WESTPAC BANKING CORPORATION -v- DAVEY [2016] WASC 316 (4 October 2016)

(a) Mr Davey borrowed $384,000 from the Bank;

(b) Mr Davey's obligations under the first loan agreement were secured by a first registered mortgage granted in favour of the Bank over a property described as 8 Rainsworth Gardens, Heathridge (the first property), which mortgage was registered on 30 July 2009; and

(c) the Bank advanced $384,000 to Mr Davey on or about 29 July 2009.

4 On or about 12 June 2009, the Bank and Mr Davey entered into a further written loan agreement (the second loan agreement), pursuant to which:

(a) Mr Davey borrowed $90,000 from the Bank;

(b) Mr Davey's obligations under the second loan agreement were secured by a first registered mortgage granted in favour of the Bank over a property described as Lot 22 Great Southern Highway, Broomehill (the second property), which mortgage was registered on 30 July 2009, together with a first registered mortgage granted in favour of the Bank over a property described as Lot 23 Great Southern Highway, Broomehill (the third property), which mortgage was also registered on 30 July 2009; and

(c) the Bank advanced $90,000 to Mr Davey on or about 30 July 2009.

5 On or about 9 July 2009, the Bank and Mr Davey entered into a further written loan agreement (the third loan agreement), pursuant to which:

(a) Mr Davey borrowed $1,080,000 from the Bank, comprised of a loan for $540,000 (with a variable interest rate) and a loan for $540,000 (with a fixed interest rate);

(b) Mr Davey's obligations under the third loan agreement were secured by a first registered mortgage granted in favour of the Bank over a property described as 29 Rodoreda Crescent, Ravenswood (the fourth property), which mortgage was registered on 25 September 2009; and

(c) the Bank advanced $1,080,000 to Mr Davey on or about 29 July 2009.

6 The Bank claims that Mr Davey defaulted in making payment required under the loan agreements and on 31 August 2015 and 10 September 2015 default notices were issued to Mr Davey requiring the repayment of arrears. The Bank also claims that Mr Davey failed to pay the arrears as required by the default notices and consequently the entire amount owing under the loan agreements became due and payable under the various loan agreements and mortgage terms.

7 The Bank commenced these proceedings on 11 January 2016 seeking orders for possession of the mortgaged properties. The writ was filed with a statement of claim and on 27 January 2016 Mr Davey entered in an appearance.

8 On 9 February 2016 Mr Davey filed a defence in these proceedings and on 18 February 2016 the Bank instructed its solicitors to prepare an application for summary judgment.[1] Despite this instruction, the Bank requires leave as the application was not filed until late May 2016.

9 On 19 February 2016, the solicitors for the Bank wrote to Mr Davey informing him of the Bank's intentions to apply for summary judgment and requesting that he contact them within seven days to confer.[2]

10 On 24 February 2016, the Bank's solicitor spoke with Mr Davey. The substance of the conversation is set out in the affidavit of Tamara Elise Strack sworn on 23 May 2016.

11 During that conversation, Mr Davey asked for a face‑to‑face meeting to discuss the matter. Mr Davey explained that he had documents that he wanted to show to the Bank and its solicitors and that he wished to attend the meeting with a representative who was not a lawyer.

12 As Mr Davey refused to provide the Bank with a copy of the documents in advance of the meeting, or particulars of the matters he wished to discuss, the request for a meeting was refused.

13 On 29 February 2016, the solicitors for the Bank received a letter from Mr Davey which outlined the matters he intended to raise in defence to the Bank's claim.[3] A copy of that letter was not included in the affidavit materials filed by the parties for the purpose of the summary judgment application.

14 On 14 March 2016, the Bank filed an amended statement of claim and served it on Mr Davey with a letter that informed him that the Bank had considered the matters he had raised and intended to proceed with an application for summary judgment.[4]

15 On 21 March 2016 (before the application for summary judgement was filed), Mr Davey filed an affidavit sworn by him. Mr Davey seeks to rely on that affidavit in opposing the application for summary judgment.

