Commonwealth Bank of Australia v Dinh [No 2] - [2019] WASC 456

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   COMMONWEALTH BANK OF AUSTRALIA -v- DINH [No 2] [2019] WASC 456
CORAM:   ARCHER J
HEARD:   23-30 JULY, 1-5, 12 AUGUST, 3 & 5 SEPTEMBER 2019
DELIVERED          :   17 DECEMBER 2019
FILE NO/S:   CIV 1376 of 2014
BETWEEN:   COMMONWEALTH BANK OF AUSTRALIA
Plaintiff
AND
PETER DINH
First Defendant
ANNE TRAN DINH
Second Defendant

Catchwords:

Default under loan agreement - Counterclaim to set aside transaction documents - Unconscionability - Misleading conduct - Inability to speak or read English - Marginal loan - Breach of Banking Code of Practice - Turns on its own facts

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth)

Result:

Judgment for the plaintiff
Counterclaim dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	C H Thompson
First Defendant	:	No appearance
Second Defendant	:	S K Shepherd

Solicitors:

Plaintiff	:	Dentons Australia
First Defendant	:	No appearance
Second Defendant	:	Forbes Kirby

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

Australian Securities and Investments Commission v Kobelt [2019] HCA 18
Bate v International Computers (Aust) Pty Ltd (1984) 2 FCR 526
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341
Caffey v Leatt‑Hayter [No 3] [2013] WASC 348, 163
Doggett v Commonwealth Bank of Australia [2015] VSCA 351; (2015) 47 VR 302
Fazio v Fazio [2012] WASCA 72
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392
Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10
Sam Management Services (Aust) Pty Ltd v Bank of Western Australia [2009] NSWCA 320
Singh v Kaur Bal (No 2) [2014] WASCA 88
The Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447
The Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85
Vadasz v Pioneer Concrete (SA) Pty Ltd [1995] HCA 14; (1995) 184 CLR 102
Westpac Banking Corporation v Haynes [2017] SASC 23

Table of Contents

Overview

Background

The Loan Agreement

Allegations pleaded by Ms Dinh

The issues

The evidence

Chronological facts

The defendants' property portfolio

The defendants farmed in Carnarvon

The defendants want to buy their own farm

Approach to the Bank - the Carnarvon meeting in November 2008

The loan application

The conversation about undisclosed properties - November

More information sought, and provided, via Andrew Dinh

A second meeting with the Bank, this time in Perth - late 2008

Ms Dinh's loan to her sister Ms Lee

The Family Trust - 27 November 2008

The Bank advises securities on the other properties will be required - 2 January 2009

The loan is conditionally approved - 2 January 2009

Meeting in Ballajura - a date between 2 January and 12 February 2009

Early possession - 4 January 2009

The contract of sale - 10 January 2009

The loan is approved on a revised basis - 16 January 2009

Signing documents to refinance loans to other lenders - 5 February 2009

Appointment of settlement agent

Gateway Hotel - the first signing of transaction documents - 12 February 2009

Ms Dinh's evidence
Analysis of Ms Dinh's evidence
Did Mr Pollard explain?

The re-signing of the loan agreement - 4 March 2009

Stamp duty extension - 16 March 2009

The settlement documents

Peter Dinh seeks a loan from one of his agents - 19 March 2009

Settlement of the Plantation - 20 March 2009

Clearance of the extension - April 2009

Request for a cash flow budget - May 2009

The challenged call report
The cash flow budget

Internet banking - June 2009

Listing the other properties for sale

Advice of overdrawn overdraft account

The Bank's arrears management team calls - August 2009

Request for another cash flow budget - September 2009

Ongoing updates and promises - October 2009 to end 2009

The ANZ bank account is set up - late 2009

The Bank statements are faxed to the Dinhs - 25 November 2009

The December 2009 strategy

Events in early 2010

Proceeds from the Aveley property - May 2010

The visit on 3 May 2010
Overdraft paid down
Ms Dinh's claimed surprise
Other evidence of Ms Dinh

Subsequent interactions to November 2010

Floods late 2010 and early 2011

The Dinhs stop paying the Bank at all - probably early 2011

The Bank makes its demand - November 2011

Ms Dinh finds out the Banks want to take all her properties

The Ombudsman - September 2012

Peter Dinh made bankrupt - September 2012

Formal demand

Other factual findings

Sale of other properties

Current position

Disabilities and resources

English abilities
Andrew as an interpreter and conduit
Other resources

Ms Dinh's knowledge pre‑loan

What did Ms Dinh know about financing?
Ms Dinh was the family banker
Ms Dinh's role in the business was the finances
Her knowledge of mortgages and credit generally
Knowledge of overdrafts
Legal advice
What did Ms Dinh know about the Loan Agreement?
Did Ms Dinh know they had to sell the investment properties?
Did Ms Dinh know the Bank was going to take securities on the other properties?
Did Ms Dinh know the Bank was going to refinance the other loans?
Did Ms Dinh know that the new home loans would be one year interest only loans?
All moneys mortgages and commercial lending terms

Post loan, was Ms Dinh aware of the state of the overdraft account?

The approval of the loan

Mr Pollard's commentary
The spreadsheet of Projected Performance
The grape income
Double-counting land
Conclusion on Projected Performance
The questionnaire
Criticisms
Questions 1 and 11
Question 5
Factoring in the high gearing, break-even income and high risks
The $50,000
Conditional on valuations
A revised surplus of $10,000
The unmentioned buffers
Was Mr Pollard 'pushing for' the loan?
Prudence of the loan

Assessment of witnesses

Ms Dinh

Failure to disclose to Centrelink
Misled the NAB
Sale of Bassendean property
Failure to disclose other properties
Oral evidence
Conclusion

Peter Dinh

Andrew Dinh

Jenny Lee

Paul Pollard

Challenges to his evidence

Failure to call Ms Regan - Jones v Dunkel

Breach of the Code

Clause 2.2

Failed to ensure that she understood
The overdraft
Having to sell other properties
Refinancing of home loans
New home loans were one year interest only loans
Shifting the goal posts
Conclusion
Failed to allow her an opportunity to take advice (cl 2.2)
Failing to comply with the Bank's policy for witnessing documents (cl 2.2)

Clause 2.1(d) and 10.2(b) - failing to provide information in Vietnamese

Clause 25.1 - Did not properly assess her capacity to repay

Did the Bank breach cl 25.1?
If the Bank did breach cl 25.1, did that cause a loss?
Comments on damages if breach of cl 25.1

Misleading or deceptive conduct

Second Representation

Third Representation

Was the Third Representation made?
Did Ms Dinh rely on it?
If Ms Dinh did rely on it, did the Bank have reasonable grounds to make it?

Unconscionability

Legal principles

In equity
Under the ASIC Act

Analysis

Was Ms Dinh under a special disability?
Did the Bank unconscientiously take advantage of Ms Dinh's disability?

Limitation defence

Conclusion on defence and counterclaim

Comments on setting aside the transactions

The relief sought

Restitution?

Ms Dinh's pre‑loan equity position

Conclusion

ARCHER J:

Overview

The parties in this case painted two very different pictures of the second defendant Anne Dinh. The plaintiff (Bank) painted a picture of an intelligent and calculating woman, willing to lie to achieve her ends, gaming the system and pretending that her poor English skills deprived her of the capacity to understand the loan agreement she entered into. Ms Dinh painted herself as a hard‑working, family oriented woman whose lack of English skills were taken advantage of by a powerful bank which ensnared her in a financial arrangement that was doomed to fail. Ms Dinh is a hard‑working, family oriented woman and her English skills are poor. However, she is also an intelligent woman with a demonstrated willingness to be dishonest and whose poor English did not deprive her of the capacity to understand the loan agreement.
Ms Dinh and her husband Peter Dinh wanted to buy a farming property in Carnarvon[1] (Plantation). They entered into a contract with the Bank to obtain the money to buy the Plantation (Loan Agreement). The obligations incurred by Mr and Ms Dinh under the Loan Agreement were secured by, among other things, mortgages over properties already owned by the Dinhs and over the Plantation itself.
[1] Lots 248 and 284 at 207 McGlades Road, North Plantations, and being the whole of the land described in certificates of title volume 2197 folio 17 and volume 1446 folio 649 - see exhibits 2.132 and 2.133.
Settlement of the Plantation occurred on 20 March 2009.
Mr and Ms Dinh defaulted under the Loan Agreement. The Bank brought an action against them both, seeking to recover the money owed under the Loan Agreement, plus interest. The Bank also sought possession of the Plantation and two other properties[2] owned by the Dinhs, each of which were subject to mortgages. I will refer to the mortgages on these three properties collectively as 'the Mortgages'. Shortly afterwards, the Bank sold one of those properties, so it now seeks possession of the Plantation and one other property.
[2] One in Ballajura and one in Dianella.
Mr Dinh is now a bankrupt. A default judgment was obtained against him.
Ms Dinh resists the Bank's claim. She does not dispute that, if the Loan Agreement and the Mortgages (collectively, the 'transaction documents') are enforceable, the Bank is entitled to the relief it claims. However, she alleges that the transaction documents are unenforceable because the Bank breached the Loan Agreement, engaged in misleading or deceptive conduct and acted unconscionably.
Ms Dinh also counterclaims against the Bank, relying on the same allegations. She seeks, in effect, to be returned to the position she was in prior to entering into the Loan Agreement. She asserts that, prior to entering into the loan, she had net assets worth $874,485. She seeks to be left with that amount.[3]
[3] See ts 354 ‑ 355.
The Bank denies Ms Dinh's allegations of wrongdoing. It further submits that, even if the transaction documents are set aside, Ms Dinh should be required to repay the money she borrowed plus interest at a commercial rate.[4]
[4] ts 1208 ‑ 1209.
Accordingly, the real issues in dispute are Ms Dinh's allegations against the Bank.

Background

The Loan Agreement

Mr and Ms Dinh are Vietnamese. They are not fluent in English. For the most part, they communicated with the Bank through their son, Andrew Dinh, who is fluent in English and spoken Vietnamese. All of the Bank's documentation was in English. The person at the Bank with whom they were dealing, Mr Pollard, only spoke to them in English.
At the time Mr and Ms Dinh entered into the Loan Agreement, they were the registered proprietors as joint tenants of four properties, each of which was subject to a mortgage. The properties were:
(1)57 Yosemite Loop, Ballajura, mortgaged to the National Australia Bank (NAB) (Ballajura property);
(2)421 Morley Drive, Dianella, mortgaged to Suncorp‑Metway Ltd (Dianella property);
(3)21 Balsam Mews, Aveley, mortgaged to SAMsLoans/Perpetual Ltd (Aveley property); and
(4)270 Landsdale Road, Landsdale, mortgaged to the Bank (Landsdale property).
Peter Dinh was also the sole registered proprietor of a property at Unit 75, 996 Hay Street, Perth, mortgaged to the Bank (Perth property).
The Loan Agreement[5] provided for the advancement of a total sum of $1,150,000 (Loan Amount) on two accounts:
(1)an overdraft account in the amount of $50,000 to provide working capital for the farming venture; and
(2)a 12‑month bill facility in the amount of $1,100,000 to provide the funds for the purchase of the Plantation (Bill Facility).
[5] Exhibit 2.92. The 'Terms and Conditions for Commercial Lending Facilities' referred to in the Loan Agreement is exhibit 2.139.
I will refer to the two accounts collectively as the 'Loan Facility'.
Above the signatures of the borrowers in the Loan Agreement, it was written that the borrowers 'further acknowledge that I/we have considered appropriate advice, legal or otherwise, before entering into this Contract'.[6]
[6] Exhibit 2.92 page 352.
The obligations incurred by Mr and Ms Dinh under the Loan Agreement were to be secured by, among other things, mortgages over the Dinhs' existing properties and over the Plantation itself.[7]
[7] Exhibit 2.92 page 350.
The Bank already had a first registered mortgage over the properties in Perth and Landsdale. The Bank refinanced the three properties which had been mortgaged to other lenders, being the properties in Ballajura, Dianella and Aveley.[8]
[8] See under the heading 'Signing documents to refinance loans to other lenders - 5 February 2009'. See also 'Did Ms Dinh know the Bank was going to refinance the other loans?'
The Bill Facility, overdraft and mortgages were all on the Bank's usual terms.
The Loan Agreement was for a term of one year. Although it was not a written condition in the Loan Agreement, the Bank granted the loan on the basis that three of the Dinhs' properties would be sold during the one year term to reduce the debt load. It was, in effect, a bridging loan.[9] The three properties were the Aveley, Dianella and Landsdale properties. I will refer to these three properties as the 'three investment properties'.

