Wenczel v Commonwealth Bank of Australia [2006] VSC 324

"It's not a case that I work and I stay at home. I could have been visiting my mother, I could have been shopping. I could have been doing one of many things, I don't know."

18 In his witness statement Mr Cheal said that he had "a general recollection" of visiting the Property. His notes indicated that he inspected the property with the "owner", although Mr Cheal agreed in cross-examination that this did not necessarily mean the registered proprietor. He may have assumed the person he met to be the owner. He said that he had "a vague recollection" that he met with a woman at the property who accompanied him during the inspection. Mr Cheal said that certain references in his notes indicated that "someone with intimate knowledge" of the Property was with him during his inspection. These references were to "Redgum - 5 coat seal", "Upper - masonite board (new carp. to be laid)", "4" conc. external wall 2" cavity 4" conc." and to that person's estimate of the size of the dwelling, verandah and garage.

19 Because she had helped build the house, the plaintiff knew this information as well as the intention to lay new carpet upstairs whereas her son Luke could not provide all of the answers during cross-examination. Mr Cheal said that he had no recollection of Luke being present during his inspection, although Luke gave evidence that he remembered the valuer commenting to him that this would have been "a nice place" in which to grow up. Mr Cheal's purported identification of the plaintiff as the person he met at the Property was considerably weakened by the circumstance that he was told it was Mrs Wenczel before he identified her outside Court.

20 Nevertheless, as I have said, even if she was not present the plaintiff was aware of the visit by the valuer. The plaintiff knew that Ms Hunter was dealing with her husband and that she had dealt with him previously. The plaintiff gave evidence that, as she wanted to speak to Ms Hunter to make sure that the home loan was not involved in her husband's dealings with the CBA, on 6 July 2001 she looked up the telephone book and rang the Northern Ranges office to find out Ms Hunter's number. She then immediately rang Ms Hunter who confirmed that the home loan was not involved in Stefan's loans. The plaintiff said that Ms Hunter told her that her husband was taking out a business loan and that the repayments could be claimed on his tax. These calls were confirmed by the plaintiff's telephone records, although perhaps surprisingly the call to Ms Hunter was recorded as having been only 65 seconds in duration. In cross-examination the plaintiff estimated that the call would have probably lasted for "two minutes or so."

21 Mr Cheal valued the Property at $320,000. His valuation, which was received by the CBA on 28 June 2001, meant that Mr Wenczel's original proposal could not proceed, as far as the CBA was concerned, because there was not enough security. Ms Hunter said that in early July 2001 she discussed with Mr Wenczel a more modest refinancing of debts. She calculated that only $76,000 could be lent. Mr Wenczel's credit risk rating and financial position were assessed by Ms Hunter.

22 An application for Business Credit form was completed by Ms Hunter on behalf of WCS. It was not signed by anyone on behalf of WCS which meant that no one had to sign the declaration that "the credit to be provided ... by the Bank is to be applied wholly or predominantly for business or investment purposes, or for both purposes." The "Bank Use Only" part of the Application for Business Credit form was completed and approved by Ms Hunter on 10 July 2001. It was recognised in the form that the company's only income was through Mr Wenczel's employment rather than any business enterprise. Therefore, the sections of the form relating to the company's assets and liabilities and its profit and loss were crossed out. Instead, the personal income and expenditure of Mr and Mrs Wenczel was set out. Mr Wenczel's income was said to be $80,000, even though a letter dated 20 June 2001 from his current employer stating that his salary package was $60,000 per annum had been previously provided to the CBA by Mr Wenczel. There was a note suggesting that commissions could greatly increase Mr Wenczel's income, but it was said in the form that "servicing based on base wage." The plaintiff's income of $4,869 was also included. After subtracting the anticipated new loan and other financial commitments from the combined incomes, it was stated in the form that there was "$740 pw available to meet living expense." This no doubt influenced Ms Hunter's assessment that she considered servicing ability to be "sound". Of course, this calculation completely ignored the fact that tax of about $30,000 would have to be paid by Mr Wenczel. Rather surprisingly, Ms Hunter said that at that time servicing calculations were performed on gross income not after tax income. Another CBA employee, Ms Catherine Walters, who was a client manager with the Group Risk Management Credit Management Unit, gave evidence that it was the after tax income that should be looked at when considering serviceability.

23 Another surprising aspect of Ms Hunter's completion of the Application for Business Credit Form was that she stated that Mr Wenczel had a "sound personal balance sheet" and "good repayment history." I do not consider it necessary to set out the full history of Mr Wenczel's relationship with the CBA. It is sufficient to state that a glance at his financial statements shows that this conclusion was highly debatable given his constant overdrawing of his bank accounts and credit cards leading to frequent reversals of cheques and other payments. Further, a personal balance sheet of Mr and Mrs Wenczel as at 11 July 2001 purported to show total liabilities of $367,811 and total assets of $705,622, leaving a surplus of $337,811. However, this figure was only achieved because the value of the Property was stated to be $500,000, which had been Mr Wenczel's original estimate. That figure was used notwithstanding that Mr Cheal's valuation of $320,000 had since been provided to the CBA. In one part of the Application for Business Credit Form the value of the security offered was said to be $500,000 whereas in another part it was stated to be $320,000.

24 By a letter dated 11 July 2001 the CBA wrote to WCS advising that a "Better Business Loan" facility in the amount of $76,000 was approved subject to the signing of certain documentation. The advance of $76,000 was to be repaid by WCS over 20 years at $590 per month. The terms were accepted by Mr Wenczel signing the letter on behalf of WCS as its "Sole Director and Sole Company Secretary." His signature was purportedly witnessed by a Corey Norman Prendergast. Contrary to an express instruction on the letter the date of execution was left blank. Despite the title search of the Property, the required security was still said to be "Registered Second Mortgage by Stefan John Wenczel and Lynda Maree Wenczel" over the Property. A company search of WCS on 12 July 2001 confirmed for the CBA that Mr Wenczel was not only the sole director and secretary. He was also the sole shareholder in this $2 company.

25 The plaintiff gave evidence that on 12 July 2001 Ms Hunter rang to speak to Mr Wenczel, but he, of course, was not there. One or other of the children took the message. The plaintiff decided to ring Ms Hunter to tell her to try his mobile phone so she once again looked up the number of the Northern Ranges office and rang that number to find out Ms Hunter's number. This time the plaintiff wrote that number in the appropriate place in her telephone book. The plaintiff said that when she spoke to Ms Hunter she again clarified with her that the loan being taken out by her husband was not associated with the home mortgage because she did not want the mortgage increased. She said that there was no discussion about her giving a mortgage or guarantee to the CBA. The plaintiff's telephone records again confirmed the existence of these two calls in quick succession. The call to Ms Hunter was said to have lasted only 41 seconds.

26 On 11 July 2001 Ms Elibol sent a Documentation Request to the CBA's Loan Processing Centre ("LPC"). This form incorrectly stated that the required second mortgage was to be given by Mr and Mrs Wenczel. Ms Elibol recognised in the form that, as the plaintiff was neither an officer of the borrowing entity nor a party to the advance being secured, she was what was called by the CBA a "vulnerable guarantor." The Documentation Request was received by the LPC on 12 July 2001.

27 By an internal memorandum dated 19 July 2001 the LPC sent to the Northern Ranges office the prepared documentation, including Mortgage, Guarantee, standard form of letter to guarantor (S33 x 2), Solvency Statement, Authority to Complete and Pay, Periodical Payment/Direct Debit Authority and another form, S22H. According to a date stamp, the internal memorandum and enclosed documentation were received at the Northern Ranges branch on 20 July 2001. The internal memorandum was addressed to "Zuleyha".

28 The CBA policy setting out the correct procedure to be followed in these circumstances was contained in a document entitled "The Code of Banking Practice - Third Party Mortgagors and Guarantors" ("the Code"). The Code required a higher standard of caution be taken with respect to guarantors classified as "vulnerable". With respect to vulnerable guarantors, the Code contained the following passages:

"For vulnerable guarantors, the final page of the [What it Means to be a Guarantor] booklet is in the form of a declaration [the Guarantor's Declaration] which must be signed by the guarantor in the presence of the credit officer. The signed declaration is to be removed, witnessed and sent back to the LPC/other documentation preparation point and held as a security document.

Where the security position for a loan contains a third party who has been identified as vulnerable, the debtor is to be asked to sign a 'Consent to Disclose Information to Third Party Mortgagor(s)/Guarantor(s)' form, S346.

...

If the debtor will not sign the consent, the Bank cannot accept the guarantee unless and until the guarantor agrees to proceed without the debtors consent. ...

...

Your LPC/other documentation preparation point will then prepare, for sending to the guarantor:

• a guarantee/third party mortgage/other third party document (as the case requires);

• copies of the loan contract (eg S22) and approval letter, (provided the debtor has signed a 'Consent to Disclose Information to Third Party Mortgagor(s)/Guarantor(s)' form, S346; and

• booklet 'What it Means to be a Guarantor'.

...

... Instructions regarding the sign-up process are attached to this Supplement (see Attachment 'A' and 'B') and must be followed when documents are to be signed. Under no circumstances are the documents to be given or sent to the debtor for delivery to the guarantor.

...

Vulnerable Guarantors.

If you have asked for the documents to be sent to your business unit, you will need to arrange sign-up. Upon receipt, they should be posted to each guarantor to give them ample time to read each document and seek legal advice, if required. The covering Form S33 will ask the guarantor to telephone and make an appointment to call and sign. Follow procedures in Attachment 'A'.

Please remember:

• the guarantor must have time to read the documents and may take them away if legal advice is required;

• the debtor must not be present when the guarantor signs the documents; and

• the documents must not be sent or handed to the debtor for onforwarding to the guarantor.

Once the documents and declaration have been signed, a short diary note is to be made. The diary note should:

• confirm that the debtor was not present; and

• record the mortgagor's answers to the following questions:

1. are you signing the guarantee of your own free will?

2. do you understand what giving a guarantee involves?

If the guarantor has not obtained independent legal advice, and appears confused about the transaction or appears not to understand what is involved, the interview is to be terminated and the guarantor advised to seek legal advice. Full details of sign-up procedure are contained in Attachment 'A'.

This is an important part of the process. For the Bank to gain maximum protection, a vulnerable guarantor must fully understand the consequences of giving the guarantee and must be allowed to sign documents freely, without duress from the debtor or lender.

Attach the diary note to the signed declaration."

29 Attachment 'A', among other things, required that if the guarantor had not seen a solicitor, the interviewing officer should inform the guarantor of the debtor's deteriorating financial position and/or that the debtor's prospects were not good, if that was the reason why the CBA was taking the security. It was also stated that if the guarantor had not seen a solicitor the sign-up should ideally take place in the presence of two officers.

30 The CBA contended that by a letter dated 19 July 2001 it wrote to the plaintiff, explaining the nature and amount of the debt to be secured, and enclosing a copy of "the facility agreement" between the CBA and WCS, a booklet entitled "What it Means to be a Guarantor" ("the Guarantor's booklet") (which included a Guarantor's Declaration), a document entitled "Instructions for signing a Guarantee or Third Party Mortgage", a separate full A4 page Guarantor's Declaration and the Mortgage. The letter instructed the plaintiff to read the enclosed documents carefully and to telephone "Zuleyha" at the CBA's Northern Ranges Small Business Centre when she was ready to attend the bank and sign the documents.

31 Not surprisingly, none of the relevant witnesses called by the CBA from its Northern Ranges office could positively recall posting the letter to the plaintiff. There was no dispute that this could not have been done on 19 July 2001, as suggested by the date of the letter, because the documents had not been received at the Northern Ranges office from the LPC until 20 July 2001. It was possible, however, that the letter was posted on that day, which was a Friday, which meant that it should have been received by the plaintiff on the following Monday, 23 July 2001. Ms Elibol said in her witness statement that, although she did not believe that she arranged for the distribution of the security documentation once it was received from the LPC, if she had done it her "usual practice" would have been to post the required documents to the plaintiff in an envelope addressed to her. Significantly, however, Ms Elibol also said that:

"If a matter had been urgent, I may have delivered such a sealed envelope to a person on behalf of the guarantor or mortgagor for the purpose of delivering the sealed envelope to the guarantor or mortgagor."

In cross-examination Ms Elibol went further and appeared to agree that Mr Wenczel was on 23 July 2001 "given the guarantee documentation which he had to sign, as well as the mortgage documentation for delivery to his wife", even though she also said that she had "no recollection".

