applications pursuant to Part 13 rule 5 and Part 15 rule 26, the former of which provides:- "5(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:- (a) no reasonable cause of action is disclosed; (b) the proceedings are frivolous or vexatious; or (c) the proceedings are an abuse of the process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings. (2) The Court may received evidence on the hearing of an application for an order under sub-rule (1)." 35 Part 15 rule 26 provides:- "26(1) Where a pleading:- (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or (c) is otherwise an abuse of the process of the Court, the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleadings be struck out. (2) The Court may receive evidence on the hearing of an application for an order under sub-rule (1)." 36 The test to be applied for the summary dismissal of proceedings was laid down in Dey v Victorian Railways Commissioners (1949) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Webster & Anor v Lampard (1993) 177 CLR 598 and Munnings v Australian Government Solicitor (1994) 68 ALJR 169. The demanding nature of it is well understood and the Court is obliged to exercise great caution in invoking the summary jurisdiction to terminate an action where any arguably triable question of fact or law emerges on which the rights of the parties depend. As Mason CJ, Deane and Dawson JJ said in Webster, at pp.611-612:- "Nonetheless, the material before the Master was clearly not such as to justify a finding that the proceedings against Sergeant Lampard are 'hopeless' in that they will inevitably fail if allowed to proceed to trial in the ordinary course. It follows that the order giving leave to Sergeant Lampard to enter summary judgment cannot be sustained." To succeed in the present application the defendants must meet this highly demanding test. Further the Court must look to the substance of the allegations made. The fact that the pleading is expressed in an infelicitous manner, if, in truth, it otherwise discloses a cause of action is not, generally speaking, a ground for dismissal. The Court must look to the substance and not merely the form. Finally, the plaintiffs are entitled, at least prima facie, to the assumption that the facts pleaded are true. This is cut down somewhat by the right of those challenging the pleading to lead evidence. Essentially, however, the Court will not determine matters of fact which are in issue on an application to strike out pleadings. 37 I find it convenient, in view of certain submissions Mr Howen made, to refer to the requirement for pleading in the Summary of Contentions in matters in the Commercial List. A submission was made that the Summary of Contentions does not have to comply with the strict requirements of pleadings and, in particular, that a party dissatisfied with the degree of particularity should seek particulars and, thereby, ascertain the totality of the case sought to be made, rather than move to strike out the pleading, even where serious allegations of forgery, bribery, fraud and conspiracy are raised. I do not agree with this submission. Practice Note 100 requires that the plaintiff's Contentions should avoid formality; state the facts on which the plaintiff relies together with adequate particulars; and identify the legal grounds for the relief claimed. I wish to emphasise that this Practice Note makes it clear that it is not sufficient to plead generally and to rely upon the furnishing of particulars to flesh out the pleadings and, thereby, to disclose a cause of action. A defendant, in my opinion, is entitled to take the Summary of Contentions as they stand and, without seeking any further particularisation, to move to have the Summons dismissed for one of the grounds set forth in the Rules to which I have referred. The defendant is not obliged to seek further and better particulars to make good a cause of action inadequately pleaded or particularised. The comments I have just made apply with even greater force when, firstly, the pleading to which objection is taken is the sixth attempt by the plaintiffs to put forward their cause of action; and, secondly, serious allegations are pleaded, which should only be alleged on firm and definite instructions based on the availability of at least, prima facie, credible evidence. The Previous Pleadings 38 Because of the course of the proceedings and in order to understand some of the submissions made, it is necessary to track through the pleadings to see the allegations which have been made and to compare them, at least to some extent, with the allegations presently being made. The original Summons asserted that on 30 October 1992 the signature of the deceased was forged on a mortgage in favour of Westpac over the Rutherford property to the knowledge of Mr Kay, such that the undivided one half share in that property of the deceased should not be encumbered by that mortgage. There were further allegations of forgery of the deceased's signature to the knowledge of Mr Kay. There were also various other allegations raised in relation to the dealings between the parties leading to relief being sought that the estate of the deceased was entitled to an unencumbered undivided one half share in the Newcastle and Rutherford properties; a declaration that the defendants in trade or commerce engaged in conduct which is unconscionable "within the meaning of the unwritten law" being s.51A of the Trade Practices Act; damages against the defendants at common law and various other consequential relief. 39 The Amended Summons of 20 March 1997 sought a declaration that the interest of the deceased in the two properties was encumbered under the mortgages to the extent of the amounts referred to in the existing Further Amended Summons, which I have quoted. It nextly sought declarations that Westpac was guilty of fraud and of conduct in breach of s.51AA of the Trade Practices Act and declarations that the other defendants were also guilty of conduct in breach of s.51AA of that Act. The Summary of Contentions continued the allegation that Westpac was guilty of fraud in advancing further moneys to Mr Sialepis "knowing that Tsatsoulis' signature on the loan documentation and the mortgage documentation had been forged". Once again forgery was of central importance to the allegations raised. 40 The Third Further Amended Summons acknowledged the obligation of the estate to repay the moneys to which I have referred and alleged that Mr Sialepis had bribed Mr Kay for his financial advantage and to induce Mr Kay to make financial advances to him and Sialepis Pty Limited "substantially in excess of the first defendant's lending policy …". It was alleged that Mr Kay had acted corruptly in soliciting a bribe to persuade Mr Sialepis to pay him $100,000 "as a secret commission or brokerage fee". The allegation thus made related to bribery and unconscionable conduct. 41 The next Further Amended Summons was based upon bribery, the allegation of forgery having, by then, been abandoned. This occurred in circumstances where the expert evidence showed there was, in all probability, no truth in the allegation Once again the thrust of the allegations was to the effect that unbeknown to him the deceased had entered into mortgages, which also secured the indebtedness of Mr Sialepis and his companies with the consequences that the deceased was made liable for such indebtedness. 42 On 12 December 1997 I refused the plaintiffs leave to file the Further Amended Summons based on bribery and that then brings one to the present Further Amended Summons filed on 18 June 1998, which has as its core another allegation of gross impropriety, namely conspiracy. The Facts 43 Before examining the Further Amended Summons I propose to consider the facts, which were proved by the evidence tendered on behalf of Westpac without objection and which were not challenged. I do so against the background of the concession in paragraph 1 of the Nature of Dispute in the Further Amended Summons that the deceased agreed to purchase Mr Thibou's half interest in the Rutherford property and to increase the partnership borrowings from Westpac to about $400,000 to purchase that half share and further develop the property, and the further concession that mortgages were granted to Westpac to secure those borrowings. Mr Dowdy, not unnaturally, relied heavily upon these concessions as showing that the deceased intended to borrow $400,000 from Westpac for the purpose of acquiring Mr Thibou's one half interest in the Rutherford property and developing it. Accordingly, so he submitted, there could be no issue that the deceased was not aware of what he was doing or why he was doing it at least to that extent and, in the absence of any claim upon the deceased for an amount in excess of $400,000, the plaintiffs could not demonstrate that the deceased or his estate had suffered any damage, even if they could prove the fundamental facts on which they sought to rely. 44 The principal affidavit that Mr Dowdy read was that of Mr William John Maiden sworn 23 October 1998. Mr Maiden annexed a number of documents to which it is appropriate to refer. 45 The first is a diary note of 18 November 1988 relating to the acquisition by Mr Sialepis and the deceased of the Newcastle property. On 9 January 1989 Mr Sialepis and the deceased signed a loan agreement for $145,000 and, on 22 March 1994, Westpac sent to the deceased a copy of that agreement. 46 On 31 January 1989 Mr Sialepis and the deceased opened an account with Westpac at its Edgecliff Branch upon which either could operate severally and, on 3 February 1989, Mr Sialepis and the deceased gave Westpac Savings Bank Limited a mortgage over the Newcastle property, which mortgage secured any indebtedness of either Mr Sialepis or the deceased "either alone or jointly with any other person". In due course the amount of the loan was drawn down and debited to the loan account in the name of Mr Sialepis and the deceased. 47 A valuation was furnished of the Rutherford property, when developed, from L.J. Hooker stating the value would be $490,000. 48 On 26 May 1992 Westpac wrote to Mr Sialepis, the letter being signed by Mr Kay, confirming its formal approval to the request for increasing borrowing facilities for Sialepis Pty Limited, Mr Sialepis and the deceased. In relation to Mr Sialepis and the deceased an investment property loan of $400,000 was to be made to cover an existing loan of $130,000, an existing loan to Mr Sialepis and Mr Thibou of $70,000, the contribution of the deceased of $100,000 to buy into the Rutherford property, and building costs for the development of that property of $100,000. After the signature of Mr Kay there was typed an acknowledgment of the receipt of the original of the letter and an acceptance of the terms and conditions and a further acknowledgment that the parties, who ultimately signed the letter, relied on their own judgment and had not relied on any warranty or representation made by Westpac or its officers before entering into the agreement. The statement went on to acknowledge other matters including the high fixed interest rate and an encouragement to seek independent advice in relation to fixed rate borrowing. In respect of Mr Sialepis and the deceased the properties mortgaged were Newcastle and Rutherford. The document was signed by Mr Sialepis and the deceased on 18 June 1992. Schedule D to the letter set forth the borrowings by Mr Sialepis and the deceased. 49 On 30 June 1992 Mr Sialepis and the deceased signed a loan agreement with Westpac for $400,000 providing for the drawing of principal in instalments as arranged with Westpac, and for repayments to be made by consecutive monthly instalments payable on the twenty fifth day of each calendar month commencing on 25 July 1994, but prior to that interest was to be paid only. Clause 10 provided the loan was repayable on demand in certain events, including failure to pay Westpac any money owing. The document was signed by Mr Sialepis and the deceased. 50 Consideration was then given to the deceased acquiring the interest of Mr Thibou and, by memorandum of transfer dated 11 August 1992, Mr Thibou and Mr Sialepis transferred the Rutherford property to Mr Sialepis and the deceased as tenants-in-common. On 30 October 1992 Mr Sialepis and the deceased granted a mortgage, registered number I565317, to Westpac Savings Bank Limited securing the repayment of the sum of $400,000 or any other moneys owing by either of them either alone or jointly with any other person. 