SERVICE FINANCE CORPORATION LTD in its capacity as responsible entity for the Countrywide Select Mortgage Income Trust (ACN 077 860 256)

Practice and procedure - Summary judgment - Default under mortgage - Whether serious question to be tried or for some reason there ought to be a trial - defendant borrowed money when arguably he had no real prospect of repaying it - Defendant a farmer with little knowledge of finance or the law - Desperate for a loan - Whether he should be allowed to defend

Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604

Conlan v Registrar of Titles [2001] WASC 201

Frazer v Walker (1967) 1 AC 569

Hurley v McDonalds Australia Ltd [1999] FCA 1728; [2000] ATPR 41-741

Leros Pty Ltd v Terara Pty Ltd (1992) 172 CLR 407

1 WALLWORK J: The respondent in this matter applied for summary judgment against the appellant after the respondent had issued a Writ claiming the sum of $1,110,000 plus interest from the appellant, which sum was claimed to be owing under a mortgage. The respondent had also claimed possession of land which was owned by the appellant, known as "Whakea Farm".

2 In his reasons for judgment on the summary judgment application, the learned Master said that the application had been based upon a mortgage granted by the appellant over his property and then held by the respondent. The Master said there was no dispute about the granting of the mortgage, the amount of the mortgage, the fact of the default and the failure to rectify the default. Therefore prime facie, the respondent was entitled to the relief which it sought in its statement of claim. Having considered the evidence and submissions from the parties, the Master granted the application.

3 The learned Master said that what had been submitted for the appellant was that the respondent or its agent had engaged in unconscionable conduct in the negotiation of the mortgage agreement. The Master said that the decided cases make it plain that one of the prime considerations, or prime elements, of the defence of unconscionable conduct is that the party seeking to rely on it must show that he or she, or perhaps they, were under a special disability; that in this case, whatever else might be said about the evidence which had been put forward by the appellant, it simply could not be concluded on any view of the facts that the appellant was under a special disability.

4 The learned Master said it might well be the case that the appellant was inexperienced and that he was relatively unsophisticated in the ways of the commercial world, but that was a far cry from not being able to read English or having some form of mental impairment, or being put under pressure by a third party. The Master said that although one might have sympathy for the position in which the appellant had found himself, in his view, those feelings could not be translated into a finding that the appellant was under a special disability. The learned Master held that in essence, the appellant failed at the first hurdle. The Master said:

"It seems to me to matter not whether the reliance is placed upon the equitable principles relating to unconscionable conduct or whether reliance is placed upon the provisions of the Trade Practices Act. I'm simply not satisfied in all the circumstances that there is any serious question to be tried and accordingly the defendant should be entitled to judgment."

5 Having made those statements the learned Master then said:

"I might say, rather more by way of comment than anything else, that it's difficult not to have sympathy for the defendant's position. It seems clear that he was overcommitted and he borrowed in circumstances where there was no real prospect of repaying the moneys that were loaned to him. The only way that the funds were to be repaid was through the sale of at least part of the defendant's property which was mortgaged to the plaintiff.

Having said that, it must also be said that it appears that the defendant when provided with the opportunity to sell part of his land holding to repay the debt chose not to do so. To that extent at least it must be said that the consequences which follow from this judgment today were of the defendant's own making."

6 The appellant now appeals against the summary judgment on a number of grounds amongst which are that the learned Master:

"(c) failed to find that there was real uncertainty without full argument or further investigation of the facts despite cogent evidence disclosing facts requiring full argument or further investigation at trial;

(d) misdirected himself in making findings of fact in relation to the issues of unconscionable or misleading or deceptive conduct of the respondent when the evidence disclosed that it was not appropriate for him to do so;

(e) misdirected himself in finding that the appellant was under no 'special disadvantage' or 'special disability' of the kind contemplated by the law on unconscionable conduct despite the fact that there was no or no sufficient evidence before him to justify such a finding;

(f) misdirected himself in finding that the respondent had not engaged in unconscionable conduct when there was no or no sufficient evidence before him to justify such a finding;

(g) failed to take any or any sufficient account of the evidence of misleading or deceptive conduct on the part of the respondent and/or its agent as constituting evidence of arguable defences or triable issues justifying the grant of unconditional leave to defend."