32 Although the documents had been sent to her by the LPC, Ms Elibol initially believed that the distribution had been done by Uta Hillinger, a commercial lending sales support assistant at the CBA's Northern Ranges office. This was because it was Ms Hillinger who had initialled the entry on the action sheet in relation to documents being sent to clients, including guarantors or third party mortgagors. Ms Hillinger had no actual recollection of distributing the documentation but she believed she had done so based on her initialling the relevant part of the action sheet. However, it is by no means clear that it was Ms Hillinger who distributed the documentation because she said that in the normal course if she had completed the entry "Documents sent to client" on the day she sent the documents out, she believed she would have entered the date rather than merely ticking the box, although she said that it was possible that she merely ticked the box on the date the documents were sent out by her. Alternatively, she said, it was possible that she ticked the box and put no date because at a later date she confirmed that the documents had been sent by reason of them having been returned to her office.

33 In her witness statement Ms Hillinger said that in accordance with her "usual practice" she would have posted the required documents to the plaintiff in an envelope addressed to her. Ms Hillinger further said that it had never been her "practice to give documentation meant for a third party's security provider to the borrower." This was contrary to her training that such documentation must be sent or delivered "directly to the guarantor or third party mortgagor."

34 The CBA also said that by a letter dated 19 July 2001 addressed to Mr Wenczel (at the 14 Manlangi Court address), it enclosed a guarantee of WCS's indebtedness for him to sign. Mr Wenczel signed the guarantee, which was dated 23 July 2001 in some other person's handwriting, and his signature was witnessed by Mr Prendergast. Mr Wenczel also signed a Statement of Solvency on behalf of WCS, which Ms Hillinger said she dated 23 July 2001.

35 In its initial defence the CBA pleaded that on 23 July 2001 the plaintiff attended at its Sunbury branch upon its commercial lending officer, Carol Taylor, whereupon it was recommended to the plaintiff that she obtain legal advice which she refused, that the plaintiff confirmed she had read the Guarantor's booklet and that she understood the general nature and effect of the Mortgage, and that the plaintiff told Ms Taylor she was signing the Mortgage and Guarantor's Declaration of her own free will and without pressure from any other person. The CBA said that the plaintiff then signed and dated the Guarantor's Declaration, which was witnessed by Ms Taylor signing the document, and that the plaintiff then delivered the executed Mortgage to Ms Taylor. It was said by Ms Taylor that it was her "invariable practice", which she had "never deviated from", that when she was required to witness the signature of any customer, mortgagor or guarantor, she required the individual to write his or her signature on the document whilst she observed that person doing so.

36 The relevant part of the Guarantor's Declaration signed by the plaintiff read as follows:

" GUARANTOR'S DECLARATION

Name of Guarantor: Lynda Maree Wenczel

Address of Guarantor: 14 Manlangi Court, Macedon

Guaranteed contract: Better Business Loan Terms Schedule dated 11/7/01

Names of Debtor: Wenczel Consulting Services Pty Ltd ACN 077 559 356

Address of Debtor: 14 Manlangi Court, Macedon

___________________________________________________________________________

I, the above named guarantor/third party mortgagor, state that:

• I have read the Bank's book What it Means to be a Guarantor, and understand what it tells me.

• I now understand the general nature and effect of a guarantee and third party mortgage.

• I know that the Bank recommends that I get legal advice before signing the guarantee or third party mortgage.

In this knowledge, I declare that -

• I do not need or want legal advice.

..."

37 The CBA also relied on a Diary Memorandum signed by Ms Taylor. It read as follows:

"DIARY MEMORANDUM

Date: 23rd July 2001

Loan Name: Wenczel Consulting Services Pty Ltd

Loan Number: 384010128935

Guarantor/s: Lynda Maree Wenczel

Subject: Signing of Guarantee and Guarantor's Declaration Without Seeking Legal Advice

(Credit Officer Witnessing the Declaration)

The above loan Guarantor has chosen not to seek legal advice from a solicitor prior to executing documents.

―- The Guarantor read the booklet 'What it Means to be a Guarantor' and stated that she understood the obligations as a guarantor and the contents of the booklet.

― The Guarantor did not show any signs of a disability.

― The Guarantor confirmed that the documents were being signed of his/her own free will and without pressure from any third party and not in the presence of the debtor.

― The Debtor was not present during this questioning period.

.....................

Carol Taylor

Sunbury Branch."

38 Answers to the plaintiff's interrogatories were sworn by a Credit Manager of the CBA on 23 December 2003 purportedly "after having made all due and proper enquiries of its servants and agents." They contained sworn statements that the plaintiff had signed the Guarantor's Declaration in the presence of Ms Taylor at its Sunbury branch between the hours of 9.00 a.m. and 5.00 p.m. on 23 July 2001 and that it was "believed" that the plaintiff had attended upon Ms Taylor by prior appointment and that it was "believed" that the Mortgage had been delivered by the plaintiff to either Ms Taylor at its Sunbury branch or an officer of the CBA at its Northern Ranges Small Business Centre "at some time" in the period between 23 and 25 July 2001.

39 In 2001 Ms Taylor was on "relieving staff" for the Northern Ranges Small Business Centre. As a result of subsequently locating Ms Taylor's vehicle log book the CBA realised in September 2004 that Ms Taylor had in fact been relieving at the Gisborne branch on 23 July 2001 and not at the Sunbury branch. The mistake apparently resulted from the reference to the Sunbury branch in the Diary Memorandum. Further inquiries revealed that there were CBA internal documents which confirmed that Ms Taylor was at the Gisborne branch on 23 July 2001.

40 The reference to the Sunbury branch had come about as follows. Contrary to the CBA's written instructions, Ms Taylor had not made "a short diary note" about the sign-up process on the day it allegedly took place. It appears that probably on 24 July 2001 Ms Hillinger started to list all of the documents needed before the funding could be advanced. They were:

2 Guarantee

3 Mortgage x 2 Vol 9020 Fol 043

4 Guarantor's dec.

5 Diary memo.

6 W4 (verified)."

She then realised that although she had the signed Guarantor's Declaration there was no Diary Memorandum signed by Ms Taylor. Obligingly, Ms Hillinger prepared the Diary Memorandum, rather than Ms Taylor, in accordance with what Ms Hillinger understood had occurred. Presumably, because Ms Taylor was at the Sunbury branch on 24 July 2001, Ms Hillinger inserted the reference to the Sunbury branch into the Diary Memorandum. It was not clear whether Ms Hillinger did so simply to record that that was where she assumed Ms Taylor would be when she signed the Diary Memorandum or whether she did so because she assumed that was where Ms Taylor had been on 23 July 2001. As it turned out, the Diary Memorandum was not signed until 25 July 2001 when Ms Taylor was relieving at Watergardens branch. The Diary Memorandum prepared by Ms Hillinger was faxed by her from the CBA's Northern Ranges office to its Watergardens branch at 10.59 a.m. on 25 July 2001 and having been read and signed by Ms Taylor was faxed back by her to the Northern Ranges office at 12.50 p.m. on the same day. Ms Taylor later placed the original of the Diary Memorandum in the overnight bag for return to the Northern Ranges office but a date stamp showed that it was received in error at the CBA's Brimbank area office on 7 August 2001. Ms Taylor was unable to recall how the original Guarantor's Declaration was sent by her from the Gisborne branch to the Northern Ranges office. She agreed that if it had been sent in the internal mail it should have been given a date stamp when received at the Northern Ranges office.

41 The plaintiff's case was very different. She gave evidence that she never received the letter of 19 July 2001 or the booklet entitled "What it Means to be a Guarantor". She also gave evidence that she never attended upon the Gisborne Branch of the CBA on 23 July 2001, nor met a woman named Carol Taylor, nor signed any documents in her presence.

42 The plaintiff gave evidence that on Monday, 23 July 2001, she arrived home from work at about 3.10 p.m. Luke was at home. Olivia did not come home from school until her regular arrival time of 4.10 p.m. Just before 4.00 p.m. Mr Wenczel came to the house demanding that she provide the Property as security for a new CBA loan. The plaintiff testified that she attempted to obtain from her husband the details of his indebtedness and the reasons for his needing her financial assistance, which she did not want to give, but that he became aggressive, shouting and swearing, banging his fists on the kitchen bench, and threatening to sell the Property if she did not sign the papers put before her. The plaintiff said that when she attempted to ascertain the nature of the debts she was being asked to guarantee, Mr Wenczel responded:

"I haven't got time for all this shit, just sign the fucking papers."

Later, Mr Wenczel shouted at the plaintiff that if she did not sign the papers, that was okay "as it would be easy to fix the debts by selling the fucking house." She said that Mr Wenczel did not allow her to read and digest the documents and that in the end, intimidated and distraught, she unwillingly signed the documents in tears. She said that she signed because she feared her husband would repeat his past behaviour of smashing and throwing things when angry. The plaintiff stated in cross-examination that:

"With respect, it is not easy to forget a husband enforcing upon his wife to sign documents that she did not want to sign."

She said that she was "in reconciliation mode, hoping that he would come to his senses and return to his devoted wife and loving children" and that she did not cope well with confrontation. The plaintiff gave evidence that she did not recall whether the documents had come by mail and that she had brought them in when she checked the mail box on her return from work or whether Mr Wenczel brought all the documents with him. She said that she was the first and only person to sign any of the documents at the Property. Mr Prendergast was not present. Immediately she signed the documents, Mr Wenczel picked them up and left.

43 Luke and Olivia Wenczel gave evidence which supported the plaintiff's account, in terms of their father's aggression and language. Importantly, they also supported the plaintiff's evidence about times, her denial that Mr Prendergast was present at the time she signed documents and that the plaintiff did not rush to the bank after their father left. Luke also gave evidence that when his father arrived he had "a bundle of papers in his hand."

44 Despite the plaintiff's evidence that she was not given time to read the documents she was being asked to sign, she stated that she later came to know that among the documents she signed were the Mortgage, the Guarantor's Declaration and a document entitled "Acknowledgement and Consent Nomination to Receive Notices of Proof of Identity Details" ("the Acknowledgement"), which also authorised the obtaining of credit information. She said she knew this because she recognised her signature on these documents and did not sign any documents relating to the loan at any other stage.

45 The Mortgage which had been signed by the plaintiff, allegedly in the presence of Mr Prendergast, was later dated by the CBA on 28 August 2001 and it was registered on 7 September 2001. The plaintiff gave evidence that she had subsequently spoken to Mr Prendergast about his purported witnessing of her signature and that his response was guarded and evasive. The CBA tendered affidavits of attempted service of a subpoena on Mr Prendergast.

46 The original mortgage document had pencil marks and handwriting indicating where "Lynda" was to sign and initial as mortgagor, where "the Sole Director and Sole Company Secretary" was to sign on behalf of the borrower WCS and where an "independent" witness was to sign in respect of each signature. It appears that these pencil handwritten additions on this and the other documents were done at the LPC. The separate full A4 page Guarantor's Declaration which was signed and dated by the plaintiff on 23 July 2001 also bore pencil marks and handwriting indicating where "Lynda" was to sign as guarantor, and pencil marks where the bank officer witness should sign and where a deletion had to be made in the alternative wording of the declaration regarding the obtaining or otherwise of legal advice. The Acknowledgement was the third of the documents which the plaintiff said she had signed on 23 July 2001. This document was signed by Mr Wenczel both on behalf of WCS and in his personal capacity as guarantor. Again there was a pencil handwritten addition to indicate where "Stefan" and "Lynda" should sign. The plaintiff had also printed her address on the form. Someone, but not the plaintiff, had put the date "25/7/01" below each of the three signatures. The plaintiff specifically recalled the pencil annotations on these three documents from when she signed them in her kitchen on 23 July 2001. One wonders why, if the Guarantor's Declaration was being signed in the presence of a Bank officer at a branch, there would be a need to indicate in pencil where Mrs Wenczel should sign and date the document as the Bank officer could have done this in person. Perhaps it is an indication that there was some lack of confidence in the capacity of the branch officers to understand what they required to do when witnessing the signing of a Guarantor's Declaration.

47 There were other documents dated 25 July 2001. They were an Authority to Complete and Pay signed by Mr Wenczel on behalf of WCS and witnessed by Ms Julie Hunter, and a Consent to Disclose Information to Third Party Mortgagor/s/Guarantor/s signed by Mr Wenczel on behalf of WCS. The Consent to Disclose Information form also had the name "Stefan" in pencil handwriting to indicate that he should sign on behalf of WCS. The practice of the CBA was that this form had to be signed by the borrower before any information could be disclosed to a third party mortgagor or a guarantor. Thus, it had to be signed before the Mortgage and the Guarantor's Declaration were signed, as otherwise they would be signed without any information about the borrower's financial position being disclosed by the CBA to the proposed third party mortgagor or guarantor. The date, which was the only evidence about when it might have been signed, suggested that this occurred after the plaintiff had signed the Mortgage and Guarantor's Declaration.

