HSBC Bank Australia Ltd v Mavaddat - [2015] WASC 153

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HSBC BANK AUSTRALIA LTD -v- MAVADDAT [2015] WASC 153

CORAM: ACTING MASTER GETHING

HEARD: 21 APRIL 2015

DELIVERED : 4 MAY 2015

FILE NO/S: CIV 1674 of 2014

BETWEEN: HSBC BANK AUSTRALIA LTD
Plaintiff
AND
MICHAEL MOOJAN MAVADDAT
First defendant
FARIBA MAVADDAT
Second defendant
FCFL PTY LTD as Trustee for the MAVADDAT FAMILY TRUST
Third defendant

Catchwords:

Summary judgment - Yerkey v Jones - Undue influence - Unconscionable conduct - 'Some other reason' not to award judgment - Extent of equity which a mortgagor is required to do if a loan is set aside

Legislation:

Australian Consumer Law, s 21
Rules of the Supreme Court 1971 (WA), O 14
Trade Practices Act 1974 (Cth), s 51AC

Result:

Summary judgment in favour of plaintiff against first defendant
Summary judgment in favour of plaintiff against second defendant on part of claim

Category: B

Representation:

Counsel:

Plaintiff:     Mr L Magistro
First defendant              :     In person
Second defendant          :     Mr C S Williams
Third defendant            :     No appearance

Solicitors:

Plaintiff:     Ashurst Australia
First defendant              :     In person
Second defendant          :     Solomon Brothers
Third defendant            :     No appearance

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

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209
Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Bank of Western Australia v Stein [2005] WASC 43
Barrick Gold of Australia Ltd v F L Smidth Inc [2007] WASC 186
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457
Buswell v Carles [2012] WASC 509
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
Darbyshire v Gilbert [2006] WASCA 13; (2006) 31 WAR 558
Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413
Eng Mee Yong v Letchumanan [1980] AC 331
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27
Fremantle Port Authority v DP World Australia Ltd [2007] WADC 202
Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458
Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395
GEL Custodians Pty Ltd v Dewar [2014] WASC 177
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Goh v First Industries Corp [2002] WASCA 341
Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290
Hee v Nyoni [2014] WASC 44
Helmers v Como [2014] WASC 394
Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338
Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 920512, 12 October 1992)
King Mortgages Pty Ltd v Satchithanantham [2006] NSWSC 1303
Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406
Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd [2011] WASC 208; (2011) 42 WAR 75
Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621
Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449
McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50
Miles v Bull [1969] 1 QB 258
Morgan v Pallister [2004] WASC 188
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
National Australia Bank Ltd v Satchithanantham [2009] NSWSC 21
Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509
Neilson v City of Swan [2006] WASCA 94
Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10 (S)
Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10; (2010) 41 WAR 353
Permanent Trustee Co of New South Wales Ltd v Hinks (1934) 34 SR (NSW) 130
Perpetual Trustee Company Ltd v Burniston [No 2] [2012] WASC 383
Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321
RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297
Siglin v Choules [2002] WASCA 9
Smart v Prisoner Review Board (WA) [2012] WASC 48
SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138
Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118
Stanley v Layne Christensen Company [2004] WASCA 50
Temwell Pty Ltd v DKGR Holdings Pty Ltd [2002] FCA 741
Tobin v Dodd [2004] WASCA 288
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Westpac Banking Corporation v Ninan [2014] WASC 456
Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71
Wookey v Quigley [No 5] [2011] WASC 275
Yerkey v Jones [1939] HCA 3; (1939) 63 CLR 649

ACTING MASTER GETHING: By a series of three loan agreements between 2004 and 2006 the plaintiff, HSBC Bank Australia Ltd (HSBC), advanced $2.472 million to the first and second defendants, Michael Moojan Mavaddat and Fariba Mavaddat. The loans were secured by a first registered mortgage over a property on Bateman Road, Mount Pleasant (Property). Mrs Mavaddat is the registered proprietor of the Property. The third defendant, FCFL Pty Ltd as trustee for the Mavaddat Family Trust, is said to have guaranteed the payment by Mr and Mrs Mavaddat of the amounts payable pursuant to the three loan agreements. It is now deregistered.
HSBC asserts that Mr and Mrs Mavaddat have defaulted on their repayment obligations, and has issued notices of default under the loan agreements and the mortgage. HSBC says that Mr and Mrs Mavaddat have failed to remedy the default. It seeks orders for repayment of all amounts due under the loan agreements, as well as possession of the Property pursuant to the mortgage.
By application dated 29 October 2014, HSBC applied for summary judgment against Mr and Mrs Mavaddat pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 14 r 1. As the application was filed more than 21 days after the date on which Mr and Mrs Mavaddat entered their appearances, HSBC has applied for leave to bring the applications. In the alternative, HSBC applies for orders that the whole of Mr Mavaddat's defence filed 4 August 2014 be struck out pursuant to RSC O 20 r 19.
Mr Mavaddat represented himself. He filed two affidavits in in opposition to the application, sworn 16 February 2015 and 15 April 2015.[1] Mr Mavaddat's defence appears to be that he has a counterclaim against HSBC in excess of any arrears in the loans. He also has a concern that there were irregularities with the business loan accounts, which may mean that the amounts owed are overstated.
[1] Which I will refer to as the 'First M Mavaddat Affidavit' and the 'Second M Mavaddat' affidavits respectively.
Mrs Mavaddat filed two affidavits in opposition to the application, dated 12 February 2015 and 2 April 2015.[2] Counsel for Mrs Mavaddat submitted that she was in effect a volunteer in relation to each of the three loans and the mortgage. As a married woman who is a volunteer, in the circumstances of the present case she falls within the approach adopted by Dixon J in Yerkey v Jones[3] affirmed by the High Court in Garcia v National Australia Bank Ltd.[4] Counsel asserted that Mrs Mavaddat's position fell with both limbs of the approach adopted in Yerkey in that, firstly, Mr Mavaddat exercised actual undue influence on her and, secondly, she did not understand the effect of the documents and the nature of the transactions.[5] As the first limb is easier for Mrs Mavaddat to establish, I address this limb first. Mrs Mavaddat also asserts an arguable defence based on unconscionable conduct by HSBC, both in equity and under Trade Practices Act 1974 (Cth) (TPA) s 51AC. She also supports her husband's claim that there is a counterclaim in excess of the claim by HSBC and that there are irregularities with the accounts which warrant further investigation. As Mrs Mavaddat's defence raises more substantial issues than her husband's, I will analyse her position first.
[2] Which I will refer to as the 'First F Mavaddat Affidavit' and the 'Second F Mavaddat' affidavits respectively.
[3] Yerkey v Jones [1939] HCA 3; (1939) 63 CLR 649.
[4] Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395.
[5] Yerkey (684) (Dixon J); Garcia [23] ‑ [25].
On the material before me, ten issues arise for determination:
•Should HSBC be granted leave to bring its summary judgment application?
•Has HSBC established its claim?
•Does Mrs Mavaddat have an arguable defence based on the second limb of the approach in Yerkey (mistake as to effect)?
•Does Mrs Mavaddat have an arguable defence based on the first limb of the approach in Yerkey (actual undue influence)?
•Does Mrs Mavaddat have an arguable defence based on unconscionable conduct in equity?
•Does Mrs Mavaddat have an arguable defence based on statutory unconscionable conduct?
•Does Mr Mavaddat have an arguable defence based on irregularities in the loans?
•Does Mr Mavaddat have an arguable defence based on his claim against HSBC?
•Is there 'some other reason' not to award summary judgment to HSBC?
•What final orders are appropriate?