16 There was then a delay of about two months before the application for summary judgment was filed on 24 May 2016. No explanation was proffered for the delay.

17 Mr Davey complains that there was not adequate conferral prior to the making of the summary judgment application. Mr Davey's complaint arises from the refusal of the Bank's solicitors to meet with him in person to discuss the substance of his defence to the proceedings and in particular the summary judgment application.

18 As is made clear in Consolidated Practice Direction 4.3.2, O 59 r 9 of the Rules of the Supreme Court 1971 (WA) requires that parties confer in the sense of their being an exchange of views for the purpose of trying to resolve the matters in issue. Conferral is required no matter how unlikely it is that the parties will reach agreement or even narrow the issues between them and practitioners with authority to resolve the dispute must confer either face‑to‑face or by telephone. While an exchange of correspondence will often be part of the conferral process it will only be where face‑to‑face or telephone contact is not feasible that reliance simply upon written communication can be justified.

19 In this case, there was an exchange of correspondence only. No substantive conferral took place either face‑to‑face or by telephone. For there to have been adequate conferral, a meeting or a telephone call to discuss the substantive issues was required after receipt of Mr Davey's correspondence of 29 February 2016 and affidavit of 21 March 2016.

20 There was inadequate conferral. However, taking into account all of the circumstances, I find that the application does not fail by reason of the refusal of the Bank's solicitors to meet with Mr Davey in person. Having regard to the issues raised by Mr Davey in opposing the application, it was unlikely that a face‑to‑face meeting or conferral by telephone would have resulted in a substantive narrowing of the issues as between the parties or any resolution so as to avoid the matter proceeding to a hearing of the summary judgment application.

21 The Bank seeks leave to bring the application for summary judgment out of time. It is well established that there are no set guidelines as when leave to apply for summary judgment out of time will be granted and the burden is on the applicant to show the delay is justifiable in all of the circumstances.[5] The application should be supported by affidavit evidence which explains the delay.

22 The affidavit evidence filed on behalf of the Bank provides a chronology which adequately explains the delay in making the application up to mid‑March 2016, when the Bank filed its amended statement of claim. There was then a delay of about two months between 14 March 2016 and the filing of the application for summary judgment on 24 May 2016. No explanation was proffered for that delay.

23 I note that had the application for summary judgment been filed in late March 2016 (immediately following amendment of the plaintiff's statement of claim), leave to bring the summary judgment application would have been required in any event. I also note that there is no evidence of any particular prejudice resulting from the delay. In the circumstances, although the delay is not adequately explained, the delay is not fatal to the Bank's application.

24 From the affidavits filed by the Bank, I am satisfied that the Bank's claim is a good one and that the affidavits do verify the essential elements of the cause of action upon which the application for summary judgment is based.

25 Once the Bank has established a prima facie case the evidentiary onus shifts to Mr Davey to demonstrate that there is an arguable defence or other reason for trial.

26 From the affidavit sworn by Mr Davey on 21 March 2016 and from the outline of oral argument filed on 6 September 2016, Mr Davey raises a number of matters which he says are questions which ought to be tried. I deal with each in turn below.

27 Mr Davey claims that the Bank has securitised the loan accounts and the mortgages the subject of these proceedings and in his affidavit of 21 March 2016, he explains the basis upon which he says securitisation results in the extinguishment of obligations as between him and the Bank.

28 The Bank says that no securitisation has occurred and even if securitisation had occurred, securitisation would not provide Mr Davey with a defence to these proceedings.