48 The plaintiff said that she did go to the Gisborne branch on 24 July 2001 and produced a deposit receipt for $100 dated that day. She said that she did not raise with anyone at the branch on that day the events of the previous afternoon.

49 On 25 July 2001 the following funds totalling $76,000 were advanced:

― $22,032.40 to WCS's bank account;

― $ 6,053.23 to Mr Wenczel's Mastercard account;

― $ 5,291.98 to the Wenczel superannuation fund bank account to repay an overdrawn amount; and

― $42,622.39 to pay out the contract with CBFC, a subsidiary of the CBA, for the Ford Explorer.

50 Mr Wenczel was not called as a witness. However, a statement which he provided for his ex-wife was tendered in evidence after counsel for the CBA cross-examined on it. The statement was dated 27 October 2003 and read as follows:

"To Whom It May Concern:

To the best of my recollection, I hereby wish to confirm that on the 23rd July 2001, I visited 14 Manlangi Court Macedon with the express purpose of obtaining Lynda's signature on several mortgage documents, which included a Better Business Loan.

I would like to make it quite clear that Lynda and myself did not visit the Sunbury branch to meet with Bank Officer Carol Taylor for the signing of documents.

I am unable to recall exactly where or when Corey Prendergast signed the documents, however I do not believe he witnessed Lynda's signature personally.

Documents were hand delivered to the Melton branch a day or two after the 23rd July 2001 by myself. I can't remember exactly who took receipt of them."

51 On or about 30 October 2001 Mr Wenczel told the plaintiff that he wanted a divorce. On the next day she saw a solicitor Mr Michael Lefebvre of Tress Cocks Maddox. His notes of that meeting record that the Property was estimated to be worth $380,000 less a CBA mortgage of $137,000 and an interest free loan from the plaintiff's mother of $62,000. The notes also record that there was a "CBA personal loan (secured over home)" of $75,000 which "refinanced Explorer $45,000 Amex $10,000 MC [Mastercard] $5,000 refund super a/c $5,000 cash ... $10,000." The plaintiff and Mr Lefebvre then discussed a property settlement offer made by Mr Wenczel. The plaintiff agreed that she had gained the information about the proceeds of the loan from what her husband told her on 23 July 2001. She maintained that she told Mr Lefebvre about the circumstances of the signing of the Mortgage, although there did not appear to be any reference to this in the solicitor's notes.

52 According to a facsimile from Ms Elibol to Mr Lefebvre 23 November 2001, the plaintiff had advised the CBA that she and her husband were separating and had requested it to "forward details of Business Loan funding" to him. By this time WCS was behind in its monthly payments. In her witness statement Ms Elibol said that during this telephone conversation the plaintiff "enquired as to the status of the better business loan and I told her the account was in arrears by one payment." In cross-examination she agreed that she now had no recollection of having spoken to the plaintiff. It then transpired that the assertion was based on what had been stated by Ms Elibol in a subsequent document.

53 In an internal memorandum dated 12 April 2002 Ms Elibol reported to the CBA's Credit Management Unit that the loan to WCS was "a troublesome and impaired asset." Ms Elibol stated in that memorandum, in answer to a question as to whether "the client" had been "informed of the bank's concerns and given an opportunity to address these concerns":

"Yes, letters, phone conversations

Vulnerable guarantor advised of arrears."

However, despite an instruction to attach any diary notes there was no record of any such advice being given to the plaintiff. To that date, the only letters about the arrears had been sent to the secretary of WCS. Ms Elibol said that her statement about advising the vulnerable guarantor of arrears referred to her telephone conversation with the plaintiff in November 2001.

54 The plaintiff said that on 22 November 2001, according to her telephone records, she had telephoned Ms Hunter's direct number, which was now written in her telephone book, and had spoken to Ms Elibol. This was correct because Ms Elibol had replaced Ms Hunter, who was on long service leave. The plaintiff denied being told that the Better Business Loan was in arrears. Certainly, Ms Elibol's facsimile to Mr Lefebvre made no mention of arrears. One might have expected that this was the very thing that a bank officer would tell a solicitor acting for a client who has separated from her husband and who was a guarantor/third party mortgagor of the bank's defaulting customer.

55 In a letter dated 25 November 2001 to her solicitor, the plaintiff stated:

"Michael, I appreciate that perhaps I have been a little foolish in loaning Stefan money, and going guarantor for the Better Business Loan, but when you live in hope of a reconcilliation [sic], one tends not to see things clearly and when someone has the ability to ride roughshod over you, giving in seems the best option at the time."

56 In another letter to Mr Lefebvre, dated 9 January 2002, the plaintiff wrote:

"On 19th December, 2001 Stefan visited here to discuss financial settlement details. Everything was quite amicable, as I have always wished it to be. I was most adamant that the Better Business Loan was not part of the Home Mortgage, simply security over it. Apart from the payout of Explorer vehicle (which I was prepared to sell prior to Stefan initiating the loan) all other debts were incurred by him.

...

I may have let my heart rule my head before, but now I need to think of the kids and not just myself."

57 Apart from the alleged communication in November 2001, it was not until 3 June 2002 that the CBA advised the plaintiff of the fact that the repayments were not being made. On that day it sent her a demand for payment of the sum of $78,106.80. On 5 June 2002 the plaintiff faxed the following to Ms Catherine Walters:

"As you can imagine, I was distressed to receive your letter dated 3rd June, 2002 re the above account.

You may or may not be aware that my husband and I separated in February, 2001 and the divorce will be final 9th June, 2002.

Judging from the nature of your letter, I assume that Stefan has defaulted on the loan - could you please advise me of these details. Since our separation I have been meeting the mortgage payments on the family home in which the two children and myself still reside.

I will be informing my solicitor and hope to be able to come up with a proposal."

58 The plaintiff's immediate response to this CBA letter is in contrast to her suggested failure to follow up the alleged advice from Ms Elibol of November 2001 that the Better Business Loan was in arrears.

59 In a Call Report or file note dated 6 June 2002 Ms Walters recorded that she had spoken to the plaintiff. It was noted that Mrs Wenczel had said that she provided the security for the business loan but that she was in no way involved with the company. The Call Report continued:

"The company does not operate as a business but is effectively just a trust account. Mr Wenczel is earning an income and can afford to make the required loan repayments but has not done so since 27 December 2001. Mrs Wenczel is making the loan repayments on the home loan.

Mrs Wenczel explained that the purpose of the BBL was to repay a number of debts including his credit cards and a vehicle loan. However, some of the funds were not used for this purpose: $5,000 was paid into Mr Wenczel's superannuation fund, $22,000 was used for his personal expenses and entertainment (as explained by her husband's solicitor).

Mrs Wenczel will seek legal advise on her situation and get back to me to advise what action is to be taken. I explained that the demands expire 14 days from the date of issue, after which the Bank's legal department will commence action to recover the outstanding debt."

60 In an email to Mr Lefebvre on the same day the plaintiff stated:

"This is a very serious issue and I'm not sure how to tackle it. As you are aware, he took out the loan to consolidate his debts. He initially wanted to include the house mortgage as well, but I didn't agree to it and the bank didn't want to change the mortgage either. He has always referred to it as 'refinancing the home loan' - but it clearly isn't."

61 On 19 June 2002 the plaintiff emailed Ms Walters the following:

"A financial settlement proposal will be sent to my ex-husband's solicitor today - I will be making attempts to have superannuation monies released to offset the above debt.

The legal system never ceases to amaze me - Stefan takes out Better Business Loan and has access to funds; I guarantee loan because at the time, I was letting my heart rule my head; he defaults on loan and I end up wearing it. Morality and ethics don't come into it.

Please be assured that I will be doing everything in my power to avoid losing our home.

I trust that the bank will be understanding and grant me some extra time to sort this out."

62 On 12 August 2002 consent orders between Mr and Mrs Wenczel were made in the Federal Magistrates' Court of Australia. The minutes recorded, amongst other things, that Mrs Wenczel agreed that she would indemnify Mr Wenczel against "all payments and liability" pursuant to the two registered mortgages held by the CBA, and that Mr Wenczel would transfer to Mrs Wenczel "all his right, title and interest" in a Ford Explorer motor vehicle and a Statesman motor vehicle.

63 On the following day, the plaintiff emailed Ms Walters:

"Property Settlement Hearing was held yesterday and I hereby wish to advise the following:

I retain property at 14 Manlangi Court, Macedon and in doing so, take on the Better Business Loan debt.

Therefore, I will need to speak with either yourself or someone you nominate soon to discuss how I do this.

Michael Lefebvre will also be advising you formally of this information. Could you please advise me of what course of action can be taken, i.e. either extending existing home mortgage term to lessen monthly repayment and keep BBL loan repayment separate. Or alternatively, lump everything together into one manageable monthly repayment.

I await your advice."

The plaintiff was now in full time employment.

64 By a letter dated 16 August 2002 the plaintiff again wrote to the CBA seeking to refinance her home loan in conjunction with the Better Business Loan. The letter contained the following statement:

"Due to the outcome of a Property Settlement Hearing on 12th August, 2002, arising from Divorce proceedings which became official on 9th June, 2002, I have inherited a Better Business Loan (BBL) Debt from my ex-husband. He initiated the loan in August, 2001 to consolidate his debts and I foolishly signed papers securing the loan."

65 In further communication with officers of the CBA the plaintiff stated the following in an email dated 26 August 2002:

"Please understand that I signed as guarantor of the BBL under duress during our separation, and if I knew then what I know now, I certainly would not have signed."

66 Following the CBA's rejection of the plaintiff's application to refinance the home loan to include the Better Business Loan in one lower monthly payment, on the basis that the commitment level was too high, the plaintiff sought an urgent meeting with Ms Walters. Her Call Report noted that:

"Mrs Wenczel explained the background to her situation. She said that she signed the mortgage documents securing her ex-husband's debts under duress. She realises now that she should not have signed them."

67 A similar statement was made by the plaintiff in a letter to the Banking Ombudsman dated 26 October 2002:

"In February, 2001 after 26 years of marriage, my husband decided he 'needed some space to sort himself out'. In July 2001, he took out a Better Business Loan with the CBA (Account No.: 3840 1012 8935) for the sum of $75,000. The bank wanted some form of security over the loan. Under duress and in front of our two children (son 20 and daughter 17) he forced me to sign as guarantor, leaving the family home which is in my name, as security over his loan.

At the time, I was in reconciliation mode, hoping that he would come to his senses and return to his loving wife and devoted children, hence the fact that I, although unwillingly, put pen to paper.

He was to maintain the loan at $590.00 per month (which he said he could claim on tax).

On 3rd June, 2002 I received a 'letter of demand' for payment of monies re above loan, from the Group Risk Management Branch of the CBA. (Refer copy of letter attached). When I queried why I had received this letter, I was told the loan was in default and six (6) months in arrears.

I was informed by a bank employee that it is standard bank policy to inform guarantors of any loan default well prior to receiving a 'letter of demand for payment'; this did not happen in my case.

The upshot of this action brought about Property Settlement proceedings on 12th August, 2002. Ultimately, because I wanted to keep the family home (and maintain mortgage payments) I also ended up wearing the Better Business Loan debt."

68 By an email dated 31 October 2002 Ms Walters advised the plaintiff that the CBA's final decision was that it would not refinance the home loan and the Better Business Loan as it was not prepared to go outside its commercial guidelines and because the level of commitment required to service the loan was too high. This was despite an offer by the plaintiff's parents to reduce the total debt level by paying $20,000. The CBA did, however, agree to refund the penalty interest charged on the Better Business Loan because of the failure before 3 June 2002 to notify the plaintiff that the loan was in default. The plaintiff was advised to seek the full refinance of the outstanding debt through another financial institution.

69 The plaintiff did go down that track and obtained an offer to refinance from Aussie Home Loans. In the meantime, however, the plaintiff had consulted new solicitors. On 18 November 2002 she conferred with Lillian Cooney of Gill Kane & Brophy. Again, the plaintiff said that she mentioned the circumstances of the signing of the Mortgage. The following is an extract from Ms Cooney's notes:

"Stefan brought guarantee to home. Children know I was forced to sign and didn't want."

70 By a letter dated 25 November 2002, Gill Kane & Brophy wrote to the CBA seeking a discharge of the Mortgage. In their letter of demand the solicitors stated:

"We are instructed that the mortgage so registered was signed by our client under duress, without any direct contact from the Bank, or any independent advice, or any recommendation from the Bank that independent advice should be obtained by her. The whole of the loan monies was provided to Wenczel Consulting Services Pty Ltd and our client has at no time received any benefit therefrom.

When the borrower failed to make the payments required of it under the said loan, the Bank failed to advise our client of such default.

Our client had an existing mortgage with your Bank on the security of the said property. All payments required under this mortgage have always been paid by her without default, and there is currently no default in respect of this mortgage.

