Accelerated Loans Pty Ltd v Forbes [No 2] - [2025] WASC 52

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   ACCELERATED LOANS PTY LTD -v- FORBES [No 2] [2025] WASC 52
CORAM:   LUNDBERG J
HEARD:   20 FEBRUARY 2025
DELIVERED          :   21 FEBRUARY 2025
FILE NO/S:   CIV 1443 of 2024
BETWEEN:   ACCELERATED LOANS PTY LTD
Plaintiff
AND
ANTHONY FORBES
First Defendant
JEAN CATHERINE FORBES
Second Defendant
ANTHONY FORBES
JEAN CATHERINE FORBES
Plaintiff by counterclaim
ACCELERATED LOANS PTY LTD
Defendant by counterclaim

Catchwords:

Costs - Appropriate order to be made following dismissal of the summary judgment application - Whether costs of the application should follow the event or be in the cause - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 14 r 8, O 66 r 1
Supreme Court Act 1935 (WA), s 37

Result:

Plaintiff is to pay the defendants' costs of the application, in any event, to be assessed if not agreed, payable forthwith

Category: B

Representation:

Counsel:

Plaintiff	:	J C Yeldon
First Defendant	:	T J Langdon
Second Defendant	:	T J Langdon
Plaintiff by counterclaim	:	T J Langdon
Defendant by counterclaim	:	J C Yeldon

Solicitors:

Plaintiff	:	Parsons & Partners
First Defendant	:	Richards & Lally Lawyers
Second Defendant	:	Richards & Lally Lawyers
Plaintiff by counterclaim	:	Richards & Lally Lawyers
Defendant by counterclaim	:	Parsons & Partners

Case(s) referred to in decision(s):

Accelerated Loans Pty Ltd v Forbes [2024] WASC 504
Blenkinsop v Blenkinsop Nominees Pty Ltd [2015] WASC 254 (S)
Chalmsbury Nominees Pty Ltd v Alita Resources Limited (Receivers and Managers Appointed) (Subject to Deed of Company Arrangement) [2023] WASC 97
Frigger v Lean [2012] WASCA 66
James Point Pty Ltd v The Minister for Transport [2015] WASC 323 (S)
Major v Woodside Energy Ltd [No 3] [2009] WASC 246
NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107
Ridgepoint Corporation Pty Ltd v McCallum Donovan Sweeney (A Firm) [2011] WASC 167 (S)
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Whitehall Holdings Pty Ltd v Custom Credit Corporation Limited [1992] WASC 356

LUNDBERG J:

A. Introduction

On 16 December 2024, I heard the plaintiff's applications for summary judgment in this action, which had been brought pursuant to O 14 r 1(1) of the Rules of the Supreme Court 1971 (WA) (RSC) in respect of the plaintiff's claims, and pursuant to O 16 r 1(1) RSC in respect of the defendants' counterclaims.
On 23 December 2024, I published reasons dismissing the summary judgment applications and reserved the costs: Accelerated Loans Pty Ltd v Forbes.[1]
[1] Accelerated Loans Pty Ltd v Forbes [2024] WASC 504.
On 20 February 2025, the Court heard argument on the issue of costs. Counsel for the defendants moved for an order that the plaintiff pay the defendants' costs of the application in any event, to be assessed if not agreed, payable forthwith. Counsel for the plaintiff submitted that the appropriate order was that the costs be in the cause of the action.
In my view, the appropriate order to be made as to the costs of these unsuccessful applications is the order sought by the defendants. My reasons for reaching that conclusion follow.