29 The Bank relies on two affidavits of Domenico Cannalonga in support of its application for summary judgment. Mr Cannalonga is an officer of the Bank and in his affidavit of 15 August 2016, he deposes to having worked on and being familiar with the books of account kept by the Bank with respect to the accounts of Mr Davey. Mr Cannalonga says that the books of account were at all material times some of the ordinary books of the Bank and the entries in the books were entries made in the ordinary course of business.[6]

30 Mr Cannalonga deposes to having reviewed the records of the Bank relating to each of the loan accounts in the name of Mr Davey. According to Mr Cannalonga, the Bank's records indicate that none of the loan accounts, loan agreements or mortgages have been securitised.[7]

31 Annexed to Mr Cannalonga's affidavit are screen prints from the Bank's electronic account information system for each of the loan accounts. The record of the fact that the loan accounts have not been securitised is indicated on the screen prints by the notation 'N' next to the word 'SECURITISED'.[8]

32 In Westpac Banking Corporation v McLean,[9] evidence similar to the screen prints annexed to the affidavit of Mr Cannalonga was accepted to establish that in fact there had been no securitisation, in the absence of any contradictory evidence.

33 In this case, there is no evidence of securitisation, there is mere assertion by Mr Davey. Mr Davey says that fulsome discovery is required to determine the authenticity of the screen prints annexed to the affidavit of Mr Cannalonga and whether, in fact, there has been securitisation of his loans and mortgages.

34 Discovery for such purpose is futile as the 'securitisation defence' raised by Mr Davey is doomed to fail. Securitisation would not provide Mr Davey with a viable defence to the Bank's claim for the reasons set out in Westpac Banking Corporation v McLean.[10]

35 In the affidavit of Mr Davey sworn on 21 March 2016, Mr Davey puts forward an alternative defence in the following terms:

A Declaration that Defendant herein did discharge all indebtedness to the Plaintiff by means of four discrete Promissory Notes duly issued to and acknowledged by the Plaintiff corporation as received, without more.[11]

36 Mr Davey says that he delivered four promissory notes to the Bank. The affidavit evidence filed on behalf of the Bank does not deal with the issue.

37 In any event, the delivery of a promissory note to a bank cannot of itself discharge any liability that a borrower has to the bank under a mortgage and a loan agreement, including in circumstances where the promissory note is not returned nor expressly rejected by the bank.[12] This defence is also doomed to fail.

38 Mr Davey alleges that the Bank's agent materially misled the Bank and him on 'several issues germane to the formation of any Contract before execution of same'[13] and falsified a 'crucial fact in a forged document' regarding Mr Davey's earnings.[14] Mr Davey says that the conduct of the Bank's agent gives rise to a complete defence to the Bank's claim against him.

39 It is useful to briefly explain the circumstances by which Mr Davey became a customer of the Bank.

40 The agent referred to by Mr Davey is Ms Yvette Fernandez of Loancom Aust Pty Ltd (the Broker), who submitted Mr Davey's loan applications to the Bank.

41 Mr Cannalonga deposes to the Bank and the Broker having engaged in communications from 4 May 2009 in relation to loans sought by Mr Davey.[15]

42 From the documents annexed to the affidavit of Mr Cannalonga sworn on 15 August 2016, it appears that two five page documents titled 'Westpac Introducer Online Application Pack' were completed, signed by Mr Davey and submitted by the Broker to the Bank on 4 May 2009, together with supporting documents including a supporting document checklist completed by the Broker.[16]

43 One of the supporting documents submitted to the Bank was a letter from TeleSecure Ltd dated 21 April 2009. TeleSecure Ltd was Mr Davey's employer, and the letter relevantly stated that Mr Davey earned in excess of net £80,000 per year.[17]

44 Mr Cannalonga deposes to the Bank having received the applications and then having engaged in correspondence with the Broker in May and early June 2009.[18] Additional information was provided to the Bank, which included a second letter from TeleSecure Ltd dated 25 May 2009. The second letter was faxed by the Broker to the Bank on 25 May 2009. The second letter differed from the first letter from TeleSecure Ltd in that it also referred to Mr Davey's annual gross income. The second letter stated that Mr Davey's annual gross income was £126,000 and his net annual income was £80,000.[19]