51 On the same date Westpac took a mortgage from Mr Sialepis and the deceased securing the repayment of $17,000 on the same basis. 52 On 4 November 1992 two officers of Westpac made a diary note in which they recorded that Mr Sialepis and the deceased called on 15 October and 30 October 1992 to execute mortgages over the Rutherford property to secure the facilities in their joint names, and that the officers attended the execution of the security documentation. The diary note continued:- "Prior to execution/explanation of the mortgage, we handed a copy of the memorandums of mortgage. At the meeting we advised the following:- We insisted to each respectively that they take the mortgages to solicitors for perusal and independent legal and financial advice, however they declined our offer, stating that they fully understood the nature of the documents they were signing. The nature and effects of the mortgages. That should they default on the loan the Bank would have the power to sell the property to recover all debts. If after the sale funds remain owing, the Bank would look to them for repayment of the outstanding and indeed would pursue them to bankruptcy. The debts would include principal interest and all costs borne by the Bank in obtaining full repayment. The all monies clause was explained, i.e. liability included both past, present and future debts that the debtor might incur by themselves or jointly with another party. This included both direct and contingent liabilities. The mortgage also extended to cover the debts of the mortgagor as well. Andrew Puga asked separately at each interview if they had any questions and if they understood their obligations to which they said they fully understood at these matters. We also explained that the GX Guarantee would be paid unconditionally if the Council demanded pay out. Sam Tsatsoulis acknowledged he understood fully his obligations and liabilities under the mortgage. Harry confirmed he knew his liability and obligations and confirmed he has had numerous explanations previously." 53 The diary note went on to set out certain action which was then taken by Westpac's officers. In respect of account 08-9227, which was a loan account in the name of Mr Sialepis and the deceased, it was shown as overdrawn to the extent of $330,000 as at 9 December 1992. In respect of account 83-1439 in the names of the same parties it had a credit balance, as at 3 November 1992, of $186,174.67 and, on 4 November 1992, a bank statement showed transfers by authority of $70,000 and $100,000. The $70,000 was used to discharge the indebtedness on the account in the name of Mr Sialepis and Mr Thibou and the $100,000 was drawn by a cheque signed by Mr Sialepis in favour of "Sialepis Pty". On 6 November 1992 Westpac wrote to Mr Sialepis and the deceased advising that following completion and execution of the security documentation on 30 October 1992 it had drawn down $178,452.54 from the existing investment property loan account 08.9227 and dispersed the proceeds as to $70,000 to clear the account of Mr Sialepis and Mr Thibou, and $108,452.54 to the account of Mr Sialepis and the deceased. The letter stated that the remaining $100,000 required to complete construction was to be drawn down against progress payments. 54 On 5 July 1993 the loan account in the name of Mr Sialepis and the deceased was overdrawn to the extent of $403,780.82 and, on 27 May 1993, Westpac wrote to Mr Sialepis and the deceased in respect of account 08.9227 advising that as the loan had been fully drawn down repayments were to commence in the sum of $4,700 on the fifth day of each month commencing on 5 July 1993. 55 On 24 February 1994 the deceased wrote to the manager of Westpac at Edgecliff stating that on checking his bank statements in respect of the joint account with Mr Sialepis he had come across some entries of which he had no details and of which he sought further particulars. He referred to the deposit of $178,452.54 and a debit of $70,000. On 9 March 1994 Westpac replied stating that the deposit was the credit proceeds and the partial drawing down of investment property loan account number 08.9227 for $300,000, and explaining in some detail how this had been accomplished. The letter continued that the debit of $70,000 related partially to the initial costs for the acquisition/transfer of the vacant land at Rutherford. A copy of cheque number 792138 for $100,000, which was debited to the joint working account 83.1439 on 4 November 1992, was enclosed and it was stated "and which also obviously relates in some way to the acquisition/transfer of the Rutherford property to you". This is the $100,000 referred to in the Further Amended Summons as having been dealt with improperly by Westpac, but in respect of which no relief is claimed. 56 After this explanation was given the deceased sought no further information, the obvious inference being that he was satisfied with the explanations, and, on 4 May 1994, Westpac wrote to him referring to its letter of 7 July 1993, and confirming that the monthly "interest only" repayment arrangement expired on 30 June 1994, and that commencing on 25 July 1994 repayments of $4,535 per month were required to cover principal and interest for the remaining thirteen years of the loan. It stated that the repayment amount was based on the then outstanding loan balance of $400,000 and a current variable interest rate of 9.75%. It concluded:- "To confirm your acknowledgment of the revised repayment arrangement please sign and return to me the enclosed copy of this letter. Upon receipt of your acknowledgment we will arrange to automatically debit the monthly payment amount to your joint cheque account No: 83.1439." 57 The deceased signed an acknowledgment in the following terms:- "I hereby acknowledge receipt of the original of this letter and accept the terms and conditions applying to the revised monthly repayment arrangement commencing 25 July 1994 contained therein." That was dated 27 May 1994. 58 On 1 September 1994 the deceased died and, on 9 March 1995, Westpac made a written demand on each of the plaintiffs as executor of the estate of the deceased for payment of $409,560.54 stated to be due by the estate to it as at 1 March 1995. The summary of amounts showed that principal and interest was owing under account number 08-9227 of $408,293.55, and principal and interest was owing under account number 83-1439 in the sum of $1,266.99. A note to the demand stated that the amount demanded did not include other unpaid amounts owing to Westpac "which may include principal, interests, costs and other charges", and informed the recipient that he and she would remain liable for those amounts. 59 It was stated from the Bar table on a number of occasions by Mr Dowdy and Mr Meek that no attempt had been or would be made by Westpac or Trigamist to recover from the estate of the deceased an amount in excess of $400,000 together with interest thereon, costs and charges, and, particularly, although this was inherent in that statement in any event, that there would be no attempt to recover from the estate any of the additional indebtedness of Mr Sialepis or any of his companies, notwithstanding that on a proper construction of the mortgages it was arguable that the money was recoverable from the estate. These matters have to be viewed in the light of the concession that to obtain relief under either the Trade Practices Act or the Contracts Review Act the estate must pay the principal sum of $230,000 together with interest. The plaintiffs' Summary of Contentions makes no offer to pay this amount in return for the granting of the relief. The Summary of Contentions 60 The Summary of Contentions in the Further Amended Summons must be read together with the additional document, containing certain amendments and additions, handed up by Mr Howen on 25 February 1999. My consideration of the Summary of Contentions will include the amendments and additions. 61 In paragraph 1 the parties are identified in an uncontroversial manner, save for paragraph 1.4, in which it is pleaded that at all material times Mr Kay was an employee of and agent for Westpac "and at all material times acted in his capacity as an officer of" Westpac. I say that this is not uncontroversial because there is an allegation that Mr Kay conspired with certain parties to injure the interests of the deceased and Westpac and, further, that Mr Kay accepted bribes from Mr Sialepis. A very real issue arises as to whether Mr Kay could have been acting within the scope of his actual or ostensible authority in carrying out those activities such as to make Westpac vicariously liable for them. 62 In paragraph 2 the ownership of the land is pleaded and, in paragraph 3, it is pleaded that in 1989 the deceased and Mr Sialepis entered into a mortgage over the Newcastle property in favour of Westpac to secure an advance of $130,000. No point was taken that the mortgage was entered into with Westpac Savings Bank Limited. 63 In paragraph 4 it is pleaded that Mr Sialepis was the managing director and major shareholder of Sialepis Pty Limited of which the deceased was neither a director nor shareholder and, in paragraph 5, that Mr Sialepis was the registered proprietor of the Rutherford property as a tenant-in-common in equal shares with Mr Thibou. 64 In paragraph 6 it continues that Mr Kay was the manager of Westpac's Branch at Double Bay and, in paragraph 7, that in 1992 the deceased and Mr Sialepis resolved to expand their property partnership to extend to the deceased's purchasing Mr Thibou's interest in the Rutherford property financed by a further advance from Westpac secured by a registered first mortgage over that property. 65 In paragraph 8 it is pleaded that in May 1992 Mr Sialepis for himself or Sialepis Pty Limited sought further substantial loan capital from Westpac for various business purposes in which the deceased had no interest. 66 The first substantive allegation is made in paragraph 9 in which it is pleaded:- "In 1992 Harry Sialepis, Greg Kay and other persons entered into a conspiracy to act against the interests of both the first defendant and the deceased. Furthermore, the conspiracy was executed causing the deceased to suffer loss." It became clear from Mr Howen's submissions that Westpac was sought to be made vicariously liable for these alleged activities of Mr Kay, who was said to be acting in his capacity as an officer of Westpac: paragraph 1.4. 67 By letter dated 8 July 1998 the solicitors for Mr and Mrs Cosco sought particulars of the "other persons" to which the paragraph referred. The reply was that Mr Smiles was one of the other conspirators, but that the plaintiffs did not know the identity of any other names "not already pleaded in the Further Amended Summons". Accordingly the named conspirators were Mr Sialepis, Mr Kay and Mr Smiles. Neither Mr Sialepis nor Mr Kay is a defendant and Mr Howen stated that it was not intended to join either as such. Therefore the parties against which and whom damages are sought in relation to the conspiracy, which conformably with principle would be on a joint and several basis, are Westpac and Mr Smiles. 68 Notwithstanding the terms of the pleading, by which I mean that Westpac is pleaded as being a victim of the conspiracy, Mr Howen submitted that it was "possible" to make Westpac vicariously liable for the conduct of Mr Kay. He conceded that he was not submitting that Mr Kay, in entering into the conspiracy, was acting on the direction of the directors or any senior employees of Westpac or was otherwise expressly authorised by Westpac to enter into conspiracies, let alone conspiracies against Westpac, but that Mr Kay could have acted against Westpac's interests and it could be held liable for the same conduct. He did not elaborate on that submission but continued that if Westpac took the view that Mr Kay acted wrongly it could "bring Mr Kay in as a third party". He added that if Westpac asserted that Mr Kay was responsible it should cross-claim against him. This, if I may say so with respect, is a somewhat extraordinary submission. It became the more extraordinary when Mr Howen conceded that it would be an absurd contention on the part of the plaintiffs to say that it was a contemplated part of Mr Kay's duties to enter into conspiracies. It becomes, if I may say so with respect, more absurd when it is appreciated that it is pleaded that as part of the consideration for doing so Mr Kay accepted bribes. 