You are advised that any attempt by the Bank to recover monies from our client or to execute under the third party Guarantee mortgage will be strenuously resisted. It is our view that the Guarantee mortgage is not legally binding upon our client. Unless a discharge thereof is provided by the Bank within fourteen days of the date hereof, legal proceedings will be taken seeking an order for the Guarantee mortgage to be expunged from our client's title."

71 The CBA's solicitor responded by a letter dated 3 December 2002 which enclosed copies of the Guarantor's Declaration and the Diary Memorandum. It was suggested that Mrs Wenczel's allegations were "incorrect and made without regard to factual circumstances." The plaintiff's solicitor replied by a letter dated 11 December 2002:

"Thank you for your letter of 3rd December 2002 with enclosures. I have shown them to my client. She confirms that the mortgage documents were brought to her home by her husband (separated since 13th February 2001), and he asked her to sign them then and there in front of his children. She did so. There was no other witness.

To the best of her knowledge she does not know, and has never met, any person known as 'Carol Taylor'.

It would appear that the documents contained in your letter of 3rd December 2002 are fraudulent.

Our client was provided with no copies of the mortgage guarantee documents.

In light of this further information, the bank may wish to reconsider its decision not to discharge the mortgage. However, if we have not heard from you to this effect by 4 p.m. on Monday 16th instant, the legal proceedings foreshadowed in our letter of 25th November 2002 will be commenced without further notice."

72 As the parties could not agree on what had occurred or the legal consequences, the plaintiff commenced this proceeding.

Some Factual Findings

73 At this stage, before the evidence surrounding the circumstances of the signing of the Mortgage is evaluated, it is appropriate to set out my views about the credibility and recollection of the witnesses in this case.

74 The plaintiff immediately impressed me, when giving her evidence, as a woman of candour and honesty. This is not to say that she did not suffer from the occasional memory loss or that I necessarily accept everything that she said. It is just that I consider that she was at all times doing her best to honestly recount these obviously stressful events. Indeed, she was so patently honest as a witness that on occasions she gave potentially unhelpful answers when she could easily have fudged her response or even told an untruth without any risk of correction. An example of this was when she said, in answer to a question from me, that the mail arrived at her home "always a little bit before ten." This left open the possibility that she could have received the letter dated 19 July 2001 from the CBA on the morning of 23 July 2001 and visited the Gisborne branch to sign the Guarantor's Declarations before going to work. An untruthful witness could have eliminated that possibility by adding an hour or two to the regular delivery time for the mail without any fear of contradiction.

75 Nothing I have read in the transcript or the documentary evidence in the intervening period has caused me to alter my view of the plaintiff as an honest and credible witness.

76 Further, as Mr Klempfner of counsel, who appeared on behalf of the plaintiff, submitted, the plaintiff's evidence in cross-examination, which spanned three days, was consistent across that lengthy period. Moreover, the plaintiff's version of events has remained consistent from her earliest correspondence with the CBA, through to the end of the litigation. Generally, when her recollection was imperfect in relation to certain matters raised by the CBA, she readily admitted as much under cross-examination. However, as to the critical issues of the circumstances in which the Mortgage and Guarantor's Declaration were signed and her understanding of the purport and effect of the Mortgage, her recollection was clear and consistent.

77 Ms Loughnan of counsel, who appeared on behalf of the CBA, submitted that the Court should give consideration to a number of inconsistencies and errors in the plaintiff's evidence when assessing her credibility and, when it was at odds with the evidence of the CBA's witnesses, give preference to the latter. Ms Loughnan highlighted seven instances in which, she submitted, the plaintiff's evidence could be said to be erroneous, inconsistent or unreliable. The first instance was that the plaintiff gave evidence that the debt to her mother of $62,000 incurred in the restructuring of the Retail Resources Group debt was presently outstanding. However, in a facsimile letter dated 28 August 2002, which was sent to the CBA in the course of the plaintiff's application to refinance the home loan and Better Business Loan the plaintiff had stated that the "loan to Mrs Iris Dawes (my mother) has been wiped from slate." I consider that both statements could be true. Mrs Dawes may well have told her daughter that the loan did not have to be repaid, whilst at the same time the plaintiff may have regarded herself as morally and emotionally still obliged to repay to her mother the financial assistance previously given. In the 2002 negotiations with the CBA, the plaintiff was adamant that her parents were not to give the bank the suggested security by mortgaging their valuable home.

78 The second instance concerned telephone calls made from the plaintiff's telephone to her husband's mobile phone. Both Luke and Olivia Wenczel gave evidence that after the date of separation they could not recall ever making a telephone call to their father, although Luke stated he spoke to him, presumably having received a call from him, about once a fortnight. The plaintiff also said she called her husband only occasionally after the separation and denied making a call to Mr Wenczel's mobile phone on 26 July 2001 (3 days after the mortgage documents were signed) and another call of some 7 minutes' duration on 28 July 2001, both of which appeared on the plaintiff's telephone accounts. She also stated she had no knowledge of her children making such calls. Ms Loughnan submitted that the appropriate inference to draw was that the plaintiff was telephoning Mr Wenczel on a regular basis immediately before and after 23 July 2001. It seems to me that this would hardly be surprising given that the plaintiff was hoping to effect a reconciliation with her husband. Nor was it surprising that after nearly four years the plaintiff said that she could not recall doing so.

79 The third instance was the dispute about whether the plaintiff was at home when the valuer, Mr Cheal, attended at the Property on 26 June 2001. I have already set out the conflicting evidence about this in paragraphs 16 to 20 above. Ms Loughnan submitted that relevant documents such as the plaintiff's pay slips should have been discovered. Indeed, she pointed out that discovery of documents relating to the plaintiff's employment over the relevant period had been specifically requested by the CBA's solicitors in October 2004. Ms Loughnan submitted that the plaintiff's conduct in this respect was suggestive of a lack of candour on her part. Ms Loughnan further submitted that the vagueness of the plaintiff's recollection of and responses to questions about the visit by Mr Cheal seemed incredible given her sworn opposition to the land being offered as security for the Better Business Loan.

80 I have concluded that this is one instance where I cannot accept that the plaintiff's evidence was correct. In my view the plaintiff was probably home when Mr Cheal came to value the Property on 26 June 2001, otherwise he would not have been able to note the very specific matters previously mentioned. Although Mr Wenczel was Mr Cheal's contact I do not consider it likely that this information was given by him. Thus, in my opinion, both the plaintiff and Luke were mistaken in their recollection that the plaintiff was not present during Mr Cheal's inspection. I accept that Luke was home on that day and that he did have the conversation with Mr Cheal about which he gave evidence. Nevertheless, the importance of this failure of memory is greatly reduced because, as I have previously said, the plaintiff did not deny that she knew that there had been a valuer inspecting the property. No doubt it was this visit which led the plaintiff to decide to attempt to speak to Ms Hunter at the bank, which she did on 6 July 2001.

81 The fourth instance was that the plaintiff did not inform the CBA of her separation from her husband, which Ms Loughnan submitted demonstrated a lack of bona fides. The plaintiff gave clear evidence that she understood that had the fact of their separation been known to the CBA it would have had a "disastrous effect" on her husband's chances of securing a loan. She said in cross-examination: "I couldn't understand how the bank could loan someone so much money with the understanding that two people weren't together." Ms Loughnan submitted that if the plaintiff genuinely opposed to the Property being security for the loan, she would have disabused the CBA of its misunderstanding regarding the status of the marriage at the earliest possible opportunity. However, as I see it, the plaintiff was caught in something of a bind. On the one hand, she did not want to do anything to jeopardise Mr Wenczel's chances of obtaining the consolidating loan, and thereby upset her hopes of a reconciliation. On the other hand, she was determined that the home loan was not to be involved in her husband's dealings with the CBA. Thus, the plaintiff sought and obtained the required reassurance from Ms Hunter in the telephone calls on 6 July and 12 July, while on the later date she also assisted Ms Hunter to make contact with Mr Wenczel.

82 The fifth instance was that the plaintiff did not quickly inform bank personnel of the events which she alleged had occurred in her kitchen with Mr Wenczel on 23 July 2001. Ms Loughnan submitted that the plaintiff had a perfect opportunity to do so prior to the funding, (which occurred in the afternoon of 25 July 2001), in the course of her attendance at the Gisborne branch on 24 July 2001. The plaintiff said that it had not occurred to her to raise the circumstances of her signing the Mortgage and the Guarantor's Declaration with the manager at the Gisborne branch on 24 July 2001 because at that time she did not know "that on the 3rd of June 2002 that I was going to get a letter of default, saying that my husband hadn't paid the loan payments." When cross-examined about why she did not inform anyone at the CBA, at any stage in the following months, of the events of 23 July 2001 the plaintiff responded:

"... because I didn't know the after shot as to what was going to happen. I assumed that he got what he wanted, that he would meet his obligation by paying the $590.00 a month. I never knew it was going to fall back in my lap."

83 The sixth instance was that at one point in her evidence the plaintiff denied having any idea of what the value of the Property was on 23 July 2001. However, at another stage in her evidence it emerged that she had probably told her solicitor, Mr Lefebvre, on 31 October 2001, that the Property had an estimated value of $380,000. There was no evidence of an intervening valuation of Property during that period.

84 Finally, it was submitted by Ms Loughnan that the plaintiff's answers to questions about her allowing Mr Wenczel to hold a key to the home after the date of separation were evasive and unconvincing, and that the answers given in re-examination were not consistent with those already given in cross-examination.

85 I consider these last three criticisms of the plaintiff's evidence to be relatively minor and largely irrelevant to the question of her credibility as a witness.

86 The obvious but nevertheless very important point to be made about the evidence of the CBA branch officers, Carol Taylor, Julie Hunter, Zuleyha Elibol and Uta Hillinger, is that they had very limited recollection and knowledge of the facts giving rise to this dispute. For example, Ms Taylor, the purported witness of the plaintiff's signing of the Guarantor's Declaration, admitted that she had absolutely no recollection of the sign-up process. It was also clear from the evidence that she also had no recollection of the transaction when the question of the false witnessing of the Guarantor's Declaration was first raised by the plaintiff's solicitors in December 2002. Indeed, when first asked about this event, Ms Taylor was misled by the terms of the Diary Memorandum into stating that she "would have worked on the file while at Sunbury branch", when she was relieving there, whereas as previously stated she was actually at the Gisborne branch on the date the documents were signed.

87 This is not a criticism of these witnesses because it was to be expected that they would have difficulty in remembering the details of this transaction given that they would have been involved in numerous other transactions in the intervening period of nearly four years. Nevertheless, it has to be recognised that their evidence was largely, if not totally, based on reconstructing from the documents what they thought had occurred and relying on the belief that they "would" have followed the CBA policy.

88 I consider that such evidence is to be given less weight than sworn evidence of actual and clear recollection if the evidence of purported recollection is otherwise credible. The inference that the relevant CBA branch officer or officers followed the Code of Banking Practice in respect of the witnessing of the Guarantor's Declaration because she or they always followed the Code was not easily drawn given that there was evidence of other instances of non-compliance with the Code.

89 A further matter to consider is the CBA's submission that the appropriate adverse inferences should be drawn pursuant to the principle in Jones v Dunkel[1] in respect of the plaintiff's failure without explanation to call Mr Wenczel, Mr Prendergast, Mr Lefebvre or Ms Cooney as witnesses. It is clear, however, that the principle cannot be applied to the non-calling of a witness unless it would be natural for the party to call the witness, or the party might reasonably be expected to call a witness[2], or "the missing witness would be expected to be called by one party rather than another."[3] Further, the principle cannot be applied unless the missing witness' "evidence would elucidate a particular matter."[4]

90 Ms Loughnan submitted that Mr Wenczel should be seen as clearly being in the plaintiff's camp. He had provided the statement and could have supported by evidence on oath the plaintiff's version of events. I do not agree. It seems to me to be quite unrealistic to suggest that the plaintiff should have called her ex-husband to give evidence that he had forced his then wife to sign a document and that he had then arranged for his friend to falsely witness the plaintiff's signature. Obviously, neither the CBA nor the plaintiff were prepared to run the risk of calling Mr Wenczel, helpful though his honest evidence would have been, and no adverse inference should be drawn against the plaintiff for not calling him. I note in passing that I have placed virtually no weight on Mr Wenczel's unsworn statement, about which he was not cross-examined.

91 I also consider that Mr Prendergast cannot be regarded as a witness that the plaintiff might reasonably have been expected to call. On the plaintiff's version, Mr Prendergast must have falsely witnessed her signature. No adverse inference can therefore be drawn from the non-calling of him as a witness.