Allegations pleaded by Ms Dinh

[9] See under the heading 'The approval of the loan'.

Ms Dinh pleads[10] that the Bank breached the Loan Agreement, by breaching cl 2.2, cl 2.1(d) and cl 10.2(b), and cl 25.1 of the Modified Code of Banking Practice 2004 (Code).[11]
[10] Minute of Proposed Further Amended Defence and Counterclaim filed 11 June 2019 (Defence) [31], [31A].
[11] Exhibit 8.521. This was the version of the code that applied at the time the Loan Agreement was entered into.
Clause 2.2 provides:
We will act fairly and reasonably towards you in a consistent and ethical manner. In doing so we will consider your conduct, our conduct and the contract between us.
Ms Dinh pleads that the Bank breached cl 2.2 of the Code by:
(1)failing to ensure that she understood the nature and terms of the proposed Loan Facility and mortgages and the nature and effect of a bill facility and an overdraft facility;
(2)failing to allow her an opportunity to take legal or financial advice about the proposed Loan Facility and Mortgages;
(3)failing to comply with the Bank's policy for witnessing documents executed by a person illiterate in English.
Clause 2.1(d) provides:
We will … provide information to you in plain language.
Clause 10.2(b) provides:
The terms and conditions of our banking services will … be in English and any other language we consider to be appropriate.
Ms Dinh pleads that the Bank breached cl 2.1(d) and cl 10.2(b) of the Code by failing to provide information (including but not limited to a translated copy of the documents comprising the Loan Facility and Mortgages) in Vietnamese or with appropriate and sufficient translation and interpretation.
Clause 25.1 provides:
Before we offer or give you a credit facility (or increase an existing credit facility), we will exercise the care and skill of a diligent and prudent banker in selecting and applying our credit assessment methods and in forming our opinion about your ability to repay it.
Ms Dinh pleads that the Bank breached cl 25.1 of the Code by failing to exercise the care and skill of a diligent and prudent banker in selecting and applying its credit assessment methods to Mr and Ms Dinh and in forming an opinion about their ability to repay the Loan Amount and any other credit facility.
Ms Dinh further alleges that the Bank engaged in misleading or deceptive conduct, by making the following representations:
(1)In a meeting prior to granting the Loan Facility, the Bank's agent Mr Pollard represented to Ms Dinh that the Loan Facility would be arranged without additional security (First Representation);
(2)At the same meeting, Mr Pollard, acting with the authority of the Bank, represented to Ms Dinh that the Bank did not require the refinancing of any of her properties (Second Representation);
(3)By offering to provide the Loan Facility, further or alternatively, in arranging the loan accounts, the Bank represented to Ms Dinh that the defendants would be able to service any finance provided to them (Third Representation).
Ms Dinh alleged that the Bank's conduct was misleading or deceptive contrary to s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and s 52 of the Trade Practices Act 1974 (Cth) (TPA).[12] The claim under the TPA was withdrawn.[13]
[12] Defence [47.2].
[13] ts 519.
In his closing address, counsel for Ms Dinh advised that the First Representation was not pressed in light of the evidence.[14]
[14] ts 1279.
Ms Dinh further alleged that the Bank acted unconscionably by making the representations and by breaching the Code.[15] Ms Dinh asserted she was under a disability in that she is a farmer and does not speak or read English.[16] Ms Dinh alleged that the Bank's unconscionable conduct contravened s 12CB[17] of the ASIC Act, s 51AA of the TPA, and the general law.[18] As with the misleading or deceptive conduct claim, the claim of unconscionability under the TPA was withdrawn.[19]
[15] Defence [48].
[16] Defence [2].
[17] Although s 12CC was pleaded, the Second Defendant's Trial Submissions filed 23 July 2019 made it clear that she intended to refer to s 12CB.
[18] Defence [56].
[19] ts 519.
As noted earlier, the Bank denies any wrongdoing. The Bank also asserts that Ms Dinh's allegations of misleading or deceptive conduct and unconscionability were time‑barred. The Bank submits that Ms Dinh amended her pleading to raise these allegations after the applicable limitation periods had expired.

The issues

In relation to the alleged breach of cl 2.2 of the Code, the following issues arise:
(1)Did the Bank fail to ensure that Ms Dinh understood the matters pleaded?
(2)Did the Bank fail to give Ms Dinh the opportunity to obtain legal advice?
(3)Did the Bank fail to comply with its policy for witnessing documents?
If the answer to any of these questions is yes, the next question is whether this caused her to suffer a loss. Answering this would require, among other things, an assessment of whether Ms Dinh would have entered into the Loan Agreement anyway.
In relation to the alleged breach of cl 2.1(d) and cl 10.2 of the Code, the issue is whether the Bank breached those clauses by not providing information in Vietnamese. Again, if the answer to this is yes, the next question is whether Ms Dinh would have entered into the Loan Agreement anyway.
In relation to the alleged breach of cl 25.1 of the Code, the following issues arise:
(1)Did the Bank fail to exercise the care and skill of a diligent and prudent banker in forming its opinion about the Dinhs' ability to repay the loan?
(2)If so, did this cause Ms Dinh to suffer a loss? In this context, the question is whether the Bank would not have offered the loan if it had not breached cl 25.1.
In relation to the alleged Second Representation, it was common ground that, if it was made, it was false. The following issues remain:
(1)Was the alleged representation made?
(2)If so, did Ms Dinh suffer a loss 'by the conduct'? In this context, that involves asking whether she relied on the alleged representation. In other words, if it had not been made, would she still have entered into the Loan Agreement?
In relation to the alleged Third Representation the same two issues arise. In addition, because it is an alleged representation as to a future matter, a further issue arises. This is whether, if the alleged representation was made, the Bank had reasonable grounds to make it.
In relation to the allegation of unconscionability, the following issues arise:
(1)Did Ms Dinh suffer from a special disadvantage (or special disability) which seriously affected her ability to make a judgment as to her own best interests?
(2)If so, did the Bank unconscientiously take advantage of that special disadvantage?

I note that, in evaluating claims of unconscionability, it is necessary to undertake a close analysis of the facts of the case.[20] Where an unconscionability claim is made under the ASIC Act, the analysis must include post‑contractual conduct.[21]
[20] Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10 [216] ‑ [217].
[21] See s 12CC(1)(j)(iv) and Australian Securities and Investments Commission v Kobelt [2019] HCA 18 [253].
The Bank's limitation defence will turn upon whether Ms Dinh's counterclaim is taken to have commenced when the proceedings began. This will depend upon the proper construction of s 81 of the Limitation Act 2005 (WA).
Finally, if the transaction documents are not enforceable, it will be necessary to determine the appropriate relief.

The evidence

The Bank primarily relied on its records. The records included emails and what were effectively file notes of telephone conversations, meetings, and planned actions.
Mr Pollard gave evidence about how the records were created and the capacity to retrospectively alter some types of records.[22] However, with the exception of one document, it was not put to Mr Pollard that he had altered any of the records or created false records.[23] Accordingly, leaving aside that single document, which I will discuss later,[24] I accept that the Bank's records were created contemporaneously.
[22] ts 963 ‑ 964, 1001 ‑ 1002, 1079 ‑ 1081.
[23] See also ts 1156 and 1269.
[24] It was a call report of 26 May 2009. It is discussed under the heading 'The challenged call report'.
In addition, very few of the Bank's records were said to be inaccurate. The only records that were challenged were those in which Mr Pollard recorded having a conversation with Peter Dinh.[25] I will discuss those documents later.[26] Excluding those documents for the moment, I accept that the Bank's records accurately reflect the events they record.
[25] See also ts 1156 and 1269.
[26] See under the headings 'The Bank advises securities on the other properties will be required - 2 January 2009' and 'Clearance of the extension - April 2009'.
Ms Dinh gave oral evidence, and called as witnesses her husband Peter Dinh, her son Andrew Dinh and her sister Jenny Lee. The Bank called Mr Pollard as a witness. I deal with my assessment of those witnesses in a subsequent section.

Chronological facts

The defendants' property portfolio[27]

[27] The evidence in this section comes primarily from Ms Dinh - see ts 458 ‑ 459, 543 ‑ 546, 582 ‑ 583, 594 ‑ 602, 606 ‑ 619, 625, 629.

Mr and Ms Dinh bought their first property in the early 90s. It was 2 Parana Crescent, Beechboro, and was financed by Homeswest. They sold it in 1993.
In the late 90s, the Dinhs bought two properties in Benara Road, Morley, numbers 337 and 361. They obtained (at least) construction finance in relation to the property at 361 Benara Road and built a house on that property.
In 1999, they purchased the Ballajura property and obtained construction finance from the NAB to build a house on the property. The Dinhs were the owner/builders, entering into a finance contract with AVCO to purchase bricks for that purpose. They ran out of money to finish the house, and re‑financed it in 2001. The Ballajura property became the Dinhs' primary residence.
In 2006, the Dinhs purchased the Aveley property, which was then a vacant block of land, financed through SAMsLoans. They built a house on the land with construction finance from the NAB. Ms Dinh gave evidence that the security for the construction finance was the Ballajura property, over which the NAB already had a mortgage, not the Aveley property.
In 2007, they bought the Dianella property, financed by Suncorp‑Metway. It was also a vacant block of land.
Again in 2007, the Dinhs[28] also bought the Perth property, financed by the Bank.
[28] Although Peter Dinh was the sole registered proprietor, Ms Dinh's case is that it was jointly owned.
Still in 2007, they bought the Landsdale property, which was then a vacant block of land, financed by the Bank. Ms Dinh said that she and her husband bought the block for her son Yuong Dinh because their son was unable to borrow the money. In 2008, Mr and Ms Dinh obtained further finance to construct a house on the land.
In 2008, Ms Dinh purchased 13 Prospector Loop, Bassendean, (Bassendean property) in her Vietnamese name, financed through the Bank. Her evidence was that she sold this to fund the purchase of the Plantation, but she ceased being the registered proprietor in December 2009, well after the Plantation was purchased.[29]
[29] Exhibit 15. The timing of when she sold the Bassendean property is discussed later - see under the heading 'The $50,000'.
As noted earlier, at the time Mr and Ms Dinh entered into the Loan Agreement, they were the registered proprietors as joint tenants of four of those properties, being the Ballajura, Dianella, Aveley and Landsdale properties. Peter Dinh was also the sole registered proprietor of the Perth property. Each property was subject to a mortgage.

The defendants farmed in Carnarvon[30]

[30] The evidence in this section comes primarily from Ms Dinh - see ts 576 ‑ 579, 630 ‑ 632.

From about 2002 up to their purchase of the Plantation, Mr and Ms Dinh farmed leased land in Carnarvon.
For the first year, they worked as share farmers with Ms Dinh's brother. Ms Dinh's role was simply to provide labour.
After that, they leased land at 720 South River Road, with Ms Dinh's sister Ms Lee. The Dinhs farmed that land with Ms Dinh's two sisters and their husbands. Then they leased and farmed land at North River Road.
Ms Dinh's main job on both of those farms was looking after the books and paying the bills.

The defendants want to buy their own farm

Mr and Ms Dinh wanted to be able to farm on their own land. In late 2007, they approached the ANZ bank for a loan to purchase the Plantation, but were told they had too much debt. Ms Dinh said they were told 'to go back and sell whatever we own so that then they will be able to lend us the money to buy that property'.[31]

Approach to the Bank - the Carnarvon meeting in November 2008

[31] ts 465. See also exhibit 6.358.

