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Perpetual Limited v Silvan Park Holdings Pty Ltd QDC 271
DISTRICT COURT OF QUEENSLAND
Perpetual Limited v Silvan Park Holdings Pty Ltd & Ors  QDC 271
SILVAN PARK HOLDINGS PTY LTD IN ITS OWN CAPACITY AND AS TRUSTEE FOR THE ROBERTSON FAMILY TRUST AND UNDER INSTRUMENT 715349630
JAMES GARYTH ROBERTSON
MACQUARIE BANK LIMITED
District Court at Brisbane
23 November 2021
11 October 2021
Kent QC, DCJ
COURT PRACTICE AND PROCEDURE – QUEENSLAND CIVIL PROCEDURE – SUMMARY JUDGMENT – where the application is to recover possession of land – where the respondents have not provided evidence resisting the claim – where the contract was for a loan to purchase land – where the first defendant failed to make mortgage repayments and was in default – where the defendant submits that the contract and mortgage were not lawful and thus not binding – where the applicant submits that the conclusions of law pleaded are not supported by pleaded facts – where the applicant submits there is no evidence to support the matters pleaded in the defence and counterclaim
Australian Securities and Investments Commission Act 2001 (Qld) ss 12DA, 12CB
Competition and Consumer Act 2010 (Cth) s 47(6)
Corporations Act 2001 (Cth) s 912A
District Court of Queensland Act 1967 (Qld) s 68(1)
Uniform Civil Procedure Rules 1999 (Qld) rr 181, 292, 293
Land Title Act 1994 (Qld) s 78
National Consumer Credit Protection Act 2009 (Cth)
Property Law Act 1974 (Qld)
Certane CT Pty Ltd v Whight  QSC 77
Deputy Commissioner for Taxation v Salcedo  2 Qd R 232
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Langman v Handover (1929) 43 CLR 334
Mayfair Trading Co Pty Ltd v Dreyer (1958) 101 CLR 428
Queensland Pork Pty Ltd v Lott  QCA 271
Town & Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540
Violet Home Loans Pty Ltd v Schmidt  44 VR 202
Wilby v St George Bank Ltd  SASC 388
S. Long for the applicant
J. Robertson appeared for himself as second defendant and as director of the first defendant
HWL Ebsworth for the applicant
First and second defendants self- represented as above
- This is an application by the plaintiff for summary judgment against the first defendant in respect of the plaintiff’s claim pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (UCPR). Secondly, the plaintiff and the third defendant together as applicants also seek summary judgment pursuant to rr 181 and 293 of the UCPR against the first and second defendants (together as respondents) in respect of the counterclaim.
- In brief, the applicants submit that there is evidence to support the relevant allegations in the plaintiff’s statement of claim whereas the allegations of fact in the defence and counterclaim are not supported by evidence. Further, the conclusions of law contended for in the defence and counterclaim are not supported by the material facts pleaded; the respondents have not placed before the court evidence of any matters justifying resistance of the plaintiff’s claim; and in fact there is no such evidence.
- The plaintiff’s claim was filed on 13 November 2020, claiming recovery of possession of land pursuant to s 78(2)(c) of the Land Title Act 1994 and a mortgage, together with the sum of $711,933.64 as a debt under a loan contract, mortgage and guarantee. The loan was made in 2013, and the first defendant’s alleged default thereunder commenced in late 2017.
- The respondents, who are self-represented litigants, filed a defence and counterclaim in December 2020. They seek an order releasing the mortgage held by the plaintiff over the land, and damages against the plaintiff and the third defendant. This is said to be the consequence of various aspects of illegality or unconscionability, set out below.
- The applicants acknowledge the test to be applied in relation to summary judgment under r 292, in cases such as Deputy Commissioner of Taxation v Salcedo. In order to succeed, the applicants must show that there is no real, as opposed to fanciful, prospect of the defence succeeding and there is no need for a trial. Moreover, it is submitted that once the applicants make out a prima facie case entitling them to judgment, the evidentiary onus shifts to the respondent.
