Westpac Banking Corporation v Eres [2025] NTSC 46

In our opinion, this ground, not raised before the judge, is without merit, as submitted by the First Respondent. No evidence was adduced to support the allegation. In respect of this ground, and many other grounds, the Applicant relied on articles and other publications without adducing the necessary evidence. In any event, even if the loans provided to the Applicant were included in any securitisation plan, this would have no effect on the enforceability of the loans and security with respect to the Applicant's obligations. The Applicant denied having received any notice of any assignment of the loans and securities, a necessary pre-condition to a legal assignment under s 134 of Property Law Act 1958. If there was indeed an equitable assignment, the correct plaintiff is the original lender and mortgagee, in this case the First Respondent. The proposed ground is without merit and leave to appeal is refused.

• [44] I note, notwithstanding the above, where the appeal proceeded on the basis that there had been no evidence that the mortgage had been sold or assigned, the Court of Appeal held, even if the loan/mortgage had been included in an equitable securitisation, it would have had no effect on the enforceability of the loan and security with respect to the Applicant's obligations. I have not been referred to any other legal authority which may assist further. Again, there is academic commentary to the effect that a failure to notify a borrower that the mortgagee rights to their loans have been assigned to the SPV, may constitute a failure to "notify borrowers of a risk that their houses could be sold through no fault of their own, would at seem at least to be unconscionable".[41] I fail to see how borrowers' homes could be sold through no fault of their own and without their knowledge, when the exercise of the mortgagee's rights, relevantly the exercise of a power of sale, requires fault (or default) by a mortgagor[42] and notice to be given. The exercise of the power of sale, even if exercised by the bank as trustee under a securitisation arrangement, would still need to be exercised according to all of the usual legal requirements, including those which protect mortgagors.
• [45] In respect to the issue of misrepresentation, as it is understood, the Defendant claims that silence in respect to securitisation of the loan/mortgage, presumably in the circumstances leading up to entering into the loan agreement and mortgage, amounted to misrepresentation which in turn would give her a remedy in respect to the relevant contracts. Generally, a misrepresentation will need to be a positive statement of conduct, and in the absence of a special relationship between the parties, non-disclosure of facts, even material and important facts, is not a misrepresentation. The general principle is, parties to contractual negotiations are entitled to remain silent and disclose nothing unless there is a duty to disclose. It has been said: "The duty is not a duty to disclose all facts which the representee might consider material. It is only a duty to disclose those which, if undisclosed, leave what is said untrue or misleading".[43] In the limited circumstances of this proceeding, on the limited evidential materials, there was no evidence or allegation that securitisation had been mentioned or referred to at all in negotiations in respect to the loan agreement. In those circumstances there is no prospect, assuming there was securitisation, that the failure to mention it would amount to an actionable misrepresentation. As stated in Walters v Morgan:[44]

The purchaser is not bound to disclose any fact exclusively within his knowledge which might reasonably be expected to influence the price...Simple reticence does not amount to legal fraud, however it may be viewed my moralists. But a single word or... nod or wink, or a shake of the head, or a smile from the purchaser intended to induce the vendor to believe the existence of a non-existing fact which might influence the price...would be sufficient ground for a Court of Equity to refuse a decree for a specific performance of the agreement.

• [46] Furthermore, I agree with the Plaintiff's submission that, in so far as any there is a duty to disclose, there needs to be circumstances giving rise to a reasonable expectation that the information will be disclosed, and there is none. That is, it is not reasonable for a bank to disclose all of its internal security and financial arrangements, to its customers, particularly in respect to where it gets its money to fund its business. I find this aspect does not raise a defence in respect to the Plaintiff's application for possession. There is no relevant question to be tried on this aspect.

Breach of the Privacy Act 1988 (Cth)

• [47] The Defendant alleged breaches of the Privacy Act 1988 (Cth). The basis of this claim was not clear. Presumably, it arises through the issue of securitisation and an allegation that, in the process of securitisation, the Defendant's details would have been provided to the SPV. Taking this allegation at its highest, as noted above, the Loan Agreement and the MCP provide for the provision of information to third parties in the event of transfer of the loan or mortgage. Even assuming those provisions do not apply, a breach of privacy would only give rise to a remedy to make a complaint to the relevant Privacy Commissioner and possibly seek compensation.[45] A breach of privacy would not affect the exercise of the power of sale by the Plaintiff. I find this aspect does not raise a defence in respect to the Plaintiff's application for possession. There is no relevant question to be tried on this aspect.