There was considerable confusion among the witnesses as to the dates and sequence of the various meetings between the Dinhs and Mr Pollard. However, various documents permitted inferences to be drawn. Ultimately, the parties were largely in agreement as to what the proper sequence was.
The relevant sequence of events began with a meeting in the Bank office in Carnarvon.
Like Mr and Ms Dinh, Ms Dinh's sister Ms Lee wanted to buy her own land to farm. Ms Lee was dealing with Mr Pollard of the Bank about a loan to enable her to do this. She suggested to her sister Ms Dinh that she attend a meeting Ms Lee had with Mr Pollard to see if the Bank would be willing to lend Mr and Ms Dinh the money to buy the Plantation.
The meeting was probably in November 2008, and was before 21 November 2008.[32]
[32] That it was before 21 November 2008 may be inferred from the fact that the loan application (exhibit 1.41) was created on that date. See also ts 1269 and 1310.
It is clear that Ms Dinh, her husband, and her sister Ms Lee were at the meeting. It is not clear whether her son Andrew Dinh was too. Either her sister or her son translated for Ms Dinh. Ms Lee speaks better English than Ms Dinh does.[33] Her son is fluent in English and spoken Vietnamese.[34]
[33] Andrew Dinh rated Ms Lee's English at 6.5 or 7 out of 10 - see ts 850.
[34] This was an agreed fact - see Plaintiff's Proposed Statement of Agreed Facts filed 22 July 2019 (Agreed Facts) item 12. Despite the title of the document, it set out the agreed facts - see ts 330.
In the meeting, Mr Pollard asked Ms Dinh what assets they had.[35] Ms Dinh gave evidence that she told him (she said through her sister, but it may have been her son), that they owned a property in Landsdale and in Perth.[36] She did not tell him about their other properties.
[35] This was common ground - see ts 1269 ‑ 1270.
[36] ts 467.
Peter Dinh said that Mr Pollard asked them to sign some documents during this first meeting. He said that Mr Pollard had told them, through his son, that they were documents that would allow the Bank to make inquiries to check their credit to determine whether they would be able to borrow money.[37] He said that, when his son told him that, he signed the documents.[38]
[37] ts 750.
[38] ts 751.
Ms Dinh said that, after the meeting, they waited for Mr Pollard to complete the documentation.[39]
[39] ts 474.
Mr Pollard said that the Dinhs seemed very enthusiastic about buying the Plantation.[40]

The loan application

[40] ts 950.

After the meeting, Mr Pollard sought financial records from the Dinhs' accountant. He also requested title searches on the Ballajura, Dianella, Aveley and Perth properties.[41]
[41] ts 952 ‑ 953.
On 21 November 2008, Mr Pollard began work on the Dinhs' loan application.[42] I will say more about this later.[43]

The conversation about undisclosed properties - November[44]

[42] Exhibits 1.41, 1.42 and 1.43. See also ts 951 ‑ 963.

[43] See under the heading 'The approval of the loan'.

[44] Counsel for Ms Dinh said it was in the middle to the end of November - ts 1310.

Ms Dinh said that, after the initial meeting, Mr Pollard telephoned them. Her husband took the call. She said that her husband has a problem with his hearing, so he passed the phone to their son Andrew Dinh.[45]
[45] ts 468.
Ms Dinh said that her son spoke English to Mr Pollard and then spoke to her while he was still on the phone. She said that her son asked her why she had not told Mr Pollard that they owned other properties in addition to the ones she had told Mr Pollard about. Ms Dinh said she told her son to reply to Mr Pollard 'that we would like to sell those assets so we can have the money to buy the - that market garden farm'. She said that her son then spoke in English down the phone and then told her that Mr Pollard had said 'you don't need to sell these assets, this property in order to have the money to buy the market garden farm'. She said that Mr Pollard made an appointment with her, through her son, for about two weeks later.[46]
[46] ts 469 ‑ 470.
Andrew Dinh thought that they had told Mr Pollard about all of the properties in the first meeting. Although it seems he was wrong about that, his evidence may provide an alternative explanation as to why his mother may have been reluctant to tell Mr Pollard about all of their properties. He said 'Jenny had owed my mum some money for a personal loan. So my mum didn't want Jenny to know the extent of her portfolio. So - but then Paul had requested it and Jenny was there so we had to disclose it in front of Jenny, which I don't think my parents …'.[47] The witness was then stopped by counsel for Ms Dinh.

More information sought, and provided, via Andrew Dinh

[47] ts 763.

On 24 November 2008, Mr Pollard sent an email to Andrew Dinh asking for more information to allow the Bank to assess the loan. Among other things, Mr Pollard asked for 12 months of loan statements in relation to the home loans with the other lenders.[48] Andrew Dinh responded the next day,[49] advising that he would forward the request to his parents and update Mr Pollard with any information he could. In his evidence, Andrew Dinh explained that he was in Perth at the time and the documents that were needed were with his parents in Carnarvon. Andrew Dinh said that he told his mother what Mr Pollard had requested and told her to forward the documents to Mr Pollard.[50]

A second meeting with the Bank, this time in Perth - late 2008

[48] Exhibit 1.28.

[49] Exhibit 1.29.

[50] ts 768 ‑ 769, 799.

Sometime after this exchange, the parties met again. This meeting was in the Bank's Perth office. It was before 2 January 2009.[51]
[51] That it was before this date may be inferred from the fact that the loan application (exhibit 1.41) was submitted and conditionally approved on that date. See also ts 1270, 1310.
Ms Dinh said that she went to the meeting with her husband, their son Andrew Dinh, and her sister Ms Lee. She said that her son was there so that he could ask questions regarding the details of the application for the loan.[52]
[52] ts 471.
Ms Dinh said that Mr Pollard said 'we can have the loan payable within 16 years and interest rates charged was 12.9%'. She was asked what her response had been. She said 'when I work out roughly ‑ so I, when I heard that the proposed loan was about $1.1 million and if interest rates were 12.9%, so roughly we have to pay over $10,000 per month, that is really beyond our ability to repay. So, we didn't say anything but just went back … went out of … the meeting room. About to reach the door and Mr Paul Pollard asks us to wait a second. He will consult with someone else'.[53]
[53] ts 471 ‑ 472.
Ms Dinh said Mr Pollard then left the room and reappeared after about 20 minutes. She said that Mr Pollard said, through her son, 'the bank will attempt to lend the money, for one year the interest ‑ the interest rate applicable was 3.4%'. She said she asked Mr Pollard, through her son, roughly how much they would have to repay every month with that interest rate. She said that Mr Pollard replied 'roughly, about five to six thousand'. She said that Mr Pollard said 'we apply this rate ‑ this arrangement for one year. After one year if you don't like it, you can change the financial institution, or you can refinance'.[54]
[54] ts 472 ‑ 473.
Mr Pollard's estimate of the monthly repayments was accurate.[55]
[55] Exhibit 5.353 (and see the summary in the Particulars of Statement of Claim filed 18 June 2019 (Particulars of Statement of Claim) [3(a)(i)]).
Ms Dinh said she had thought at the time that it was within their ability to make the repayments.[56]
[56] ts 473.
Ms Dinh said that Mr Pollard then proposed that they transfer all of their property to the Bank. She said that she told her son to tell Mr Pollard 'we do - do not want this arrangement because it will cost us money. We just wait for us to sell the properties and then for us to have money to buy - enough money to buy that market garden farm'.[57] She later said 'I understood that if we were to transfer our assets to the Commonwealth Bank, then it will cost us the - the fees for transfer doing such transfer and also Mr Sang Nguyen[58] also told us that it is better to apply … for loans that - in different institution, that … is safer and cheaper'.[59]
[57] ts 473.
[58] Sang Nguyen was a mortgage broker Ms Dinh used who spoke Vietnamese.
[59] ts 474.
Andrew Dinh did not give evidence that his mother had said this or asked him to tell Mr Pollard this. It was not put to Mr Pollard in cross‑examination that he was told this.[60]
[60] And see ts 1270 ‑ 1271.
I accept the submission of Ms Dinh's counsel that it may be inferred that Andrew Dinh did translate all relevant statements made by his mother and Mr Pollard.[61] However, I am not satisfied that Ms Dinh asked her son to say this to Mr Pollard. As I later explain,[62] I do not accept her evidence. In any event, Ms Dinh knew, before she signed the Loan Agreement, that the Bank would be refinancing the loans to the other lenders and taking security over all of their properties.[63]
[61] ts 1281.
[62] See under the heading 'Assessment of witnesses'.
[63] See under the headings 'The Bank advises securities on the other properties will be required - 2 January 2009' and 'Did Ms Dinh know the Bank was going to refinance the other loans?'
Ms Dinh pleads that Mr Pollard also said in this meeting that additional security, other than a mortgage over the Plantation, would not be required. However, there was no evidence that he said this and therefore no basis upon which I could find that he did.[64]
[64] See under the heading 'The Second Representation'.
Ms Dinh said that Mr Pollard said the loan could be up to $1.1 million and with a $50,000 overdraft. She was asked if she knew what an overdraft was. She said 'yes. So, Mr Paul Pollard explained that the overdraft account means that the $50,000 in there, you will use it when you need and the rates - the rates applicable for that account is 20.9%'.[65]
[65] ts 473. The interest rate for the overdraft was actually 11.14%, with a rate of 13.99% applying to excesses.
Ms Dinh also gave evidence of events that she thought had occurred a few days after the Perth meeting. She said that Mr Pollard came to their Ballajura home with documents for them to sign. It appeared she was saying that these were the transaction documents. If so, she was clearly mistaken about that.[66] However, her evidence of what she understood she was agreeing to remains relevant.
[66] This was conceded by Ms Dinh's counsel at ts 1271 ‑ 1272.
Ms Dinh said 'I understood mainly that we borrow an amount of money within a year with 3.4% applicable rates - interest rate'. She said 'my son translated that information to me. I did - I was careful in confirming this information and then where I know that it is - what it was, then I will sign. I did sign that - that form'.[67]
[67] ts 476.
She was asked what she understood about the security for the loan. She said (emphasis added):[68]
I ‑ what I understood at that point in time, that Mr Paul Pollard told us that we do not need to sell anything, and I agree on his terms that I borrow that amount of money for one year with 3.4% rate.
… What I intended ‑ what I understood at that point in time was when he first said 12.8%. That's too high. That's beyond our ability for the repayment. And then he ‑ next his proposal was that lending the money for one year, the rate is 3.4%, then we have some time for us to sell ‑ to sell our assets in order to make the repayment. What I understood from that ‑ our position at that point in time.
[68] ts 476.
Counsel for the Bank submitted that, on Ms Dinh's own evidence, Ms Dinh clearly understood that they needed to sell their other properties within the year. As I explain later, I accept this submission.[69]
[69] See under the heading 'Did Ms Dinh know they had to sell the investment properties?'
Ms Dinh also said[70] that she understood that she needed to pay $5,000 to $6,000 monthly to the Bank 'and then after one year there will be change'.

Ms Dinh's loan to her sister Ms Lee

[70] ts 489. She gave this evidence in the context of what she understood at the time of settlement, but there was no suggestion that she had not understood this earlier.

Ms Dinh gave evidence that, during this Perth meeting, she told Mr Pollard that she had borrowed $50,000 from a bank for her sister Ms Lee, as her sister was unable to make the necessary repayments.
Her evidence about this was very unclear.[71] However, having regard to other evidence, the following seems likely.
[71] ts 488, 490 ‑ 494. See also ts 1160, 1173, 1274.
Ms Dinh had, some years before, borrowed $50,000 from the NAB for her sister, effectively lending her sister that sum. At some point prior to the settlement of the Plantation, Ms Dinh told Mr Pollard about the loan she had given to her sister (and possibly told him that she had borrowed money from the NAB to fund the loan). When he was told about it, Mr Pollard asked Ms Lee to repay the money (and possibly told Ms Dinh to repay the loan to the NAB). Ms Lee did not repay the money at that time. It appears that, sometime after settlement, she repaid $30,000. The balance of $20,000 remains unpaid.
It appears that, because Ms Lee did not repay the money before settlement, the Dinhs instead sought a loan from one of their agents. This was around 19 March 2009, the day before settlement. The loan was sought on the basis that it would be repaid from the proceeds of sale from watermelons that the Dinhs said were ready to be picked at that time. The agent deposited $30,000 into the overdraft account on 20 March 2009.[72]

The Family Trust - 27 November 2008

[72] See under the heading 'Peter Dinh seeks a loan from one of his agents - 19 March 2009'.