B. Relevant principles

The Court has a wide discretion to award costs, pursuant to the power in s 37 of the Supreme Court Act 1935 (WA). The discretion regarding costs has been described as 'absolute, unconfined or unfettered although a discretion that must be exercised judicially, not arbitrarily or capriciously, or on grounds unconnected with the litigation'.[2]
[2] Frigger v Lean [2012] WASCA 66 [53] (Allanson J, Newnes and Murphy JJA).
Several general rules as to costs are described in O 66 r 1 RSC. The first rule, in rule 1(1), states that 'the Court will generally order that the successful party to any action or matter recover his costs', which is subject to any express provisions in any statute or in the Rules, and of course does not limit the Court's general discretion. This is typically the starting point for most analyses of costs outcomes.[3] However, the Court has often emphasised that it is 'unwise to seek to lay down hard and fast rules in considering the application of a court's general discretion for costs orders'.[4]
[3] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96; (2019) 54 WAR 388 [49] (Murphy, Mitchell and Pritchard JJA) (Strzelecki Holdings).
[4] Ridgepoint Corporation Pty Ltd v McCallum Donovan Sweeney (A Firm) [2011] WASC 167 (S) [10] (Kenneth Martin J) (Ridgepoint Corporation).
The rationale for this general rule is that where a party has unjustifiably brought another party before the Court, that party should be liable to compensate the other in costs. It is therefore incumbent on an unsuccessful party to satisfy the Court that there are good reasons it should not pay the successful party's costs.[5]
[5] Strzelecki Holdings [50] - [52] (Murphy, Mitchell and Pritchard JJA).
In relation to summary judgment applications, particular issues of practice concerning the nature of such applications require consideration, as do the terms of O 14 r 8 RSC. That rule, which does not limit the Court's general discretion, states:
8.Costs
(1)If the plaintiff makes an application under rule 1 and the case is not within this Order, or if it appears to the Court that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, the Court may dismiss the application with costs, and may require the costs to be paid by the plaintiff forthwith.
(2)The Court shall have the same power to dismiss an application under rule 6 as it has under subrule (1) to dismiss an application under rule 1, and that subrule shall apply accordingly with the necessary modifications.
The first limb of O 14 r 8(1) RSC would appear to capture applications for summary judgment which fail by reason of a defect, rather than applications which fail because the moving party has failed to discharge the high burden associated with summary judgment applications. However, I did not hear full argument on that issue and it is unnecessary to decide the point.
The second limb is directed to circumstances in which the plaintiff is on notice of opposing arguments which, if accepted in the context of an interlocutory summary judgment application, would lead to the opposing party being granted unconditional leave to defend. Put another way, this limb captures those circumstances where the moving party should have known that the application for summary judgment would inevitably fail.
There nonetheless remains the general discretionary power to make costs orders, which is not confined by O 14 r 8 RSC. In this regard, as to the practice in relation to costs outcomes in summary judgment applications, there is established authority to the effect that, if a summary judgment application has been properly brought but dismissed (for reasons other than defects in the application), the 'most usual order' is that the costs of the application be costs in the cause. That authority is the decision of the Full Court in Whitehall Holdings Pty Ltd v Custom Credit Corporation Limited,[6] delivered in 1992.
[6] Whitehall Holdings Pty Ltd v Custom Credit Corporation Limited [1992] WASC 356 (Whitehall Holdings).
Some analysis of Whitehall Holdings is pertinent, at this point.
In Whitehall Holdings, the Master at first instance had granted summary judgment in favour of the plaintiff, upholding a claim for several millions of dollars. Indeed, the expedited list judge had accepted that the summary judgment application was a 'reasonable procedure' and allowed the case to stay in the expedited list pending the application being determined. The Full Court upheld the appeal and granted the defendants leave to defend the action.
In upholding the appeal, Ipp J made it clear he considered the application had been 'readily arguable'. His Honour then explained his approach to the costs issue as follows:[7]
The usual order where an application for summary judgment is dismissed is that the costs of the application be in the cause so that the party successful at the trial recovers them. The basis on which it is said on behalf of the appellants that the usual order should not be made is that the respondent should have known before the application for summary judgment was brought or, alternatively, in the course of bringing the application, that it would inevitably fail.
The principal defence of the appellants was a counter-claim for damages that exceeded the respondent's claim, and it is said that the respondent should have known that the existence of this counter-claim would have resulted in the application for summary judgment failing.
Exceptionally, when an application for summary judgment is dismissed, costs are awarded to the defendant; cases of this kind occur where the applications should never have been made.