7 In his affidavit before the learned Master the appellant, amongst other things, deposed that he was 56 years of age. Throughout his childhood, adolescence and early adult life, his brother and he had helped his father on the family farm known as "Whakea" at Gingin in Western Australia. He said that as far as he was aware his father had made him and his brother partners in the farming partnership when his brother and he were in their late teens. The farm had been in the Wedge family for as long as he could remember. The appellant deposed that from about 1975 until the death of his father on the 25 January 1985, his brother had helped in managing the farm. Prior to that, their father had managed it himself. After the death of their father, his brother had managed the farm, being more familiar with those kind of things than the appellant was.

8 The appellant deposed that he never had any involvement in managing the farm and that his brother had always dealt with those kinds of matters. The farm covered an area of about 1,400 hectares. The appellant lived in a farmhouse on the land. The farm was the only home he had ever known. The only occupation he had ever carried out was that of a farmer. He wished to continue in that occupation.

9 The appellant deposed that in 1993 his brother had commenced proceedings in the Supreme Court which had ended in the dissolution of the partnership on the 1 March 1995. As a result of the dissolution of the partnership the appellant said he had signed a mortgage and borrowed money. He had bought his brother's share of the farm. He was aware that the date for repayment of the loan was 18 May 1997 but otherwise did not fully understand the details of the papers which he had signed.

10 The appellant deposed that the present Court action, the borrowing of the money and the buying of his brother's share of the farm, were all events that he had been exposed to for the first time in his life which had anything to do with complicated paperwork and the law. He said the original loan had been arranged by a finance broker; that in 1997, he had signed paperwork which had postponed the repayment until the 18 May 1998. He deposed that on the 20 May 1998 he had appointed Countrywide Home Loans Limited ("Countrywide Credit") as his finance broker as he had needed to borrow money to keep the farm going.

11 It appears from the documents in the appeal papers that on the 20 May 1998 the appellant appointed Countrywide Credit as his financial broker and authorised it to make applications to suitable lenders for a loan facility. The appellant deposed that he believes he may have then borrowed from some mortgage investors. He deposed that later, on or about the 31 January 2000, he had submitted an application to Countrywide Credit to borrow $1,000,000. Further that on the 1 February 2000, Countrywide Credit gave notice of default to him for his failure to repay the principal sum of $1,000,000 to the mortgage investors by 30 January 2000.

12 The appellant deposed that he believed that he had paid default interest until the 15 March 2000 when he signed legal papers borrowing moneys from Guardian Funds Management Limited ("Guardian"). He said that at no time had he been aware that Countrywide Credit was a subsidiary of Guardian. Further that the person from Countrywide Credit who had arranged the loan from Guardian was known to him as Mr Greaves. He deposed that in about February or March 2000 Mr Greaves had advised him that finance could be arranged through Guardian. The appellant deposed that he had been feeling desperate at that time and was extremely relieved that he was able to refinance the original loan. He said that Mr Greaves had said to him words to the effect of:

"There is one condition. You have to do your best to sell Lot 3 by December but if you don't, it will get expensive for you. If it goes by auction, you will get less for it and you might even have to sell off more of the farm."

13 The appellant deposed that as a result of his discussions with Mr Greaves he was led to believe that if he did not sell Lot 3 by December, then Guardian would take over and sell Lot 3, but not the whole farm.

14 The appellant deposed that Mr Greaves showed him the paperwork before he signed it. However he did not read it because he took what Mr Greaves said on trust as he seemed to be an honest person. He said that in any event it would have been no use his reading the paperwork because he would not have been able to read or properly understand the papers which Mr Greaves showed him and which looked to him to be "very legal and complicated." He deposed that Mr Greaves had read out parts of the paperwork to him, such as the amount being borrowed, the interest rates, the date of repayment and also the condition that he sell Lot 3 by December. He deposed that Mr Greaves had advised him that he could telephone and speak to a lawyer before he signed the paperwork if he wanted to. However, he said that Mr Greaves did not make a big issue out of it, or try to send the appellant away to do so. The appellant deposed that:

"Anyway, I was so desperate for the loan that I did not want to think about lawyers so I simply went ahead with signing the paperwork."

15 The appellant deposed that he believed that it was odd that he should pay any fees to Mr Greaves personally and that he should have the opportunity to make some investigations in relation to this, for the purpose of defending himself in the action. He deposed that he believed he should be given the opportunity to instruct his solicitors to carry out investigations and enquiries into all of the circumstances surrounding his financial arrangements with the respondent, including enquiries from a Mr Douglas, as well as Countrywide Credit, Guardian and the plaintiff, Service Finance Corporation Limited, which sued in its capacity as the "Responsible Entity for the Countrywide Select Mortgage Income Trust (ARSNO87 846 615) and is the respondent.