'The PD & AD Family Trust' was set up by deed dated 27 November 2008 (Trust Deed).[73] Ms Dinh gave evidence that she and her husband set it up on advice from their accountant. She said that their accountant told them it was advantageous to set up the business that way.[74] Ms Dinh's accountant speaks Vietnamese and communicates with her in that language.
[73] Exhibit 6.364.
[74] ts 501.
However, later in her evidence, Ms Dinh claimed that Mr Pollard had told her through her son that they would not be able to borrow the money to buy the farm in their current circumstances. The effect of her evidence was that Mr Pollard told them that if they set up the trust they would be able to buy the farm.[75] This is inherently implausible and I do not accept it. Ms Dinh gave other implausible evidence as to Mr Pollard's involvement in the contract for the sale of the land and the settlement.[76] It appeared that Ms Dinh wanted to present a picture that everything happened because she simply did whatever Mr Pollard told her to do, and that she was not doing anything independently of him.

The Bank advises securities on the other properties will be required - 2 January 2009

[75] ts 504.

[76] See under the headings 'The contract of sale - 10 January 2009' and 'Settlement of the Plantation - 20 March 2009'.

Ms Dinh claimed that she did not know that the Bank intended to take securities over all of their properties. She claimed that she only found out when the first of those properties was sold, in May 2010.
Mr Pollard was asked if he ever had a conversation with Mr or Ms Dinh about the security that the Bank would be taking if the loan was granted. He said:[77]
I did. I think we had a conversation with Peter which then I spoke with Andrew later on via an email, just explaining we - we had to - we would do it on the basis of on that bridging - bridging term because clearly we couldn't show servicing without doing the bridging. So the properties had to be taken and they had to be sold which was - was fine. They were already looking to offload those properties to then buy the plantation.
[77] ts 962.
Bearing out his recollection, Mr Pollard did send such an email to Andrew Dinh. This was on 2 January 2009:[78]
I [s]poke with your dad this morning to explain that if we approve finance we will take security over all the relative security properties.
Therefore I have attached 2 title searches to explain what encumbrances are on these. After [s]peaking with Peter, I will need to determine if these encumbrances should still be there and how to remove them off the title.
You will probably need to liaise with [Landgate] to investigate them and seek removal of them.
Any [p]robs please give me a call.
[78] Exhibit 1.44. See also ts 799, 1057.
Peter Dinh denied speaking to Mr Pollard on 2 January 2009. He said that his English was quite poor so Mr Pollard never talked to him personally.[79]
[79] ts 924 ‑ 925.
I am satisfied that Mr Pollard did speak with Peter Dinh that morning. As I will explain,[80] I do not accept Peter Dinh's English was as bad as he claimed. He was also an unsatisfactory witness.[81] Further, it is inherently unlikely that Mr Pollard would record in an email to Andrew Dinh that he had had a discussion with Peter Dinh if Peter Dinh's English skills would have made that impossible.
[80] See under the heading 'English abilities'.
[81] See under the heading 'Assessment of witnesses'.
Andrew Dinh said that he did not know what an encumbrance was at the time of that email, so he rang 'Irene' to find out. This was Irene Casella, the family's settlement agent. Ms Casella worked at Settlements Plus.[82]
[82] ts 800 ‑ 801. Ms Dinh gave evidence that Ms Casella did all of their settlements for them. Ms Casella did not speak Vietnamese and would communicate with Ms Dinh through Andrew Dinh - see ts 504 ‑ 505.
On 15 January 2009, Andrew Dinh emailed Mr Pollard:[83]
Hi Paul, [a]s per phone conversation, [I] want to inform you that all [c]aveats on both properties have begun process and should be remove[d] successfully in due for further progress with our application. I am requesting the loan statements and should have most of them if not all tomorrow. [I]'ll be in contact with yourself prior to the week end so you can relax on your holiday. [T]hanks heaps for your valuable help in assisting us in our application.
[83] Exhibit 1.50. See also ts 967.
Andrew Dinh admitted that he knew, at least by this date, that the caveats had to be removed from the properties in order for the loan to go through.[84]
[84] ts 801.
Andrew Dinh said that Ms Casella helped his parents to get the caveats removed. He said he was sure that his mother was involved in that process.[85]
[85] ts 801.
In light of this evidence, I find that Ms Dinh was aware, in January 2009, that the Bank would only lend them the money to buy the Plantation on the basis that the Bank would take securities over all of their properties. As I will later explain,[86] I find that Andrew Dinh did pass on, and translate, to his parents, primarily his mother, messages from Mr Pollard. Further, as will be seen, the Dinhs signed documents that made it plain that the Bank intended to take securities over the properties which were mortgaged by other lenders and indeed intended to refinance them.[87] Further, the Loan Agreement itself set out that securities would be taken over each of the properties.[88]

The loan is conditionally approved - 2 January 2009

[86] See under the heading 'Andrew as an interpreter and conduit'.

[87] See under the heading 'Signing documents to refinance loans to other lenders - 5 February 2009'.

[88] Exhibit 2.92. See also ts 1229.

Later that day, the Bank gave conditional approval for the loan, subject to, among other things, valuations of the Dinhs' other properties.

Meeting in Ballajura - a date between 2 January and 12 February 2009

Peter Dinh gave evidence that Mr Pollard attended their Ballajura home and told them that they would be able to borrow money to buy the farm. From the other events that occurred, it appears this must have been after 2 January 2009 and before 12 February 2009.[89] Peter Dinh said that Mr Pollard explained some documents and his son translated the explanation.[90]
[89] It must have been after the loan was approved, but before the Gateway Hotel meeting. See also ts 1310.
[90] ts 753.
Peter Dinh said that he spoke to his wife in Vietnamese, swearing and saying he did not want to buy the farm. He said that he told Mr Pollard, through Andrew, that the ANZ had already refused the loan so how was it that the Bank was able to make it happen. Peter Dinh said that Mr Pollard did not respond and he, Peter Dinh, was not happy and walked out. He said Mr Pollard spoke to his son Andrew Dinh and asked them to sign some documents. Peter Dinh agreed that he had signed the documents but said 'I was not happy, but I just want to finish it, to get it over it, I signed it'.[91]
[91] ts 752.
In cross‑examination, Peter Dinh agreed he had not wanted more debt and had told his wife that. He agreed he was annoyed with his wife.[92]

Early possession - 4 January 2009

[92] ts 905 ‑ 906.

The Dinhs took possession of the Plantation on 4 January 2009, before settlement.[93] Ms Dinh said they knew there was a risk that, if they did not get the money from the Bank, they would have to move off the Plantation.

The contract of sale - 10 January 2009

[93] Exhibit 9.616.

The contract for the sale of land for the Plantation was dated 10 January 2009.[94]
[94] Exhibit 9.587. See also exhibit 6.365 (an unstamped version which did not include Ms Dinh as trustee).
In cross‑examination, Ms Dinh agreed there was no real estate agent involved. The owner of the Plantation was an English speaker. It was put to Ms Dinh that she and her husband had made the contract with the seller. She replied 'Paul Pollard show me what - show us what to do'.[95] Ms Dinh then conceded that Mr Pollard had done nothing other than tell them how much they would be able to borrow.[96]

The loan is approved on a revised basis - 16 January 2009

the[97]
116[98]

Signing documents to refinance loans to other lenders - 5 February 2009

[95] ts 643.

[96] ts 643 ‑ 644. And see ts 950.

[97] ts 963, 966.

[98] Exhibit 8.452 page 2114 and ts 1063. See also exhibit 3.143 and ts 1003 ‑ 1004.

On 5 February 2009, the Bank issued 'Consumer Loan Authorities' which, when signed, would authorise the Bank to pay out the NAB loan on the Ballajura property and the Suncorp‑Metway loan on the Dianella property. Mr and Ms Dinh signed those documents.[99] It is not known precisely when they signed these documents, but it is likely to have been before 12 February 2009, when the documents next discussed were received by the Bank.
[99] Exhibits 2.61 and 2.62. Although Mr Dinh claimed he did not recognise the signatures on those documents (ts 869 ‑ 870, 873 ‑ 874), Ms Dinh admitted she had signed them both (ts 550 and 551). As I explain later, I find Mr Dinh did sign each document purporting to bear his signature - see under the heading 'Assessment of witnesses'. See also Second Defendant's Reply to Plaintiff's Chronology filed 18 July 2019 rows 28 ‑ 29. I will refer to this document as the 'Agreed Chronology' as the Bank did not have any substantive issues with it (ts 330 ‑ 331).
On the same day, the Bank issued 'Consumer Credit Contract Schedules' setting out the terms of the home loans between the Bank and the Dinhs in relation to the Ballajura, Dianella and Aveley properties. Each stated there were to be 11 months of interest only payments followed by repayment of the full amount. Mr and Ms Dinh signed those documents.[100] It is not known precisely when they signed these documents, however the documents were received by the Bank on 12 February 2009.
[100] Exhibits 2.75, 2.77 and 6.366 and Agreed Chronology rows 25 ‑ 27. Although Mr Dinh claimed he did not recognise the signatures on those documents (ts 875 ‑ 876), Ms Dinh admitted she had signed them all (ts 551, 552 and 553). As I explain later, I find Mr Dinh did sign each document purporting to bear his signature - see under the heading 'Assessment of witnesses'.
These documents appear to have been sent to the Dinhs prior to their meeting with Mr Pollard when they signed the first version of the Loan Agreement, discussed below.[101] Mr Pollard explained that he did not have anything to do with the home loan documentation and that these documents were dealt with by a different section of the Bank, in the Carnarvon branch.[102]

Appointment of settlement agent

[101] See under the heading 'Gateway Hotel - the first signing of transaction documents - 12 February 2009'.

[102] See, for example, ts 974 ‑ 976, 1071 ‑ 1072.

Ms Dinh agreed she and her husband had signed a document appointing Settlements Plus as their settlement agents in relation to the Plantation.[103] Ms Dinh said she had not read the document and had just signed it. She said she had not asked her settlement agent Ms Casella to explain the document in English. Ms Dinh said that Ms Casella's job was just to do the property transfer.[104]

Gateway Hotel - the first signing of transaction documents - 12 February 2009

[103] Exhibit 10.671.

[104] ts 651 ‑ 652.