92 Given that both Mr Lefebvre's notes and Ms Cooney's notes of their initial conferences with the plaintiff were tendered in evidence, I have difficulty in understanding why it was said that they should have been called as witnesses, particularly when Ms Cooney's notes contained the reference to the plaintiff being forced to sign. As over three years had elapsed since Mr Lefebvre's meeting with the plaintiff, I am prepared to proceed on the basis that he could add nothing to what he had recorded in his notes. In the circumstances, I consider that no adverse inference can be drawn against the plaintiff for not calling either Mr Lefebvre or Ms Cooney.

93 I turn then to my factual findings about the events surrounding the signing by the plaintiff of the Mortgage, the Guarantor's Declaration and the Acknowledgement on 23 July 2001.

94 First, I accept the plaintiff's evidence that she reluctantly signed these documents in the kitchen of her home at about 4.30 p.m. on that day as a result of the pressure imposed on her by Mr Wenczel. Her evidence about this aspect was supported in all relevant respects by the evidence of her children, Luke and Olivia. I find that Luke Wenczel and Olivia Wenczel were truthful and credible witnesses.

95 I further find that Mr Wenczel brought these documents to the Property on that occasion and that they were not posted to the plaintiff. I accept Luke Wenczel's evidence that his father had telephoned earlier on 23 July to say that he would come later that day and that he arrived at the Property with a bundle of papers in his hand. I find that Mr Wenczel had collected the letter addressed to his wife and the enclosed documents, the letter addressed to him and the enclosed guarantee, and the other documents required to be signed on behalf of WCS such as the Acknowledgement, from the Northern Ranges office on 23 July 2001. Although Ms Hillinger denied that she would have ever given an envelope containing documents to a person on behalf of the mortgagor for the purpose of delivering the sealed envelope to the mortgagor, Ms Elibol conceded that in urgent situations she may have done so. This was contrary to the CBA's Code of Banking Practice. That Mr Wenczel was at the Northern Ranges office on or about 23 July is supported by two facts. First, the Statement of Solvency signed by Mr Wenczel was dated 23 July 2001 by Ms Hillinger. She agreed that there was no need to back date such a document and that in the usual course she would date the document on the day it was signed. Secondly, no letter addressed to WCS enclosing the other documents required to be signed on its behalf, such as the Acknowledgement, was discovered by the CBA. This suggests to me that these documents were collected in person by Mr Wenczel and not posted to the company.

96 The plaintiff denied ever seeing or receiving the letter addressed to her from the CBA dated 19 July 2001 or the Guarantor's booklet. No such documents were discovered by her. The plaintiff was a methodical and well-organised person, evidenced by her meticulous maintenance of household records, supermarket dockets, bank statements, individual payslips and the like. I accept that if she had received such documents they would have been retained in her files. It is also instructive that the relevant entry on the action sheet for "Documents sent to client" bore no date, merely a tick and initials by Ms Hillinger. One possible explanation for the omission of a date was that the documents, including the documents for the guarantor and third party mortgagor, were not posted but handed to Mr Wenczel, and that Ms Hillinger later ticked the box knowing by then that the relevant documents had been returned, so that they must have been sent at some earlier unknown date.

97 All of this evidence is supportive of the finding that Mr Wenczel was entrusted with the relevant documents, including the documents intended for the plaintiff, by someone at the Northern Ranges office on 23 July 2001.

98 Next, I find that the plaintiff did not attend at the CBA's Gisborne branch on 23 July 2001 and sign the Guarantor's Declaration in the presence of Ms Taylor. Her denial that she did go to the Gisborne branch was supported by a number of matters.

99 First, the CBA's letter of 19 July 2001 purporting to enclose the security and other relevant documents requested that the plaintiff telephone "Zuleyha" at the Northern Ranges Small Business Centre to arrange a time to call and sign the documents. As discussed earlier, the security documents were not received at the North Ranges branch until 20 July 2001, which was a Friday, and therefore, even if they were posted that same day, they could not have arrived at the plaintiff's mail box until Monday 23 July 2001. This was therefore the first opportunity the plaintiff would have had to contact Ms Elibol as requested. However, the plaintiff's telephone records indicate that no call was made to that destination on 23 July 2001, nor any day immediately prior thereto. Ms Elibol confirmed that she had no recollection of the plaintiff contacting her. In the absence of a telephone call to Ms Elibol, the plaintiff could not have known that she could attend the Gisborne branch, as opposed to the Northern Ranges branch or some other branch, for the sign up.

100 Secondly, the branch diaries for the Gisborne and Sunbury branches for 23 July 2001 make no reference to an appointment made by Mrs Wenczel. Without an appointment the plaintiff probably would not have been able to gain admittance to a branch after 4.00 p.m.

101 Thirdly, it would seem that the plaintiff was not physically able to attend the Gisborne branch on 23 July 2001. On that day she was working at the Marist Brothers' Retreat Centre between 11.00 a.m. and 3.00 p.m. Brother Jack Skehan, her supervisor, gave evidence that he would have noticed the plaintiff's absence from work during those hours. The plaintiff gave evidence that she would not have checked the mail before work, and in any case would not have had time call into the Gisborne branch before work. She further gave evidence that she would not have attended the Gisborne branch in her smelly work clothes. I have no doubt that this particular statement by the plaintiff was truthful. Thus, the plaintiff would have had only one hour between finishing work and the bank closing, to return from work, check the mail, decide what to do about this requested financial commitment, change her clothes, drive to the Gisborne branch and meet Ms Taylor. She would then have had to leave the bank before 4.00 p.m. in order for her to be at home when her daughter, Olivia, arrived home from school at 4.10 p.m. I find it improbable that all this could be physically achieved in one hour. In any case, Olivia gave evidence that when she arrived home her mother was still in her Marist Brothers uniform. Moreover, Luke's evidence was that his mother did not leave home after she returned from work.

102 It was submitted on behalf of the CBA that the most likely scenario was that the plaintiff went to the Gisborne branch between 10.00 and 11.00 on the morning of 23 July. I do not accept that this occurred. It would mean that the plaintiff brought in the mail as soon as it arrived, which she said she did not do, opened the envelope from the CBA, read the enclosed documents and decided of her own free will to drive to the Gisborne branch with the unsigned Guarantor's Declaration without contacting "Zuleyha" at the Northern Ranges office as instructed in the letter, explained why she had come to the branch, met Ms Taylor and answered her questions, left the branch and driven to work and been able to start on time, all in the space of less than an hour. In my opinion, it is a most unlikely scenario. Moreover, it is completely contrary to the credible evidence of the plaintiff and her two children about the events of that afternoon.

103 Obviously, the most difficult obstacle confronting acceptance of the plaintiff's account is that the signing of the Guarantor's Declaration by the plaintiff was purportedly witnessed by Ms Taylor. Nevertheless, I have concluded that in the light of the plaintiff's evidence I cannot accept that Ms Taylor witnessed the plaintiff signing the Guarantor's Declaration or took her through the required question and answer session to establish that she did not want legal advice and that she understood the general nature and effect of what she was signing.

104 First, as previously discussed, there is the fact that Ms Taylor had no recollection of the transaction and therefore could only give evidence of what she would or would not have done. This was to be compared with the plaintiff's consistent and unequivocal denial that she had signed any documents in front of Ms Taylor at the Gisborne (or the Sunbury) branch on 23 July 2001.

105 Secondly, there were the problems surrounding the Diary Memorandum, which was intended to be the CBA's contemporaneous record of the sign up. According to the CBA's Code of Banking Practice, a short diary note was to be made "once the documents and declaration have been signed" and the note then attached to the signed declaration. It is implicit in this instruction that it is the bank officer who asked the required questions and witnessed the signing who should make the contemporaneous record of what had occurred. As previously discussed, this is not what occurred on this occasion. No contemporaneous note of what had occurred on 23 July was prepared by Ms Taylor and attached to the signed declaration. Instead, the Diary Memorandum was prepared in standard form probably by Ms Hillinger on 24 or 25 July and faxed to Ms Taylor for her signature on 25 July. The signed Memorandum was faxed back to Ms Hillinger on the same day, but the original Memorandum ended up at the Brimbank branch on 7 August 2001. Presumably, at some stage the copy or the original Memorandum was attached to the signed declaration by Ms Hillinger.

106 The fact that the Diary Memorandum drafted by Ms Hillinger showed Ms Taylor as being at the Sunbury branch suggests that there was very little, if any, discussion between Ms Taylor and Ms Hillinger before the Memorandum was prepared. Otherwise Ms Taylor would have been described as being at the Gisborne branch because the Memorandum was clearly intended to look like a contemporaneous document, thus the date 23 July 2001, even though it was not signed on that day. The fact that Ms Taylor did not correct the reference to the Sunbury branch suggests at the very least that she did not pay much attention to the wording of the Memorandum. Otherwise, one might have expected that she would have changed the branch name to Gisborne, being the branch where she allegedly witnessed the signing, or to Watergardens, being the branch where she was signing the Memorandum. Either way, there was no reason to mention the Sunbury branch. The fact that Ms Taylor failed to follow the correct procedure and to correct any of these errors raises doubts in my mind about the extent of her involvement in the sign up.

107 Finally, there is the issue of how Ms Taylor knew what to do with the documents once she had spoken to the plaintiff and how the documents went from the Gisborne branch to the Northern Ranges office.

108 The Guarantor's Declaration was not date stamped, which it should have been if it had been received at the Northern Ranges office through internal mail. This was the means by which Ms Taylor suggested, in the absence of actual recollection, that she would have forwarded it to that office. Ms Taylor said it was usual for documents sent through the Bank's internal mail system to be date stamped on receipt, while documents handed "over the counter" or sent by fax were not date stamped.

109 One matter arguably lending some support to the CBA's version of events was the expert evidence of Mr Neil Holland that it was highly probable that the plaintiff's signature and Ms Taylor's signature were both written using the same black paste ink and that this ink matched an ink used in Bic brand writing instruments. However, Mr Holland also concluded that he was unable to establish that the same writing instrument was used for both signatures. Given what I understand to be the popularity of this type of biro, I cannot rule out that this was simply a coincidence.

110 Moreover, Mr Klempfner criticised the failure of the CBA to instruct the handwriting expert to examine the ink paste used in the plaintiff's other original signatures, on the Mortgage and the Acknowledgement, and Mr Wenczel's signatures on his Guarantee, the Mortgage and the Acknowledgment. Given that the Diary Memorandum suggested that the Debtor was not present during the questioning period it would have been of assistance to know whether the expert held the opinion that the ink paste used in Mr Wenczel's signatures was the same as the ink paste appearing on the Guarantor's Declaration. Finally, Mr Klempfner drew attention to the fact that the plaintiff's evidence that Mr Wenczel handed her the pen with which she signed the documents was not challenged by the CBA. All in all, it was hard to see that the limited expert evidence took the matter any further.

111 Although in one sense the plaintiff was not required to establish how it came about that the CBA held a Guarantor's Declaration signed by her and witnessed by Ms Taylor and the Mortgage signed by her and witnessed by Mr Prendergast and the Acknowledgement signed by her, it was obviously helpful to acceptance of her version of events if the relevant circumstances could be satisfactorily explained. It seems to me that what probably occurred was that after the plaintiff had signed the three documents in question, Mr Wenczel took them on the same day to his friend Mr Prendergast who witnessed Mr Wenczel's signature on the Guarantee and purportedly witnessed the plaintiff's signature on the Mortgage. Early on the following day, Mr Wenczel took the documents back to the Northern Ranges office and somehow or other persuaded one of the CBA's officers that there was no issue about his wife's agreement and that officer asked Ms Taylor, who like Ms Hunter had the necessary seniority to witness such a document, to sign as witness in order to avoid having to trouble Mrs Wenczel to come in to the office in Melton to sign again. Ms Hunter was not available because she was about to go on long service leave. It was possible that Ms Taylor was present at the Northern Ranges office early that morning prior to going out to perform her relieving duties at the Sunbury branch. She may even have been present to ascertain at which branch she was rostered to relieve. (Of course, that possibility also means that this was how Ms Taylor delivered the documents signed at the Gisborne branch to the Northern Ranges office without using the internal mail.) All of the undated documents were then dated "25/07/01" probably by Ms Hillinger when she was finalising the funding arrangements on that day.

112 The suggestion that officers of the CBA flagrantly disregarded their instructions on the correct procedure for completing various documents and indeed falsely purported to have told the plaintiff certain required information and witnessed her signature is a serious one and is not to be made lightly. However, this conclusion is more easily reached when the true circumstances of the creation of the Diary Memorandum are understood and when it is appreciated that other breaches of the CBA's Code of Banking Practice occurred. In particular, nowhere in the letter of 19 July 2001 was there any reference to the CBA forwarding to the plaintiff information about Mr Wenczel's financial position or the way in which the proposed loan was to be disbursed. Indeed, until Mr Wenczel signed the Consent to Disclose Information form, which was dated 25 July 2001, it would have been contrary to the CBA's Code of Banking Practice to disclose any such information to the plaintiff. If Mr Wenczel did not sign that document until 24 or 25 July, then no relevant information could have been disclosed to the plaintiff before she signed the Guarantor's Declaration or if it were disclosed it was in breach of the CBA's Code. In any event, Ms Taylor was never in a position at the Gisborne branch to explain the detail of WCS's or Mr Wenczel's financial position to the plaintiff before she signed the Guarantor's Declaration and handed over the Mortgage.