Should HSBC be granted leave to bring its summary judgment application?

Mr Mavaddat filed an appearance on 9 June 2014. Mrs Mavaddat filed an appearance on 25 August 2014. HSBC had some difficulty in serving Mrs Mavaddat, and ultimately obtained an order for substituted service. HSBC's summary judgment application was filed on 29 October 2014. As the summary judgment application was made more than 21 days after the date on which the appearances were filed, HSBC has sought leave to commence the application.
The reasons for the delay are set out in an affidavit of Garth Stuart Tinsley, sworn 29 October 2014. Mr Tinsley is a solicitor employed by HSBC's lawyers. Mr Tinsley states that after a status conference held on 11 August 2014 he spoke to Mr Mavaddat. Mr Mavaddat said words to the effect that 'we will consider putting forward a proposal to HSBC to try to settle this matter without incurring further costs'. On 15 August 2014 Mr Tinsley says he was informed by Solomon Brothers that they acted for the Mavaddats in the matter. After that date, HSBC, through its lawyers and the Mavaddats, through their lawyers, engaged in without prejudice negotiations to settle the matter. These negotiations continued until HSBC filed its application on 29 October 2014. Self‑evidently, the negotiations were not successful. During this time there was also conferral in relation to the proposed application.
The policy rationale for the time limit is to ensure that summary judgment applications are brought at an early stage of proceedings before unnecessary expense has been incurred.[6] The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties, and may be exercised in favour of an applicant where strict compliance with the rules will work an injustice upon the applicant.[7] In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant and refusal of the application for the extension of time.[8]
[6] GEL Custodians Pty Ltd v Dewar [2014] WASC 177 [17] (Gething M); Barrick Gold of Australia Ltd v F L Smidth Inc [2007] WASC 186 [10] (Templeman J); Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd (Unreported, WASC, Library No 920512, 12 October 1992) (Adams M).
[7] Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458, 459 (McHugh J); Bank of Western Australia v Stein [2005] WASC 43 [53] (Commissioner Siopis SC); GEL Custodians [17].
[8] Gallo (459); Bank of Western Australia [53].
The decision of HSBC to delay commencing the summary judgment application against Mr Mavaddat whilst Mrs Mavaddat was being served is entirely understandable and appropriate. The issues involve both of them, and needed to be determined together. The delay whilst the parties negotiated in the present case is not excessive. It is certainly less than the delay considered by Chaney J in RHG Mortgage Corporation Ltd v Schafer.[9] There, leave was granted for a delay of 10 months which was occasioned by the lender giving indulgences to the borrower who had complained to the Financial Ombudsman Service.
[9] RHG Mortgage Corporation Ltd v Schafer [2014] WASC 297 [9].
In the present case, the application was still brought at an early stage of proceedings, before too much expense had been incurred. No defendant identified any specific prejudice. A grant of leave is appropriate.

Has HSBC established its claim?