69 Mr Howen's submission was that it was within the scope of Mr Kay's authority to deal with loan applications, to prepare security documents, and to handle mortgages. He continued that Mr Kay used his position and this authority to enter into transactions "to facilitate the conduct of a conspiracy". Undoubtedly an employer may be liable for the wrongful, even fraudulent, conduct of its employees if it has either expressly authorised them, or if the wrongful conduct is carried out by an employee carrying out activities, which he or she has ostensible authority to do. In this case it was conceded that Mr Kay had no actual authority. It is not asserted that he had any ostensible authority or, if such a submission was made, that this is a case where the deceased was aware of that. There was no holding out by Westpac of Mr Kay to the deceased as having authority to do anything. The deceased did not deal with Mr Kay. 70 In his written submissions Mr Howen seemed to accept that Mr Kay could not enter into a conspiracy in the course of his employment and then to reject that proposition. He wrote:- "1.1 It is not contended that Mr Greg Kay or any other officer of the first defendant was expressly authorised or directed to enter into any conspiracy with an unlawful object. Furthermore it is not contended that Mr Greg Kay or any other officer of the first defendant was expressly authorised or directed to commit any act of dishonesty or to make any representation inconsistent with their duties on behalf of the first defendant in administering the banker/customer relationship with the deceased. In other words, the scope and nature of Mr Greg Kay's duties did not include performing any fraudulent acts or entering into any conspiracies. 1.2 I submit that notwithstanding para 1.1 above the first defendant is liable for the acts of its employees where those acts are within the ambit of the employees' duties. The nature of the duties, the extent of authority conferred on the employee, and the level of supervision are matters for evidence and findings of fact by the trial judge." 71 An employer is vicariously liable for the acts of his employee where the employee commits a tortious act in the course of his employment in circumstances where the employee is acting within the scope of his or her actual or ostensible authority. In his written submissions Mr Dowdy wrote:- "An employer is not liable merely because the employment gives an opportunity to an employee to commit fraud or other tortious acts": paragraph 10. In his oral submissions Mr Howen accepted that this correctly stated the law. 72 In my opinion, if Mr Kay entered into a conspiracy he was engaging in a "frolic of his own". It is conceded by Mr Howen that he was not expressly authorised to do so; there is no suggestion that it was within his ostensible authority; it is pleaded that in doing so he was acting contrary to the interests of Westpac, which is totally inconsistent with his acting in circumstances where Westpac could be vicariously liable; and further in particulars furnished it was conceded that the deceased never relevantly attended the premises of Westpac and never met Mr Kay at any material time. The purpose of these observations is not to suggest that Mr Kay could not have conspired with other persons, but to demonstrate that, as a matter of law, Mr Kay could not have done so in circumstances where he made Westpac vicariously liable for his conduct. 73 Circumstances in which an employer may be vicariously liable for the acts of an employee were considered in Deatons Pty Limited v Flew (1949) 79 CLR 370. At p.378 Latham CJ said:- "Liability of the employer depends upon the scope of employment of the barmaid and the authority which her employment conferred upon her, such authority to be exercised on behalf of the employer. An employer is liable for the act of his servant only if the act is shown to come within the scope of the servant's authority either as being an act which he was employed actually to perform or as being an act which was incidental to his employment." At p.379 his Honour continued:- "Upon the evidence given for the defendant the act was an act of personal resentment and was not in any way performed as on behalf of the employer. It was not done even in supposed furtherance of the interests of the employer. In doing what she did the barmaid was, as Isaacs J said in Bugge v Brown acting so 'as to be in effect a stranger in relation to (her) employer with respect to the act (she) has committed, so that the act is in law the unauthorised act of a stranger'. In my opinion the act of the barmaid was not expressly authorised, it was not so connected with any authorised act as to be a mode of doing it, but was an independent personal act which was not connected with or incidental in any manner to the work which the barmaid was employed to perform." 74 At p.381 Dixon J said:- "Nor is it one of those wrongful acts done for the servant's own benefit for which the master is liable when they are acts to which this ostensible performance of his master's work gives occasion or which are permitted under cover of the authority the servant is held out as possessing or of the position in which he is placed as a representative of his master. .. The truth is that it was an act of passion and resentment done neither in furtherance of the master's interests or under his express or implied authority nor as incident to or in consequence of anything the barmaid was employed to do." 75 Mr Howen's submissions seemed to proceed on the basis that Mr Kay was employed to carry out financial transactions and to obtain security documents and, accordingly, if he entered into a conspiracy to bring about a result different from that anticipated by the other party, namely the deceased, that was sufficiently incidental to the activities, which he was employed to carry out, to make Westpac vicariously liable. In the absence of actual authority, which was conceded by Mr Howen, it would be necessary for the deceased to establish that Mr Kay had ostensible authority. However, not only is such a case not pleaded, although I am prepared to infer that perhaps it may be said to arise from the matters stated, but on the particulars furnished it could never succeed because the deceased had no idea of any involvement by Mr Kay in this matter. In the answers to particulars it is stated:- "(d) The deceased never attended any premises of the first defendant for the purposes of any meeting or discussion in relation to the said loan from the first defendant nor for the execution of any documents relating to the loan and securities. Furthermore, the deceased did not ever meet Mr Greg Kay at any time material to the negotiation or approval of loans or the execution of documentation for loans from the first defendant. (e) In or about August 1992 Harry Sialepis met the deceased at the home of Mary Tsatsoulis and requested the deceased to sign some pagers unattached to any loan documentation but which he represented to the deceased as being in relation to a loan for the refinance and development of the Rutherford and Newcastle properties. The deceased signed some unattached pages believing them to be only related to the refinance and development of the Rutherford and Newcastle properties." (My emphasis.) 76 Accordingly no case is pleaded that Westpac held Mr Kay out to the deceased as having authority to do anything relevant to the entry into the transaction. 77 In delivering the opinion of the Privy Council in Kooragang Investments Pty Limited v Richardson & Wrench Limited [1981] 2 NSWLR 1 at pp.7 and 8 Lord Wilberforce said:- "In the present case, R & W did carry out valuations. Valuations were a class of acts which Rathborne could perform on their behalf. To argue from this that any valuation done by Rathborne, without any authority from R & W, not on behalf of R & W but in his own interest, without any connection with R & W's business, is a valuation for which R & W must assume responsibility, is not one which principle or authority can support. To endorse it would strain the doctrine of vicarious responsibility beyond the breaking point and in effect introduce into the law of agency a new principle equivalent to one of strict liability." 78 The facts of Kooragang were, in my opinion, stronger in favour of the employer than in the present case in that there was some commercial advantage to Westpac. But, in my opinion, the allegation of a conspiratorial agreement supported by the allegation of the acceptance of bribes paid to Mr Kay, in circumstances adverse to the interests of Westpac, shows quite clearly that Mr Kay was acting on a "frolic of his own", if he did what he was alleged to have done, such that Westpac could not be vicariously liable. 79 The fact that what Mr Kay allegedly did was against the interests of Westpac is made clear by paragraph 9.1, which was stated by Mr Howen to be the pleading of an overt act, namely to induce Westpac to provide various advances and credit facilities to Mr Sialepis and Sialepis Pty Limited substantially in excess of Westpac's lending policy, which dictated the margin of loans that could be made having regard to the security and the identity of the borrower. Accordingly, an overt act pleaded against the alleged conspirators was one which supported the pleading that the conspiracy was "to act" against the interests of Westpac. 80 In paragraph 9.2 it was pleaded, as an overt act, that there was an inducement to the deceased to agree to enter into a loan agreement with Westpac, which was fraudulently represented to the deceased as being a loan for the purchase of Mr Thibou's interest in the Rutherford property and for advances to be made to Mr Sialepis in excess of the purchase consideration for that property, all secured by mortgages to Westpac on both the Rutherford and Newcastle properties. The fraudulent representation is particularised as having been made by Mr Sialepis at Mrs Tsatsoulis' home. It is not alleged that Mr Sialepis was acting on behalf of Westpac. 81 Mr Howen said this was not a term of the conspiratorial agreement but an overt act, although on its own it was a lawful act, which only became unlawful if it was part of a wider conspiracy. No "wider conspiracy" was alleged in paragraph 9. I think that Mr Howen was seeking to say that other conspiracies subsequently alleged created the "wider conspiracy". On the other hand he conceded that those alleged conspiracies would not be established unless the conspiracy alleged in paragraph 9 was proved. 82 Paragraph 9.3 needs to be quoted in full. It states:- "9.3 To induce the deceased to sign loan documentation which was then fraudulently manipulated to be a loan agreement with the first defendant for the sum of $400,000 secured by mortgages on the properties, and securing all other borrowings by Harry Sialepis from the first defendant and liabilities by Harry Sialepis to the first defendant. 9.3.1 The deceased was induced to sign loan and security documentation in blank. 9.3.2 Without the consent or knowledge of the deceased part or all of the documentation once signed by the deceased, was then copied and those parts which were copied were added to other documentation in a manner designed to make it appear that the copied sections were part of that documentation. 9.3.3 Part or all of the documentation had other text added without the knowledge or consent of the deceased creating materially different documentation to that the deceased intended to sign." 83 This pleading, of course, is one of gross fraud. However, it really goes beyond the allegation of conspiracy. It is one thing to allege a conspiracy to have a document signed, which has an effect different from that which the deceased thought he was signing. It is quite a different thing to allege a conspiracy to have a document signed in effect and relevantly in blank, which document will then be "fraudulently manipulated" in the ways alleged. The most cursory analysis shows that these are two quite different allegations. 