The Plaintiff's Causes of Action

113 In his submissions on behalf of the plaintiff, Mr Klempfner pointed out that the plaintiff's four causes of action, the "married woman's equity", undue influence, duress and unconscionability, all arose out of the same set of facts. He submitted that it was neither surprising nor inappropriate that the causes of action overlapped to a considerable degree, rather than being mutually exclusive. For example, in Commercial Bank of Australia Ltd v Amadio[5] Mason J, after identifying the essential difference between unconscionable conduct and undue influence, went on to comment:

"There is no reason for thinking that the two remedies are mutually exclusive in the sense that only one of them is available in a particular situation to the exclusion of the other. Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent and voluntary will, is unable to make a worthwhile judgment as to what is in his best interest."

114 Mr Klempfner submitted that the unifying theme running through all of the plaintiff's causes of action was her appeal to the Court to set aside the Mortgage to the CBA on the ground that to allow it to stand would offend equity and good conscience. Nevertheless, it is appropriate to consider each of the plaintiff's causes of action separately.

The "Married Woman's Equity"

115 In Yerkey v Jones[6] Dixon J enunciated the principle which later became known as the "married woman's equity". His Honour said that:

"if a married woman's consent to become surety for her husband's debt is procured by the husband and without understanding its effect in essential respects she executes an instrument of suretyship which the creditor accepts without dealing directly with her personally, she has a prima-facie right to have it set aside."[7]

116 Later in his judgment, Dixon J contrasted the requirements for making out a case of undue influence and the requirements for "married woman's equity". His Honour said:

"But it is clearly necessary to distinguish between, on the one hand, cases in which a wife, alive to the nature and effect of the obligation she is undertaking, is procured to become her husband's surety by the exertion by him upon her of undue influence, affirmatively established, and on the other hand, cases where she does not understand the effect of the document or the nature of the transaction of suretyship. In the former case the fact that the creditor, on the occasion, for example, of the actual execution of the instrument, deals directly with the wife and explains the effect of the document to her will not protect him. Nothing but independent advice or relief from the ascendancy of her husband over her judgment and will would suffice. If the creditor has left it to the husband to obtain his wife's consent to become surety and no more is done independently of the husband than to ascertain that she understands what she is doing, then, if it turns out that she is in fact acting under the undue influence of her husband, it seems that the transaction will be voidable at her instance as against the creditor. It is not clear how far the same principle is to be applied to a case where the wife is induced to become surety by the husband making some fraudulent or even innocent misrepresentation of fact which, though material, does not go the nature and effect of the instrument or transaction. It may be said that the making of such a representation is no more to be anticipated by a creditor when a husband procures his wife's guarantee than when any other principal debtor procures a surety. On the other hand, the basal reason for binding the creditor with equities arising from the conduct of the husband is that in substance, if not technically, the wife is a volunteer conferring an important advantage upon her husband who in virtue of his position has an opportunity of abusing the confidence she may be expected to place in him and the creditor relies upon the person in that position to obtain her agreement to become his surety. Misrepresentation as well as undue influence is a means of abusing the confidence that may be expected to arise out of the relation.

In the second case, that where the wife agrees to become surety at the instance of her husband though she does not understand the effect of the document or the nature of the transaction, her failure to do so may be the result of the husband's actually misleading her, but in any case it could hardly occur without some impropriety on his part even if that impropriety consisted only in his neglect to inform her of the exact nature of that to which she is willing blindly, ignorantly or mistakenly to assent. But where the substantial or only ground for impeaching the instrument is misunderstanding or want of understanding of its contents or effect, the amount of reliance placed by the creditor upon the husband for the purpose of informing his wife of what she was about must be of great importance.

If the creditor takes adequate steps to inform her and reasonably supposes that she has an adequate comprehension of the obligations she is undertaking and an understanding of the effect of the transaction, the fact that she has failed to grasp some material part of the document, or indeed, the significance of what she is doing, cannot, I think, in itself give her an equity to set it aside, notwithstanding that at an earlier stage the creditor relied upon her husband to obtain her consent to enter into the obligation of surety. The creditor may have done enough by superintending himself the execution of the document and by attempting to assure himself by means of questions or explanation that she knows to what she is committing herself. The sufficiency of this must depend on circumstances, as, for example, the ramifications and complexities of the transaction, the amount of deception practised by the husband upon his wife and the intelligence and business understanding of the woman. But, if the wife has been in receipt of the advice of a stranger whom the creditor believes on reasonable grounds to be competent, independent and disinterested, then the circumstances would need to be very exceptional before the creditor could be held bound by any equity which otherwise might arise from the husband's conduct and his wife's actual failure to understand the transaction... If undue influence in the full sense is not made out but the elements of pressure, surprise, misrepresentation or some or one of them combine with or cause a misunderstanding or failure to understand the document or transaction, the final question must be whether the grounds upon which the creditor believed that the document was fairly obtained and executed by a woman sufficiently understanding its purport and effect were such that it would be inequitable to fix the creditor with the consequences of the husband's improper or unfair dealing with his wife."[8]

117 In Garcia v National Australia Bank Ltd[9] the High Court rejected the submission that Yerkey v Jones had been overruled by Amadio or that the principles applied in Yerkey v Jones had been subsumed in principles applied in Amadio. The Court reaffirmed the existence of the "married woman's equity" as a separate and distinct ground of unconscionability. In the joint judgment of Gaudron, McHugh, Gummow and Hayne JJ it was stated that:

"31. The principles applied in Yerkey v Jones do not depend upon the creditor having, at the time the guarantee is taken, notice of some unconscionable dealing between the husband as borrower and the wife as surety. Yerkey v Jones begins with the recognition that the surety is a volunteer: a person who obtained no financial benefit from the transaction, performance of the obligations of which she agreed to guarantee. It holds, in what we have called the first kind of case, that to enforce that voluntary transaction against her when in fact she did not bring a free will to its execution would be unconscionable. It holds further, in the second kind of case, that to enforce it against her if it later emerges that she did not understand the purport and effect of the transaction of suretyship would be unconscionable (even though she is a willing party to it) if the lender took no steps itself to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her by a competent, independent and disinterested stranger. And what makes it unconscionable to enforce it in the second kind of case is the combination of circumstances that: (a) in fact the surety did not understand the purport and effect of the transaction; (b) the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed); (c) the lender is to be taken to have understood that as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet; (d) the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.

32. To hold, as Yerkey v Jones did, that in those circumstances the enforcement of the guarantee would be unconscionable represents no departure from accepted principle. Rather, it 'conforms to the fundamental principle according to which equity acts, namely that a party having a legal right shall not be permitted to exercise it in such a way that the exercise amounts to unconscionable conduct.'

33. It will be seen that the analysis of the second kind of case identified in Yerkey v Jones is not one which depends upon any presumption of undue influence by the husband over the wife. As we have said, undue influence is dealt with separately and differently. Nor does the analysis depend upon identifying the husband as acting as agent for the creditor in procuring the wife's agreement to the transaction. Rather, it depends upon the surety being a volunteer and mistaken about the purport and effect of the transaction, and the creditor being taken to have appreciated that because of the trust and confidence between surety and debtor the surety may well receive from the debtor no sufficient explanation of the transaction's purport and effect. To enforce the transaction against a mistaken volunteer when the creditor, the party that seeks the benefit of the transaction, has not itself explained the transaction, and does not know that a third party has done so, would be unconscionable."[10]

118 In Kranz v National Australia Bank Ltd[11], Charles JA (with whom Winneke P and Eames JA agreed) held that:

"The principle stated by the High Court in Garcia would make it unconscionable for a bank to enforce a guarantee given by a volunteer if it has not explained the situation to the guarantor, and does not know that an independent person has done so, if the bank knows that there was a relationship of trust and confidence between the guarantor and the debtor whose debt has been guaranteed. In Australia it remains therefore for the debtor [sic-read guarantor?] to establish that the bank was aware of a relationship that put the bank on inquiry, such as that of husband and wife or solicitor and client, or that there was a relationship of trust and confidence between the debtor and the third party."

119 Thus, in order to succeed under the principle of the "married woman's equity" it would seem that according to Garcia the plaintiff must establish four factors:

(a) that she was a volunteer;

(b) that she was mistaken about the purport and effect of the transaction;

(c) that the CBA appreciated that because of the trust and confidence between the plaintiff and Mr Wenczel, she may well not receive from him a sufficient explanation of the transaction's purport and effect; and

(d) that the CBA had not itself explained the transaction and did not know that a third party had done so.

120 Mr Klempfner submitted that the plaintiff had established all of these factors. On the other hand, Ms Loughnan submitted that the plaintiff had failed to satisfy each one of these factors. She also advanced a number of other submissions as to why the principle of the "married woman's equity" was not applicable in this case.

121 I turn first then to the question of whether the plaintiff was a volunteer. On behalf of the CBA, Ms Loughnan submitted that the plaintiff was not a volunteer because she obtained a benefit in two ways from the contract, the performance of which she guaranteed. First, a large part of the $76,000 lent by the CBA went to paying out the CBFC lease for the Ford Explorer. This was the vehicle used by the plaintiff, although it was registered in Mr Wenczel's name. Moreover, ownership of that vehicle by Mr Wenczel meant that it was part of the matrimonial property which was later the subject of the consent orders in the family law settlement under which the plaintiff had title to the Ford Explorer transferred to her. Secondly, payment of the sum of $22,032.40 into the WCS bank account enabled Mr Wenczel to repay to the plaintiff some $8,500 previously borrowed from her.

122 In my opinion, the plaintiff was a volunteer. The fact that some of the loan funds may ultimately have been applied for her benefit is beside the point. As was stated in Garcia:

"Although the trial judge found that from time to time some benefit flowed to the family from the companies, he found that they were companies that were in the 'complete control' of the appellant's husband. Taken as a whole, those findings demonstrate that the appellant in fact obtained no real benefit from her entering the transaction; she was a volunteer. The fact that she was a director of the company is nothing to the point if, as the trial judge's findings show, she had no financial interest in the fortunes of the company."[12]

Here, the plaintiff was neither a director nor a shareholder in WCS. Clearly, she had no financial interest in its fortunes. Any benefit which flowed to the plaintiff from the loan of $76,000 arose not as of right but as a result of the exercise of discretion by Mr Wenczel, who in effect was WCS. If having paid out CBFC and WCS having received the $22,000 balance of the loan, Mr Wenczel had decided to sell the Ford Explorer and keep the proceeds for himself or WCS and if he had decided not to repay the plaintiff the $8,500 but spend the whole of the $22,000 on something else, the plaintiff was in no position to complain to the CBA. Thus, she "obtained no financial benefit from the transaction, performance of the obligations of which she agreed to guarantee."[13]

123 Next, Ms Loughnan submitted that the plaintiff could not establish that she was in ignorance of the purport and effect of the transaction to the extent required. Counsel argued that it was clear from the evidence of what the plaintiff said she was told by her husband and of what she told Mr Lefebvre on 31 October 2001 regarding the application of the loan funds, that she knew that by signing the documents on 23 July 2001 she was putting the Property up as security for a Better Business Loan of $75,000 which Mr Wenczel intended to use to pay out the lease on the Ford Explorer in an amount of about $39,000, to pay out one or two credit cards (Mastercard and American Express) and to repay the overdrawn superannuation fund account by some $5,000. It was submitted that this was sufficient knowledge for her to make an informed decision regarding her willingness to agree to the Property being security for the loan.

124 I do not accept that the plaintiff sufficiently understood the purport and effect of the transaction. As Dixon J made clear in Yerkey v Jones[14], when he quoted from the earlier judgment of Cussen J in Bank of Victoria v Mueller[15], the wife must "fully understand" the transaction. Nothing less than a full explanation of the transaction will be sufficient because without a full explanation, there can be no hope of a guarantor having a full understanding. On my factual findings, the plaintiff never received the required full explanation. It is therefore not surprising that I have concluded that her understanding was superficial, incomplete and confused.