16 The appellant deposed that he has been advised by his solicitors and believes that the investigations and enquiries he wishes to make would include discovery and interrogatories and that at the date of his affidavit he did not have enough information or papers to help him defend the action. He requested unconditional leave to defend himself at a public hearing in order to give him the opportunity to test the respondent's case in public in relation to any suspicious, or misleading, or unfair, or unconscionable conduct.

17 It is significant, in my view, that as stated earlier in these reasons, the learned Master in commenting upon what he had heard at the application for summary judgment, said:

"It seems clear that he was overcommitted and he borrowed in circumstances where there was no real prospect of repaying the moneys that were loaned to him. The only way that the funds were to be repaid was through the sale of at least part of the defendant's property which was mortgaged to the plaintiff."

18 It is apparent from the amended statement of claim dated 2 April 2001 that the appellant granted and Guardian accepted a first mortgage over the relevant land. The mortgage was registered on the 15 March 2000. Further, amongst other things, if the appellant defaulted under the mortgage and did not remedy the default, Guardian was authorised to take possession of the land.

19 On the 15 March 2000 Guardian advanced $1,110,000 to the appellant. Pursuant to the mortgage document the appellant was to repay the principal sum nine months after the date on which it was advanced. The appellant was to pay interest on the principal sum by equal payments monthly in arrears, commencing one month after the settlement date and calculated at the rate of 14.5 percent per annum, except for the first four months interest, which was payable in advance and on the settlement date. It was agreed between the parties that if the appellant paid interest on the due date each month and was not otherwise in default under the loan, Guardian would accept interest on the principal sum calculated at the rate of 11.5 percent per annum. The money was loaned on a first mortgage of the Whakea Farm.

20 It is pleaded in the statement of claim that if the appellant defaulted under the mortgage and did not remedy the default, Guardian could take possession of the land; also that Guardian was entitled to assign the mortgage and any rights under it, to any other person without obtaining the appellant's approval or consent; further that by an agreement dated 24 November 2000, Guardian had agreed to retire as the responsible entity for the Scheme and the respondent (Service Finance Corporation Ltd) had agreed to its appointment as the Responsible Entity for the Scheme. Guardian had agreed to assign absolutely and transfer to the respondent, all of its right, title and interest in inter alia, the loan and the mortgage, effective from 22 December 2000. The respondent became registered as the responsible entity of the Scheme on 22 December 2000.

21 It is pleaded that by a transfer of mortgage registered on 24 January 2001, Guardian transferred the mortgage to the respondent and by notice dated 23 January 2001, after the appellant had failed to repay the principal sum on 15 December 2000 and any interest accrued after that date, the respondent gave notice of the assignment to the appellant and demanded that the default by remedied by 30 January 2001; that the appellant had failed to remedy the defaults pleaded, being the repayment of the principal sum and interest, and that the respondent then became entitled to possession of the land.

22 It is provided in O 14 r 3(1) of the Supreme Court Rules (WA) that on an application for summary judgment:

"... unless the Court dismisses the application, or the defendant satisfies the Court with respect to the claim, or the part of the claim, to which the application relates that there is an issue or question in dispute which ought to be tried, or that there ought for some reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed."

23 In Fancourt v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87 at 99, five Justices of the High Court said:

"In these circumstances, the appellants ought, we think, to have been given leave to defend. The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: see Clarke v Union Bank of Australia Ltd; Jones v Stone; Jacobs v Booth's Distillery Co. In our view, it is not possible to say without doubt, on the whole of the material, that there is no question to be tried concerning the payment of the deposits by the appellants. The facts which are established are inconclusive, but the respondent, as well as the appellants, was in a position to establish conclusively the payment of the deposits if that fact could be established and, given the opportunity, it did not do so. That leaves, we think, a question to be tried and, although the appellants have not succeeded in positively establishing a defence, they should not in the circumstances be debarred from defending the action."