84 Mr Howen submitted that save for the words "to induce the deceased to sign loan documentation", which was a term of the conspiratorial agreement, the balance of paragraph 9.3 were overt acts of the conspiracy pleaded in paragraph 9. He stated that the fraudulent manipulation was carried out by Mr Kay, Mr Smiles and Mr Sialepis and that it occurred by inducing the deceased to execute loan documentation, which did not reflect his intention. As I have pointed out the pleading does not reflect this. Two separate allegations are made. There is no particularisation other than that contained in paragraphs 9.3.1 and .2. Mr Howen said that on his instructions the deceased was induced to sign loan and security documentation in blank and, once again on his instructions, without the consent or knowledge of the deceased part or all of the documentation once signed by him, was then copied and those parts which were copied were added to other documentation in a manner designed to make it appear that the copied sections were part of that documentation. Mr Howen said that whilst he had instructions that evidence would be led to this effect it was not possible to identify which of Mr Kay, Mr Smiles or Mr Sialepis carried out the conduct particularised in paragraph 9.3.2. He also said that the added text referred to in paragraph 9.3.3 could not be identified, and that he would be leading evidence of the additions to the documentation and, Tp.18, that they were made without the knowledge and consent of the deceased and created materially different documentation to that which he intended to sign. I have pointed out the differences in the two allegations, which the pleading does not address. The transcript discloses:- "HIS HONOUR: On your present instructions you have evidence on all those matters. HOWEN: Yes your Honour." 85 In my opinion, it is embarrassing for the defendants to be confronted with these two separate allegations. They are entitled to know whether the allegation is that the deceased was induced to sign a completed document, which did not accord with his intention; or whether he was induced to sign an incomplete document, which was subsequently "fraudulently manipulated" so as not to reflect his intention. The seriousness of these allegations demands precise pleading. 86 In any event, the allegations of fraudulent manipulation make it clearer, in my opinion, that Mr Kay, if he was engaged in any such conduct, was not acting in the course of his employment. Similarly the allegations in paragraph 9.3.2, which would indicate the copying of various parts of the documentation in the manner therein particularised, reinforce this view, as do the matters pleaded in paragraph 9.3.3. 87 The further particulars in paragraphs 9.4, 9.5, 9.6 and 9.7 are pleaded as overt acts and, in paragraph 9.8, the pleading is said to be of the intention of the deceased. 88 In paragraphs 1.6, 1.7 and 1.8 of his written submissions, Mr Howen submitted that a corporation may be held vicariously liable for a fraud committed by one of its servants, despite the fact that the fraud or deceit may involve the formation of a motive or intent, and that an innocent principal may be civilly responsible for the fraud of its authorised agent or servant acting within his authority to the same extent as if it was his own. He further submitted that it was not necessary for the plaintiffs to plead and prove intention on the part of Westpac to cause injury to the deceased, the issue being an assessment of the employee's authority, actions and intention. For reasons to which I shall refer this is not a correct statement of the law when one is considering the tort of conspiracy based on an agreement to perform a lawful act in an unlawful way. It must be there established that the predominant purpose was to injure the plaintiffs. He continued that Westpac received some benefit "from completed conspiracy" and, in paragraph 1.10, that Westpac "can be a victim, beneficiary and be also vicariously liable for the acts of its servants", which he characterised as "for the acts of Mr Kay for entering into a conspiratorial agreement". 89 Certain of the submissions made by Mr Howen are undoubtedly correct depending upon the context. However, in the present context, at least qua Westpac, it must be established that Mr Kay had either actual or ostensible authority, or that the acts he did were incidental to those for which he had such authority. It was conceded he had no actual authority and, in the absence of the deceased's knowing what role Mr Kay was playing any suggestion of ostensible authority falls by the wayside. In my opinion it cannot be said that the entry into a conspiratorial agreement was an act incidental to those Mr Kay was authorised to carry out. Finally, it is inconceivable that an act against the interests of the employer, whereby the employer was induced to act to its detriment, is one for which the employer becomes, in the circumstances pleaded in this case, vicariously liable. 90 The plaintiffs have elected not to join two of the three named conspirators, namely Mr Sialepis and Mr Kay. They seek, presumably, to recover damages for the alleged conspiracy from Westpac, as being vicariously liable for the acts of Mr Kay, and from Mr Smiles. In so far as it is a presumably relevant consideration, I disagree with the submission of Mr Howen that if Westpac takes the view that Mr Kay was acting wrongfully it is its duty to join him as a cross-defendant. The obligation undertaken by the plaintiffs, on the present pleading, is to prove a conspiracy of which Westpac, through Mr Kay, Mr Sialepis and Mr Smiles were parties. The plaintiffs cannot seek to advance that case on the hypothesis that Westpac will join Mr Kay. Further, the submission is at odds with the fundamental basis on which the plaintiffs are proceeding, viz that Mr Kay was acting on behalf of Westpac in circumstances where Westpac is vicariously liable for his conduct. 91 In my opinion the facts as pleaded do not establish a case that Westpac is vicariously liable for any wrongful conduct of Mr Kay. Therefore the pleading does not disclose a triable issue, in the sense to which I have referred, against Westpac and Mr Kay is not a party. 92 A conspiracy must be an agreement to perform a lawful act unlawfully or to perform an unlawful act. In the present case the plaintiffs' allegations revolve around an agreement to have the deceased sign a mortgage or mortgages, although, as I have sought to point out, it is not clear whether they mean to allege documents in a form other than he intended to sign or documents which, because of their nature, could be "fraudulently manipulated". Whichever approach is taken the asserted object was to have mortgages signed. That is inherently a lawful activity. In this context it only becomes a conspiracy if it was performed unlawfully, i.e. if the execution of the mortgages was procured in an unlawful way. There are two further essential elements that must be alleged in such circumstances. Firstly, the plaintiffs must allege that the conspiracy was carried out with the predominant purpose of causing the plaintiff injury and the overt acts must show that purpose. Secondly, the plaintiffs must allege that they have suffered damage. The Nature Of The Tort Of Conspiracy 93 In the light of the pleading in the Further Amended Summons and certain of the submissions made on behalf of the plaintiffs, it is desirable to consider the tort of conspiracy in some little detail. It is convenient to start by reference to certain texts. 94 In Clerk and Lindsell on Torts (17th Edition) (1995) the authors, at paragraph 23-77, state:- "The tort of conspiracy therefore takes two forms: conspiracy to use unlawful means, and 'conspiracy to injure'. The latter does, but the former does not, require a predominant purpose to injure. Liability for 'conspiracy to injure', where the acts would without combination be lawful, forms a qualification to the general rule that the mere agreement of many persons to act in concert cannot make the act of any one or more wrongful, if it would not be wrongful when done by each alone independently." 95 In paragraph 23-78 they continued:- "The tort requires an agreement, combination, understanding, or concert to injure, involving two or more persons." 96 At paragraph 23-85 the authors consider combinations, which employ no acts or means that are in themselves unlawful, commonly known as "conspiracies to injure". They continued:- "Everything here turns on the distinction 'between the case where the object is the legitimate benefit of the combiners and the case where the object is deliberate damage without any just cause'". 97 In Fleming "The Law of Torts" (9th Edition) (1998) Professor Fleming wrote, at p.175:- "The critical issue, it was made clear, was the object and purpose of those acting in concert. If the 'sole or predominant' motive was to advance an interest of their own rather than to cause injury to the plaintiff, it was not actionable. In particular, malice in the sense of spite or ill-will, which has often been touted as a decisive factor, was now banished from the scene: if the defendants acted in pursuit of a legitimate object, their combination was not vitiated by glee at their adversary's expected discomfiture; conversely, absence of malice was insufficient to establish that they had a just cause or excuse." 98 In Winfield and Jolowicz on Torts (14th Edition) (1994) the authors said, at p.539:- "The object or purpose of the combination must cause damage to the plaintiff. The test is not what the defendants contemplated as a likely or even an inevitable consequence of their conduct; it is 'what is in truth the object in the minds of the combiners when they acted as they did?'" 99 In Salmon and Heuston "Law of Torts" (21st Edition) (1996), at p.356, the authors stated:- "There are two forms of the tort conspiracy. The first exists when two or more persons agree to commit an act which would be lawful if done by one person but which is intended by the conspirators to do damage to the plaintiff, and such damage is in fact caused. The plaintiff must prove actual personal or financial loss." At p.358, in dealing with the first type of conspiracy, they said:- "Before Crofter some had thought that a combination to do damage to another was not actionable unless it was inspired by malice or malevolence. But it is now clear that the predominant intent to injure is not to be equated with spite, vindictiveness or malevolence. Although these will often be present. The correct proposition is that if there is a predominant intent to injure, and resultant damage, the conspiracy is actionable unless there is some justification." 100 The present pleading in paragraph 9 does not assert that the alleged conspirators entered into an agreement, combination, understanding, or concert, but rather that they "entered into a conspiracy". Nor does it allege that they entered into any such arrangement "to injure". The allegation is that they entered into the arrangement "to act against the interests of both the first defendant and the deceased". I appreciate that it is then proposed to be pleaded that the conspiracy was executed "causing the deceased to suffer loss". However, that, as I understand the authorities, is not a sufficient allegation to support the tort of conspiracy. The fact that damage may flow from an agreement, and that makes a large assumption in the present case in favour of the plaintiffs, does not mean that the agreement had the nature of a conspiracy. Not only must there be an agreement but it must be pleaded that its predominant purpose or intention was to damage the plaintiff and, further, that damage was in fact caused. 101 Finally it is well recognised that the conspiracy must lead to damage. The Summary of Contentions fails, in my view, to set forth any basis on which the plaintiffs have suffered damage, although the particulars, to which I have referred, make some attempt to specify how damage was caused by rference to lost opportunity. 102 In Volume 33 "The Laws Of Australia" sub-title 33.8 "Intentional Torts", paragraph 80, it is stated that the tort of conspiracy may take two forms, namely:- "(1) an agreement or combination between two or more persons to commit a lawful act with the predominant purpose of injuring or damaging the plaintiff, and the act is carried out and the purpose achieved; or