In addition to Mr Tinsley's, HSBC relies on four affidavits. Two were sworn by Anthony James Woods, on 28 October 2014 and 17 March 2015.[10] Mr Woods is HSBC's Manager of Collections, and has been involved in the management of the loans to Mr and Mrs Mavaddat. The other two were affirmed by Natalie Shu Ying Wee on 29 October 2014 and 9 April 2015. Ms Wee is also a solicitor employed by HSBC's lawyers.[11]
[10] Which I will refer to as the 'First Woods Affidavit' and the 'Second Woods Affidavit' respectively.
[11] Which I will refer to as the 'First Wee Affidavit' and the 'Second Wee Affidavit' respectively.
Mr Wood's evidence is that between 2004 and 2006 HSBC entered into three loan agreements with Mr and Mrs Mavaddat, together with a mortgage over the Property.
The first loan agreement was entered into on 8 December 2004 when Mr and Mrs Mavaddat signed a letter of offer dated 7 December 2004 from HSBC (First Loan Agreement).[12] A copy of the First Loan Agreement is in evidence,[13] as is the application for this loan.[14] The purpose of the First Loan Agreement was to finance the purchase of the Property.[15] It was to be secured by a mortgage over the Property.[16] Pursuant to this loan agreement, HSBC advanced $1,160,000 to Mr and Mrs Mavaddat.[17]
[12] First Woods Affidavit [5(a)].
[13] First Woods Affidavit AJW‑1 (13 ‑ 28).
[14] Second Woods Affidavit AJW‑15 (13 ‑ 26).
[15] Second Woods Affidavit (32).
[16] First Woods Affidavit (24).
[17] First Woods Affidavit [6] ‑ [7].
The second loan agreement was entered into on 31 December 2004 when Mr and Mrs Mavaddat signed a letter of offer dated 20 December 2004 from HSBC (Second Loan Agreement).[18] A copy of the Second Loan Agreement is in evidence,[19] as is the application for this loan.[20] The purpose of the loan is stated in the loan documentation to be 'investment', specifically to allow Mr Mavaddat to refinance a facility he had with the ANZ.[21] It was also to be secured by a mortgage over the Property.[22] Pursuant to the Second Loan Agreement, HSBC advanced $700,000 to Mr and Mrs Mavaddat.[23]
[18] First Woods Affidavit [5(b)].
[19] First Woods Affidavit AJW‑2 (29 ‑ 43).
[20] Second Woods Affidavit AJW‑17 (44 ‑ 64).
[21] Second Woods Affidavit (31).
[22] First Woods Affidavit (41).
[23] First Woods Affidavit [8] ‑ [9].
The third loan agreement was entered into on 10 January 2006 when Mr and Mrs Mavaddat signed a letter of offer dated 5 January 2006 from HSBC (Third Loan Agreement).[24] A copy of the Third Loan Agreement is in evidence,[25] as is the application for this loan.[26] The purpose of the loan was 'business or investment purposes'.[27] It was also to be secured by a mortgage over the Property.[28] Pursuant to the Third Loan Agreement, HSBC advanced $612,000 to Mr and Mrs Mavaddat.[29]
[24] First Woods Affidavit [5(c)].
[25] First Woods Affidavit AJW‑3 (44 ‑ 59).
[26] Second Woods Affidavit AJW‑23 (125 ‑ 132).
[27] Second Woods Affidavit (58).
[28] First Woods Affidavit (56).
[29] First Woods Affidavit [10] ‑ [11].
Initially both Mr and Mrs Mavaddat were the registered proprietors of the Property. In the middle of 2005, Mrs Mavaddat became the sole registered proprietor of the Property. Mr and Mrs Mavaddat signed a letter dated 24 May 2005 by which the parties agreed to change in the collateral security for the loans with HSBC. The change was that Mrs Mavaddat would give a registered first mortgage over the Property.[30] There was a further letter of variation to similar effect in June 2008.[31] Mrs Mavaddat provided a first registered mortgage over the Property dated 7 June 2005, which was registered with Landgate on 10 June 2005.[32]
[30] First Woods Affidavit [14], AJW‑6 (97 ‑ 99); Second Woods Affidavit [14] ‑ [18].
[31] First Woods Affidavit [15], AJW‑7 (100 ‑ 102).
[32] First Woods Affidavit [16].
On or about 20 September 2013, HSBC sent notices of default to Mr and Mrs Mavaddat advising them that they were in default of the three loan agreements, and that the following amounts were due and payable:[33]
•First Loan Agreement - $66,866.55;
•Second Loan Agreement - $44,838.62; and
•Third Loan Agreement - $33,678.39
Mr and Mrs Mavaddat failed to comply with these notices of demand.[34]
[33] First Woods Affidavit [21], AJW‑11 (146 ‑ 151).
[34] First Woods Affidavit [22].
On 25 November 2013, HSBC sent notices of demand to Mr and Mrs Mavaddat, demanding that they pay the total outstanding amount under each loan agreement.[35]
[35] First Woods Affidavit [23], AJW‑12 (152 ‑ 154).
As at 28 October 2014 Mr and Mrs Mavaddat had failed to comply with the notices of demand.[36] They also failed to make monthly payments for the months of September 2013 to October 2014.[37]
[36] First Woods Affidavit [24].
[37] First Woods Affidavit [20].
On 5 March 2014, HSBC sent a notice to vacate the Property.[38] Mrs Mavaddat remains in possession of the Property.[39]
[38] First Woods Affidavit [25], AJW‑13 (155).
[39] First Woods Affidavit [26] ‑ [29].
As at 28 October 2014 Mr and Mrs Mavaddat:[40]
(a)had received advanced from HSBC in a total amount of $2,470,791.05;
(b)were in arrears in the amount of $351,320.90; and
(c)were indebted to HSBC in the amount of $2,546,853.20, with a continuing obligation to pay interest at a default rate.
[40] First Woods Affidavit [30] ‑ [37].
I am satisfied that Mr Woods has verified the facts on which HSBC's claim is based as required by O 14 r 2(1). Mr Woods also deposes that he believes that neither Mr nor Mrs Mavaddat have a defence to the action, also required by O 14 r 2(1).[41]
[41] First Woods Affidavit [40].
As a general principle, an applicant for summary judgment who complies with the requirements of RSC O 14 r 2 establishes a prima facie right to summary judgment.[42]
[42] Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71, 74 (Murray J); GEL Custodians [22]; Hee v Nyoni [2014] WASC 44 [17] (Gething AM).
I am therefore satisfied that HSBC has established a prima facie right for summary judgment.

Does Mrs Mavaddat have an arguable defence based on the second limb of the approach in Yerkey (mistake as to effect)?

As HSBC has satisfied all the requirements of RSC O 14 so as to give it a prima facie right to summary judgment, the burden shifts to Mr and Mrs Mavaddat to satisfy the court why judgment should not be given against it.[43] They must satisfy the court 'with respect to the claim … that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim'.[44] They do not have to show a defence on the balance of probabilities, but must at least show cause why there is an arguable defence.[45] This is an evidentiary burden, the overall legal burden of persuasion remaining on HSBC as the applicant.[46]
[43] Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 (Brinsden J); Westwind (74); GEL Custodians [25]; Hee [25].
[44] RSC O 14 r 3(1).
[45] Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27 [4] (Reasons of the Court).
[46] Morgan v Pallister [2004] WASC 188 [4] (Pullin J).