45 On 9 June 2009, the Bank sent the Broker a facsimile informing the Broker that three loans had been approved, and issued three loan approval letters. By that facsimile, the Bank also asked the Broker to check that the Bank had recorded Mr Davey's details correctly on the three loan approval letters. Any changes were to be advised before the final loan documents were printed and sent to the Bank's Nedlands Branch, for the branch to arrange a suitable time with Mr Davey to sign the documents.[20]

46 Mr Cannalonga says that it is part of the Bank's process to provide the borrower with a Personal Finance Application (which summarised the details contained in the loan application), together with the loan documents to be signed.[21]

47 Annexed to the affidavits of Mr Cannalonga are Personal Finance Applications and the first, second and third loan agreements, signed by Mr Davey.[22]

48 Mr Davey alleges that there was a manipulation (alternatively the creation) of a document, being a second letter from TeleSecure Ltd dated 25 May 2009. As explained above, the second letter was faxed by the Broker to the Bank on 25 May 2009 and differed from the first letter from TeleSecure Ltd in that it stated that Mr Davey's annual gross income was £126,000. The statement concerning Mr Davey's net annual income (of £80,000) did not change.[23]

49 Mr Davey asserts that the alleged manipulation (or creation) of the second TeleSecure Ltd letter and delivery of that document to the Bank by the Broker acting as the Bank's agent is a complete defence to the Bank's claim against him.

50 Although parts of the written and oral submissions of Mr Davey were difficult to understand, it appears to have been accepted by Mr Davey that in order for the Bank to be fixed with responsibility for the actions of the Broker, it would need to be established that the Broker was the Bank's agent or otherwise had knowledge of the matters alleged.

51 While there is no presumption at law that a mortgage broker is the lender's agent, the facts of any particular case may indicate otherwise, although, agency ought not be readily inferred.[24]

52 The Bank denies that the Broker was its agent and notes that there is no evidence that would indicate otherwise. The Bank relies on the following as matters which refute any inference of agency:

(a) the Broker was employed by Loancom Aust Pty Ltd, not the Bank or any subsidiary of the Bank;

(b) the Broker is characterised in the 'Westpac Introducer Online Application Pack' loan application documents as an 'introducer'; and

(c) the loan application documents contain an acknowledgment to the effect that Mr Davey had authorised the Broker to be his agent and that the Broker had no authority to act on behalf of the Bank in any capacity.[25]

53 Mr Davey relies on the following as matters, which he says establishes a relationship of agency as between the Bank and the Broker:

(a) The Broker was allocated a unique 'Introducer ID' by the Bank (and not Mr Davey), which ID was recorded in a mandatory field in the forms submitted by the Broker to the Bank.

(b) The payment by the Bank to the Broker of some undisclosed remuneration or commission for 'introducing' Mr Davey to the Bank.

54 The matters described above are not sufficient to displace the express acknowledgments to the contrary signed by Mr Davey. Further, receipt by the Broker of a commission paid by the Bank of itself does not alter the position.[26] In the circumstances of this case, I also find that the allocation of a unique 'Introducer ID' to the Broker (alone or in combination with the payment of a commission), does not alter the position.

55 In any event, even if the alleged conduct (being the alleged document manipulation described above), and agency were established, they would not ground a viable defence to the Bank's claim against Mr Davey.

56 This is because Mr Davey does not dispute that his net annual income was £80,000. Rather, he says that he did not receive an annual gross income of £126,000, and TeleSecure Ltd (his employer) did not write the 25 May 2009 letter in the form presented to the Bank.

57 At the time of the loan applications, £80,000 was equivalent to $AUD165,457 and Mr Davey's net monthly income for the purposes of the loan applications was calculated at $AUD13,788.08.[27]

58 Even if the Broker was the agent of the Bank and did falsify a 'crucial fact in a forged document' regarding Mr Davey's earnings (which is a mere allegation and has not been established), the loan applications were not made and granted in reliance on a falsehood, but rather were granted based on Mr Davey's net annual income of £80,000, which amount is not disputed by Mr Davey and was the amount stated in both letters. This defence is also doomed to fail.