(2) an agreement or combination between two or more persons to commit an unlawful act with an intention to injure the plaintiff and the act is carried out and the intention achieved."

103 The present case is an example of the first type of conspiracy, it being lawful to require, as the price for the making of a loan, the giving of a mortgage over real estate. The plaintiffs' complaint, in so far as I understand it, is that the deceased was unaware when he executed the mortgage that it not only secured his indebtedness but also the indebtedness of Mr Sialepis and his companies to unlimited amounts. There is, as I have noted, the further complaint that the document executed by the deceased made no such provision, but was executed in a form which enabled it to be "fraudulently manipulated" to achieve the same result. These two positions only have to be stated to make clear the difference between them. 104 In Marrinan v Bibart & Anor [1963] 1 QB 234 Salmon J said, at p.238:- "If, contrary to my judgment, the contention were correct that the gist of the tort of conspiracy is the conspiratorial agreement alone, it may be that the plaintiff would be entitled to succeed on this preliminary issue. In my view, however, this contention is plainly wrong; the gist of the tort of conspiracy is not the conspiratorial agreement alone, but that agreement plus the overt act causing damage. It is true that the crime of conspiracy is the very agreement of two or more persons to effect an unlawful purpose, and any overt acts done in pursuance of the agreement are merely evidence to prove the fact of the agreement. But the tort of conspiracy, however, is complete only if the agreement is carried into effect so as to damage the plaintiff. Accordingly, the acts done in pursuance of the agreement are an integral part of the tort: Crofter Hand Woven Harris Tweed Co Limited v Veitch." 105 In Lonrho Limited & Anor v Shell Petroleum Co Limited & Anor (No 2) [1982] AC 173 at p.188, Lord Diplock said:- "Regarded as a civil tort, however, conspiracy is a highly anomalous cause of action. The gist of the cause of action is damage to the plaintiff; so long as it remains unexecuted the agreement, which alone constitutes the crime of conspiracy, causes no damage; it is only acts done in execution of the agreement that are capable of doing that. So the tort, unlike the crime, consists not of agreement but of concerted action taken pursuant to the agreement." At p.189 his Lordship continued:- "The civil tort of conspiracy to injure the plaintiff's commercial interests where that is the predominant purpose of the agreement between the defendants and of the acts done in execution of it which cause damage to the plaintiff, must I think be accepted by this House as too well-established to be discarded however anomalous it may seem today. It was applied by this House eighty years ago in Quinn v Leathem [1901] AC 495, and accepted as good law in the Crofter case [1942] AC 435, where it was made clear that injury to the plaintiff and not the self-interest of the defendant must be the predominant purpose of the agreement in the execution of which the damage-causing acts were done." 106 In United States Surgical Corporation v Hospital Products International Pty Limited & Ors [1982] 2 NSWLR 766 at p.819, McLelland J said:- "In the light of the recent decision of the House of Lords in Lonrho … the claim based on conspiracy can be dealt with shortly. In that case it was held unanimously that the scope of what was described as the 'anomalous' tort of conspiracy should be confined to 'acts done in execution of an agreement entered into by two or more persons for the purpose not of protecting their own interests, but of injuring the interests of the plaintiff: at p.189. In order to be actionable 'injury to the plaintiff and not the self-interest of the defendants must be the predominant purpose of agreement in execution of which the damage-causing acts were done': Ibid. In the present case if there was an agreement to which HPI and Mr Blackman or either of them were parties which might otherwise have constituted an actionable conspiracy, the predominant purpose was the self-interest of HPI and Mr Blackman rather than injury to USSC, although such injury may have been an actual consequence, and therefore it would not have fallen within the limited scope still left to the tort of conspiracy by the above decision of the House of Lords." 107 In Scottish Pacific Business Finance Pty Limited v Soundstage Australia Limited & Ors (Federal Court of Australia - French J - 14 May 1993 - unreported) his Honour considered a submission that the conspiracy plea was inadequate and should be struck out. He quoted from the Thirteenth Edition of Bullen and Leake and Jacob's "Precedents of Pleadings" at pp.221-222:- "The gist of the tort of conspiracy is not the conspiratorial agreement to injure alone, but that agreement plus the overt acts causing damage (Marrinan v Vibart [1963] 1 QB 234, affirmed [1963] 1 QB 528). The statement of claim should describe who the several parties to the conspiracy are and their relationship with each other. It should allege the conspiracy between the defendants giving the best particulars it can of the dates when or dates between which the unlawful conspiracy was entered into or continued, and the intent to injure ..: there is no call for a general plea of 'acting wrongly and maliciously' (Sorrell v Smith [1925] AC 700 at 714) nor is that sufficient. It should state precisely the objects and means of the alleged conspiracy to injure and the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance of the conspiracy, and lastly, the injury and damage occasioned to the plaintiff thereby." His Honour continued:- "In my opinion, the pleading in this case fails to specify the content of the alleged agreement by reference to the agreed means whereby injury was to be caused to SPBF. It is not good enough in that respect to refer to the earlier paragraphs of the statement of claim which at most describe some of what might be termed overt acts. In any event the overt acts relied upon should be specified and identified as such. Importantly it is not clear what purpose is served by the conspiracy plea beyond unnecessary complication and expense. It is difficult to see how the plea could succeed if neither the claims under the Trade Practices Act 1974 and Fair Trading Act 1987 nor the fraud claim were to succeed." 108 In Little v Law Institute of Victoria & Ors (No 3) [1990] VR 257 at p.271, Kaye and Beach JJ stated that the modern doctrine of tort conspiracy was expressed and expanded upon in Lonrho. Their Honours quoted the passage from the speech of Lord Diplock, commencing at p.188, that the gist of the cause of action is damage to the plaintiff. They continued:- "It follows that a statement of claim pleading tortious conspiracy must allege an agreement or combination between defendants to injure or harm the plaintiff, overt acts of the defendants in furtherance of the agreement or combination, and consequential injury or damage suffered by the plaintiff: see Bullen and Leake and Jacobs, Precedents of Pleading (1975) (12th Edition) p.341. In the present case the allegations contained in paragraph 11 of the statement of claim constitute a pleading of an agreement or combination to injure the appellant. For the purposes of the pleading summons, it may be assumed that the appellant, at the trial, would prove the existence of an agreement or combination between the respondents to injure him in the manner alleged. However, the pleadings do not disclose a cause of action unless the allegations of overt acts as pleaded are capable of sustaining the conclusion that the predominant purpose of the respondents' agreement was to injure the appellant in the practice of his profession." (My emphasis.) 109 Their Honours held that as the overt acts pleaded did not amount to conduct or could not be treated as having the predominant purpose of injuring the plaintiff, no cause of action for tortious conspiracy, as pleaded, could be sustained. On the matters pleaded Ormiston J came to a different conclusion, p.292, although not because he disagreed, as I read his reasons, with the principles enunciated by the majority. 110 In The Council of the City of the Gold Coast v Pioneer Concrete (Q'ld) Pty Limited & Ors (Federal Court of Australia - Drummond J - 26 June 1998 - unreported), his Honour adopted the statement of the majority in Little, which I have quoted, as a correct exposition of the law. Before doing so he referred, at p.19, to the principles set forth in Volume 33 of "The Laws of Australia" at paragraph 80 to which I have referred and, after quoting from Little, he continued, at pp.19-20:- "The overt acts which must be pleaded to complete a proper allegation of conspiracy are acts which justify the inference that the conspiracy exists: cf Adstream Building Industries at 133." 111 In the latest edition of Bullen and Leake and Jacobs, Section 25, the same principles as those to which I have referred in the earlier editions are set forth. 112 The pleading in paragraph 9, even allowing for the particulars furnished, falls far short of the pleading required to support a claim for tortious conspiracy. 113 There is no pleading of the agreement in the sense that there are no allegations as to what it is agreed the conspirators would or would not do save "to act against the interests of both the first defendant and the deceased". That, in my opinion, does not raise an appropriate issue. It must be alleged that there was an agreement between the defendants to injure or harm the plaintiff. It must further appear from the overt acts, which are pleaded in paragraphs 9.1 to 9.7, that they are capable of sustaining the conclusion that the predominant purpose of the defendants' agreement was to injure the deceased. It must further be alleged that the deceased sustained injury and damage in consequence of the overt acts. 114 The first overt act pleaded in paragraph 9.1 is directed to the position of Westpac and does not relate to any purpose, let alone a predominant purpose, in respect of the deceased. The other overt acts upon which reliance is placed address the question of the deceased's entering into a loan agreement and loan and security documentation, which had the effect not only of securing money he was borrowing from Westpac but the further indebtedness of Mr Sialepis and his company. A reading of the overt acts, and it is to be noted that the pleading does not identify them as such it being necessary for me to enquire of Mr Howen how he characterised paragraphs 9.1 to 9.8 and what the overt acts pleaded were, leads me to the conclusion that the predominant purpose was not the intent to injure the deceased, but rather to obtain additional security for Mr Sialepis and his companies and, thereby, increase the amount they could borrow. There is no pleading that at that point Mr Sialepis and his companies would not be able to repay the moneys he and they borrowed, nor that the interest of the deceased in the properties would be in any way jeopardised. The Further Amended Summons does not make the allegations of the relevant predominant purpose necessary to found the tort of conspiracy against the deceased. In my opinion, the pleading establishes as the predominant purpose the furnishing of additional financial assistance to Mr Sialepis and his companies. Further, as I said earlier, it does not provide a basis for alleging that Westpac was a party to the conspiratorial agreement, or vicariously liable for the alleged actions of Mr Kay. 115 The plaintiffs have not alleged that by virtue of the impugned conduct the deceased or the plaintiffs suffered any injury or damage, although they have furnished some particulars. The deficiency in this pleading is that Westpac is the party alleged to have caused the damage, but the pleading does not establish that it was a party to the conspiracy. Nor does it establish that Westpac had the requisite intent. At the time that Westpac held the securities and was the creditor its demand was limited to recovering the amount borrowed by the deceased. There is no suggestion in the Further Amended Summons that Trigamist, which now holds the securities, has made any demand on the plaintiffs in their role as executors of the deceased's estate. I have referred to the only particulars of damage. The difficulty with this assertion of damage is that each of the deceased and Mr Sialepis had mortgaged their respective interests in the properties. If Mr Sialepis had fallen into default the holder of the security could have invoked s.66G of the Conveyancing Act 1919 to effect a sale, and the position as between the deceased or the plaintiffs would then have had to have been worked out. However, as the plaintiffs concede the obligation to pay some $230,000, together with interest, to the holder of the security it cannot be assumed that damage of the type to which reference is made would have occurred. 116 In my opinion, for all these reasons, the claim of conspiracy in paragraph 9 fails. This is so whoever are alleged to be the parties to it. 117 A second conspiracy is pleaded in paragraph 24, it being alleged that Mr and Mrs Cosco and Mr Smiles, together with Mr Sialepis and Mr Kay "and other persons" "entered into a conspiracy to induce" Westpac "to assign the loan portfolio relating to Harry Sialepis to the second defendant at below market value of the loans and supporting securities". 118 This allegation fails, in my opinion, for a number of reasons. The most that is alleged is that there was an assignment by Westpac to Ironaid and, subsequently, by Ironaid to Trigamist of the debt and security. Whilst there is lengthy pleading, particularly in the amended document handed up by Mr Howen, I am not satisfied that that pleads a conspiracy conformably with the principles to which I have referred. Once again Westpac is pleaded as a victim of the conspiracy, which would have to be characterised as one to perform a lawful act in an unlawful manner. It does not appear from a consideration of the overt acts that the predominant purpose was to injure the deceased and/or the plaintiffs. Nor is it pleaded that any damage was caused. Mr Howen understood this problem and, at Tp.23, he said:- "Now, I can see if the plaintiff fails to prove the first conspiracy to execute the mortgage, there will be some difficulties, I submit, to prove the further assignments were a wrongful conspiracy." 119 At Tp.26 the following transpired:- "HOWEN: Although I have covered some of this already, just in relation to some of the submissions of the other defendants, in dealing with the second and third conspiracies, they are matters concerning the other defendants. I have already made some submissions in relation to that. HIS HONOUR: Once again it turns on whether you have properly pleaded the first conspiracy. HOWEN: Yes, and whether it can be proved. HIS HONOUR: That will depend if you get to trial on this pleading, whether you win. The first matter we have got to decide is whether you get to trial on this pleading. HOWEN: Yes, your Honour." 