The plaintiff’s claim
- On or about 2 September 2013, the plaintiff and first defendant entered into a written contract whereby the plaintiff agreed to make available to the first defendant, a Macquarie Bank Offset Home Loan A Package (Home Loan Package) of $550,000 for the first defendant to purchase land, described as lot 2 on RP155817, as an investment property.
- The loan was secured by a mortgage, executed by the first defendant on that day and subsequently registered in the Titles Office. It was a term of the loan that the first defendant would be in default if it failed to pay the amounts due and payable on time. The plaintiff advanced funds to the first defendant pursuant to the loan.
- It was a term of the mortgage that if the first defendant defaulted and the default was not remedied after appropriate notice, the plaintiff became entitled to call in the total amount secured by the mortgage, enter into possession and sell the land. These terms are admitted in the pleadings.
- No payments were made after 1 December 2017 with the result that by 10 September 2020 the first defendant had exceeded the loan facility by $127,378.85 and the first defendant was therefore in default.
- Thus, the applicants say there is no real issue as to the debt, which as at 17 September 2021 was $774,103.98. The first defendant’s defence admits that the funds were advanced, that the mortgage was executed and registered and that the first defendant failed to comply with the default notice.
The defence and counterclaim
- The first defendant essentially pleads that the home loan package was not lawful, and therefore the first defendant is not bound by the loan (consequently there would be no obligation caught by the guarantee, so that the second defendant is not exposed to liability). It pleads that:
- (a)the applicants engaged in misleading and deceptive conduct in breach of s 12DA(1) of the ASIC Act (referred to by the applicant as the Misleading and Deceptive Conduct Claim);
- (b)further that the applicants breached s 912A of the Corporations Act 2001 which sets out the general obligations of financial services licensees (broadly, it seems, the complaint is that the financial services were not provided efficiently, honestly and fairly, and that the plaintiff’s representatives did not comply with the financial services laws) (the Corporations Act Claim);
- (c)further that the respondents were at a special disadvantage and the applicants engaged in conduct in contravention of s 12CB of the ASIC Act (an Unconscionable Conduct Claim).
- The respondents assert that the home loan package was not properly established according to law and is thus not binding; further that the respondents would not have executed the loan and mortgage if certain matters had been disclosed.
- The counterclaim seeks relief from the loan agreement and release of the mortgage; refund of the payments made under the loan, and $127,378.85, being the arrears owed as at 10 September 2020.
- The second defendant also claims loss and damages against the applicants including $145,000 which is alleged to be the sum that he advanced to the first defendant to purchase the land, and, again, the amount of the arrears.
- The defence and counterclaim plead that there were 11 representations made by either the plaintiff or the third defendant that are said to be false, and this is the basis of the pleaded claim for relief.
- These representations include that the home loan package application had been formally approved; that the home loan package was a lawful financial product; that the respondents were eligible for the home loan package; that the third defendant had approved the second defendant’s credit card application; that the third defendant had adhered to the responsible lending obligations of the National Credit Code, the ASIC Act and the Code of Banking Practice (the Code) towards the second defendant; that the applicants would confirm that the conditions precedent to the advance were satisfied before the advance was made and mortgage registered; that the applicants would adhere to the responsible lending obligations of the National Credit Code under the ASIC Act; that they would do all things necessary as financial service licensees to act efficiently, honestly and fairly and ensure that their representatives would comply with the financial services law.
- In response to these matters, the applicants submit that no triable issue emerges from them, as follows. The representation that the third defendant had formally approved the home loan package was true. It was approved on or about 19 August 2013. The third defendant undertook a credit assessment of the second defendant on 6 August 2013. The applicants also make the point that even if this representation had been incorrect, this in no way impugns the first defendant’s obligations under the mortgage and loan because the loan funds were in fact advanced to the first defendant to purchase the property, something which is of course not disputed.