• [48] This aspect of the Defendant's claim relates to issues concerning the Default notices issued by the Plaintiff. As noted above, a joint default notice/s 88 of the National Credit Code ("NCC") and s 89(2) of the Law of Property Act 2000 (NT) Exercise of Power of Sale notice was served on the Defendant. A default notice/s 88 NCC notice was also served on Mr Eres, as the co-borrower. As I understand the Defendant's argument, the claim is that the notices were defective because they should have been jointly addressed to the Defendant and Mr Eres, rather than separately. There was no issue taken as to the mode of service (other than described above), but rather the form. It was alleged that the failure to jointly address the notice was a breach of the notice provisions of the NCC. In response, the Plaintiff submitted that there was no requirement to serve notices jointly.
• [49] Section 88 of the NCC provides for the requirements to be met before a credit provider can enforce a mortgage. In particular, s 88(2) of the NCC provides that a credit provider must not begin possession enforcement proceedings against a mortgagor unless the credit provider has given the mortgagor a default notice. The Defendant is the mortgagor. Mr Eres was not the mortgagor and arguably did not require a s 88(2) NCC notice. The notice provided that it constituted a notice issued under "Section 88 of the National Credit Code (if applicable)". Given the notices were combined, the Defendant required notice of default and a s 88 notice, and Mr Eres only required a default notice, it makes practical sense that each were provided with a notice separately. There is no legal issue arising in that regard.
• [50] In terms of a default notice under the loan agreement, clause 18 of the loan agreement deals with the provision of notices and demands. It provides that "you will be served". "You" is defined to relevantly mean "any one or more of you, and where that is the case, each of you is individually liable for the full amount". There is no legal issue in respect to the Defendant and Mr Eres separately receiving default notices.
• [51] I find this aspect does not raise a defence in respect to the Plaintiff's application for possession. There is no relevant question to be tried on this aspect.

• [52] This aspect of the Defendant's relates to an allegation that the lender's mortgage insurance ("LMI") is capable of having a relevant impact on the Plaintiff's application. The allegation, as far as can be discerned, is that the Plaintiff's application for possession somehow ignores the receipt of LMI which has partially or fully compensated the Plaintiff for its loss, and therefore it should not proceed with the exercise of the power of sale. The allegation being that the Plaintiff has already been paid under the insurance for the Defendant's loan arrears, and further that the insurance would pay out the entire mortgage on default. Furthermore that, somehow, on eventual sale of the Property, having received a payment under the LMI, the Plaintiff would be dishonestly double-dipping. To what end any of the issues about LMI is relevant to the Plaintiff's right to possession is not clear. The issue of securitisation, which I have found to be irrelevant, is also intertwined.
• [53] The loan agreement sets out provisions regarding the LMI. A fee for LMI appears in the loan agreement. The Defendant and Mr Eres were charged $7,308.95 for LMI, which is standard practice. Above the execution clause on the Acceptance of the Loan Offer, signed by the Defendant and Mr Eres, are the usual warnings about entering into the agreement. They are not quite the "red hands of Lord Denning" but they are printed in a format that they bring the relevant matters to the borrowers' attention and are included specifically on the execution page. Included are provisions reminding borrowers to read the contract so that they know what they are entering to and what their obligations are and a statement stating "do not sign this contract document if there is anything you do not understand". LMI is provided at clause 9(c) under "Costs, Fees and Charges" which states:

Lenders Mortgage Insurance protects us - not you, the borrower. It provides protection in case anything happens which entitles us to sell the security property, and the sale proceeds are insufficient to fully repay your loan. In this case we may incur a loss. We may recover this loss under our Lenders Mortgage Insurance policy. Please note, however, that because you are not protected by Lenders Mortgage Insurance, you are still legally responsible for repaying the insurer the amount outstanding under your Loan Contract and any security.

• [54] In response, it was the Plaintiff's case that, had there been any payments received in respect to LMI they would have been applied to the loan balances, and would have shown up as deductions on such balances, which they did not.[46] Additionally, even if there had been payments made under the LMI, which was denied, such payments would have occurred after mortgagor's default, and the order for possession was capable of being sought even if subsequent payments were made against the loan (even by a third party), short of, presumably, the entire loan being paid out. I agree. The LMI has no bearing on the issue of whether the Plaintiff is entitled to possession. The Defendant may harbour theories about when the LMI may be paid, and potential double dipping. The Property has not yet been sold and so any assessment as to whether there is a shortfall on the loan as against the value of the Property, and whether LMI applies in accordance with the provision in the loan document, is moot. Additionally, issues as to LMI and payment under insurance policies are matters between the Plaintiff and its insurer. The fact of the matter is, the Defendant had agreed to loan money from the Plaintiff, she offered security for that loan, the loan has been defaulted on, and the security is now in peril. The Plaintiff may have had an insurance policy (which under terms of the loan agreement was paid for by the Defendant), providing for insurance on default, against any shortfall between the sale of the Property and the outstanding loan balance, but that is not something that relevantly bears on the Plaintiff's right to possession.
• [55] I find this aspect does not raise a defence in respect to the Plaintiff's application for possession. There is no relevant question to be tried on this aspect.
• [56] Consequently, the Defendant's application for early return subpoenas, dated 25 February 2025, addressed to Westpac Banking Corporation (ACN 33 007 457 141) in respect to materials relating to the LMI are therefore dismissed.