It cannot be said that this case falls into that category.
…
The rule that the costs of a summary judgment application may be ordered against an unsuccessful plaintiff where he knows of the existence of a defence rests in essence on the principle that applications for summary judgment should not be brought when the plaintiff is aware or should be aware that the application is hopeless and that it has no prospect of succeeding.
[7] Whitehall Holdings (2 - 4) (Ipp J).
Pidgeon J reached the same view, as to the reasonableness of the application.[8] As did Owen J.[9] The decision of the Full Court that the costs of the failed application ought be in the cause, is explicable in these circumstances.
[8] Whitehall Holdings (6) (Pidgeon J).
[9] Whitehall Holdings (7 - 8) (Owen J).
Consistently with Ipp J, both Pidgeon and Owen JJ expressly accepted there would be circumstances in which orders other than costs in the cause should be made where a summary judgment application has not succeeded.[10]
[10] Whitehall Holdings (7) (Owen J).
In his Honour's reasons in Ridgepoint Corporation, Kenneth Martin J sought to place Whitehall Holdings in historical context, explaining that the Full Court decided that case 'in the environment before intensification of case management practices now utilised by courts in Western Australia under rules such as RSC O 1 r 4A and r 4B'.[11] His Honour made specific reference to the practice of the Court in the CMC List to 'strongly discourage interlocutory disputation unless it is absolutely necessary'.[12]
[11] Ridgepoint Corporation [8] (Kenneth Martin J).
[12] Ridgepoint Corporation [9] (Kenneth Martin J). See also James Point Pty Ltd v The Minister for Transport [2015] WASC 323 (S) [22] (Martino J) (James Point).
Kenneth Martin J also noted that an outcome on a summary judgment application does not necessarily translate to a similar outcome at trial, given the different questions and burdens involved and, in any event, most actions in the Court are resolved before trial. Accordingly, the logic which underlies the 'usual costs order' lacks a degree of force.
The asserted logic is that, where the unsuccessful summary judgment application is brought by a plaintiff, should the plaintiff ultimately fail in the action, he or she will probably be ordered to pay the defendant's costs of the action which will then include the costs of the failed interlocutory application. The defendant will, through that mechanism, recover the costs of the application.
In Ridgepoint Corporation, Kenneth Martin J ultimately ordered that the costs of the failed summary judgment application of the second defendant be the plaintiff's costs in the cause of the action as between those parties (at [13]). His Honour declined to order those costs be payable forthwith (at [12]).
More recently, in NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd,[13] the Court of Appeal considered the correctness of a costs order, made by the primary judge in that matter following an unsuccessful summary judgment application in respect of a counterclaim. The order was to the effect that the party who successfully resisted the application should be entitled to its costs. The primary judge had analysed the decision of Kenneth Martin J in Ridgepoint Corporation in the course of her reasons, and suggested in passing (without deciding) that the 'usual rule' should be revisited.
[13] NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107 (NRW Contracting).
Murphy JA concluded that:
[112]While the judge unnecessarily appears to have expressed the view in passing that the usual rule endorsed by the Full Court in relation to failed summary judgment applications[14] should be 'revisited', it appears that her Honour did not decide the question of costs on that basis. Rather, it appears that her Honour concluded that, in the particular circumstances of this case, on the arguments presented to her Honour, a reasonable party in BGC's position ought to have known that it had no reasonable prospects of success in obtaining summary judgment. Where the application for summary judgment has that character, and particularly bearing in mind case management principles, it may not be just for the applicant, even if successful at trial, to have the costs of the failed interlocutory application. Ridgepoint, to which her Honour referred, is, and should be understood as, an illustration of the application of that kind of reasoning, albeit in that case the applicant's absence of reasonable prospects related to the factual context in which the claim was brought.
[113]There is no error in that approach in principle, and no error as alleged by BGC has been established. There is no basis for this court to doubt the correctness of the ordinary rule referred to in Whitehall and the cases which have followed it, but it cannot be hardened into a fixed and inviolable rule that costs are always in the cause in this context. (underlining added)
[14] Murphy JA cited Whitehall Holdings (2 - 4); Major v Woodside Energy Ltd [No 3] [2009] WASC 246 [16]; and Blenkinsop v Blenkinsop Nominees Pty Ltd [2015] WASC 254 (S) [3] (Allanson J).
Beech and Vaughan JJA agreed with Murphy JA's reasoning and conclusion on the costs issues (at [135]).
Given the decision of the Court of Appeal in NRW Contracting, it is appropriate that I refrain from expressing any view as to the need to revisit the 'usual rule', other than to observe that the Court of Appeal expressly recognised (at [112]) the relevance of case management principles as part of the discretionary analysis.