On 12 February 2009, Mr Pollard met with Ms Dinh, Peter Dinh, Andrew Dinh, Ms Lee and Ms Lee's husband. Mr Pollard was staying at the Gateway Hotel in Carnarvon and they met him there. Mr Pollard intended to get the transaction documents signed by the Dinhs.
At this meeting, Mr and Ms Dinh signed various documents, including a version[105] of the Loan Agreement and the Mortgages (being the mortgages on the Plantation, the Ballajura property and the Dianella property).[106]
[105] As will be seen, it had to be amended and was subsequently re‑signed.
[106] The Mortgages were exhibits 2.83, 2.84 and 2.85 (and see ts 1228).
Each of the Mortgages incorporated the terms set out in the Memorandum of Common Provisions J584291[107] which had been registered at Landgate.[108] The Dinhs had previously entered into mortgages with the Bank on these same terms.[109]
[107] Exhibit 2.138.
[108] See exhibits 83 page 303, 84 page 307 and 85 page 311.
[109] This was not in dispute - see ts 1273. And see exhibits 2.138, 8.522, 16, and 1.36.
The home loan documents for the various properties were not signed during this meeting. As previously mentioned, Mr Pollard explained that he was not involved with the home loans and that they were dealt with by a different section of the Bank.[110]
[110] ts 974 ‑ 976, 1071 ‑ 1072.
Peter Dinh's evidence of this meeting was limited. He said he asked Mr Pollard what the documents were before he signed them. He said Mr Pollard said 'they're just normal'. Counsel then asked Mr Dinh 'Did he say normal for what?' Mr Dinh replied 'That's all - yes - normal like the one I signed before, but I don't know what it - it is'. He said he did not understand what the documents were about.[111]
[111] ts 881.
Ms Dinh and her son Andrew Dinh gave more detailed evidence of this meeting. There were some differences in their evidence. However, both said that Mr Pollard presented Mr and Ms Dinh with a pile of documents for them to sign, with arrow stickers showing where signatures were required. Both said that Mr and Ms Dinh signed the documents without reading them or having them translated to them.
Andrew Dinh said that Mr Pollard produced the documents, and his parents signed them, before they all ate dinner together. He said Mr Pollard said they were the documents for the farm. Andrew Dinh said that he did not translate the documents to his parents. He said that Mr Pollard then gave them an envelope which Mr Pollard said were copies of the documents. Andrew Dinh said that the thickness of the envelope was the equivalent of about 350 pages.[112]

Ms Dinh's evidence

[112] ts 764 ‑ 765.

Ms Dinh gave evidence that they intended to have dinner with Mr Pollard but he had already eaten by the time they got there. She appeared to be saying that Mr Pollard sat with them, with her son doing most of the talking, while the Dinhs ate dinner. Ms Dinh said that, after dinner, she and her sister had come out of the toilets and were going to leave. She said she saw Mr Pollard, her husband, her sister's husband and her son already standing at the door. She said that her son told her that Mr Pollard was waiting for her to come out so that she could sign the documents that would provide an overdraft. Ms Dinh was asked if the documents were read to her by her son in Vietnamese. She said 'No. No. It was near closing time. So we need to do it quickly to - to leave'.[113]
[113] ts 524 ‑ 527.
Ms Dinh said:
What I saw that Mr Pollard handover, he - stack of documents, and he did ask me to sign. And then there was a lot of - for signature to be signed. So I said to my son, it's just a simple overdraft. How come I have to sign so many documents?[114]
[114] ts 525.
Ms Dinh said that Mr Pollard answered that 'this is the standard documentation of the bank. Everyone has to do the same. It's nothing - nothing important. Just sign it'.[115]
[115] ts 526.
Ms Dinh said that, after she had signed the 'stack of paper', Mr Pollard gave her another stack of paper to keep, but that it was not as thick as the stack she signed.[116]
[116] ts 526.
Ms Dinh said that they were dealing with the documents for 10 minutes at the most. Ms Dinh was asked if she was able to check that the documents Mr Pollard gave her were copies of the same documents that she had signed. She replied:[117]
Yes, yes. I - I never thought about anything else. He always told us that, 'you are a good couple. Yes. Good and hardworking people'. So my intention is always to help him. So I really trust him. I - I - I would sign the documents that he asked me.
[117] ts 527.
Ms Dinh was then reminded that the question was whether she checked whether the documents she had been given were the copies of the ones that she had signed or whether they were other documents. She replied 'no. Absolutely not, because I don't read English. I don't read English that well to - to check that'.[118]

Analysis of Ms Dinh's evidence

[118] ts 527.

By her response to the question whether Andrew Dinh had translated the documents to her, Ms Dinh said, in effect, that the reason he had not was because they had to sign the transaction documents quickly, because it was near closing time and they had to leave. I do not accept that this was the reason.
First, there were many other documents that Ms Dinh signed that she said she did not ask her son to translate, in circumstances where there was no immediate time pressure or any other reason why it was not practical for him to translate. Indeed, her evidence was to the effect that her son did not translate any of the significant documents. These included the settlement documents from Ms Casella which were faxed to her son's work number.[119]
[119] Discussed later.
Second, I do not accept her evidence that the documents were signed at the end of the evening. It was inconsistent with Andrew Dinh's evidence that the documents were signed before dinner. I prefer his evidence to hers.[120]
[120] See under the heading 'Assessment of witnesses'.
Third, although Mr Pollard intended to get the relevant loan documents signed by the Dinhs that night, there was no reason why he would have pressured the Dinhs into signing the documents quickly. Mr Pollard gave evidence that it would not have caused the Bank any difficulty at all if the loan documents had not been signed in February.[121] The defence did not seriously contend that there was any reason why it would have caused the Bank any problems.[122]
[121] ts 976 ‑ 977.
[122] See ts 1220 ‑ 1221, 1234 ‑ 1235 (noting that counsel did not subsequently identify any such documents).
In my view, in giving this evidence, Ms Dinh was seeking to give the false impression that she had no opportunity to find out what the documents said.
Further, in my view, by her evidence in relation to whether she had checked that the copies she was given were copies of the documents she had signed, Ms Dinh was also seeking to give the false impression that she had no capacity to check this because she could not speak English. I do not accept that she had no capacity to check this when her son, a fluent English speaker and reader, was with her.
Ms Dinh also appeared to be suggesting, by her evidence that Mr Pollard gave her a stack of paper to keep that was not as thick as the stack she signed, that she was not given copies of all of the documents she had signed. Her son Andrew Dinh's evidence did not appear to support this[123] and her counsel did not seek to argue in his closing that she was not given copies of the documents she signed.[124] In any event, even if Ms Dinh was given a thinner bundle, this would not demonstrate she was not given copies of what she signed. Mr Pollard gave evidence that the Bank kept multiple copies of certain documents. I am satisfied that Mr Pollard gave her a copy of each document that she signed.
[123] ts 764.
[124] At ts 1278, I asked counsel for Ms Dinh if he intended to make this submission. He did not respond at that time, and did not subsequently make that submission.
In my view, in giving the answer extracted above which included the statements 'So my intention is always to help him. So I really trust him. I ‑ I ‑ I would sign the documents that he asked me', Ms Dinh was seeking to give the false impression that she would blindly sign documents presented to her by Mr Pollard because she trusted him. This is not consistent with her evidence that she asked her son why she had to sign so many documents when it was 'just a simple overdraft'. In my view, it is also implausible in light of other evidence. In particular, the evidence in relation to Mr and Ms Dinh's development of a property portfolio,[125] the various resources they used[126] and Ms Dinh's knowledge and experience in financial matters.[127]

Did Mr Pollard explain?

[125] Discussed earlier.

[126] See under the heading 'Disabilities and resources'.

[127] See under the heading 'What did Ms Dinh know about financing?'

Ms Dinh said that the only explanation Mr Pollard gave her about the documents was that they needed to sign them in order to complete the transaction to buy the Plantation.[128]
[128] ts 479 ‑ 480.
Mr Pollard no longer has a memory of this meeting. However, he gave evidence of his usual practice where customers are going to sign loan documents:[129]
So I would provide - the letter of offer has the majority of the information, so I would go through what the products are, what are we looking at doing, what the relevant security is and, sorry, going back, with the products, you know, interest rates, anything that was - was relevant terms, etcetera. So [I] would just briefly go through the document. Then we would go to explain what the securities were and then if there's any conditions of funding or either post-funding or prior to funding, you know, what they are on there. Then I would - so once - that I guess sets the context. After I've done that, then I would go through. There's the mortgages. I would explain, “These are the mortgages. These are what link the properties to the loan and this is obviously what the bank has, you know, to effect its security.” The same with equitable charges, the equitable charges with the water licences. … So yes, so any of the relevant stuff I would briefly explain what they were and how they are linked to the - to the loan.
[129] ts 969 ‑ 970.
Mr Pollard said that, if a customer wanted greater detail, he would tell them to seek independent advice.[130]
[130] ts 970.
Mr Pollard said that, if a customer expressed reservations about signing documents, he would tell them to take the documents away and get them checked out with whoever they wanted or to go through them or have a think about them and then come back.[131]
[131] ts 970.
He said this was his normal practice in 2009 and that he had no reason to think he would not have followed it on this occasion.[132]
[132] ts 971.
I find that Mr Pollard followed his usual practice of providing a simple explanation of the terms of the agreement. As will be seen, I find Mr Pollard to have been a truthful and reliable witness.[133] In addition, Ms Dinh's evidence supports Mr Pollard's evidence that he did give explanations. She was asked if she knew what an overdraft was. She said 'yes. So, Mr Paul Pollard explained that the overdraft account means that the $50,000 in there, you will use it when you need and the rates - the rates applicable for that account is 20.9%'.[134] While this was her recollection and summary of what she had been told, and she was wrong about the rate,[135] her evidence supports that, at some stage, Mr Pollard did explain at least this component of the loan.

The re-signing of the loan agreement - 4 March 2009

[133] See under the heading 'Assessment of witnesses'.

[134] ts 473.

[135] The interest rate for the overdraft was actually 11.14%, with a rate of 13.99% applying to excesses.

Due to an issue in relation to water licences, it was necessary to amend the loan agreement documentation and have it re‑signed.[136] The final version of the Loan Agreement was signed on 4 March 2009.[137] The version that had been signed at the Gateway Hotel was not in evidence. However, there was no suggestion that it differed from the final version, other than in relation to the water licences.
[136] ts 1073 ‑ 1075. See also exhibit 2.91.
[137] Exhibit 2.92. See also ts 1272 and 1310.
The terms of the Loan Agreement were set out earlier, in the Background section of these reasons.

Stamp duty extension - 16 March 2009

Shortly before settlement, Ms Casella, the settlement agent, asked the Dinhs for the stamp duty fee. It was $47,765.50. Andrew Dinh gave evidence that the Dinhs did not have that amount of money and could not borrow it. He said he contacted Mr Pollard who dispersed the money from the overdraft.[138]
[138] ts 767 and 772.
Mr Pollard explained that Andrew Dinh had contacted him when he, Mr Pollard, was 'on the road'. Mr Pollard gave Andrew Dinh verbal approval and then told his analyst, Shellice Regan, that he had done so, and asked her to put a temporary extension on the overdraft. Ms Regan made a 'call report' note on the system to record this, dating it 16 March 2009:[139]
Paul Pollard called and advised Peter and Anne Dinh require stamp duty prior to settlement which is booked in for the 19th of March. Paul has verbally approved a Temporary Excess limit of $50k to be place[d] on account 6000 1127 4073. Clearance is to come from watermelon sales which are expected in within 30 days. Watermelon picking will commence next week, delayed due to poor weather.
[139] Exhibit 2.96 and ts 978 ‑ 979, 1075 ‑ 1076.
Subsequently, Mr Pollard added a note to the call report to explain his decision. Mr Pollard's addition is shown as the top part of the same note and states (typographical errors corrected):[140]
Added by Paul Pollard on 18/03/2009 11:11:25 AM
Andrew, Peter's son phoned me to advise that they have approx 3000 water melon plants in, each with approx 2-3 watermelons upwards of 30kg each. Conservatively assuming an average weight of 15kg per water melon at 2 melons per plant at even $0.70/kg (which is another reason for the delayed picking. Prices have been in excess of $1/kg previously and are predicted to go back to this once supply dips off).
Andrew was going to send an email however has had some computer problems.
I will approve a temp facility for 30 days for $50,000 with clearance to come from the watermelon sales.
[140] Exhibit 2.96 and ts 978 ‑ 979, 1075 ‑ 1076.
In his evidence, Andrew Dinh acknowledged that he had had a conversation with Mr Pollard about the stamp duty and had given Mr Pollard information about watermelons growing on the property. However, he said he did not remember speaking to Mr Pollard about the specific numbers, and said he would not have known them off the top of his head to tell Mr Pollard. He also said he did not think that there were watermelons ready to be picked in March. He said that generally they would plant watermelons in July and they would be ready to be picked three months later. He then said he did not remember talking with Mr Pollard about watermelons.[141]
[141] ts 813 ‑ 815.
Mr Pollard said that the call report was accurate to the best of his knowledge.[142] It was put to Mr Pollard in cross‑examination that Andrew Dinh had not given him the details about watermelon pricing. Mr Pollard said that Andrew Dinh had given him that information.[143]
[142] ts 979.
[143] ts 1077.
It was then put, somewhat inconsistently with the first proposition, that Mr Pollard had been effectively coaching Andrew Dinh on what he needed to say.[144] Mr Pollard agreed he explained to Andrew Dinh the information he needed. He said:[145]
So when clients require temporary overdraft, that's - that's what - that's my general - my general course of action. So I asked for the - what they need it for, how long are they needing it, why they need it and when it was going to be - how it was going to be cleared.
[144] ts 1077.
[145] ts 1078.
Mr Pollard was asked if he had taken any steps to verify that the details Andrew Dinh had given him were correct. He said that they sounded reasonable based on discussions he had had with other growers around town.[146]
[146] ts 1078.
The effect of Mr Pollard's approval of a temporary excess limit of $50,000 was to increase the overdraft limit to $100,000 until 15 April 2009. After that date, the increase would 'drop off', making the limit again $50,000 unless a further temporary extension was granted.[147]
[147] ts 1019.
I find that Andrew Dinh did give Mr Pollard the information Mr Pollard recorded in the call report, for the following reasons.
First, as will be seen,[148] shortly after Andrew Dinh contacted Mr Pollard about the stamp duty, a letter was sent on behalf of Peter Dinh to one of the Dinhs' agents, seeking a loan. The letter was dated 19 March 2009, three days after Andrew Dinh called Mr Pollard to ask for an extension. The letter advised, in English, that the Dinhs had 'watermelons in the ground which are ready to be picked, we spoke to you about it and you suggested it would return better prices in a week or so, therefore we are preparing to pick it early next week'. From the evidence, it appears that the letter was written by Andrew Dinh. Accordingly, either there were watermelons ready to be picked in mid‑March, or Andrew Dinh was willing to tell people this in order to borrow money.
[148] See under the heading 'Peter Dinh seeks a loan from one of his agents - 19 March 2009'.
Second, as will be seen,[149] on 22 April 2009, Mr Pollard attended the Plantation and was told that 'the first batch' of watermelons had been sold. He also saw a second patch of watermelons and was told this was expected to generate approximately $37,000 within 30 days.
[149] See under the heading 'Clearance of the extension - April 2009'.
Third, there was no reason why Mr Pollard would make this up.
Fourth, to the extent that there were differences between the evidence of Mr Pollard and Andrew Dinh, I prefer Mr Pollard's evidence.[150]