• [57] The Defendant also raised a number of other issues concerning specific provisions of the loan agreement claiming they were "unconscionable and unfair under equity contrary to s 24 of the Australian Consumer Law". Those provisions included:

(i) Clause C8 "unilateral transfer": permits the Plaintiff to transfer the loan without notice or consent. Clause C8, entitled "transfer", is a provision of the MCP not the loan agreement. It provides for the potential transfer of the mortgage, the debt it secures and any secured arrangement.

(ii) Clause 16 "default acceleration": enables demand for full repayment for minor breaches. This is a clause in the loan agreement. It provides for, on default, the acceleration of the whole loan amount if the default continues for at least 31 days. The clause is subject to requirements of the NCC in respect to acceleration.

(iii) Clause C6 "Excessive Fees": Imposes disproportionate penalties during default. Clause C6 of the MCP is titled "Set Off" and provides, if the mortgagor has money in any account with the Lender and is in default, the Lender can use it to pay secured amounts under the mortgage. The provision removes the right of the borrower to set off of any moneys the Lender owes the mortgagor against amounts the mortgagor owes under the mortgage.

• [58] In respect to the above, it is the Plaintiff's case that none of the provisions are relied on in respect to the application and therefore the question as to whether they are void or unenforceable does not arise. I agree. In so far as there is an issue with clause C8 of the MCP, the unilateral transfer provision, I do not understand there to have been an actual transfer of the loan or mortgage. If this issue relates to the issue of securitisation, it is dealt with above. In so far as there is an issue with clause 16 of the loan agreement, default acceleration, such a provision is standard in all such contracts and is recognised as a possibility in the NCC,[47] there is no legal basis for claiming such a provision is invalid. In any event, the Plaintiff relies on the failure of the Defendant's payment of the loan arrears in the relevant default notices, not on any acceleration, for its right to possession. In so far as there is an issue relating to excessive fees (i.e. clause C6), the Defendant has not advanced that argument and the provision referred to does not appear, on its face, to refer to the correct provision.

• [59] On the above basis, I find that the Defendant does not have a defence in response to the Plaintiff's application. There should be summary judgment in favour of the Plaintiff, in terms of the summons filed 30 September 2024.
• [60] Therefore, I make the following orders:

(1) Pursuant to Rule 45.05(2):

(a) the requirements of Rules 5.03(1) and 8.02 be dispensed with; and

(b) the Plaintiff be authorised to commence this proceeding by originating motion in Form 5C.

(2) The Plaintiff to have possession of the whole of the land comprised in Certificate as to Title Register Book Volume 742 Folio 847 more particularly described as Lot 6179 Town of Sanderson from plan(s) S 81/0850 and known as 57 Eaton Place, Karama in the Northern Territory of Australia.

(3) The Defendants two applications for early return subpoenas, dated 25 February 2025, are dismissed.

(4) I will hear the parties as to costs. If any application for costs is to be made, it is to be made within 4 weeks of this decision, with two weeks following for any reply, and otherwise will be dealt with on the papers.

[1] Otherwise described as Certificate as to Title Register Book Volume 742 Folio 847 more particularly described as Lot 6179 Town of Sanderson from plan(s) S 81/085C.

[2] As provided by Rule 45.05(4) the relevant order under Rule 45.05(2) may be made on application after the proceeding is commenced. This type of expedited procedure does not prevent full consideration of matters in dispute as illustrated in Australia and New Zealand Banking Group Limited v Oldroyd & Anor [2025] NTSC 20.

[3] Known as Points of Dispute and Reply to Points of Dispute.

[5] Issued to both the Defendant and Mr Eres.

[7] Affidavit of Fernando made 30 September 2024 at paragraph [24].

[8] Affidavit of Manoel made 3 December 2024 at paragraph [5].

(1) Each person in occupation of the land whose name the plaintiff knows shall be a defendant.

(2) If the plaintiff does not know the name of a person in occupation, the proceeding may be commenced without naming a person as defendant.

[10] The right to the order of possession arising under terms of the mortgage and s 86 of the Law of Property Act 2000 (NT).

[11] Secure Funding Pty Limited v Coughlin [2009] NSWSC 384.