24 With respect to the second criterion in O 14 r 3(1) of the Rules, "or that there ought for some other reason to be a trial of that claim or part ..." it is stated in "Civil Procedure Victoria" (Williams) p 3377 that:

"The words are invoked if the defendant cannot point to a specific issue which ought to be tried, but nevertheless satisfies the Court that there are circumstances that ought to be investigated: ibid. The Court can give leave to defend for a reason other than that there is a question to be tried: Bank fur Gemeinwirtschaft v City of London Garages Limited [1971] 1 All ER 541. In that case Lord Justice Cairns said at 548, that the only reported case in which that provision has been applied is Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632. Megarry J there gave leave to defend because the documents on which the claim was based had some appearance of a sham. It is not difficult to think of other circumstances where it might be reasonable to give leave to defend although no defence is shown, eg if the defendant was unable to get in touch with some material witness who might be able to provide him with material for defence; or if a claim were of a highly complicated or technical nature which could only properly be understood if oral evidence were given; or if the plaintiff's case tended to show that he had acted harshly and unconscionably and it was thought desirable that if he was to get judgment at all, it should be in the full light of publicity."

25 The authors refer to Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 and state:

"The grant of leave to defend under this part of the rule might also be justified where the circumstances are 'such as to require close investigation' (Miles v Bull (supra)) or where most or all of the relevant facts are under the control of the plaintiff and the defendant would have to seek to elicit by discovery and cross examination, those which support the defence: ibid; Harrison v Bottenheim (1878) 26 WR 362. Compare Rosser v Austral Wine and Spirit Pty Ltd [1980] VicRp 33; [1980] VR 313; Brisbane Unit Development Corp Pty Ltd v Robertson (1983) 2 Qd R 105 at 109."

26 In Moscow Narodny Bank Ltd (supra) at 111 Brinsden J said:

"The matter is rather differently expressed by Brett LJ in Ray v Barker (1879) 4 Ex D 279 at 293, where he said that leave should be given to defend if facts were shown leading to 'the inference that at the trial of the action he (ie the defendant) may be able to establish a defence', while in Harrison v Bottenheim (1878) 26 WR 362 it was said that such leave should be given if the defendant 'has shown enough to entitle him to interrogate.' From all this it appears that where there is a real case to be investigated either in fact or in law, leave to defend should be given."

"Only to the above statement I think should be added reference to the words now appearing in O 14 r 3(1) 'or that there ought for some other reason to be a trial of that claim or part.'"

28 His Honour referred to the decision in Miles v Bull [1969] 1 QB 258 and to the words of Lord Justice Cairns in Bank fur Gemeinwirtschaft v City of London Garages Limited [1971] 1 All ER 541 which are referred to above.

29 In General Credits (Finance) Pty Ltd v Shipton Holdings Ltd and Schofield, unreported; SCt of WA; Library No 2054; 19 May 1977, Brinsden J said:

"However, it is difficult to shut a defendant out by summary procedure, when he raises a defence that a mortgagee exercising a power of sale has not performed the equitable duties the law attaches to the exercise of that power. It seems to me that in the material in evidence and the arguments addressed to me by counsel for the defendants, there is sufficient to refuse the application provided the defendants amend their defence, as indicated to me during the course of argument. I would, for example, think that there is sufficient in the material to lead to 'the inference that at the trial of the action [they] may be able to establish a defence': see Brett LJ in Ray v Barker 4 Ex D 279 at 283. In any event this may well be the sort of case to which the additional words to r 3(1) to which I have already referred apply, namely that where a mortgagee's bona fides are challenged on grounds not devoid of merit, the mortgagee's claim should require the close investigation of a trial."

30 In Miles (supra) at 265 Megarry J said with reference to the words "that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial":

"These last words seem to me to be very wide. They also seem to me to have special significance where, as here, most or all of the relevant facts are under the control of the plaintiff, and the defendant would have to seek to elicit by discovery, interrogatories and cross examination those which will aid her. If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfies the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked. There are cases when the plaintiff ought to be put to strict proof of his claim, and exposed to the full investigation possible at a trial; and in such cases it would, in my judgment, be wrong to enter summary judgment for the plaintiff."

31 In Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457at 470 Gleeson CJ and Callinan J said:

'The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy, or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other.'

The nature of the relevant disadvantage concerns the ability of the weaker, or victimised, party, to make an informed judgment as to his interests. This is made clear in Commercial Bank of Australia Ltd v Amadio. Mason J, after referring to the words of Fullagar J in Blomley v Ryan said:

'It is made plain enough ... that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word 'disadvantage' by the adjective 'special' in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.'

In the same case Deane J, identifying the weakness which attracts the jurisdiction, referred to the statement of McTiernan J in Blomley v Ryan that the 'essence of such weakness is that the party is unable to judge for himself.'