120 Because of the view to which I have come in relation to the first conspiracy I am of the opinion that it is unnecessary to further consider the subsequent conspiracies because of the concession made by Mr Howen. Mr Howen's concession also covered allegations of unconscionable conduct. However, in saying that, I have had regard to them and I am of the view, essentially for the reasons I have given, that the claims as pleaded are not sustainable. Some Other Matters 121 There is a reference in paragraph 20 to the sum of $100,000 but, as I pointed out to Mr Howen, no relief has been sought in relation to that and, in any event, it seems tolerably clear from the evidence that the matter was dealt with in the adjustment of the financial rights between the parties with the full knowledge and concurrence of the deceased. 122 So far as the assignment is concerned there is various pleading based on the provisions of the Trade Practices Act it being alleged, in paragraph 31, that the third defendant, Mr Cosco, made certain representations to Westpac, which were false and as a consequence of which the assignment was made, which would not otherwise have been made. This seeks to raise a case as between the defendants from which in some unarticulated way the deceased and/or the plaintiffs can take a benefit. The failure to specify the reason leads me to the conclusion that the pleading must fail. It is not suggested that any representations were made to the deceased and, accordingly, it is not suggested that the deceased acted in reliance upon any representations. It is pleaded that had the assignment not taken place Ironaid would not have been in a position to have collected the rents and obtained other benefits from the mortgaged properties, although the relief sought in relation to this is not tenable. 123 There is a further allegation that Westpac has engaged in unconscionable conduct within the meaning of s.51AA(1) of the Trade Practices Act and that it has, in trade and commerce, engaged in conduct that was misleading and deceptive and was likely to mislead and/or deceive within the meaning of s.52 of that Act. There is added, in paragraph 45, the bald assertion that in the alternative Westpac has conspired with the persons named "in the facts above to defraud the deceased". In paragraph 46 it is pleaded that Westpac was negligent towards the deceased in respect of the management of the customer relationship with him, and the execution and management of the loans the security for which the deceased provided. The pleading does not set forth any facts to support paragraphs 43 to 46 inclusive. Mr Howen submitted this was not necessary. I disagree. In my opinion the Practice Note clearly requires such material to be articulated. The position is, in my opinion, that a pleading in this form is clearly embarrassing and vexatious in that it fails to identify the case the defendants are called on to meet. For these reasons paragraphs 43 to 46 inclusive should be disallowed. 124 The last series of allegations allege that the loan agreement between Westpac, Mr Sialepis and the deceased, and the mortgage granted by Mr Sialepis and the deceased to Westpac, were unjust within the meaning of s.7 of the Contracts Review Act in so far as they are concerned with the deceased's one half share as tenant-in-common in the properties. It is pleaded that the deceased was commercially inexperienced in respect of the purchase of investment properties; that he was not a party to any negotiations as to the provisions of the loan; that he did not receive any independent legal advice in relation to the transactions; that no officer of Westpac nor Mr Sialepis explained the effect of the contract to him; that Westpac allowed Mr Sialepis to arrange for the execution of the loan documents rather than having them executed on bank premises under the supervision of an officer of Westpac; and that the deceased did not know of the true nature of the loan agreements and neither were they explained to him prior to signing any documents. Certain of those allegations are at odds with the uncontradicted evidence tendered and to which I have referred. 125 That evidence establishes, at least prima facie, that the mortgages were explained to the deceased. However, assuming for the moment that there is some validity in the claim under s.7, it is expressly made subject to the repayment of the specified amounts and interest thereon. There is no offer in the pleadings to repay these amounts and there is no evidence that the plaintiffs are able to do so. Further, heavy reliance is placed upon the fact that the agreements into which the deceased entered were precisely the agreements set out in paragraph 1 of the Nature of Dispute, save for the security granted in relation to Mr Sialepis and his companies. At a factual level the claim would, prima facie, confront serious difficulties. However, it may not be possible to say it is hopeless. 126 A substantial legal problem, which the claim under the Contracts Review Act faces, is s.6(2) thereof, which provides:- "A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, business or profession carried on by him or proposed to be carried on by him …" 127 I asked Mr Howen what submission he proposed to make having regard to s.6(2). At Tp.27 he said:- "HOWEN: I concede that the Contracts Review Act is not a statute which is designed, by some exclusion of commercial transactions, to ordinarily deal with business and commercial transactions. HIS HONOUR: Do you say these are business and commercial transactions involved in this case? HOWEN: There is a difficulty of characterising it, because Mr Tsatsoulis never intended to enter into a business and commercial transaction relating to providing support for any other loan, cross-collateralisation issue. HIS HONOUR: We have been through that. HOWEN: My only submission is, having never intended to do that, he had no intention to enter into a business and commercial transaction in relation to that aspect of the Sialepis empire. HIS HONOUR: The Union Street and Rutherford properties were business properties. It was all part of the venture; stated by you in paragraph 1 to be part of the venture. All I am saying is, do you assert these were not business and commercial transactions? HOWEN: I assert that the late Mr Tsatsoulis did not intend to enter into business and commercial transactions relating to what ultimately were the documents. There was evidence to support the contention that there was a business relationship in relation to the Rutherford and Union Street properties, but is arguable, I submit, that that is not what Mr Tsatsoulis intended to do." 128 In Australian Bank Limited v Stokes & Anor (1985) 3 NSWLR 174 Rogers J considered the effect of s.6(2). At p.176 his Honour said that that sub-section excluded the operation of the Act:- ".. if a trader enters into the contract in the course of or for the purpose of the trade, business or profession carried on. Prima facie, the defendants were not carrying on any relevant trade, business or profession; they were utilising the form of enterprise known as the limited company for the purpose of engaging in a business activity." 129 In the present case I am not confronted with the difficulty to which his Honour referred because there is no doubt that the deceased was the person carrying on the business in relation to the two properties. In those circumstances sub-s.(2) precludes the granting of relief to a person in relation to a contract entered into in the course of or for the purpose of a trade or business carried on by him or proposed to be carried on by him. The answer to the submission made by Mr Howen is that the Act could only operate if it was found that the contract was "unjust" in the circumstances relating to it when it was made. Mr Howen's submission must be that because the mortgage went beyond that intended by the deceased that made it unjust. Had the mortgage not been entered into in the course of or for the purpose of the deceased's business then there would, in my opinion, undoubtedly have been an argument available to the deceased and, I shall assume, to the plaintiffs, that the contract was unjust. I say nothing about the prospects of that claim succeeding having regard to the concessions made in paragraph 1 of the Nature of the Dispute and the evidence. However, the provisions of the Act do not allow for relief to be granted in the circumstances. Hence the claim for relief under the Contracts Review Act must fail. 130 In any event it seems to me that it would be necessary to plead a willingness to bring into Court the amount admittedly due as the price for the obtaining of that relief as a condition of allowing the pleading to go forward. There would be absolutely no point in the Court considering the factual issues raised by that claim for relief unless the plaintiffs could satisfy the Court, which they have made no attempt to do, that they can comply with the conditions specified in the order they seek. For all these reasons, I consider there is no triable issue in relation to the Contracts Review Act claim. 131 In paragraph 48 it is pleaded that in taking an assignment of the loans and securities Ironaid and Trigamist engaged in unconscionable conduct within the meaning of s.51AA(1) of the Trade Practices Act and, in paragraph 49, that Mr and Mrs Cosco and Mr Smiles were persons who aided and abetted that contravention pursuant to s.75B(1)(a) and (c) of the Act. In paragraph 50 an order is sought under s.87(2) setting aside all mortgages in respect of the properties to the extent necessary to protect the interest of the deceased. That order is sought subject to the payment of the amounts to which I have referred. 132 Section 51AA(1) provides that a corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the State and Territories. As I understood Mr Howen's submissions the unconscionability necessarily refers back to the original allegation of conspiracy, the allegation of unconscionability being that the conduct involved in the original conspiracy, of which it is alleged Ironaid and Trigamist had knowledge through their directors Mr and Mrs Cosco and through Mr Smiles, made the conduct in taking the assignment of the debts and mortgages unconscionable. It is conceded that these allegations turn upon my finding as to the original conspiracy. As I am of the view that the original conspiracy has not been made out, at a pleading level, it is unnecessary to further pursue them Conclusions 133 For all these reasons I am of the opinion that the plaintiffs should not be granted leave to rely upon the Further Amended Summons filed on 19 June 1998 together with the amendments proposed to be incorporated by the document handed up by Mr Howen on 25 February 1999. 134 The question which then arises is whether the plaintiffs should be granted leave to re-plead. The matters to which account should be taken in considering this were referred to by the Court of Appeal in Sialepis v Ironaid Pty Limited & Ors (Court of Appeal - 10 December 1997 - unreported). At p.13 Gleeson CJ said:- "Following the delivery by Rolfe J of his reasons for dismissing the action against the three respondents, Senior Counsel for the appellant applied to his Honour for leave to further amend the pleading. This would have been the seventh version of the claim, which had been further amended on the day of the argument before Rolfe J, but before he gave judgment. It appears that the proposed amendments were not formulated and, indeed, they had still not been formulated at the commencement of the hearing of the present appeal. During the course of the appeal this Court rejected an application for further amendment. That is the subject of a separate judgment. The decision of Rolfe J not to permit further amendment was an appropriate discretionary decision. The appellant had far more than ample opportunity to formulate a viable claim against the respondent if one existed. The difficulty which the appellant's lawyers had experienced in framing a plausible statement of her cause of action against the respondents is a good indication that, on the facts known to them, or which they can realistically expect to prove, there is no cause of action." Handley and Cole JJA agreed. 135 In the present case the history discloses that the plaintiffs have had more than ample opportunity to plead a viable cause of action, if there be one, against the present defendants. I have traced the history of the pleading and I do not propose to repeat it. Suffice to say that many serious allegations have been made and they have not been able to be established even at a pleading level. I would add that my reasons of 27 May 1998, particularly at pp.8-10, made clear to the plaintiffs and their legal representatives that the matter could not be allowed to proceed in the unsatisfactory way it had. As I have pointed out the proceedings have now been on foot for over two years and the originating process has gone through many variations and, in my opinion, save for one matter, a proper exercise of discretion demands that the plaintiffs be refused leave to plead further. 136 In considering this application I consider the Court must also have regard to the position of the defendants. I referred to this in my reasons of 27 May 1998. The plaintiffs have made a series of very serious allegations against them over a long period. They have been forced to consider these allegations and they have successfully established that the claims cannot be sustained, even at a pleading level. This has no doubt caused considerable expense. However, it must also be a matter of deep personal concern to the individuals against whom the unsustainable allegations are made. In the absence of a viable pleading these are matters which, in my opinion, the Court should take into account in exercising its discretion. The One Matter 137 When Mr Howen brought in his further amendments to the Further Amended Statement of Claim on 25 February 1999, which included paragraphs 9.3.1, .2 and .3, Mr Dowdy read the affidavit of Mr David Winston Low of 8 May 1998 for the purpose of putting into evidence the report of the forensic document examiners, Chris Anderson & Co Pty Limited, dated 25 September 1997. It was this report, which was prepared by Mr Anderson and which was substantially destructive of the case that the signatures of the deceased were forged. However, in it Mr Anderson dealt with certain other matters. I shall set out the report and certain parts of the appendix:- "RE: THE ESTATE OF THE LATE SAM TSATSOULIS v WESTPAC & ORS - SUMMARY REPORT