[12] Kerr v Sheriff of New South Wales (1996) 9 BPR 16,215 at 16,216

[13] Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193, Young CJ in Eq at [64]-[69].

[14] Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42.

[15] Fancourt v Mercantile Credits Limited [1983] HCA 25 at [99].

[16] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 130.

[17] Outback Civil Pty Ltd & Anor v Francis [2011] NTCA 3 at [10].

[18] Shew & Ors v Police and Citizens Youth Club & Ors [2013] NTSC 15 ("Shew") at [9] citing Sportsbet Pty Ltd v Moraitis [2010] NTSC 24 per Southwood J.

[19] Heller Financial Services v Solczaniuk [1989] NTSC 36 at [9].

[20] Latec Investments Ltd v Hotel Terrigal Pty Ltd [1965] HCA 17; (1965) 113 CLR 265.

[21] Which have been described as common law proceedings. Rather the Defendant would likely need to bring application for an injunction restraining the exercise of the power of sale or for some order for relief. Australian and New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11, 748; Also see Croft C & R Hay, The Mortgagee's Power of Sale (Sydney: LexisNexis, 3rd ed, 2013) at p 90: "As the action for possession is a common law proceeding".

[22] see Rajapakse R, 'Assessment of Law Relating to the Transfer of Mortgagee's Rights to the Trustee Issuer in Mortgage Securitisation', (2007) 33(1) Monash Law Review.

[23] As required for example under s 182 of the Law of Property Act 2000 (NT).

[24] Rajapakse P & Senarath S, Commercial Law Aspects of Residential Mortgage Securitisation in Australia (Palgrave Macmillian, 2019), ch 2.. Also see Rajapakse P, 'Assessment of Law Relating to the Transfer of Mortgagee's Rights to the Trustee Issuer in Mortgage Securitisation', (2007) 33(1) Monash Law Review.

[25] Authored by Leon Ashby entitled "Quick Summary of the Repossession Rights Scam in Securitisation".

[26] DKLR Holding Co (No.2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431 ("DKLR").

[27] See Rajapakse R, 'Assessment of Law Relating to the Transfer of Mortgagee's Rights to the Trustee Issuer in Mortgage Securitisation', (2007) 33(1) Monash Law Review at 155-156.

[28] See Westpac Banking Corporation v Mason [2011] NSWSC 1241 at [29] per McCallum J, where a defence based on 'securitisation' of the loan and registered mortgage was rejected and summary judgment granted to the bank. Similarly, it was held in RHG Mortgage Corporation Ltd v Astolfi [2011] NSWSC 1526 at [15] per Davies J that any defence to a bank's claim to enforce its mortgage based on securitisation must inevitably fail. See also McLean v Westpac Banking Corporation [2012] WASCA 152; National Australia Bank Ltd v Norman [2012] VSC 14; Bendigo and Adelaide Bank Ltd v Prichard [2021] QSC 179.

[29] I was referred to an article, Lilienthal G & Ahmad N. 'Colonial Land Title in Australia: a meta-legal critical inquiry', (2019) 45(2) Commonwealth Law Bulletin, pp 231-256.

[31] Affidavit of Linda Eres made 26 February 2025, Annexure A, dated 1 August 2022.

[32] Mabo and Others v Queensland (No. 2) [1992] HCA 23; (1992) 175 CLR 1 at 31 per Brennan J ("Mabo No. 2").

[33] Geographically established through instructions to Governor Phillip in 1787 and Governor Darling's Commission of 1825, and the fixing of the boundary of South Australia in 1836, through letters Patent establishing the Province of South Australia in 1836, and Letters Patent erecting the Colony of Queensland in 1859, and Letters Patent altering the western boundary of Queensland in 1862.

[35] Northern Territory Acceptance Act 1910 (Cth).

[36] Mabo No. 2 at pp 47-48 per Brennan J.

[37] Burger King v Hungry Jacks Pty Limited [2001] NSWCA 187.

[38] Citing Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4; [1976] QB 801.

[40] Collis v Bank of Queensland Ltd [2021] VSCA 17 at [111]- [113].

[41] The author makes mention of action under the Trade Practices Act 1974 (Cth). Rather, any proceeding would likely commence under s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth).

[42] As required by s 89 of the Law of Property Act 2000 (NT).

[43] See Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019), p 563.

[44] Walters v Morgan (1861) 43 ER 1056 at 723-724.

[45] See s 25 of the Privacy Act 1988 (Cth).

[46] See affidavit of Fernando made 30 September 2024, annexure E which is details of the loan balance as at 20 June 2024, with arrears of $47,667.

[47] See s 93 of the NCC which requires certain things to be done by a credit provider before it can enforce an acceleration clause.