125 Mr Klempfner pointed out that in evidence in chief the plaintiff said that:

(a) she was not given any chance to read the documents her husband presented for her signature and that her attempts to ask questions only made Mr Wenczel more angry;

(b) she understood in June 2001 that Mr Wenczel's debts were car payments, credit card payments and superannuation debt but she did not know the actual amounts owing nor that Mr Wenczel was in arrears of his car lease payments or credit card debts;

(c) she did not know the extent of the liabilities referred to in the "Personal Balance Sheet" nor was she told of them by either her husband or the CBA;

(d) she had no recollection or record of having received any documents from the CBA; and

(e) she was never provided with a copy of the Memorandum of Common Provisions.

126 Further, under cross-examination, the plaintiff said that:

(a) she did not really have an opportunity to look at or read the documents presented to her for signature by Mr Wenczel;

(b) she did not receive, and therefore could not read, the Guarantor's booklet 'What it Means to be a Guarantor';

(c) she did not know that she was signing a mortgage as such, she just knew it as loan documents or a Better Business Loan;

(d) she thought that she was guaranteeing Mr Wenczel's loan;

(e) Mr Wenczel refused to explain how the $75,000.00 Better Business Loan was to be applied;

(f) she did not know the level of Mr Wenczel's indebtedness to the CBA;

(g) she did not know that the document she signed was going to be a second mortgage on the house; and

(h) she only found out about the terminology of "second mortgage" when "in consultancy" with her family solicitor for the divorce proceedings.

127 It seemed to me that throughout the plaintiff's evidence she demonstrated considerable confusion between the effect of giving a guarantee by way of security and giving a mortgage over her home. A relatively contemporaneous example of this was her letter to her solicitor dated 9 January 2002 referring to a recent visit by her husband to discuss financial settlement details. As set out more fully in paragraph 56 above, the plaintiff said:

"I was most adamant that the Better Business Loan was not part of the Home Mortgage, simply security over it."

128 As Mr Klempfner submitted, the plaintiff viewed her guarantee as something separate and distinct from a mortgage. In her eyes, the link between the Property and the guarantee she was providing was that her ownership of the Property made her a guarantor of substance as opposed to her husband who was no more than a man of straw. In reality, she had no knowledge of the manner in which the Property was to be used as security for her guarantee of the Better Business Loan. In particular, there was no evidence that she had any understanding that by signing a mortgage in registrable form she was creating an encumbrance on her title in favour of the Bank. Rather, the evidence was clear that the plaintiff viewed mortgages as supporting home loans not guarantee transactions. Thus, I find that the plaintiff did not understand that her obligations as a guarantor were secured by the Mortgage which she had given over her home.

129 Mr Klempfner also drew attention to the fact that the Mortgage provided by the plaintiff to the CBA was an "all moneys mortgage". Thus, the plaintiff would have been liable to pay the CBA not only in respect of any default by WCS under the Better Business Loan dated 11 July 2001 but also in respect of any other "Secured Moneys" as that term was defined in provision 3 of the Memorandum of Common Provisions. The CBA's counsel did not seek to cross-examine the plaintiff as to her understanding of this particular aspect of the Mortgage. Without a copy of the Memorandum of Common Provisions, which the CBA admitted it did not send to the plaintiff, she would have had no hope of understanding the purport and effect of her signing the Mortgage. Even if the plaintiff had been sent a copy of the Memorandum of Common Provisions, she still would not have understood the purport and effect of her signing the Mortgage, without a careful and detailed explanation from someone who knew all of the circumstances of the transaction.

130 In my opinion, such an explanation would also have entailed explaining to the plaintiff that this transaction was not a "consolidation" by Mr Wenczel of his existing debts. Time and time again, in evidence and in pre-litigation correspondence, the plaintiff reiterated her belief that the Better Business Loan was taken out by Mr Wenczel to consolidate his debts. In fact, the funds advanced to WCS under the Better Business Loan were applied only in part to pay out pre-existing indebtedness of Mr Wenczel and his company. After paying out the CBFC lease in respect of the Ford Explorer, clearing a credit card debt and paying out the overdraft on the superannuation account, the balance of $22,032.40 was simply deposited into WCS's cheque account to be drawn down by Mr Wenczel at his discretion. Thus, the Better Business Loan was not a "consolidation" of existing debts. Rather, it represented the extending of fresh credit to WCS. Furthermore, two of Mr Wenczel's most significant loans, being his CBFC car loans in respect of the BMW and the Range Rover, were not even affected by the Better Business Loan. In other words, in addition to the Better Business Loan, Mr Wenczel (or his company) still had to service the debts in respect of the BMW and Range Rover finance facilities through the CBA's subsidiary. The plaintiff clearly had no understanding of these aspects of the transaction.

131 Finally, in order to have a full understanding of the transaction, the plaintiff would have to have been told that agreeing to provide security for the Better Business Loan by way of the Mortgage was fraught with danger for her and her desired retention of her home. This is because the purported surplus of $38,525 or $740 per week "to meet living expenses", after deduction from Mr and Mrs Wenczel's combined income of $84,869 of the annual commitments of $46,344 for the home loan, the Better Business loan, the credit card and CBFC lease, was simply illusory. There was no such surplus because Mr Wenczel's base income was $60,000 not $80,000 and tax of at least $30,000 had to be paid by Mr Wenczel. None of this information was known to the plaintiff when she signed the documents.

132 Then it was submitted by the CBA that the plaintiff did not repose trust and confidence in her husband. It was pointed out that by this time:

(a) Mr Wenczel had been bankrupted by his partners in the Major Graphics business;

(b) Mr Wenczel had in 1989 called in a life policy of Mrs Wenczel to repay creditors;

(c) the business operated by the Retail Resources Group had failed by 1993 and debts of over $250,000 had accrued as the personal responsibility of Mr and Mrs Wenczel;

(d) the plaintiff had granted a mortgage to the CBA as security for a loan of about $200,000 to repay the debts of the Retail Resources Group;

(e) the plaintiff had borrowed $50,000 jointly with her husband from her mother to repay the CBA loan debt arising out of the Retail Resources Group business;

(f) at one point in the 1990s when Mr Wenczel lost his job the plaintiff approached the CBA to reduce loan repayments;

(g) Mr Wenczel was in and out of jobs on an average of every 3 years;

(h) Mr Wenczel had purchased a Jaguar motor vehicle using funds from the superannuation account without the plaintiff's consent;

(i) Mr Wenczel had traded in the Jaguar in 2000 and purchased a Range Rover without informing the plaintiff beforehand;

(j) following the separation the plaintiff lent money to her husband in April 2001 to pay a dental bill;

(k) between February and June 2001 the plaintiff lent about $10,000 to Mr Wenczel;

(l) in May 2001 Mr Wenczel told his wife that he had been retrenched which caused her a number of concerns including the repayment of his borrowings from her;

(m) all of the mortgages registered against the land in favour of the CBA were in respect of business debt; and

(n) upon giving Mr Wenczel her ATM card and PIN number, between 17 April and 2 July 2001 he helped himself to substantial cash withdrawals with the full knowledge of the plaintiff.

Thus, it was submitted that on the basis of her own evidence it could not be contended that the plaintiff had, on 23 July 2001, a shred of faith in the capacity of her husband to manage his financial affairs.

133 The first answer to this submission is that it is sufficient to prove that the CBA knew of the marital relationship at the time of the transaction and not that it knew that the wife actually had trust and confidence in her husband at that time. In the joint judgment in Garcia, their Honours stated:

"We consider that the only question of notice that arises is whether the creditor knew at the time of the taking of the guarantee that the surety was then married to the creditor [sic - read borrower?]). Other questions of notice do not intrude."[16]

There was no dispute that the CBA, through its officers such as Ms Hunter and Ms Elibol, knew that the plaintiff was married to Mr Wenczel.

134 A second answer is that despite all her husband's failings, the plaintiff did still repose trust and confidence in him. He was the major breadwinner and a person familiar with business. She was neither. As the plaintiff said when explaining that she had given Mr Wenczel her ATM card and PIN number to withdraw money from her account.

"I had a certain amount of trust in him. He was my husband."

135 Ms Loughnan further submitted that in any event the "married woman's equity" was not applicable because on 23 July 2001 the plaintiff and Mr Wenczel were separated and had been in that situation since he left the matrimonial home on 13 February 2001. Luke Wenczel's evidence would suggest that on 23 July 2001 Mr Wenczel had no intention of resuming co-habitation, but he had not told his wife that and he did not ask for a divorce until some three months later. In the absence of Mr Wenczel's evidence, the CBA cannot prove what his state of mind was at this time. Threatening to sell the house was not necessarily an indication that Mr Wenczel had decided to separate permanently. The plaintiff, on the other hand, was very much "in reconciliation mode" and clearly she still regarded herself as married to Mr Wenczel despite their temporary separation. Whatever may be the position in family law[17], it seems to me that in this context the mere fact of separation is not necessarily fatal to the plaintiff's case.

136 What is important, in my opinion, is whether the confidence that is said to be reposed by the wife in the husband still subsists in circumstances where they have been separated for a period of over five months. It was submitted on behalf of the CBA that the confidence so contemplated is a belief in the husband's abilities to manage the financial affairs of the marriage and that where the marital relationship is severed by separation so too are its financial affairs. However, as Mr Klempfner submitted, the emotional vulnerability of a woman such as the plaintiff who was vainly trying to hold a failing marriage together is the very weakness which this equity seeks to protect. Furthermore, as previously discussed, in this case the plaintiff did still repose trust and confidence in her husband.

137 The fourth requirement, that the CBA had not itself explained the transaction and did not know that a third party had done so, is clearly satisfied given my findings set out above about the signing of the Guarantor's Declaration. Because of Mr Wenczel's actions, the plaintiff never received the CBA's letter of 19 July 2001 and its enclosures including the Guarantor's booklet. She received no explanation of the transaction from any bank officer or Mr Wenczel. She was not advised that the CBA recommended that she should seek legal advice before signing the third party Mortgage. It is therefore unnecessary for me to consider Mr Klempfner's further submission that, even if the plaintiff did go to the Gisborne branch and sign the Guarantor's Declaration before Ms Taylor, the limited explanation given to her was not sufficient.

138 It seems to me that there is a great deal of sense in Mr Klempfner's submission that if the CBA truly wanted to ensure the integrity of the sign-up process, the sensible solution was to despatch the Guarantor's booklet with details of the guaranteed loan to Mrs Wenczel under cover of a letter advising her that:

(a) she had been asked to guarantee the loan;

(b) as part of the guarantee the bank required a mortgage to be executed;

(c) she should carefully read the booklet and consider getting independent legal advice before entering into any such mortgage; and

(d) if she was still prepared to provide the guarantee, she should make an appointment to attend the bank where the mortgage would be provided to her for execution in the presence of a bank officer.

139 In this way, execution of the Mortgage would be kept separate from the "warning/notice" process necessary to protect both the CBA's position and the guarantor's vulnerability. As Callinan J noted in Garcia[18]:

"I do not think that there is any injustice to a lender in requiring it to be diligent in the way in which Yerkey prescribes in the case of married women who enter into transactions advantageous to husbands or legal personalities controlled by them, but which are disadvantageous or potentially so to the wife_._"

140 Thus, subject to the further arguments by the CBA, including various equitable defences, which I am about to consider, I am of the opinion that the plaintiff has made out her claim based on the principle of the "married woman's equity".

141 The equitable defences relied on by the CBA were laches or delay, affirmation, acquiescence, ratification and estoppel. The CBA also submitted that, in accordance with such equitable maxims as "he who seeks equity must do equity" and "he who comes into equity must come with clean hands", if the plaintiff had any right to equitable relief she must first perform her own legal and equitable obligations arising out of the subject matter of the dispute. The CBA contended that its equitable defences were founded on the plaintiff's failure to take steps after becoming aware of the matters which were the basis of her alleged entitlement, and that she thereby knowingly permitted the CBA to act to its detriment by continuing to provide banking accommodation in reliance on the Mortgage.

142 However, it seems to me that, in whatever way the argument is put, the alleged factual bases for the CBA's defences are missing.

143 First, the CBA argued that the plaintiff withheld from it two pieces of vital information prior to the funding of the Better Business Loan. One was the fact that Mr and Mrs Wenczel had separated. The second was how the Mortgage had come to be signed by the plaintiff. It may be assumed that if the CBA had known of either of these matters, events would have taken a different course with the result that the Better Business Loan would not have proceeded. I also assume, without deciding, that Ms Loughnan was correct when she submitted that if that loan had not proceeded the CBA would have been in a better position than it now was.

144 Nevertheless, in my view, this argument turns matters on their head. The plaintiff was not relevantly the CBA's customer. She owed it no duty of disclosure. It was the CBA which had to be diligent to ensure that Mr Wenczel's wife fully understood the purport and effect of the transaction. If it had done this, both of the "pieces of vital information" would have come to light.