The settlement documents

[150] See under the heading 'Assessment of witnesses'.

On 18 March 2009, Ms Casella faxed a letter to the Dinhs (Settlement Letter), attaching a Settlement Statement and an Authority to Proceed to Settlement form.[151] The documents (collectively, the 'settlement documents') were faxed to Andrew Dinh's business, HTD Manufacturers, on 18 (and 19) March 2009. Andrew Dinh said that the fax machine was in Perth and so he and his mother would have gone down to Perth to get the documents.[152]
[151] Exhibit 10.621. See also exhibits 9.616 and 9.620.
[152] See exhibits 9.616, 9.620, 10.621 and ts 770 ‑ 772.
Ms Dinh agreed she and her husband signed the Settlement Statement and Authority to Proceed to Settlement forms.[153]
[153] Exhibits 9.620 and 10.621, ts 654 ‑ 659.
In the Settlement Letter, Ms Casella confirmed that, further to a conversation with Andrew Dinh, settlement would be on 19 March 2009. She noted that penalty interest would be charged for the late settlement. She noted that attempts had been made to settle earlier, but the Bank 'was not able to arrange all the discharging banks to effect settlement any earlier due to the National Australia Bank not being ready on your behalf prior to the 19th March, 2009. We understand there are 6 parties involved on your behalf for this transaction'.
In the Settlement Statement, it was noted that, due to the late settlement, penalty interest of $9,493.05 had to be paid.
In the Authority to Proceed to Settlement document,[154] the Dinhs were required to 'acknowledge that Settlements Plus has recommended Legal Advice be received. We confirm we wish settlement to proceed'.
[154] Exhibit 9.616.
Ms Dinh said that her son Andrew Dinh did not explain to her what was in the settlement documents and she did not ask him to explain before she signed them. She said that her son did not tell her that the Authority to Proceed to Settlement document said that Settlements Plus had recommended she get legal advice.[155]
[155] ts 656, 658, 659, 663 ‑ 664.
Andrew Dinh's evidence was different, although very general. He said he talked to his parents about the fax and agreed he would have explained to them what it said.[156]
[156] ts 808.
The Bank relied upon these settlement documents in two respects.
First, the Bank submitted that they showed Ms Dinh had been told to get legal advice, but she had chosen not to do so. While I accept that Andrew Dinh would have explained to his parents what the documents were about, it is possible his explanation did not include this level of detail. He was not asked if he had explained specific matters. It is unnecessary to consider this further as I am satisfied that Ms Dinh was well aware that she could obtain legal advice.[157]
[157] See under the heading 'Legal advice'.
Second, the Bank submitted that the settlement documents showed that both Ms Dinh and Andrew Dinh had to have known, prior to the settlement, that the Bank was refinancing the loans from the other lenders. I will discuss this in more detail later.[158]

Peter Dinh seeks a loan from one of his agents - 19 March 2009

[158] See under the heading 'Did Ms Dinh know the Bank was going to refinance the other loans?'

In March 2009, Peter Dinh asked a company called EPT for a loan. EPT was one of the agents the Dinhs used for the produce they grew. A letter dated 19 March 2009 was sent seeking the loan. It purported to be signed by Peter Dinh and its contents indicated it was written by or on behalf of Peter Dinh. Peter Dinh said he thought his son had written the letter and that the signature, which purported to be his, was not his signature. He then said he could not remember if he or his son signed it. However, he did admit a letter was sent.[159]
[159] ts 919 ‑ 921.
The letter stated:[160]
I am in a bit of financial strife at this very moment with the purchase of my new plantation. As the stamp duty and fees was very extent, [I] have not allocated enough funds to cover for settlement which is due at 12:15PM tomorrow.
I seek to you [to] see if you can ask your business partners if EPT are able to help us with the shortages which we need to settle tomorrow.
The amount we are short is approx $39,000.00. We come to you as basically you['re] the only one that [I] have a close relationship with and the one we send most of our produce to. If EPT is able to assist me with the short funds, [I] would be very relie[v]ed and [I] will endeavour to make sure that the amount will be repaid as soon as possible, in which we have watermelons in the ground which are ready to be picked, we spoke to you about it and you suggested it would return better prices in a week or so, therefore we are preparing to pick it early next week and will use the proceeds of sales to return the money to EPT.
The [m]oney will be used to settle a home loan with National Australia Bank and could you transfer the funds to our Commonwealth Business Account in which tomor[r]ow at set[t]lement the bank will draw the funds.
Our anticipated return time for this advance by EPT is whol[ly] upon EPT with our produce sales but we will have produce sent to you during next week, as you have supplied me with bins for watermelons. My produce is only going to EPT so we can continue our business relationship and advance.
[The letter then set out the account number for the overdraft.]
[160] Exhibit 18.
Peter Dinh said that EPT lent him the money.[161] The overdraft statement records that a deposit of $30,000 was made by 'The Directors EPT No' on 20 March 2009.

Settlement of the Plantation - 20 March 2009

[161] ts 922.

Ms Dinh claims that she was told by the owner of the Plantation Mr Wainwright that, if the settlement could not be completed by 18 March 2009, she would be fined $10,000 a day.[162]
[162] ts 720.
Ms Dinh said that Mr Pollard brought documents to her in Carnarvon on 18 March 2009. She said she knew only that she needed to sign 'the documents for the transfer of the land'. By this, Ms Dinh appeared to be asserting that Mr Pollard had brought the transfer of land document for her to sign. Ms Dinh said her sister Ms Lee was also present on this occasion.[163]
[163] ts 486 ‑ 488.
It is certainly possible that Mr Pollard did attend at the Plantation around this time. However, I do not accept that he brought with him the transfer of land document for her to sign. His unchallenged evidence was that he was not involved in the purchase of the Plantation.[164]
[164] ts 950. See also ts 1273.
Settlement on the Plantation occurred on 20 March 2009.[165]

Clearance of the extension - April 2009

[165] Exhibit 2.102.

As noted earlier, the temporary extension granted by Mr Pollard expired on 15 April 2009. On that date, the overdraft limit reverted to $50,000. The Dinhs had not brought the overdraft back under the limit. As will be seen, the Dinhs told Mr Pollard that this was for two reasons. First, because the family loans that they expected to be repaid had not been repaid. Second, because the proceeds of the watermelon sales that the Dinhs had told Mr Pollard would rectify the account had been given to EPT to repay the loan EPT had given the Dinhs.
On 21 April 2009, Mr Pollard recorded that he spoke to Peter Dinh by telephone about the non‑clearance of the temporary extension. He wrote that Peter Dinh explained that 'he will be talking to his agent today and will call back'.[166] When asked about this, Peter Dinh said '[w]hatever he spoke to me on the phone I could not understand him'.[167] Peter Dinh claimed that he never contacted his agents to find out when they would be paying him for his products.[168]
[166] Exhibit 3.158 and see ts 1079 ‑ 1081.
[167] ts 926.
[168] ts 926 ‑ 929.
I do not accept Peter Dinh's evidence on this point. First, his evidence is inconsistent with a contemporaneous note. Second, as I later explain, I find his English was better than he admitted and that overall he was an unsatisfactory witness.[169]
[169] See under the headings 'English abilities' and 'Assessment of witnesses'.
On about 22 April 2009, Mr Pollard met with the Dinhs at the Plantation. Mr Pollard's note of that meeting stated (typographical errors corrected):[170]
[170] Exhibit 3.159. See also ts 983 ‑ 985.
Met with Peter, son Andrew and Anne on the Plantation to review the non-clearance and upcoming cash flow.
Non-clearance:
Speaking with Andrew and Peter it was apparent the non-clearance was brought about from a number of issues
1) Personal Loans to Family, that owe Peter (approx 55,000) were expected to be paid back however have been unable to pay at this point in the season (commencement of the season where income is low). This would have cleared the excess. However one family is able pay 20,000 in the next 2 weeks.
2) Watermelon Income: Original watermelon income from the first batch was projected to clear the debt however the market agent advised Peter not to pick until the price picked up. As a result, approx 40% of his crop was affected by the hot conditions. Therefore they only ended up with 42 smaller bins (approx 21 tonne) 24 seedless and 18 seeded at a price of $16,000. This money will be retained by the market agent as he originally advanced funds to help Peter with seedlings, and the acquisition of the Plantation.
New Clearance Source
1) Jenny Lee owes Peter 35K, however is only in a position to pay him 20,000 in 2 weeks.
2) 2nd patch of watermelons was sighted by RM [RM is the 'relationship manager', being Mr Pollard[171]] and Peter expects to harvest 70 large bins (70 Tonne). Assuming 0.70 per kg less $75 per pallet (Tonne) freight cost and 15% commission. Peter would expect to bank approx $37,000, assuming 1 fruit per plant on 3500 plants.
3) the first patch of tomatoes is due to be picked in 5 weeks 12,000 seedlings at 1 fruit per plant would expect to yield 3 tonne of tomatoes, working from $24 per box (given the early part of the season) after freight and packing ($4.60 per box) and commission 15%, Peter will have approx 5,000.
Not included in this is his rental income from Blackburne real estate and approx 4,500 in other account.
Peter apologised for having to ask for an extension and assured me the limit will be cleared within 30 days.
Therefore I am prepared to extended the TE [temporary extension] to 50k for another 30 days.
Shellice please ensure limit is input.
[171] ts 984.
It was put to Mr Pollard in cross‑examination that the specific information had come from Andrew Dinh not Peter Dinh. It was put, in effect, that Peter Dinh's English was insufficient to enable him to give that sort of information. Mr Pollard did not independently remember this meeting. However, he said that that sort of information could have come from Peter Dinh and that Peter Dinh's English was sufficient.[172]
[172] ts 1082 ‑ 1083.