- The representation that the home loan package was a lawful financial product concerns the respondents’ plea that it was in breach of the exclusive dealing –third line forcing obligations in s 47(6) of the Competition and Consumer Act 2010 (Cth) (CCA). However, the applicants submit that there was no such breach in circumstances where the relevant third line forcing notice had sought and received written approval from the ACCC, pursuant to s 47(10A) of the CCA, in October 2009; the approval was in effect at all material times.
- As to the balance of the alleged misrepresentations, the applicants submit that they were in no way false, and even if such a proposition could be established, there is no causal connection between such representations and any relevant loss or damage said to have been suffered because the respondents cannot show that they were induced to do something which gives rise to the damages. For example, it is pleaded that the respondents were not eligible for the home loan package because it was in breach of s 47(6) of the CCA. As outlined above, this is simply incorrect.
- Similarly, the submission that the third defendant falsely represented that it had approved the credit card application of the second defendant is bound to fail because the relevant credit assessment was undertaken on or about 6 August 2013; the application was approved and the credit card account opened on 19 October 2013 and activated on 5 November 2013. Indeed, it was utilised until the limit of the credit card was exceeded.
- Again, on that topic, even if the application had not been approved until some later time, this conduct does not impugn the obligations under the loan and mortgage, or entitle the respondents to any damages.
- The applicants point out that the issuance of the credit card was independent of the first defendant entering into the loan and mortgage. It was something the respondents became entitled to but was not a condition precedent of the home loan advance. It was not a term of the loan or mortgage that the first defendant would not meet the credit and eligibility criteria to qualify for a home loan if the second defendant failed to meet the credit and eligibility criteria for a credit card.
- This is an overarching theme in the case. There is no reason why the applicants should be precluded from enforcing the loan and mortgage where the issuance of the credit card was simply unrelated.
- Further, the various allegations that there had been no credit assessment performed are without basis.
- Similarly, the idea is advanced that the applicants did not confirm that the conditions precedent to the advance were satisfied prior to the advance of the funds and the registration of the mortgage. This is without merit; in fact, the funds were advanced, and the mortgage registered. The conditions precedent to the loan were satisfied in those circumstances.
- The pleaded grounds for relief in the defence and counterclaim include, as outlined above, the misleading and deceptive conduct claim; the Corporations Act claim and the unconscionable conduct claim. None of these have any factual basis, as outlined above. Further, even if the plaintiff did engage in the alleged conduct, there is no realistic prospect that the first defendant could successfully defend the claim by obtaining any relief that would avoid the loan and mortgage. The respondent’s pleaded case as to causation cannot give rise to any purported loss or damages sought.
- Thus, the applicants submit that the factual allegations pleaded in the counter claim by the first defendant are insupportable. Further, the conclusions of law contended for are also not supported by the material facts pleaded. There is a significant disconnect between the relief sought by the first defendant and the allegations made against the applicants; and again the pleaded case as to causation cannot give rise to the purported damages claim.
- In relation to the second defendant, again the factual allegations are argued to be insupportable; the legal conclusions are not supported by the material facts pleaded. Moreover the claim for $145,000.00 is statute barred as it occurred between August and October 2013 and the damages, if any, must have been incurred by the second defendant around that period of time.
- The claim that there were breaches of the ASIC Act raises the prospect of relief including the avoidance of contracts under s 12GM. In that context the applicants refer to Certane CT Pty Ltd v Whight. As outlined therein, the statutory protections in the ASIC Act related to unconscionable conduct in connection with the making of a loan and mortgage. Taking advantage of vulnerability or lack of understanding, trickery or misleading conduct will also potentially engage this section. The relevance of Certane to the present case includes the proposition, as explained in that case, that a party seeking relief under the statutory provision, similarly to the equitable relief available in such circumstances, was required usually to do equity by making restitution to the lender of advances made under the loan contract as a condition of the relief avoiding the loan agreement and setting aside the mortgage.