An application for summary judgment is to be determined on the basis that the version of the facts put forward by the respondent to the application, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action.[47] The court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent.[48] If after argument there remains real uncertainty as to the applicant's right to judgment without further investigation of the facts, summary judgment must be refused.[49]
[47] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 608 (Mason CJ, Deane & Dawson JJ); RHG Mortgage Corporation [28] (Chaney J).
[48] Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 [28] (Newnes M); Eng Mee Yong v Letchumanan[1980] AC 331, 341 (Reasons of the Court).
[49] Ansearch [28]; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, 335 (Herring CJ, Lowe & Fullagar JJ).
Mrs Mavaddat filed an affidavit sworn 12 February 2015. From this affidavit, it appears that her defence is that she did not really understand the documents she was signing. Specifically, she states:[50]
[50] First F Mavaddat Affidavit [4] ‑ [11].
4.I was born in Iran in 1957 and came to Australia as a refugee in 1986. At that time I spoke very little English. I studied in Italy and I knew some Italian.
5.From about 1989 to 1997, I intermittently attended TAFE to study English and also attended a course in childcare. I also did a real estate sales person's course for about two weeks.
6.Over the 25 years that I have been in Australia, my English has improved, my preferred and spoken language is Farsi. I speak Farsi most of the time.
7. About 10 years ago, my English was not as good as it is now. I could speak a little English, and read a little English, but I still had some difficulties. I had particular difficulty in understanding complicated or legal documents.
8.I recall that, on a number of occasions, I signed documents for HSBC Bank. I do not recall each specific occasion on which I signed those documents. My husband arranged all of our financial affairs, and I left this to him. I was asked by my husband to sign documents, which I did without question.
9.I recall that, on the first occasion that I signed documents for HSBC Bank, a person from the bank told me that they were for a home loan. At about this time, the property at 8 Bateman Road was transferred into my name.
10.I also recall understanding that some of the other documents that I signed for HSBC Bank related to Michael's company, International Land Developments Pty Ltd (which I understand is the third defendant to this action), and were for an office. I cannot now recall who told me this.
11.Other than this, I do not recall the circumstances in which I signed documents for HSBC Bank.
Mrs Mavaddat says that she has been shown the First Woods Affidavit, and says that:[51]
(a)she does not recall the First Loan Agreement, does recognises her signature, but states that but the printing of her name and the date are not in her handwriting;
(b)she does not recall the Second Loan Agreement, does recognises her signature, but states that but the printing of her name and the date are not in her handwriting;
(c)she does not recall the Third Loan Agreement, does recognise her signature, but states that the printing of her name and the date are not in her handwriting;
(d)she does not recall the letter varying the loan agreement dated 24 May 2005 and cannot tell from the copy of the affidavit that she has seen whether or not the signature is her signature;
(e)she does not recall the letter varying the loan agreement dated 9 June 2008 and cannot tell from the copy of the affidavit that she has seen whether or not the signature is her signature; and
(f)she does not recall signing be mortgage, and cannot tell from the copy of the affidavit that she has seen whether or not the signature on the mortgage is hers.
[51] First F Mavaddat Affidavit [12].
Mrs Mavaddat has also been shown the Second Woods Affidavit, and says that:[52]
(a)she does not recall the loan application in relation to the First Loan Agreement, and cannot tell whether the signature it contains is hers;
(b)she recognises her signature on the mortgage, but does not recall the document;
(c)she does not recall the loan application for the Third Loan Agreement, and cannot say whether the signature on it is hers.
[52] Second F Mavaddat Affidavit [4].
In her first affidavit, Mrs Mavaddat goes on to say:[53]
13.I did not understand that I was borrowing any money from HSBC Bank, or that I would have to repay any money to HSBC Bank. Even though I knew that the house at 8 Bateman Road was in my name, and the first documents I signed for HSBC Bank related to a home loan, I still did not understand that I was borrowing the money. My husband had organised the loan, and I understood that my husband would be repaying the loan.
14.I never received advice from a lawyer or accountant regarding the documents I signed for HSBC Bank. I do recall seeing a lawyer in relation to the house at 8 Bateman Road being transferred into my name, but not otherwise.
[53] First F Mavaddat Affidavit [13] ‑ [14].
She reiterates this position in her second affidavit:[54]
5.I have never been a licensed real estate agent. I have never told anybody, at HSBC Bank or otherwise, that I was a licensed real estate agent.
6.I recall that, when the property at 8 Bateman Road was bought, I understood that Michael was borrowing the money to pay for the property and was giving a mortgage as he had the income. I recall that Michael told me this. Michael told me that the property was being bought in both of our names. Michael took care of all business arrangements regarding the purchase of that property, including dealing with all banking matters. Michael arranged all of our financial affairs, and I left this to him.
7.I do not recall ever meeting any lawyer or obtaining any legal advice regarding anything to do with HSBC Bank, including all of the documents annexed to the affidavits sworn by Mr Woods on 28 October 2014 and 17 March 2015.
8.I do not recall meeting with, or receiving legal advice from, any lawyer from Freehills.
9.I recall meeting with Angela Millar and Novita Lawidjaja-Robinson at HSBC Bank. All of those meetings were with Michael. I never met either of those persons without Michael being present.
10.I was never asked to take any documents away to seek advice from a lawyer or an accountant, or being told that I could do so. I was simply asked to sign documents
[54] Second F Mavaddat Affidavit [5] ‑ [10].
I do not view Mrs Mavaddat's evidence as being inherently incredible, and so proceed to determine the application for summary judgment on the basis that the version of the facts put forward by her would ultimately be accepted at the trial of the action.
On the evidence before me, I am not satisfied that there is an arguable defence based on Mrs Mavaddat not in fact signing each document relied on by HSBC. She has not made a specific allegation of forgery. Neither is the fact that Mrs Mavaddat cannot recall signing the documents, and appears not to have read them, sufficient of itself to give rise to an arguable defence. 'The general rule … is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document'.[55] In the present case Mrs Mavaddat's defences turn on whether there is a vitiating element or claim for equitable or statutory relief.
[55] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [57] (Judgment of the Court).
In Garcia, in 1979 Mrs Garcia and her then husband executed a mortgage over the matrimonial home in favour of a bank. The mortgage secured all moneys which the mortgagors might owe the mortgagee, including moneys owing under future guarantees given by either of them to the mortgagee. It was given to secure a loan of $5,000 made to the husband for use in his business. Between 1985 and 1987 Mrs Garcia signed four guarantees in favour of the respondent bank, who was the successor in title to the initial bank. The guarantees guaranteed repayment to the bank of debts owed by two companies through which the husband conducted his business. In September 1988, the appellant and her husband separated. Mrs Garcia commenced proceedings to set aside the guarantees, and was successful.
The plurality (Gaudron, McHugh, Gummow & Hayne JJ) affirmed the approach taken by Dixon J in Yerkey, which they did not consider to be significantly different from the other members of the court.[56] Those reasons identified at least two kinds of circumstances which may arise when a married woman enters into a transaction with her husband, which the plurality in Garcia summarised as follows:[57]
In his reasons for decision in Yerkey v Jones, Dixon J dealt with at least two kinds of circumstances: the first in which there is actual undue influence by a husband over a wife and the second … in which there is no undue influence but there is a failure to explain adequately and accurately the suretyship transaction which the husband seeks to have the wife enter for the immediate economic benefit not of the wife but of the husband, or the circumstances in which her liability may arise. The former kind of case is one concerning what today is seen as an imbalance of power. In point of legal principle, however, it is actual undue influence in that the wife, lacking economic or other power, is overborne by her husband and goes surety for her husband's debts when she does not bring a free mind and will to that decision. The latter case is not so much concerned with imbalances of power as with lack of proper information about the purport and effect of the transaction. The present appeal concerns circumstances of the latter kind rather than the former.