145 Further, I reject the suggestion that the plaintiff engaged in any "subterfuge" in her conversation with Ms Hunter on 12 July 2001. I accept the plaintiff's evidence that she did not know if the CBA was aware that she and her husband had separated but that she assumed that he would have told the CBA of their separation. When the plaintiff spoke to Ms Hunter on 6 and 12 July 2001 she was assured that the home loan would not be touched, so that there was no need for the plaintiff to engage in any "subterfuge" in respect of the status of her marriage.

146 With hindsight, it is very easy to say that the plaintiff could have avoided her problems if she had told the staff at the Gisborne branch on 24 July 2001 of her distressing experience on the previous afternoon. But this assumes that she understood that being pressured into signing the documents without a proper understanding of what she was doing, gave her some entitlement to have the signed documents set aside. Nothing could be clearer than that she did not understand her legal rights on that day and for months afterwards. There is no evidence, and I am not prepared to draw an inference, that Mr Lefebvre gave the plaintiff any such advice at the time of the property settlement. It seems clear to me that it was not until the plaintiff conferred with Ms Cooney in November 2002 that she received appropriate advice about her rights to obtain relief against the CBA's demand.[19] Shortly thereafter the letter of demand dated 25 November 2002 was sent. Prior to that time the plaintiff had been prepared to meet the Mortgage payments whilst at the same time complaining about having signed the documents under "duress".

147 Therefore, I can see no basis on which the CBA could succeed in its defences of laches or estoppel. Once the plaintiff was properly apprised of her rights, she very quickly advised the CBA of her complaints about what had occurred and when it rejected them she issued this proceeding. Mr Peter Pouki, a manager in the CBA's Group Credit and Market Risk Credit Management Unit, gave formal evidence about the quantum of the CBA's counterclaim. In cross-examination, he conceded that whether the proceeding was issued in June 2002, when the CBA first notified the plaintiff of the default under the Better Business Loan, or February 2003 made no difference to the CBA's attitude to its defence of the plaintiff's claim. Thus, even if the plaintiff should have brought her complaints to the CBA's attention earlier (which I do not accept), there was no evidence to suggest that it suffered any further detriment once the loan had been made.

148 The next argument advanced on behalf of the CBA was, as I understood it, that the plaintiff was adequately compensated in her family law settlement and that, having agreed with her husband to be responsible for payment of the two mortgages over the Property in return for him giving up his rights in the Property, she should not now be entitled to seek to have the second Mortgage set aside. Alternatively, it was submitted that the plaintiff having accepted responsibility for the Better Business Loan in return for her husband giving up his claim to 40% of the equity in the Property and to ownership of the Ford Explorer, equity required that the plaintiff repay the debt under the Better Business Loan by having recourse to that 40% equity in the Property and the Ford Explorer. That is, that the plaintiff had affirmed or ratified or acquiesced in the validity of the Mortgage by entering into the family law settlement with Mr Wenczel.

149 In my opinion, it is clear that this submission cannot succeed. The family law settlement was between Mr and Mrs Wenczel. Neither the CBA nor WCS, the primary debtor, whose debt was guaranteed by both Mr and Mrs Wenczel, were parties to that settlement. It is just not relevant, in my opinion, to the plaintiff's claim against the CBA what property settlement she reached with her ex-husband. Obviously Mr Wenczel might have certain rights of indemnity against the plaintiff if her successful setting aside of the Mortgage resulted in the CBA looking to him for repayment. But that is as between Mr and Mrs Wenczel and is nothing to do with the CBA. In any event this will not happen in this case because Mr Wenczel went bankrupt.

150 Further, as Mr Klempfner pointed out, in Garcia itself Mrs Garcia's action to have her guarantees set aside was commenced after the Garcias were divorced and after an order had been made by the Family Court of Australia transferring to Mrs Garcia her former husband's interest in a property, subject to the all moneys mortgage to the National Australia Bank Ltd previously granted by them. The fact that property rights had been adjusted pursuant to the Family Law Act 1975 (Cth) prior to any claim for relief being instituted against the creditor caused no obstacle to the ultimate success of Mrs Garcia's claim to have the relevant guarantee set aside on the ground that enforcement of it would be unconscionable.

151 Emphasis was given by counsel for the CBA to the fact that, following the CBA's rejection of the plaintiff's application for refinancing of the two mortgages over the Property, the plaintiff applied for, and on or about 11 December 2002 obtained approval for, a refinancing loan from Aussie Home Loans. As I understood the argument, this conduct was said to constitute affirmation or ratification of the Mortgage. The offer of the refinancing loan by Aussie Home Loans was not taken up by the plaintiff because having been advised of her rights by Ms Cooney in November 2002 she decided to seek to set aside the Mortgage. I simply fail to see how these facts could constitute some equitable defence for the CBA.

152 Therefore, in my opinion, none of the CBA's equitable arguments succeed and the plaintiff is entitled to a declaration that the Mortgage be set aside. Although this is sufficient to dispose of the proceeding, in case my approach to the "married woman's equity" is later held to be wrong I propose to consider briefly appropriate aspects of the plaintiff's other causes of action.

Undue Influence

153 The main reason why it might have become essential to consider the plaintiff's cause of action based on undue influence was if my finding had been that the plaintiff did understand the purport and effect of the transaction. The primary question then becomes whether, notwithstanding that understanding, the plaintiff brought a free will to the execution of the security document. That is the essential difference between cases involving the "married woman's equity" and cases involving undue influence referred to in Yerkey v Jones and Garcia. It is also necessary for the plaintiff to prove that the CBA left it to Mr Wenczel to obtain the plaintiff's consent to become a third party mortgagor and that she did not receive any independent advice in respect of her entry into the transaction.

154 In my opinion, in the circumstances as I have found them, the CBA did leave it to Mr Wenczel to obtain the plaintiff's consent. The only relevant contact between the CBA and the plaintiff prior to 23 July 2001 were the plaintiff's two telephone calls to Ms Hunter on 6 and 12 July in which the plaintiff expressed her concern that the home loan might be involved in her husband's proposed consolidation of debts and she was assured that the home loan would not be touched. The CBA made no attempt to contact the plaintiff prior to preparation of the security documents to ascertain her willingness to provide the third party Mortgage. The documents were simply handed to Mr Wenczel to take to his wife.

155 Ms Loughnan submitted that giving a sealed envelope addressed to Mrs Wenczel to Mr Wenczel for delivery to her was not evidence of the CBA seeking the procuration of the execution of the Mortgage by Mr Wenczel and that the CBA was not responsible if Mr Wenczel chose to break the seal and tamper with the contents. I do not agree. Handing to Mr Wenczel the envelope addressed to Mrs Wenczel for delivery to her made him the CBA's agent, in my opinion. That action made it virtually inevitable that the husband and wife would be together when the documents were being considered. But it also gave Mr Wenczel the opportunity to deprive the plaintiff of critical information by removing most of the enclosures.

156 There is no dispute that the plaintiff did not receive any independent advice in respect of this transaction. For the reasons already given, the CBA cannot rely on the plaintiff's statement in the Guarantor's Declaration that she did "not need or want legal advice." In any event, as Dixon J said in Yerkey v Jones[20]:

"The fact that the creditor, on the occasion, for example, of the actual execution of the instrument, deals directly with the wife and explains the effect of the document to her will not protect him. Nothing but independent advice or relief from the ascendancy of her husband over her judgment and will would suffice."

157 I turn then to the question of whether the plaintiff brought a free will to the signing of the Mortgage. In Amadio[21], Mason J said that the test of undue influence was whether "the will of the innocent party is not independent and voluntary because it is overborne." Ms Loughnan submitted that the evidence of the plaintiff and her two children about the aggressive and threatening behaviour of Mr Wenczel was exaggerated and that in any event his conduct was not truly the reason why the plaintiff signed the documents. She submitted that the plaintiff did so for two reasons - to promote the chances of a reconciliation and to avoid her husband invoking his rights under the Family Law Act and selling the house. Ms Loughnan also referred to the phrase which the plaintiff used twice in correspondence to the effect that she had let her heart rule her head.

158 In my opinion, this was a case of undue influence in that the plaintiff's will was overborne. I agree with Mr Klempfner's submission that the plaintiff only signed the documents as a result of a combination of threats, emotional manipulation and betrayal of her trust and confidence in her husband. Whatever the precise circumstances of the kitchen confrontation I find that Mr Wenczel bullied his wife into signing the Mortgage and forced her to change from a long standing position of not wanting to be involved with her husband's debts. I accept that she was reduced to signing the documents in tears. I also accept that Mr Wenczel manipulated his wife's emotions in persuading her to sign. As the plaintiff said:

"I never wanted to place the house at risk but when Stefan was threatening to force the sale of the house if I didn't sign the mortgage I felt I had no choice. He had an uncanny ability to make me feel guilty by making me feel wrong that I was opposing him."

The plaintiff knew that at that time her wages were not sufficient to meet the monthly home loan payments and that she was reliant on her husband's continued support in that regard. Thus, the threat to sell the house was real. Finally, I have found that the plaintiff still had trust and confidence in her husband. His conduct in pressuring his wife into signing the Mortgage betrayed that trust.

Duress

159 Having decided that the plaintiff could also have succeeded in having the Mortgage set aside on the ground of undue influence, it is really unnecessary to consider the alternative claim of duress. With this cause of action the coercion or compulsion is more severe then the "undue" influence. The assent is procured by an illegitimate threat.

160 In my opinion, the physical actions alone of Mr Wenczel constituted duress. He swore at his wife, threatened to become physical towards her, banged his fists on the kitchen bench, raised his voice and became angry. As I have found he bullied his wife into signing the Mortgage. That is not a legitimate way in which to persuade a reluctant surety to agree to sign the Mortgage. I reject as simply unrealistic the submission by the CBA that the plaintiff was in a position to send her husband away from the home, but she chose not to do so. As Mr Klempfner so aptly put it, Mr Wenczel came to the Property on 23 July 2001 for one sole purpose - to obtain his wife's signature on the documents. He was determined to stay until he obtained her signature and he left as soon as it was obtained. The pressure he exerted was illegitimate in the sense in which that phrase was used by McHugh J in Crescendo Management Pty Ltd v Westpac Banking Corporation[22].

Unconscionability

161 In the light of my findings in respect of the plaintiff's first three causes of action and the frank concessions in the final submissions made on behalf of the plaintiff that the claim is unconscionable conduct was "very much a back stop; certainly not abandoned but not pressed with the same vigour" and that its pleading "only partly mirrors the evidence adduced in this case", I consider that I need not trouble further with this particular claim.

Conclusion

162 For all of the above reasons I have concluded that there should be a declaration that the Mortgage should be set aside and that there be an order that the CBA provide a discharge of the Mortgage and make the Certificate of Title available for registration of the discharge. It follows that the CBA's counterclaim must fail. I will hear from the parties on the precise wording of the appropriate orders and on the question of costs.

[1] [1959] HCA 8; (1959) 101 CLR 298.

[2] O'Donnell v Reichard [1975] VicRp 89; [1975] VR 916 at 929 per Newton and Norris JJ.

[3] Payne v Parker [1976] 1 NSWLR 191 at 201 per Glass JA.

[4] Payne v Parker [1976] 1 NSWLR 191 at 201 per Glass JA.

[5] [1983] HCA 14; (1983) 151 CLR 447 at 461

[6] [1939] HCA 3; (1939) 63 CLR 649

[7] [1939] HCA 3; (1939) 63 CLR 649 at 683

[8] [1939] HCA 3; (1939) 63 CLR 649 at 684-686

[9] [1998] HCA 48; (1998) 194 CLR 395

[10] [1998] HCA 48; (1998) 194 CLR 395 at [31]- [33]

[11] [2003] VSCA 92; (2003) 8 VR 310 at [31]

[12] [1998] HCA 48; (1998) 194 CLR 395 at [43] per Gaudron, McHugh, Gummow and Hayne JJ.

[13] Garcia [1998] HCA 48; (1998) 194 CLR 395 at [31] per Gaudron, McHugh, Gummow and Hayne JJ.

[14] [1939] HCA 3; (1939) 63 CLR 649 at 680

[15] [1925] VicLawRp 74; [1925] VLR 642 at 651

[16] [1998] HCA 48; (1998) 194 CLR 395 at [40] per Gaudron, McHugh, Gummow and Hayne JJ.

[17] See In the marriage of Todd (No.2) (1976) 9 ALR 410 at 403 per Watson J

[18] [1998] HCA 48; (1998) 194 CLR 395 at [113]

[19] Coastal Estates Pty Ltd v Melevende [1965] VicRp 60; [1965] VR 433 at 435-436 per Herring CJ; at 445 per Sholl J and at 450 per Adam J.

[20] [1939] HCA 3; (1939) 63 CLR 649 at 684

[21] (1983) 115 CLR 447 at 461

[22] (1988) 19 NSWLR 40 at 45