59 Mr Davey also alleges that there was no valid contract formed as between the Bank (as lender) and him (as borrower) because of a 'lack of terms certain' and a 'lack of notice' of any of the terms of the loan agreements before signing them.

60 At par 4 of the affidavit of Mr Davey sworn on 21 March 2016, he says that he had 'no advice prior to signing two of five only pages faxed to me on board a ship I was then working on. ... I therefore provably had no Pre‑contractual notice of ANY Terms of said Contract'.[28]

61 The pages of the 'Westpac Introducer Online Application Pack' documents bearing the signature of Mr Davey appear to have a facsimile transmission receipt at the bottom of each page which suggests the pages were faxed on the same date as execution.[29] The facsimile transmission does not appear at the bottom of every page.

62 It may be the case that Mr Davey did not receive the whole of the 'Westpac Introducer Online Application Pack' from the Broker before signing the execution pages. However, the 'Westpac Introducer Online Application Pack' documents signed by Mr Davey are not the binding agreements the Bank now seeks to enforce. Upon giving favourable consideration to the 'Westpac Introducer Online Application Pack' documents, the Bank issued a number of documents to the Broker which confirmed the next steps, which included the preparation and execution of formal loan agreements.[30]

63 A copy of the executed first, second and third loan agreements are annexed to the affidavit of Domenico Cannalonga sworn on 4 May 2016.[31] Each agreement appears to have been signed by Mr Davey. The first and second agreements are dated 12 June 2009 and the third agreement is dated 9 July 2009. There is no facsimile transmission receipt on any of the pages of the loan agreements. They are complete documents.

64 At par 15 of his affidavit of 15 August 2016, Mr Cannalonga explains that it is part of the Bank's process to provide the borrower with a Personal Finance Application which summarises the details contained in the loan application and the loan documents to be signed. He explains that one of the purposes of this process is to have the borrower declare and confirm that the information contained in the loan application is complete and correct. Three Personal Finance Applications are annexed to the affidavit of Mr Cannalonga sworn on 4 May 2016.[32]

65 Each Personal Finance Application contains an express declaration on pages 6 and 8 of the form that the information contained in the application is complete and correct and that the applicant had read and understood each section of the application form. Mr Davey's signature appears on the Personal Finance Applications dated 12 June 2009 which related to the first and second loan agreements and the Personal Finance Application dated 9 July 2009 which related to the third loan agreement. There is no facsimile transmission receipt on any of the pages and he made no changes to the information in the documents. Mr Davey does not address these documents in his materials.

66 The power to order summary judgment must be exercised with great care, particularly where the ultimate outcome turns upon the resolution of some dispute or issues of fact.[33] It was never intended that when the facts are in dispute, actions should be disposed of summarily.[34] The court is not, however, bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent.[35] But if after argument there remains real uncertainty as to the plaintiff's right to judgment without further investigation of the facts, summary judgment must be refused.[36] On the evidence before me it is possible that Mr Davey was not provided with a complete copy of the 'Westpac Introducer Online Application Pack' documents initially submitted on his behalf by the Broker to the Bank.

67 There is no evidence to suggest that Mr Davey only received the execution pages of the Personal Finance Applications or the first, second and third loan agreements. There has been no evidence adduced by Mr Davey that he was at sea on 12 June 2009 or on 9 July 2009 when he signed the Personal Finance Applications and the loan agreements.

68 I do not consider that there is any triable issue as to whether Mr Davey was bound by the terms of the loan agreements and mortgages by reason of him having not received or had before him any of the pages which formed the loan agreements and mortgages or execution, raising questions or injustices or other forms of unconscionability.

69 In all of the circumstances, I am satisfied that Mr Davey has no defence to the claim and that the Bank is entitled to leave and judgment.

70 The Bank has advised that it does not presently seek a monetary judgment although on the evidence adduced it would be entitled to move for the same. Presently the Bank seeks only orders for possession of the four mortgaged properties. I will make orders for possession of those properties in the Bank's favour.