[56] Garcia [17].
[57] Garcia [23] (footnotes omitted).
In Garcia the plurality identified four elements to the cause of action in relation to the second limb of the approach in Yerkey:[58]
The principles applied in Yerkey v Jones do not depend upon the creditor having, at the time the guarantee is taken, notice of some unconscionable dealing between the husband as borrower and the wife as surety. Yerkey v Jones begins with the recognition that the surety is a volunteer: a person who obtained no financial benefit from the transaction, performance of the obligations of which she agreed to guarantee. It holds, in what we have called the first kind of case, that to enforce that voluntary transaction against her when in fact she did not bring a free will to its execution would be unconscionable. It holds further, in the second kind of case, that to enforce it against her if it later emerges that she did not understand the purport and effect of the transaction of suretyship would be unconscionable (even though she is a willing party to it) if the lender took no steps itself to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her by a competent, independent and disinterested stranger. And what makes it unconscionable to enforce it in the second kind of case is the combination of circumstances that:
(a)in fact the surety did not understand the purport and effect of the transaction;
(b)the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed);
(c)the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet
(d)the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.
[58] Garcia [31].
A key aspect of both limbs of the approach in Yerkey is that the wife is a volunteer, someone who obtained no financial benefit from the transaction.[59] The wife must be a complete volunteer in the sense of having obtained no financial benefit; being a partial volunteer is not sufficient.[60] In Garcia the wife was a guarantor. In Yerkey the wife entered into a mortgage over property which she alone owned securing obligations owed by her husband. In both cases, the wife was a volunteer who secured no benefit from the impugned transaction. Counsel for Mrs Mavaddat submitted that whether or not she was a volunteer is to be determined by reference to the substance of the agreement, not its form.[61]
[59] Garcia [31]. See also: Elkofairi v Permanent Trustee Co Ltd[2002] NSWCA 413 [41] (Beasley JA, with whom Santow JA & Campbell AJA agreed); King Mortgages Pty Ltd v Satchithanantham[2006] NSWSC 1303 [124] ‑ [127] (Bell J).
[60] Elkofairi [44] ‑ [49].
[61] Permanent Trustee Co of New South Wales Ltd v Hinks (1934) 34 SR (NSW) 130, 138 (Jordan CJ, with whom Street J & Maxwell AJ agreed).
Counsel for Mrs Mavaddat accepted that the First Loan Agreement should be treated differently from the Second and Third Loan Agreements.
The purpose of the First Loan Agreement was to allow Mr and Mrs Mavaddat to purchase their matrimonial home, being the Property. The purchase price was $1,450,000[62] and the loan was for $1,160,000.[63] At the time the First Loan Agreement was entered into she was a joint registered proprietor of the Property with her husband.[64] In June 2005 she became the sole registered proprietor.[65] She has lived in the Property since then. In these circumstances, I do not consider it is arguable that she is a volunteer. Her joint ownership of the Property, and subsequent sole ownership of the Property, was and remains a clear benefit. Accordingly, the approach adopted in Yerkey, at least in regards to the second limb, does not apply to the First Loan Agreement. Nor does it apply to the mortgage insofar as HSBC seeks to enforce the mortgage to secure payment of the funds advanced pursuant to the First Loan Agreement.
[62] Second Wood Affidavit [8], (10).
[63] First Wood Affidavit [6]; Second Wood Affidavit [9].
[64] Second Woods Affidavit (10, 32).
[65] First Woods Affidavit (145); Second Woods Affidavit [14] ‑ [18].
The purpose of the Second Loan Agreement was to allow Mr Mavaddat to refinance a facility which he then had with the ANZ Bank.[66] Mr Mavaddat states that this was a business loan.[67] I am required to determine the application for summary judgment on the basis that this evidence will be accepted at trial.
[66] Second Wood Affidavit (48); Second M Mavaddat Affidavit [21] ‑ [23].
[67] Second M Mavaddat Affidavit [21] ‑ [23].
The purpose of the Third Loan Agreement was to create a business overdraft facility.[68]
[68] Second Wood Affidavit (142); Second M Mavaddat Affidavit [24].
The Second Loan Agreement and the Third Loan Agreement are not on their face for the benefit of Mrs Mavaddat. Where 'the transaction is not on its face for the benefit of the wife (such as where she is a surety for another's debts), the onus will lie on the party seeking to enforce the security that the wife was not, relevantly, a volunteer'.[69] In my view, it is arguable that Mrs Mavaddat was a volunteer in relation to the Second Loan Agreement and the Third Loan Agreement, in the sense of being someone who did not obtain a financial benefit from the transactions.
[69] Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10; (2010) 41 WAR 353 [190] (Murphy JA); Elkofairi [46].
In Garcia, the plurality makes it clear both that the limits of the approach taken in Yerkey are far from settled[70] and that the approach 'conforms to the fundamental principle according to which equity acts, namely that a party having a legal right shall not be permitted to exercise it in such a way that the exercise amounts to unconscionable conduct'.[71] A court should be careful not to risk stifling the development of the law by summarily disposing of actions where there was a reasonable possibility that, as the law develops, it will be found that a cause of action and remedy lies.[72] In Permanent Mortgages Pty Ltd v Vandenbergh Murphy JA expressed concerns about the limits of the Yerkey approach, however those concerns focussed on whether it should be extended to an aged parent/child relationship, and not on whether it should be extended to a loan executed by a wife for the benefit of her husband.[73] For the purposes of an alternate argument, his Honour assumed (without deciding) that the Yerkey approach applied beyond guarantees.[74] In Siglin v Choules the Full Court set aside a decision of the master to grant summary judgment, among other grounds limiting the approach in Yerkey to guarantees.[75] In that case the relevant relationship was that of aged parent and child. The transaction was a mortgage, with the aged parent being the borrower rather than a surety. Scott J, with whom Wallwork J agreed, ultimately concluded that the Australian cases to date do not 'exclude the possibility that the law may extend to cover situations of the type presently under consideration'.[76] His Honour continued:[77]
The mortgage by an elderly mother of her property in order to raise money for a child might well come within that category. That is particularly so in circumstances where the mother has had no capacity to repay the amount borrowed.
The full facts of this case will not be revealed until such time as the persons involved in this transaction give evidence and are cross‑examined. Whether the facts emerge as they did before the Master, or in some different form, can only be determined after trial. In my view the appellant has a sufficiently arguable case to justify permitting the defence to stand.
[70] Garcia [22].
[71] Garcia [32], citing Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406, 444 (Mason & Deane JJ).
[72] Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365, 373 ‑ 374 (Allen M); Neilson v City of Swan [2006] WASCA 94 [18] (Buss JA, with whom Wheeler & Pullin JJA agreed); Lois Nominees Pty Ltd v QBE Insurance (Australia) Ltd [2011] WASC 208; (2011) 42 WAR 75 [35] (Beech J); Helmers v Como [2014] WASC 394 [25] (Gething AM).
[73] Permanent Mortgages [189] ‑ [197].
[74] Permanent Mortgages [354].
[75] Siglin v Choules [2002] WASCA 9.
[76] Siglin [54]. See also: Elkofairi [47] ‑ [49]; King Mortgages [124] ‑ [127]; National Australia Bank Ltd v Satchithanantham [2009] NSWSC 21 [55] ‑ [75] (McCallum J).
[77] Siglin [54] ‑ [55].
Accordingly, I ought not to resolve on a summary basis the issue of whether the approach in Yerkey is limited to volunteers who are guarantors. The general principle underpinning the approach in Yerkey appears to be based on the wife being a volunteer, someone who obtains no benefit or gain from the contract. It is arguable that in relation to the Second Loan Agreement and the Third Loan Agreement, and the mortgage insofar as it relates to these loans, Mrs Mavaddat is a volunteer and falls within this general principle.
Accepting Mrs Mavaddat's evidence for present purposes, as to the other elements, it is arguable that:
(a)HSBC knew at the time of entering into the Second Loan Agreement and the Third Loan Agreement that Mr and Mrs Mavaddat were married, being the only question of notice which arises; and[78]
(b)Mrs Mavaddat did not understand the purport and effect of the transactions.[79]
[78] Garcia [40].
[79] Garcia [31]. The evidence is set out above [31] ‑ [32].