I refer to your letter of the 22 September 1997 requesting an urgent comparative examination of the documents listed in Appendix 'A'.

The purpose of this examination was to determine whether or not the writer of the S Tsatsoulis signatures on the specimen signatures referred to in items 12 to 19 wrote the S Tsatsoulis signatures on the questioned documents referred to in items 1, 2, 4 to 10.

Items 3 and 11 are photocopies of item 2. Neither item 3 or item 11 are an exact copy or replication of item 2. Item 3 is missing page 4, four pages of Schedule 'A', two pages pf Schedule 'B', one page of Schedule 'C' and has three pages comprising of Schedule 'D', where item 2 has only two pages for Schedule 'D'.

Page 3 of Schedule 'D' on item 3 contains a typed signature block, signatures 'H Sialepis' and 'S Tsatsoulis' and a date '18 6 92'. The typed signature block, these signatures and the date are identical to the last typed signature block, H Sialepis and S Tsatsoulis signatures and the date '18 6 92' on page 4 of item 2. As item 2 is an original document with original typed entries, original H Sialepis and S Tsatsoulis signatures and an originally written date, the signatures appearing on page 3 of Schedule 'D' on item 3 have been copied from the page 4 of item 2. In other words, neither Mr Sialepis nor Mr Tsatsoulis signed on the original of page 3 of Schedule 'D' as it purports.