71 As to the question of costs, an unjustified delay in bringing the application for summary judgment may deprive the applicant of some of its costs, as may the failure to substantively confer before making the application. However, in circumstances where:

(a) there is no evidence of any particular prejudice resulting from the Bank's delay in bringing the application; and

(b) it was unlikely that a face‑to‑face meeting or conferral by telephone would have resulted in a substantive narrowing of the issues as between the parties or any resolution so as to avoid the matter proceeding to a hearing of the summary judgment application,

I do not propose to make an order depriving the Bank of its entitlement to its costs on judgment.

[1] Affidavit of Tamara Elise Strack sworn on 23 May 2016 [4].

[2] Affidavit of Tamara Elise Strack sworn on 23 May 2016 [5].

[3] Affidavit of Tamara Elise Strack sworn on 23 May 2016 [7].

[4] Affidavit of Tamara Elise Strack sworn on 23 May 2016 [8].

[5] Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki SMI (Unreported, WASC, Library No 920512, 12 October 1992) (Adams M).

[6] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [2].

[7] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [7].

[8] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [7] ‑ [8], and annexure 'DC5'.

[9] Westpac Banking Corporation v McLean [2012] WASC 182 [50].

[10] Westpac Banking Corporation v McLean [86] ‑ [99]. See also Westpac Banking Corporation v Mason [2011] NSWSC 1241; and National Australia Bank v Norman [2012] VSC 14.

[11] Affidavit of John Walter Davey sworn on 21 March 2016 [13].

[12] ING Bank (Australia) Ltd v Wilson [2013] SASC 6; Maksacheff v Commonwealth Bank of Australia (No 2) [2016] NSWSC 1109; St George Bank v Hammer (No 2) [2015] NSWSC 953.

[13] Affidavit of John Walter Davey sworn on 21 March 2016 [5(a)].

[14] Affidavit of John Walter Davey sworn on 21 March 2016 [5(b)].

[15] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [9] ‑ [14].

[16] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [9], and annexure 'DC6'.

[17] Affidavit of Domenico Cannalonga sworn on 15 August 2016, and annexure 'DC6' at page 852.

[18] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [10] ‑ [13], and annexures 'DC7' ‑ 'DC9'.

[19] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC9'.

[20] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [14], annexure 'DC11'.

[21] Affidavit of Domenico Cannalonga sworn on 15 August 2016 [15].

[22] Copies of the Personal Finance Applications are annexed to the affidavit of Domenico Cannalonga sworn on 15 August 2016, annexures 'DC12' ‑ 'DC14'. Copies of the first, second and third loan agreements are annexed to the affidavit of Domenico Cannalonga sworn on 4 May 2016, annexures 'DC15' ‑ 'DC7'.

[23] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC9'.

[24] Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [2006] WASC 177 [65].

[25] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC6', pages 846 and 859, which pages bear the signature of Mr Davey and are dated 23 April 2009.

[26] NMFM Property Pty Ltd v Citibank Ltd (No 10) [2000] FCA 1558.

[27] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC6' at pages 851 and 853.

[28] Affidavit of John Walter Davey sworn on 21 March 2016 [4].

[29] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC6' at pages 846 ‑ 847 and 859 ‑ 860.

[30] Affidavit of Domenico Cannalonga sworn on 15 August 2016, annexure 'DC11'.

[31] Affidavit of Domenico Cannalonga sworn on 4 May 2016 2016, annexures 'DC5', 'DC6' and 'DC7'.

[32] Affidavit of Domenico Cannalonga sworn on 4 May 2016 2016, annexures 'DC12', 'DC13' and 'DC14'.

[33] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, cited in Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [43].

[34] White v Johnston (1886) 8 ALT 53, cited in Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [43].

[35] Eng Mee Yong v Letchumanan [1979] UKPC 13; [1980] AC 331, 341, cited in Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [43].

[36] Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] Vic Law Rep 47; [1947] VicLawRp 15; [1947] VLR 332, 335, cited in Esanda Finance Corporation Ltd v Spence Financial Group Pty Ltd [43].