- In this case the first defendant used the loan to purchase an investment property, funding approximately 79 per cent of the purchase price. It is not alleged that the respondents did not understand the transaction, its purpose or their obligations. Indeed, the loan was maintained by the respondents for about two years before falling into default. Importantly, no offer of repayment is made. Thus, even if there were contraventions of the ASIC Act established, the facts and circumstances show no real prospect of avoidance of the loan and mortgage. This is particularly so where the first defendant had the full benefit of the advance and does not offer restitution or to repay the principal sum as a condition of an order for avoidance, as mentioned above.
- In response to this, the respondents argue that the normal rule, that before a power of sale will be enjoined the mortgage debt should be paid into court, has exceptions. These include where there is an attack on the enforceability of the security documents, see Town & Country Sports Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd. This is such a case, in the respondents’ submission, as outlined above. However the rule seems to apply where the statute prohibited or expressly made the transaction unenforceable, so that the loan and mortgage were subject to the legal doctrine of illegality. As outlined above, in my view this is not such a case, or at least the respondents have no real as opposed to fanciful prospects of avoiding the loan and mortgage on such a basis.
- The respondents also raise questions about the documents. Specifically it is said that the loan application, exhibit JR 2 to the affidavit of Ms Rodrigues, is not what it purports to be, rather, Mr Robertson says, it is a “merge” of two documents dated 6 and 7 August 2013. This is then relied on to invalidate the transaction, despite the loan being approved, the desired advance being made, the property purchased and the payments under the mortgage being made for some years thereafter.
- What he refers to are apparent anomalies on the document. At its foot, the first page has a date of 6 August 2013; the rest of the seven pages have the date 7 August 2013. The first page is described as “1 of 6”; there are in fact 7 pages. Mr Robertson says he did not tell Mr Mason, the Mortgage Choice manager who took the application, that his occupation was Environment, Parks and Land Care Manager or that his Gross Annual Income was $1,242,618.
- These may be errors, possibly by Mr Mason. However there seems no doubt that Mr Robertson did apply for, and received, the loan. The name of the First Defendant is correctly recorded as the borrower, and Mr Robertson was correctly recorded in the relevant space but crossed out and the First Defendant’s inserted by hand writing. Mr Robertson’s employer was correctly recorded as was his address. There are no other challenges to the accuracy of the document and Mr Robertson signed it as borrower and as guarantor. As noted above, it is common ground that the loan was made, the mortgage registered and the repayments made for some time.
- There is no pleading or other allegation of forgery. In my view, the anomalies in the loan application document are no more than curiosities which are immaterial to the merits of this application.
- The thrust of the balance of the respondents’ arguments is set out above. Mr Robertson essentially accuses the plaintiffs of unconscionable “asset lending”. The pleadings set out the three broad categories of alleged wrongdoing. However for the reasons outlined above, those possible grounds of defence are without merit.
Further argument re exclusive dealing
- The respondents raised at the hearing of the application the argument that although the notification of exclusive dealing was obtained in 2009, there was no subsequent notification. Further, the notification was for the plaintiffs proposed “consumer residential loan product”. It was argued that there was no such notification seeking legal immunity for the 2019 investor loan product where the debtor was not a consumer. Thus it was said that the offer and loan product were in breach of s 47(1) of the CCA and it would be unconscionable for the plaintiff to succeed.
- In response to this, the applicants submit that the notice does not refer to a “consumer residential loan product”; see the notice, Exhibit JR17 to the affidavit of Ms Rodriguez.