C. Relevant features of these unsuccessful applications

There are several features of the applications brought by the plaintiff which are pertinent to the costs outcome and the exercise of the costs discretion, in my opinion.
First, and most importantly, the defendants raised, in opposition to the summary judgment applications, a number of fact-sensitive defences which would require a trial before any findings and conclusions could be reached as to their viability. These matters have a similar degree of fact-sensitivity to the matters identified by Kenneth Martin J in Ridgepoint Corporation as justifying an order other than the usual order. His Honour was there dealing with the 'unique nature of ascertaining the existence of a common law duty of care and its scope' (at [11]).
The principal defences raised by the defendants in the present action were:[15]
(a)a contention that the plaintiff has engaged in unconscionable conduct in circumstances which may be described as asset-based lending (which also constituted the defendants' counterclaim), contrary to s 12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act);
(b)a contention that the default interest rate was an unenforceable penalty and/or constituted unfair contracts terms under s 12BF of the ASIC Act;
(c)a contention that the debt had been (or ought to have been) repaid from the proceeds of assets sold in the receiverships of two of the corporate borrowers; and
(d)a contention that the amount of the loan was increased without the consent of the defendants after the guarantee and mortgage were executed, such that the guarantee and mortgage were unenforceable.
[15] Primary Reasons [29].
The unconscionability and other allegations pleaded and asserted by the defendants rendered the summary judgment applications brought by the plaintiff as 'rather ambitious' (Primary Reasons at [44]).
Second, most of these defences were pleaded by the defendants in the Defence and Counterclaim filed on 17 June 2024, prior to the summary judgment applications being filed on 5 August 2024.
The plaintiff was thus on notice at an early juncture, and ahead of the applications being filed, that the defendants were seeking to raise fact-sensitive defences which would render the prospects of succeeding on a summary judgment application challenging, to say the least.
Third, an affidavit sworn by one of the defendants was filed on or about 29 August 2024, which verified the defendants' responses to the claims. That affidavit also referred to and verified the substance of the written submissions in support of the defendants' opposition to the summary judgment applications which had been prepared by the defendants' solicitors. Those submissions are dated 29 August 2024, but appear to have been filed with the Court only on or about 25 September 2024. Nonetheless, it appears from the affidavit they were prepared and served much earlier.
Accordingly, by no later than the end of August 2024, the plaintiff was on notice that the defendants had filed affidavit evidence in opposition to the applications which, on their face, created triable issues.
Fourth, and pointing against the defendants' contention that a costs order in its favour should be made, I identified in the Primary Reasons several aspects of the defendants' opposition, and their affidavits, which lacked weight. I refer to the Primary Reasons at [26], [59], [67] and [95]. Indeed, not all of the plaintiff's criticisms of the defendants' materials were rejected by the Court. Nonetheless, I concluded that the Court was not in a position to resolve the disputed issues of fact, or any differences or discrepancies in the affidavit material, on a summary application.
Fifth, the conclusion I reached on the summary judgment applications was not only that the applications should be refused, but the extension of time which was sought should be refused.
Sixth, there were several procedural non-compliance issues associated with the plaintiff's applications which will have contributed to additional costs being incurred by the defendants in opposing the matter, as well as evidentiary issues which supported the dismissal of the application such as the lack of cogency in the affidavits filed on behalf of the plaintiff. I refer to the Primary Reasons at [6] - [8] and [86] to [94].
Seventh, I reached the following conclusions in the Primary Reasons which are particularly telling as to the viability of the summary judgment applications, and which I set out now for ease of reference:
[44]Given the fact-sensitive unconscionability and other allegations which have been pleaded and asserted by the defendants, it must be said the summary judgment applications brought by the plaintiff were rather ambitious.
[45]For the reasons which follow, I have reached the view that this is not a proper case for judgment to be granted to the plaintiff in the absence of a trial. In the circumstances, the extension of time which the plaintiff seeks should be refused (given the lack of merit in the substantive applications) and the summary judgment applications should themselves be dismissed. The defendants should be granted unconditional leave to defend the action and to prosecute their counterclaims.
…
[65]On a summary judgment application, the Court must proceed on the basis that the defendants' evidence will ultimately be accepted, except where the Court is able to characterise that evidence as inherently implausible or lacking any substance. In the present matter, the evidence presented by the defendants does not meet those descriptions. The evidence must be accepted, in my view, on its face. When that point is reached, I consider the summary judgment application must inevitably fail.
[66]The evidence reveals a circumstance which, on established authority, may arguably constitute unconscionable conduct that may be attributable to the plaintiff, or for which the plaintiff may be held responsible. The Court is in no position to make any positive finding in this regard, one way or another.
…
[78]The allegation that the interest rate regime constitutes an unlawful penalty requires a proper examination at a trial of the action and of the counterclaim. It cannot be assessed (and certainly cannot be rejected) at this summary judgment level.
…
[92]As to the substance of the affidavits, other than addressing written communications with which Mr Shen was involved, there is no evidentiary foundation apparent in the affidavits for any of the further matters of fact to which he deposes, in his capacity as a legal practitioner acting for the plaintiff. Much of the affidavit material consists of references to documents and unnecessary commentary on the terms of those documents.
[93]It is somewhat unusual, at least in my experience, to embark on a summary judgment application such as this, which was always likely to traverse some measure of factual disputation, without adducing an affidavit sworn by a director, senior employee or other internal representative of the party seeking summary judgment. It is significant that no director, senior employee or other internal representative of Accelerated Loans Pty Ltd, the plaintiff lender in this action, has sworn any affidavit in support of the application. Alternatively, a partner at the law firm who was directly involved in the transaction may have sworn a supporting affidavit, but has not.
[94]Where there are disputed questions of fact, which might be capable of resolution on an application such as this, the absence of persuasive affidavit material from a person on the plaintiff's side with direct knowledge of the facts strikes me as highly detrimental to the ability of the plaintiff to demonstrate that summary judgment ought be granted. For example, there is no evidence from the plaintiff as to the relationship it has with the finance broker and the accountant, or as to steps it took to assure itself that the parties to the transaction received independent legal and financial advice, or as to the usual processes it implements in financial transactions such as this which have high rates of interest and are in the nature of asset-based lending.