Absence of independent legal advice, like age, or infirmity, or some other condition or circumstance of the kind referred to, may, in a given case, be of factual importance in determining whether special disability or weakness of the relevant kind exists, but it is important to bear in mind the essence of the supposed disability or weakness."

32 In my view, a question in this case arises concerning whether the respondent knew or ought to have known that the appellant was unlikely to be able to comply with the terms of the mortgage and to repay the sum owing. It should have been obvious to a commercial lender of that sum of money in all the circumstances of this case, that the appellant could have had a "lack of education, lack of assistance or explanation where assistance or explanation is necessary" with the meaning of the words of Fullagar J in Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362.

33 In my view, it could also be argued for the appellant, that the appellant came within the words of Mason J in Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447 as a person who was "placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage" was taken of the opportunity thereby created. Mason J stressed that the disabling condition or circumstance of the person concerned has to seriously affect that person's ability to make a judgment as to that person's own best interests "when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party."

34 The question of the indefeasibility of the respondent's title as a registered mortgagee was raised by the respondent as a complete defence to the arguments for the appellant.

35 In my view, the complicated questions arising in connection with the claimed indefeasibility cannot be decided until all the relevant facts are known. They are not all known at this time.

36 In my opinion, the respondent did not establish before the learned Master that there was no real question to be tried. To use the words of the Justices of the High Court in Fancourt (supra) "it is not possible to say without doubt ... that there is no question to be tried...". The appellant

should not in the circumstances be debarred from defending the action. In the words of Brinsden J in General Credits (supra) "...the mortgagee's claim should require the close investigation of a trial".

37 I would allow the appeal, set aside the summary judgment and order that the appellant have leave to defend the action.

38 WHEELER J: The facts in this matter, and the applicable legal principles, are accurately and clearly summarised in the reasons for decision of Wallwork J which I have had the advantage of reading in draft. The view which I take is that this appeal should be dismissed, this being one of the relatively rare cases in which there appears to be no real question to be tried. As will appear from the reasons which follow, I differ from Wallwork J in the interpretation and application of the facts in this case, rather than in principle.

39 So far as the question of unconscionability is concerned, relevant unconscionability would exist if Mr Wedge had been under a special disability or disadvantage in dealing with the respondent and that disability was sufficiently evident to the respondent to make it prima facie unfair or unconscientious to procure or accept Mr Wedge's assent to the transaction in question. A difference in bargaining power is not a special disability, although illiteracy or lack of education may be. As I understand it, Mr Wedge asserts in his affidavit some lack of education or lack of commercial sophistication, and he relies upon a particular conversation with Mr Greaves, who arranged the loan, as he understood it, on behalf of Guardian Funds Management Limited (not on behalf of the respondent).

40 Mr Wedge's own affidavit, to my mind, falls far short of establishing any relevant disadvantage. For the purposes of this application I accept its contents as being true. However, there is no reference in it to the age at which he left school, or his level of education achieved. It is evident from the affidavit that he has been engaged in farming all his life, and that the management of the farm was left by him to his father and later to his brother. He was engaged in proceedings in this Court in 1993, initiated by his brother, and resulting in an order for dissolution of partnership. He deposed that that court action, subsequent borrowing of money and buying of his brother's share were the first events in his life that "had anything to do with complicated paperwork and the law". There is no evidence from him as to his degree of understanding of those events.

41 In relation to this transaction, he deposed that he was shown the "paperwork" before he signed it but that he did not read it. He did not read it, not because he could not read or did not understand it, but because he took what Mr Greaves had to say "on trust". Apart from a conversation to which I will shortly turn, there is no record of what Mr Greaves said nor any suggestion that he in any way misled Mr Wedge. Mr Wedge further deposes that it would have been "no use" his reading any of that paperwork because "I would not have been able to read or properly understand the papers which he showed me, which looked to me to be very legal and complicated." He does not depose that he has looked at any of the relevant material since that time and failed to understand it.