Item 11 is almost identical to item 2, except that item 11 has three pages comprising of Schedule 'D', whereas on item 2 there are only two pages comprising of Schedule 'D'. Page 3 of Schedule 'D' on item 11 does not have the signature block or signatures that are evidence on this page on item 3.

It has also been noted that page 2 of Schedule 'D' on item 2 has a footer '…/3' which indicates there is page 3 to follow. This footer is also reproduced on items 3 and 11.

I have also been provided with a photocopy of this document that was sent by Westpac to Mr Tsatsoulis on the 9 March 1994. See Appendix 'B' for a copy of this document. It has been noted that on the second page of this document there are no details when the loan is to be repaid, whereas on the original document (item 4) the following details have been written '25 25 JULY 94'

Ink differentiation tests using the Video Spectral Comparator reveal that the ink used rule out the lines in the Repayments section of this document is different to the ink to write the entries '25 25 JULY 94'

See Appendix 'C' for video prints highlighting the ink differentiation.

This indicates that these entries were written at a later time to when areas of the document were ruled out. However, it is indeterminate when these entries where written compared to the ruling out on the document.

Due to the limited time provided for this examination I have not conducted all the necessary examinations. These include ESDA examinations of the questioned documents for latent indentation impressions and a detailed examination of the stapled documents to determine if all staple holes of the pages of the documents match. If I am given the time these examinations can be undertaken.

A microscopic and macroscopic examination was conducted on the S Tsatsoulis signatures referred to in items 1, 2, 4 to 10 and 12 to 19 using a stereomicroscope as an aid. In the first instance I satisfied myself that all the S Tsatsoulis signatures on the specimen documents were written by the same person. Then I conducted a side by side (juxtaposition) comparison between the questioned and specimen signatures.

As a result of these examinations I am of the opinion that the writer of the S Tsatsoulis signatures on the specimen documents referred to in items 12 to 19 probably wrote the S Tsatsoulis signatures on the questioned documents referred to in items 1, 2, 4 to 10.

This is a qualified conclusion in which I am satisfied the evidence contained in the signatures points rather strongly towards the questioned and specimen signatures having been written by the same individual; however, it falls short of the 'virtually certain' degree of confidence. The limitation being the lack of contemporaneous specimen signatures.

This opinion is based solely on the material supplied for this examination.

Trusting this information is of assistance to you in your enquiry. Please do not hesitate in contacting me if you have any further queries.

138 Item 2 in the Schedule is a thirteen page letter addressed to "Mr Harry Sialepis" on Westpac Banking Corporation letterhead and dated 26 May 1992, containing on page 4 a signature "S. Tsatsoulis". Items 3 and 11 are stated as being:- "3. Photocopy of eight pages of letter addressed 'Mr Harry Sialepis' on Westpac Banking Corporation dated 26 May 1992 containing on page 8 a photocopy signature 'S Tsatsoulis'. Note that this is a part photocopy of the document referred to in item 2 and was purportedly received by Sam Tsatsoulis from Mr Greg Kay the Commercial Manager Westpac Bank, Double Bay and enclosed with a letter dated the 9 March 1994.

……………. 11. Photocopy of fourteen page letter addressed to 'Mr Harry Sialepis' dated 26 May 1992. This document is on the whole, a photocopy of the document referred to in item 2. The document being part of a bundle of photocopy documents sent by Minter Ellison under the cover of a letter dated 25 May 1995 to Briggs Paul & Dowding." (My emphasis.)

139 The point of referring to this report is that it demonstrates that, on a hurried consideration, Mr Anderson was able to ascertain matters in some of the documents, which provide some foundation for the matters raised in paragraphs 9.3.2 and.3. I appreciate that Mr Anderson's view is only a prima facie view, and that the matters particularised do not give rise, in my opinion, to the cause of action in support of which they were sought to be pleaded. My comments are not to be taken as a resiling from the view I take of the present pleading, which is that it is hopelessly flawed. 140 However, the matters to which Mr Anderson refers may, on careful reflection, indicate that there is the germ of a case, albeit not that presently pleaded. The possible existence thereof, notwithstanding what I have said in earlier judgments and in this judgment, leads me to the conclusion that the plaintiffs should have another opportunity to plead a viable case. I do not think that as such discrepancies have been pointed up, (and previously the Court's attention was not directed to these aspects of the report), and an attempt, albeit unsuccessful to plead them has been made, it is appropriate not to grant leave to re-plead. I have come to that conclusion with considerable reluctance for the reasons to which I have referred. But, in the end, I am not satisfied that it would be a proper exercise of discretion to prevent the plaintiffs from pursuing these allegations in a properly structured pleading. I should add that I am not to be taken as having formed anything more than a prima facie view about the possible effects of the matters to which Mr Anderson refers or their significance. There is sufficient for present purposes. 141 These reasons also make it inappropriate, in my opinion, to entertain dismissing the proceedings for want of prosecution. Orders 142 I refuse the plaintiffs leave to rely on the Further Amended Statement of Claim filed in Court on 19 June 1998. I grant the plaintiffs leave to replead.

(a) the plaintiffs pay the defendants' costs of the motions I have considered in this judgment and any reserved costs; (b) the exhibits be returned; and (c) the proceedings stand over to 19 March 1999 for directions.

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