There was no evidence, from any witness, that Mr Pollard said this, and it was not put to him that he did.[553]
[553] This was accepted by counsel for Ms Dinh at ts 1282.
When I raised this with counsel for Ms Dinh in his closing address, he submitted that, as Ms Dinh had given evidence before Mr Pollard,[554] the Bank was obliged to ask Mr Pollard in his evidence‑in‑chief whether he had said that additional security would not be required. Counsel for Ms Dinh submitted that, as Mr Pollard had said he did not remember what was discussed in that meeting, he was not required to prompt Mr Pollard into a specific denial in cross‑examination.[555]
[554] Prior to the trial commencing, I had ordered that the Bank open its case first, but that Ms Dinh was to call her evidence before the Bank called its evidence.
[555] ts 1275, 1279 ‑ 1283.
When I reminded counsel that Ms Dinh had not given any evidence that Mr Pollard had said that additional security would not be required, he submitted that there was, in effect, misleading conduct by silence. He said this arose from Ms Dinh's evidence that Mr Pollard had proposed that they transfer all of their property to the Bank, and that she had told her son 'to tell Mr Paul Pollard we do - do not want this arrangement because it will cost us money. We just wait for us to sell the properties and then for us to have money to buy - enough money to buy that market garden farm'.[556] He said that, as Mr Pollard did not expressly tell Ms Dinh that they were going to refinance all the properties, this was misleading conduct by silence. Counsel accepted that this was not how the case had been pleaded. I indicated that he would need to make an application to amend the pleading if he wished to pursue this argument.[557]
[556] ts 473.
[557] ts 1283. See also ts 1303.
Later that day, counsel made an application to amend the pleading. I refused leave, giving oral reasons.
In any event, had leave been granted, I would not have found there was misleading conduct by silence. There was considerable evidence that the Bank had communicated to the Dinhs, prior to the signing of the Loan Agreement, that the Bank would be taking securities over all of the properties and that the loans to other lenders would be refinanced. The Dinhs, through their son Andrew and their settlement agent, facilitated that.[558] As I have explained elsewhere, Ms Dinh was well aware that the Bank intended to refinance the loans with the other lenders.[559]
[558] See under the headings 'The Bank advises securities on the other properties will be required - 2 January 2009' and 'Signing documents to refinance loans to other lenders - 5 February 2009'.
[559] See under the heading 'Did Ms Dinh know that the Bank intended to refinance the other loans?'

Third Representation

The alleged Third Representation was that, by offering to provide the Loan Facility, further or alternatively, in arranging the loan accounts, the Bank represented to Ms Dinh that she and her husband would be able to service any finance provided to them.

Was the Third Representation made?

The Bank submits that an offer to provide a loan and arranging the loan is not a representation that Mr and Ms Dinh would be able to service any finance provided to them. The Bank submits that Doggett at [163] is authority for this proposition.[560] That paragraph was quoted earlier.[561]
[560] Plaintiff's Submissions on the Second Defendant's Case and List of Authorities dated 22 July 2019 (Plaintiff's Counterclaim Submissions) [40].
[561] See under the heading 'Clause 25.1 - Did not properly assess her capacity to repay'.
The paragraph[562] supports the proposition that a bank may, without breaching cl 25.1 of the Code, decide to lend money even if it is possible that the borrower may be unable to repay the loan.
[562] See also Doggett [164] ‑ [165] (McLeish JA), [1], [8] ‑ [10] (Whelan JA), [218] (Garde AJA).
However, Ms Dinh did not rely on cl 25.1 in relation to the Third Representation. Ms Dinh's case was simply that, by taking information from her and then offering the loan, the Bank was representing that the Dinhs could service the loan.[563]
[563] See ts 1307 ‑ 1308.
It is unnecessary to consider this further. That is because, as I will explain, even if it was a representation that the Dinhs would be able to service the loan, Ms Dinh's own evidence compels the conclusion that she did not suffer a loss 'by' the conduct.

Did Ms Dinh rely on it?

The word 'by' in this context expresses the notion of causation. The contravening conduct need not be the sole cause of the claimant's loss and damage. It is enough to demonstrate that the conduct was a substantial (rather than negligible) cause of the loss or damage. Reliance and causation may be inferred.[564]
[564] See Caffey v Leatt‑Hayter [No 3] [2013] WASC 348 [325] ‑ [339] in relation to analogous provisions, s 82 of the Trade Practices Act 1974 (WA) and s 79 of the Fair Trading Act 1987 (WA).
Ms Dinh's case was that the Third Representation caused a loss because she relied on it. Ms Dinh's case is that she would not have entered into the loan if the Bank had not represented to her that the Dinhs had the capacity to make the repayments.
As noted earlier,[565] Ms Dinh's evidence was to the following effect. She said that Mr Pollard first offered a loan for a 16 year term with an interest rate of 12.9%. She knew they could not afford the monthly repayments that would require, and so they went to walk out of the room. Mr Pollard stopped them, and later came back with an offer for a loan for one year with an interest rate of 3.4%. The repayments would then be about $5,000 ‑ $6,000. She knew they could afford this. The loan went ahead from there.
[565] See under the heading 'A second meeting with the Bank, this time in Perth - late 2008'.
Clearly, Ms Dinh did not interpret the first proposal as a representation that they could afford the repayments, or rely on it as making such a representation. Rather, she relied on her own assessment of what they could repay.
In addition, Ms Dinh did not give evidence that she had relied on the alleged representation. On the contrary. This exchange occurred in the examination‑in‑chief of Ms Dinh:[566]
[566] ts 554 ‑ 555.
SHEPHERD, MR:   If you had known that the bank's assessment - in the bank's assessment it was unlikely you could support the loan, what would you have done?
INTERPRETER:   Yes, yes. When - at first when I've been told that the loan term will be 16 years with the interest rate at 12 per cent I did not agree because - I did not agree then at - at first.
SHEPHERD, MR:   Yes. My question is if you had known that the bank looked at your information and thought that … it was unlikely that you would be able to meet the repayments required by the bank over the term of the loan, what would you have done?
INTERPRETER:   Yes. When I have been told that the repayments will be around $5000 then I - I think I would be able to - to meet that repayment.
In my view, Ms Dinh was confident that she knew what their capacity was and did not rely in any way on any assessment by the Bank.
Ms Dinh had the same mindset when seeking the loan from the NAB in 2001. Ms Dinh exaggerated her financial position to the NAB to improve the chance that the NAB would grant the loan.[567] Clearly, she was not relying on the NAB to assess whether she could repay the loan.
[567] See under the heading 'Assessment of witnesses'.
Counsel for Ms Dinh also sought to argue that Ms Dinh relied upon what she was told about what the repayments would be. This was not the pleaded allegation. In any event, what she was told about that was true. The repayments were about $6,000 a month.[568]
[568] Exhibit 5.353 (and see the summary in the Particulars of Statement of Claim [3(a)(i)]).

If Ms Dinh did rely on it, did the Bank have reasonable grounds to make it?

Assuming the representation was made, if I am wrong to find that Ms Dinh did not rely on it, the next issue would be whether the Bank had reasonable grounds to make the representation at the time.

I am satisfied that the Bank did have reasonable grounds to make such a representation.[569]
[569] See under the heading 'Prudence of the Loan'.

Unconscionability

Ms Dinh pleads that the Bank acted unconscionably by reason of the alleged breaches of the Code and the misleading conduct. Ms Dinh claims the unconscionable conduct was contrary to s 12CB[570] of the ASIC Act and the general law.[571]
[570] Although s 12CC was pleaded, the written submissions made it clear that she intended to refer to s 12CB.
[571] Defence [56]. The claim under the TPA was withdrawn - see ts 519.

Legal principles

The legal principles were not in dispute.[572]
[572] See ts 1276.

In equity

To establish in equity that the Bank acted unconscionably, Ms Dinh must prove:[573]
[573] Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85 [38], [64]. See also Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 [14] ‑ [20], [122] ‑ [124], endorsed by the plurality in Thorne at [37].
(1)she suffered from a special disadvantage (or special disability) which seriously affected her ability to make a judgment as to her own best interests; and
(2)the Bank unconscientiously took advantage of that special disadvantage.[574]
[574] This element generally requires that the alleged perpetrator knew or ought to have known of the existence and effect of the special disadvantage.
The adjective 'special' emphasises that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his or her own best interests.[575] Lack of English proficiency of itself does not mean the innocent party has a special disadvantage. It will only do so if it seriously affected the person's ability to make a judgment as to his or her own best interests. Ms Dinh did not contend otherwise.
[575] See the much quoted remarks of Mason J in The Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447, 462.

Under the ASIC Act

Section 12CB of the ASIC Act prohibits unconscionable conduct in connection with financial services.
The scope of s 12CB is not entirely settled.[576] However, this does not affect the resolution of this case. That is because Ms Dinh did not run her case on the basis that unconscionability under s 12CB of the ASIC Act set a lower bar than equity or that she did not need to prove that she suffered from a special disadvantage and the Bank unconscientiously took advantage of that. Rather, Ms Dinh ran her unconscionability case on the basis that she suffered from a special disadvantage and the Bank unconscientiously took advantage of that.[577] I also note that both counsel invited me to determine the matter on the basis that the test under s 12CB was the same as the test in equity.[578]
[576] See ASIC v Kobelt [48] ‑ [50] (Kiefel CJ and Bell J), [82] ‑ [93] (Gageler J), [118] ‑ [123] (Keane J), [144], [232] ‑ [234] (Nettle and Gordon JJ), [295] (Edelman J).
[577] See, for example, the Second Defendant's Trial Submissions [78] ‑ [91].
[578] See ts 353 and 442.
In any event, in light of the findings I have made and the matters set out below, any difference in the tests is likely to be academic. I have, however, had regard to the matters listed in s 12CC of the ASIC Act to the extent that they are relevant.

Analysis

Was Ms Dinh under a special disability?

Ms Dinh asserts she was under a disability in that she is a farmer and does not speak or read English.[579]
[579] Defence [2]. See also ts 1210.
I accept that Ms Dinh has been involved in a farming business for a long period of time. However, I would not describe her as a farmer. She was the book‑keeper for the business.
I accept that Ms Dinh's English skills are poor.
As I will explain, I do not accept her occupation or her lack of English skills seriously affected her ability to make a judgment in her own best interests. Indeed, in the context of this case, I do not consider that her ability was affected in any practical sense.
First, Ms Dinh's occupation as a book‑keeper did not detract from her ability to make decisions about whether to enter into the Loan Agreement. On the contrary, it made her better equipped.
Second, Ms Dinh had available to her at all relevant times a competent translator.[580] It was common ground that Andrew Dinh was fluent in both English and spoken Vietnamese. The evidence established that Ms Dinh used Andrew Dinh as an intermediary between herself and English speaking people, including Mr Pollard and Ms Casella the settlement agent. Andrew Dinh passed documents, instructions and requests to and from Mr Pollard and Ms Casella and his parents. While Andrew Dinh may have, understandably, felt that he had little choice but to help his parents, there was no suggestion that he ever refused to assist them or failed to translate anything they had asked him to translate.
[580] See s 12CC(1)(c) of the ASIC Act. The sixth point is also relevant to this subsection.
Third, Ms Dinh had ample opportunity to obtain advice. The only time pressure came from the settlement date for the purchase of the Plantation. The Bank did not impose any time pressure. In any event, Ms Dinh first signed a version of the Loan Agreement on 12 February 2009. If she had asked for time to review the document before signing it, Mr Pollard would have given her time. She was given copies of the documents she signed. She signed the final version on 4 March 2009. Settlement did not occur until 20 March 2009.
Fourth, Ms Dinh had access to various people who could have assisted her with queries or advice. Both her brother and her niece worked in banks, at least at some stage. She had used Vietnamese‑speaking mortgage brokers on a number of occasions. As a result of the advice of their accountant, Mr and Ms Dinh executed the Trust Deed, a document that had been prepared by lawyers. She also said she sought advice from her accountant as to whether she was permitted to work while receiving the disability pension.
Fifth, Ms Dinh had a long history of borrowing money from lending institutions and at more than a basic level. She and her husband had embarked on a property development strategy. She purchased their first home in the early '90s with money from Homeswest. Later, they bought a number of vacant blocks of land and built houses on the vacant blocks. On at least one occasion, they were the owner/builders of the house that was built. On occasions, they borrowed money to fund construction from a different institution to the institution that lent them the money to buy the land. At the time they bought the Plantation, they owned five other properties.
Sixth, Ms Dinh understood the fundamentals of banking transactions. She knew what a mortgage was and what an overdraft was. She knew the overdraft carried a much higher interest rate.[581] She knew that, if the Bank took over the other lenders' loans, this would incur fees. She checked bank statements to see which cheques had been presented and which had not, and to work out what she needed to pay on loan accounts.
[581] Although she thought it was higher than it was. The interest rate for the overdraft was actually 11.14%, with a rate of 13.99% applying to excesses - see exhibit 2.92 page 349.
Seventh, Ms Dinh was able to calculate the repayments that would have been required if the interest rate was 12.9%,[582] and she knew they could not afford that.
[582] See under the heading 'A second meeting with the Bank, this time in Perth - late 2008'.