42 The "paperwork" to which Mr Wedge refers is contained in the appeal book. The mortgage memorandum and the document headed "Loan Conditions" are in relatively large type and relatively plain English for documents of this kind, but they are lengthy and one can see how they might be intimidating to persons of limited education and commercial experience. However, the "offer to borrow" which Mr Wedge signed runs to effectively less than three pages, with very clear headings and brief and clear details. The first item, "Details of Borrower or Borrowers", has under that heading Mr Wedge's full name and his address. The "amount of credit" is recorded as $1,110,000. Items 3 through to 11 are contained in two boxes, the first headed "Interest payments and FID" and the next headed "Credit fees and charges", simply listing those relevant dates and figures. Item 12 shows that payment is to be by direct debit from Mr Wedge's bank account. Item 13, "Security", reads simply "First registered mortgage over the properties known as 'Whakea Farm' " (underlining supplied). The next items are not of interest, but do not appear to be distracting. Finally, there is a "Special Condition" which reads in its entirety as follows:

"It is a condition of this offer that you use your best endeavours to sell part of the security stated in item 13 being Lot 3 on Plan 17221 and being the whole of the land contained in Certificate of Title 1917 Folio 941 ('Lot 3') at a price and on terms and conditions reasonably acceptable to us. You must obtain our written approval to any offer that you receive for Lot 3 and all offers must be submitted via Bullsbrook Real Estate. A breach of this Special Condition will enable us to exercise our rights under the mortgage to be registered over the security stated in item 13."

It is difficult to see how any person, even the most unsophisticated, who took the trouble to look at this document could fail to understand that the security was over the whole of the farm and that if the special condition relating to Lot 3 was not complied with that Guardian Funds Management Limited would be able to exercise its rights over the whole of the security, being the farm referred to in item 13. Mr Wedge's affidavit does not refer to these conditions at all. At the least, one would expect in a case such as the present that he would have explained what, if anything, he presently understood by them.

43 It seems to me, having regard to the documents which are in fact in issue in this case, that Mr Wedge's affidavit simply fails to raise any arguable case that he suffered from a relevant disability in relation to them. Even if that were not so, there is nothing in the circumstances set out in this affidavit to suggest that Mr Greaves or any other person would have been aware of the disability.

44 Mr Wedge relied also upon a conversation with Mr Greaves which he said went as follows. Mr Greaves said to him words to the effect of "There is one condition. You have to do your best to sell Lot 3 by December but if you don't, it will get expensive for you. If it goes by auction, you'll get less for it and you might even have to sell off more of the farm." He deposed that as a result of that discussion he was led to believe that if he did not sell Lot 3 by December, then Guardian Funds Management Limited would take over Lot 3 (but not the whole farm) and sell Lot 3. The difficulty with this assertion, is that it does not seem to flow naturally or at all from the words which were used, so that there would be no reason for Mr Greaves to suppose that his words would be understood in that way. There is no evidence in Mr Wedge's affidavit of any response made by him, or anything in the surrounding circumstances, which would or could have led Mr Greaves to suspect that he had so misunderstood what was said to him. An unexpressed misunderstanding cannot, it seems to me, give rise to unconscionability.

45 Finally, it is suggested that there are circumstances which require investigation in this case. It appears not to be disputed that the mortgages in question were ultimately transferred by Guardian Funds Management Limited to the respondent who became the registered mortgagee. It was conceded on behalf of Mr Wedge that the respondent itself was not involved in any circumstances which appear to merit further enquiry. However, it is submitted that "Countrywide and Guardian Funds had some association ... the connection between Countrywide, Guardian Funds and the respondent isn't presently immediately apparent." It

appears to have been conceded also that there is nothing in the evidence to suggest any connection between Mr Greaves and the present respondent. As I understand it, not only does the evidence not demonstrate any connection between the present respondent and either Guardian Funds Management Limited or Countrywide Home Loans Limited or Mr Greaves, but there is also nothing which would give rise to any suspicion of an association, let alone one with any element of impropriety which would require investigation.

46 I accept, as Wallwork J has pointed out in his reasons, that a defendant is entitled to a trial where, even if a defendant cannot point to a specific issue which ought to be tried, he or she is able to satisfy the court that there are circumstances that ought to be investigated. However, it seems to me that the present appellant's argument is not that there are particular circumstances which require investigation, in the sense of there being any material to found any suspicion, however remote, but rather that he should have leave to defend in order to ascertain whether there are such circumstances. This appears to me to stretch relevant principle beyond any appropriate limits. For those reasons, it would be my view that this appeal should be dismissed.

47 OLSSON AUJ: I have had the advantage of reading the judgment of Wallwork J in draft. I agree both with the reasons expressed by him and the conclusion to which he has come. This was not, in my view, one of those relatively rare, clearcut cases in which summary judgment was justified.