In these circumstances, HSBC 'is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife'.[80] It has an obligation to 'itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her'.[81]
[80] Garcia [31].
[81] Garcia [31].
With one exception, Mrs Mavaddat's evidence is that she never received any legal advice in relation to any of the documents that she signed, nor was she given the opportunity to take them away to obtain any legal or accounting advice.[82] She does recall seeing a lawyer in relation to the Property before it was transferred into her name.[83]
[82] First F Mavaddat Affidavit [14]; Second F Mavaddat Affidavit [7], [10].
[83] First F Mavaddat Affidavit [14].
In his second affidavit Mr Woods seeks to explain the steps taken to explain the transactions to Mrs Mavaddat. He deposes to HSBC's usual practice which is for the relationship manager is to explain the documents to the clients and then give them the opportunity to take them away to seek legal advice.[84] Counsel for HSBC also pointed out that:
(a)Mrs Mavaddat was described in the loan application as a 'licensed estate Agent';[85]
(b)Freehills was acting for Mr and Mrs Mavaddat in relation to the First Loan Agreement and the Second Loan Agreement; and[86]
(c)each loan agreement contained disclaimers on the signature page, with words such as: 'Do not sign this contract document if there is anything you do not understand'.[87]
[84] Second Woods Affidavit [4] ‑ [7].
[85] Second Woods Affidavit [10], (31).
[86] Second Woods Affidavit [11], (65 ‑ 68).
[87] First Woods Affidavit (28, 59, 59).
There is a factual dispute as to whether or not the steps taken by HSBC were sufficient to enable a finding that it took sufficient steps to explain the transactions to Mrs Mavaddat. This is not a dispute that should be determined in a summary manner.
I am satisfied that Mrs Mavaddat has an arguable defence to the claim brought by HSBC in so far as it relates to the Second Loan Agreement and the Third Loan Agreement. As I am not so satisfied in relation to the First Loan Agreement, I need to proceed to consider the balance of the defences asserted by Mrs Mavaddat, but only in relation to the First Loan Agreement.