Did the Bank unconscientiously take advantage of Ms Dinh's disability?

Even if I am wrong about that, I do not accept that the Bank took advantage of Ms Dinh's disability.
First, the transaction documents were on the Bank's usual terms.[583]
[583] See s 12CC(1)(f) of the ASIC Act.
Second, the letter of offer contained most of the important terms. It omitted that the Bank was going to refinance the loans from the other lenders. However, as I have explained, Ms Dinh knew this. It omitted, if this was a condition as distinct from an expectation, that the three investment properties had to be sold. Again, as I have explained, Ms Dinh knew this.
Third, the Bank did not breach the Code.[584]
[584] See s 12CC(1)(g) of the ASIC Act.
Fourth, the Bank did not make the alleged Second Representation. If the Bank made the alleged Third Representation, it had reasonable grounds to do so.
Fifth, the Bank knew it was dealing with a person with considerable experience in the acquisition of property.
Sixth, Ms Dinh presented to the Bank as having a trusted source of translation in her son Andrew Dinh.
Seventh, unlike the parents of Vincenzo Amadio,[585] Ms Dinh received a benefit from the loan. The loan enabled the Dinhs to buy the Plantation and then earn an income from it.
[585] Amadio. See in particular at page 475.
Eighth, the only time pressure came from the contract of sale for the Plantation. The Bank did not impose any time pressure on the Dinhs or exert any other form of pressure or influence.[586]
[586] See s 12CC(1)(d) of the ASIC Act.
Ninth, the Bank acted in good faith.[587]
[587] See s12CC(1)(l).
Tenth, the Bank's conduct after the Loan Agreement was entered into was supportive and restrained:[588]
[588] Relevant by s 12CC(1)(j) of the ASIC Act.
(1)The Bank gave the Dinhs considerable support in granting temporary extensions to the overdraft at their request. The Bank accepted at face value, as it was entitled to, the Dinhs' promises of how the extensions would be cleared.
(2)The Bank assisted the Dinhs to make applications for temporary extensions by teaching Andrew Dinh how to do a cash flow analysis.
(3)The Bank did not roll the Bill Facility into a Bills Matured Account until 30 November 2011, despite the Bank's contractual right to do so arising in March 2010. This saved the Dinhs interest.
(4)The Bank did not seek to sell the Dinhs' investment properties as mortgagee after the one year term expired. Instead, the Bank gave the Dinhs time to sell the properties themselves.
(5)The Bank took no court action until March 2014, even though the Dinhs stopped making any deposits into the overdraft account after February 2012 and had not made a payment prior to then since early 2011. This gave the Dinhs a considerable period of time in which to attempt to organise their affairs.
I accept that the Bank had a far superior bargaining position to Ms Dinh.[589] However, it was open to Ms Dinh to refuse the loan.
[589] See s 12CC(1)(a) of the ASIC Act.
Mr Pollard's note‑taking was imperfect. The loan was tight. However, I am not satisfied that the Bank's conduct was unfair or unreasonable in any respect.

Limitation defence

The Bank's written submissions in reply asserted that Ms Dinh's allegations of misleading or deceptive conduct and unconscionability were time‑barred. The Bank submitted that Ms Dinh amended her pleading to raise these allegations after the applicable limitation periods had expired.[590]
[590] See the Plaintiff's Counterclaim Submissions [41] ‑ [48], [51] ‑ [63].
Ms Dinh's written submissions asserted that the Bank's submissions were misconceived, having regard to s 81 of the Limitation Act.[591] That section relevantly provides:
[591] Second Defendant's Submissions on Plaintiff's Case and List of Authorities filed 23 July 2019.
(1)A counterclaim in an action (except a counterclaim solely by way of defence) is, for the purposes of this Act, a separate action.
(2)If a defendant in an action makes a counterclaim against a plaintiff in the action the counterclaim is to be taken to have commenced as against the plaintiff when the defendant became a party to the action.
Ms Dinh submitted that her counterclaim was solely by way of defence and therefore no limitation period applied. Ms Dinh also submitted that, even if her counterclaim was classified as a separate action, it is, by s 81(2), taken to have commenced as against the Bank when Ms Dinh became a party to the action. This was on 18 March 2014, when the Bank's action was commenced. Therefore, Ms Dinh submitted, her counterclaim is to be taken to have been commenced within the limitation period.

In opening submissions, the Bank cited[592] Belgravia Nominees Pty Ltd v Lowe Pty Ltd on this point.[593] That case settled, among other things, that the doctrine of 'relation back' did not apply in Western Australia. It did not address s 81 of the Limitation Act.
[592] ts 349.
[593] Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; (2017) 51 WAR 341.
During the Bank's oral closing submissions, I indicated that my preliminary view was that there was no merit in the Bank's submissions, and gave the Bank the opportunity to make further submissions. The Bank indicated that it did not seek to make further submissions.[594]
[594] ts 1209 ‑ 1210.
In my view, s 81 is clear.[595] Ms Dinh's counterclaim is to be taken to have commenced on 18 March 2014. I reject the Bank's limitation defence.
[595] See also Bate v International Computers (Aust) Pty Ltd (1984) 2 FCR 526, 532 in relation to a similar provision in a Victorian statute.

Conclusion on defence and counterclaim

I have rejected Ms Dinh's allegations that the Bank breached the Code, engaged in misleading or deceptive conduct and acted unconscionably.
Accordingly, I would dismiss her counterclaim and find for the Bank on its claim.

Comments on setting aside the transactions

In case I am wrong about that, I turn to Ms Dinh's claim for relief.

The relief sought

If successful in establishing misrepresentations or unconscionability, Ms Dinh sought to have the transaction documents set aside and be put in the position she was in before entering into the Loan Agreement.
For convenience, I will refer to the date on which the Loan Agreement was entered into as the 'Agreement Date'.

Restitution?

The Bank submitted that, if the transaction documents were set aside, Ms Dinh should be required to repay the money she borrowed plus interest at a commercial rate.[596] The Bank submitted, in effect, that the interest rate that should be applied is the Supreme Court interest rate.[597]
[596] ts 1208 ‑ 1209.
[597] ts 359.
Counsel for Ms Dinh effectively conceded that, if the transaction documents were set aside, the money would have to be paid back.[598] That said, he did not retreat from Ms Dinh's contention that she should be left in the position she was in before the Agreement Date.
[598] ts 1278 ‑ 1279.
Where equitable relief in the shape of rescission of a contract is granted, equity does not require complete restitution of the position which existed before the contract. It allows its remedies 'to be utilised to achieve practical restitution and justice'.[599] Equity also allows a court to not set aside the transaction in its entirety or to set it aside subject to conditions, so as to prevent one party obtaining an unwarranted benefit at the expense of the other.[600] The 'concern of equity, in moulding relief between the parties is to prevent, nullify, or provide compensation for, wrongful injury'.[601]
[599] Vadasz v Pioneer Concrete (SA) Pty Ltd [1995] HCA 14; (1995) 184 CLR 102, 111.
[600] Vadasz (114).
[601] Vadasz (115).
Clearly, if the transaction documents were set aside, Ms Dinh would be left with an unwarranted benefit if no conditions were imposed. However, if she had succeeded in proving that the Bank had engaged in misleading or unconscionable conduct, it would not have been equitable to require her to repay the entire debt. This would have left her homeless and without any assets. She would have been far worse off than if she had never entered into the Loan Agreement. This would not have been just.
In my view, if she had succeeded in proving that the Bank had engaged in misleading or unconscionable conduct, it would have been appropriate to make orders that would leave her in the same position she was in immediately prior to the Agreement Date, so far as that was possible.

Ms Dinh's pre‑loan equity position

Ms Dinh asserts that, prior to the Agreement Date, she had $874,485 in net assets.
The figure of $874,485 is the total amount of Mr and Ms Dinh's net equity from their various properties as at the time immediately prior to the Agreement Date. This was calculated by deducting the amount owed to the mortgagor of each property from the value of the property.[602] Mr and Ms Dinh were joint tenants of each property, except the Perth property. Mr Dinh was the sole registered proprietor of the Perth property.
[602] See the summary set out in Ms Dinh's table titled 'Total Security Property Equity'.
The Bank submitted that Ms Dinh did not have an interest in the Perth property, or, at least, that the evidence had not established that she did.[603] It is fair to say that the Bank did not pursue this submission with vigour.[604]
[603] See for example the Plaintiff's Counterclaim Submissions [87] ‑ [88].
[604] See ts 1147.
The evidence showed that Mr and Ms Dinh treated their assets and income as joint assets and income. I am satisfied that the Perth property was purchased with the joint funds of Mr and Ms Dinh. I am satisfied that a resulting trust arose and that the Dinhs were equitable joint tenants.
Ms Dinh seeks to be left with the whole of the net interest she and her husband had at the Agreement Date. This was on the basis that she was a joint tenant and therefore fully seised of the whole of the properties at that time.
A joint tenancy may be severed in a number of ways, including by alienation. Alienation may be voluntary or involuntary by bankruptcy.[605]
[605] Singh v Kaur Bal (No 2) [2014] WASCA 88 [42] ‑ [43].
Although Peter Dinh was made bankrupt in 2012, severing the joint tenancies, this occurred after the Agreement Date. Ms Dinh seeks to be returned to the position she was in before the Agreement Date, at which time the joint tenancies had not been severed.
I accept that Ms Dinh was fully seised of the whole of the properties at the Agreement Date. However, the joint tenancy was capable of being severed. She was not in the same position as if she was the only person who had an interest in the properties. In my view, it would not have been equitable to put her in the position of owning that sum outright to the exclusion of any other person, when that was not her previous position. In my view, it would have been equitable to put her in a net position of 50% - being $437,242.50.
However, Ms Dinh did not adduce any evidence of her current asset position. It is not known, for example, how much money she is owed by family members.
Nor would it have been possible, without more evidence, to craft relief to permit her to retain the Ballajura property subject to paying the Bank an amount that would leave Ms Dinh with equity of no more than $437,242.50. Ms Dinh did not provide an updated valuation of that property.
Accordingly, had Ms Dinh been successful in obtaining orders to set aside the transaction documents, it would have been necessary to hear from the parties as to how to achieve equity.

Conclusion

I give judgment for the Bank and dismiss the counterclaim. As at 23 July 2019, a total of $4,695,933.52 was outstanding on the two accounts.[606] The Bank foreshadowed filing an updated certificate as to the debt as at the date of judgment.
[606] Exhibit 11.
I will hear from the parties as to final orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SW
Research Orderly to the Honourable Justice Archer
17 DECEMBER 2019

[425] Exhibit 1.48 pages 186 ‑ 192.

[427] Exhibit 8.452 page 2114 and ts 1063.