I ultimately concluded there were serious questions to be tried in the action, having regard to the factual and legal defences which had been raised and verified by the defendants, and that there was also some other reason for a trial of the action. This was certainly not one of the 'clearest of cases' which is reserved for summary judgment to be granted.
The power to order summary judgment is one that should be exercised with great care, and it is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Sutton Investments Pty Ltd v Realistic Investments Pty Ltd.[16]
[16] Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24] (and the cases cited therein).
In my view, given the foregoing features of the case which I have identified, it is evident that the plaintiff was aware, or should reasonably have been aware, from an early point in the course of the application, and indeed, likely prior to the application being filed, that the application had no reasonable prospect of succeeding.
The circumstances of this case thus fit within the exception identified by the Court of Appeal in NRW Contracting. Specifically, where a reasonable party ought to have known it had no reasonable prospects of success of obtaining summary judgment, it may not be just for the applicant, even if successful at trial, to have the costs of the failed interlocutory application.[17]
[17] Adopting, in this respect, the language of Hill J in Chalmsbury Nominees Pty Ltd v Alita Resources Limited (Receivers and Managers Appointed) (Subject to Deed of Company Arrangement) [2023] WASC 97 [90] (Hill J).
I am therefore satisfied that an order that the costs of the application be in the cause of the action would be inappropriate and not in the interests of justice. The appropriate order in all the circumstances, is that the unsuccessful plaintiff should bear the costs of the application in any event, which will include, for the avoidance of any doubt, the costs of the directions hearings on 7 November 2024 and the substantive hearing on 16 December 2024.
Further, the circumstances outlined above justify an order that those costs be payable forthwith - the defendants should not be required to bear those costs until the conclusion of the litigation.
These orders will be made pursuant to the power in the second limb of O 14 r 8(2) RSC, or otherwise pursuant to the Court's general costs powers in s 37 of the Supreme Court Act 1935 (WA) and O 66 r 1(1) RSC.

D. Conclusion and orders

For the foregoing reasons, I will order that the plaintiff pay the defendants' costs of the summary judgment applications, in any event, to be assessed if not agreed, and to be payable forthwith.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IR
Associate to the Hon Justice Lundberg
21 FEBRUARY 2025