Does Mrs Mavaddat have an arguable defence based on the first limb of the approach in Yerkey (actual undue influence)?

The relationship of husband to wife is not one which gives rise to a presumption of undue influence.[88] However, it may arise as a matter of fact. As I have noted, in Garcia the plurality stated that what is required in relation to the first limb of the approach taken in Garcia is actual undue influence, 'in that the wife, lacking economic or other power, is overborne by her husband and goes surety for her husband's debts when she does not bring a free mind and will to that decision'.[89]
[88] Yerkey (675).
[89] Garcia [23].
The law in relation to undue influence is conveniently summarised in the judgment of Murphy JA in Permanent Mortgages, which I respectfully adopt:[90]
[90] Permanent Mortgages [166] ‑ [168], [176] ‑ [180].
The basis of the equitable jurisdiction to set aside an alienation of property on the grounds of undue influence is the prevention of the unconscientious use of any special capacity in or opportunity for the disponee to affect the disponor's will or freedom of judgment in reference to the transaction: Johnson v Buttress (1936) 56 CLR 113, 134.
The jurisdiction to set aside a transaction procured by undue influence is exercised on two bases. The first is where undue influence is proved as a fact. The second is where undue influence is presumed by reason of the antecedent relationship between the parties, and the presumption has not been rebutted: Johnson v Buttress (119); Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573, 575. The former is 'actual' undue influence and the latter is 'presumed' undue influence: Powell v Powell [2002] WASC 105 [120] - [121].
Actual undue influence requires proof that the transaction was the outcome of such an actual influence over the mind of the disponor that it cannot be considered to be the free act of the disponor: Johnson v Buttress (134). The source of power to practise such influence or domination over the disponor may not arise from an antecedent relationship, but may arise in the particular situation, or by the deliberate contrivance of the disponee: Johnson v Buttress (134).
...
The doctrine of undue influence looks to the quality of the consent, or assent, of the weaker party: Commercial Bank of Australia v Amadio (474); Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457, 478.
Where a third party, who is a volunteer, obtains the benefit of a transaction tainted by the undue influence of the influencer, the volunteer will be affected by the equity (unless the volunteer has taken through some intermediate bona fide purchaser for value without notice): Bainbrigge v Browne (1881) 18 Ch D 188, 196 - 197; Giarrantano v Smith (1985) NSW ConvR 55-267.
Even where the third party has given value, or provided consideration, the transaction may be voidable by the party the subject of the undue influence. Such cases often involve a guarantee or charge given by the person the subject of the undue influence to a bank to secure the indebtedness of the bank's customer.
The receipt and retention of a benefit by a third party bank arising from the customer's undue influence has generally been held to be unconscientious on three principal bases. The first is where it has participated with notice, the second is agency, and the third involves special principles historically developed and applied to married women.
As to the first of those, the third party is affected in equity where it participates in the transaction with actual or constructive notice of the circumstances giving rise to the impropriety, ie of the actual undue influence exercised, or of the circumstances from which the presumption of undue influence arises: Yerkey v Jones (677); Bank of New South Wales v Rogers (1941) 65 CLR 42, 55, 70 - 72, 85 - 86; Commercial Bank of Australia v Amadio (464); Garcia v National Australia Bank (408); Budget Nominees Pty Ltd v Registrar of Titles (1988) V ConvR 54-311, 63-988. (But see also [204] below.)
In my view, there are three reasons why Mrs Mavaddat does not have an arguable defence based on actual undue influence.
The first is that she was not a volunteer in relation to the First Loan Agreement. The requirement that the wife be a volunteer is equally a requirement for the first limb of the Yerkey approach. In National Australia Bank McCallum J declined to apply the first limb as the wife has received a substantial benefit from the loan in question, namely repayment of an existing loan.[91]
[91] National Australia Bank [75].
The second is that Mrs Mavaddat does not give evidence that Mr Mavaddat forced her to sign the documents sought to be impugned, nor does she say that she signed them under any form of coercion. Her evidence is that she signed the documents because her husband asked her to.[92] There is no evidence her will was not independent and voluntary because it was overborne.[93] Nor is there any evidence to this effect in Mr Mavaddat's affidavits. This again is in contrast to a case like National Australia Bank where the wife's evidence was that her husband forced her to sign the documents, was violent towards her and that she was in fear of him.[94]
[92] First F Mavaddat Affidavit [8]; Second F Mavaddat Affidavit [6], [10].
[93] Commercial Bank of Australia Ltd v Amadio[1983] HCA 14; (1983) 151 CLR 447, 461 (Mason J) (Amadio).
[94] National Australia Bank [1], [64], [66].
The third is that, if there was any undue influence, there is no evidence that HSBC was aware of any facts said to give rise to the undue influence nor of facts which might have put it on notice of such impropriety.[95] In National Australia Bank, this was fatal to the wife's case. McCallum J concluded:[96]
I turn to consider whether Mr Satchithanantham's influence over Mrs Satchithanantham was sufficiently evident to the bank to make it unconscionable for the bank to enforce the transaction. The evidence as to what the bank knew is extremely limited. There is no evidence from which I could infer that the bank was on notice of any of the unhappy features of the relationship between Mrs Satchithanantham and her husband. Mrs Satchithanantham did not suggest that any aspect of her two meetings with [the bank officer] would have alerted a reasonable person to her fear of her husband.
[95] Amadio (467).
[96] National Australia Bank [76].
Accordingly, I am not satisfied that Mrs Mavaddat has an arguable defence based on actual undue influence by Mr Mavaddat.

Does Mrs Mavaddat have an arguable defence based on unconscionable conduct in equity?