- Secondly, the respondents refer to the definition of “consumer” in the National Consumer Credit Protection Act 2009 (Cth) (NCCPA). The applicants submit that this has no relevance to the definition of the word “consumer” as used in the notice or as defined in the CCA. The NCCPA was not in force at the time when the notice was issued, and there is no later deeming provision altering the definition of a word used in the CCA. In fact, s 5 of the NCCPA contains the dictionary and is preceded by s 4 which provides that the dictionary relates to that Act. It is not expressed as having relevance to, or amending, the CCA.
- In the CCA, s 4B provides that the definition is for the purposes of that Act. The word “consumer” in the notice is not a reference to the definition within s 4B, rather it has its ordinary and every day meaning.
- It is alternatively submitted that the respondents fell within the scope of being a “consumer” (as defined in the CCA) when obtaining the loan in 2013; the provision of the home loan package was a “service” as provided for in s 4B(1)(b)(ii) of the CCA and the loan was for personal, domestic or household use. Section 4B(3) of the Act raises a presumption that the person is a “consumer” in relation to the relevant goods or services unless the contrary is established. A loan for a business or investment purpose may fall within the scope of financial services of a kind ordinarily acquired for personal use.
- Thus s 82 of the CCA allows an action for damages or loss if there is contravention of Part IV of the Act. What is submitted by the applicants is that the respondents cannot establish that they have suffered any loss or damage for the reasons outlined above. The funds were advanced to the first defendant to purchase the property, they amounted to approximately 79 per cent of the purchase price and the property has likely significantly increased in value since 2013.
- In short, the point belatedly raised by the respondents does not assist.
- In my view the applicants’ arguments ought to be accepted. For the reasons outlined above, none of the respondents’ arguments have real, as opposed to fanciful, prospects of success and there is no need for a trial. The allegations of misleading and deceptive conduct, breach of the Corporations Act or unconscionability are without factual basis and in any case are not liable to be causative of any actionable loss.
- It follows that the plaintiff’s application must succeed, and the orders will be as proposed by the applicants, that is:
- Pursuant to Rule 292 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) the plaintiff recover from the first defendant possession of the land described as Lot 2 on Registered Plan No. 155817, being the whole of the land contained in Title Reference 15713094 and known as 169 Winston Road, Palmwoods in the State of Queensland.
- Pursuant to Rule 181 and 293 of the UCPR, summary judgment be given for the plaintiff and third defendant against the first and second defendants for all of their counter claim.
- The first and second defendants pay the plaintiff and the third defendant’s costs of the application and counter claim to be assessed or otherwise agreed.
 This is within the jurisdiction of the Court pursuant to s 68 (1)(a) (iv) and (b)(i) of the District Court of Queensland Act 1967 (Qld).
  2 Qd R 232 at -.
 Queensland Pork Pty Ltd v Lott  QCA 271 at .
 The relevant notice pursuant to s 84 of the Property Law Act 1974 (Qld) was sent to the respondents on 15 September 2020; see the affidavit of Ms Aguinaldo, court file doc. no. 8 and the exhibits thereto.
 Defence, court file document no. 2, at .
 Affidavit of Ms Rodrigues, court file document no. 7, at .
 Affidavit of Ms Rodrigues, court file document no.7, at [42(c)].
 Affidavit of Ms Rodrigues, court file doc. no. 7, at - and the exhibits thereto.
 Certane CT Pty Ltd v Whight  QSC 77 at .
 Ibid at .
 Ibid at ; Langman v Handover (1929) 43 CLR 334; Wilby v St George Bank Ltd  SASC 388,  – .
 Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161.
 (1988) 20 FCR 540 at 545.
 Mayfair Trading Co Pty Ltd v Dreyer (1958) 101 CLR 428.
 Violet Home Loans Pty Ltd v Schmidt  44 VR 202 at  – .
- Published Case Name:
Perpetual Limited v Silvan Park Holdings Pty Ltd & Ors
- Shortened Case Name:
Perpetual Limited v Silvan Park Holdings Pty Ltd
 QDC 271
Kent QC, DCJ
23 Nov 2021