Unconscionable conduct focuses more on the unconscientious conduct of the HSBC in dealing with Mrs Mavaddat, whereas undue influence looks more to the quality of the independence of her consent or assent to the transactions in question.[97] The law when equity will set aside a transaction based on unconscionable conduct is conveniently summarised in the judgment of Murphy JA in Permanent Mortgages, which I again respectfully adopt:[98]
[97] Permanent Mortgages[215]; Amadio (461, 474); Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457 [72] ‑ [76] (Gaudron, Gummow & Kirby JJ).
[98] Permanent Mortgages[219] ‑ [233].
Equity's jurisdiction to set aside a transaction for unconscionable dealing is invoked where one party to the transaction is under a special disadvantage or disability in dealing with the other party, and that special disadvantage or disability was sufficiently evident to the other party to make it prima facie unfair or unconscionable for that other party to accept or retain the benefit of the transaction: Commercial Bank of Australia v Amadio; Louth v Diprose (1992) 175 CLR 621, 637.
The underlying equitable principle may be invoked 'whenever one party by reason of some condition or circumstance' is placed at a special disadvantage of which unfair and unconscientious advantage is taken by the other party: Commercial Bank of Australia v Amadio (462).
The special disadvantage will be sufficiently evident to the other party if the other party knows facts which would raise the possibility of the special disadvantage in the mind of a reasonable person: Commercial Bank of Australia v Amadio (467 - 468, 479).
Where such circumstances are shown to exist, the onus is on the other party to establish that the transaction was fair, just and reasonable: Commercial Bank of Australia v Amadio (474).
The special disadvantage need not have been created by the party taking the benefit of the transaction: Louth v Diprose (629).
The special disadvantage alleged must be one 'which seriously affects the ability of the innocent party to make a judgment as to his own best interests'; mere difference in bargaining power is insufficient: Commercial Bank of Australia v Amadio (462). The 'essence of such weakness is that the party is unable to judge for himself': Blomley v Ryan (1956) 99 CLR 362, 392; or 'to conserve his own interests': Blomley v Ryan (415); ACCC v C G Berbatis Holdings [12], [46], [55].
In this regard care must be taken not to 'eviscerate unconscionability of its meaning': NZI Capital Corporation v Fulton [1998] FCA 667 Black CJ & Lehane J, quoting Mason CJ in Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489, 503.
In ACCC v C G Berbatis Holdings, Gleeson CJ [14] said:
'Unconscientious exploitation of another's inability, or diminished ability, to conserve his or her own interests is not to be confused with taking advantage of a superior bargaining position. There may be cases where both elements are involved, but, in such cases, it is the first, not the second, element that is of legal consequence ...'
In ACCC v C G Berbatis Holdings, Gummow & Hayne JJ [56] also said that even a person in a 'greatly inferior bargaining position' may nevertheless not lack capacity to make a judgment about that person's own best interests.
In all cases, the court's equitable jurisdiction is to be exercised according to recognised principles, and the courts are not armed with a general power to set aside transactions which in the eyes of the judges appear unfair, harsh or unconscionable: Louth v Diprose (654) (Toohey J, although in dissent in the result). See also the observations of Sir Anthony Mason in 'The Impact of Equitable Doctrine on the Law of Contract', (1998) 27 Anglo-American Law Review 1, 12 cited by Debelle & Wicks JJ in Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1 [648]:
'There is a strong objection to simply equating the concept to what is unreasonable and unfair. The object of the doctrine is not to protect people from the consequences of their own mistakes. Because our contract law, unlike that of the United States, does not impose a general obligation of good faith and fair dealing, it is preferable to think of unconscionable conduct in terms of that which shocks the conscience, something which is harsh or oppressive in that it involves taking advantage of another's special disability or disadvantage. So understood, the concept is not one which is open-ended, to be applied according to the subjective whim of the Judge, though like other standards, such as that of "the reasonable person", borderline applications will require an element of value judgment.'
In Bridgewater v Leahy [76], Gaudron, Gummow & Kirby JJ referred with approval to the Privy Council's observations in Hart v O'Connor [1985] AC 1000, in which unconscionable conduct was described as:
'[V]ictimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances.'
In The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 225 FLR 1 [4924], Owen J said that it is not enough for there to be unequal bargaining power - the conduct of the stronger party has to be exploitative or oppressive.
Whilst the categories of disability are not closed, the requisite special disadvantage often involves poverty, need, sickness, age, infirmity of body or mind, sex, drunkenness, illiteracy, lack of education and lack of assistance or explanation when assistance or explanation is necessary: Blomley v Ryan (405, 415); lack of or limited comprehension of the English language: Commercial Bank of Australia v Amadio; impaired intelligence: Wilton v Farnworth (1948) 76 CLR 646; or infatuation with or emotional dependence upon another person: Louth v Diprose.
Absence of independent legal advice may in a given case be a circumstance of factual importance in determining whether a special disability exists: Bridgewater v Leahy [41].
Physical frailty and enfeeblement, with diminished knowledge by the party in question of that party's property and affairs generally, are not necessary elements of a special disadvantage: Bridgewater v Leahy [116].
Counsel for Mrs Mavaddat submitted that she laboured under two special disabilities, her reliance on her husband and her limited command of English. Counsel further submitted that no evidence has been adduced by HSBC suggesting that it was not aware of either of these disabilities, or that it did not in any way act upon them.
In my view there are five reasons why I do not consider that a defence of unconscionable conduct is arguable in relation to the First Loan Agreement.
The first is that the mere fact that Mrs Mavaddat was married, or even that she may have been a 'mere housewife', is not sufficient of itself to give rise to a special disability.[99]
[99] National Australia Bank [91].
The second is that there is that is no evidence that HSBC knew that Mrs Mavaddat was unduly reliant upon her husband, or that it knew facts which might have raised this possibility. Assuming as I must that Mrs Mavaddat's evidence is accepted at trial, at its highest it is that she attended all meetings with HSBC with her husband. A husband and wife attending a bank to sign documents for a loan to purchase a house which they intend to own and occupy together does not of itself suggest any undue reliance by the wife on her husband. Counsel did not draw my attention to any case in which the mere fact of marriage was sufficient to give rise to a special relationship.[100]
[100] See [62] above to the contrary. The decision in Louth v Diprose [1992] HCA 61; (1992) 175 CLR 621 appears to have been cited in support of this proposition. However, it is apparent that the relationship between the parties, who were not married, had its unique characteristics based on the manipulative behaviour of the female in the relationship. It has no relevance to the present case.
The third is that there is no evidence that any limited command of the English language by Mrs Mavaddat was known to HSBC, or that it knew facts which might have raised this possibility. On the contrary, in the loan application for the First Loan Agreement the following appears: 'Fariba MAVADDAT (Wife) is a licensed Estate Agent however is not working and is responsible for Home Duties'.[101] Mrs Mavaddat's states that she has never been a licensed real estate agent, and never told HSBC that.[102] She is currently a licenced real estate sales representative, though there is no evidence before me as to when she became one.[103] However, even if the information in the application as incorrect, it is nonetheless evidence of HSBC's corporate knowledge at the time of receipt of the application.[104]
[101] Second Woods Affidavit (31).
[102] Second F Mavaddat Affidavit [5].
[103] Second Wee Affidavit [4].
[104] See for example: Permanent Mortgages [91]; National Australia Bank [31].
The fourth is that Mrs Mavaddat was not a volunteer in relation to the First Loan Agreement. In relation to this aspect, in Amadio, Deane J stated:[105]
In most cases where equity courts have granted relief against unconscionable dealing, there has been an inadequacy of consideration moving from the stronger party. It is not, however, essential that that should be so … Notwithstanding that adequate consideration may have moved from the stronger party, a transaction may be unfair, unreasonable and unjust from the view point of the party under the disability.
[105] Amadio (475) (footnoted omitted). This passage was adopted by Murphy JA in Permanent Mortgages [244].
In the present case, there is no basis for saying that the First Loan Agreement was unfair, unreasonable or unjust from the point of view of Mrs Mavaddat. It was a loan for the purchase of a residential property, which she and her husband were going to own and occupy.[106] The loan to valuation ratio was less than 80%.[107] It was a standard 30 year residential mortgage on a discounted interest rate as the Mavaddats were entitled to the HSBC Premier Package.[108] The loan fell within HSBC's serviceability guidelines based on Mr Mavaddat's income.[109] This was not an 'asset lending' transaction to a person with no ability to repay the loan.[110] Put slightly differently, if unconscionable conduct were found to exist, HSBC would be easily discharge the onus upon it to establish that the transaction as 'fair, just and reasonable'.[111]
[106] Second Woods Affidavit (31).
[107] Second Woods Affidavit (31 ‑ 32). Contrast the factual position in National Australia Bank [34].
[108] First Woods Affidavit (14).
[109] Second Woods Affidavit (32). Contrast the factual position in Permanent Mortgages [334].
[110] See generally: Permanent Mortgages [206] ‑ [243]; Elkofairi [56] ‑ [59].
[111] Louth (637) (Deane J, with whom Dawson, Gaudron & McHugh JJ agreed); Permanent Mortgages [222].

Fifthly, there is no evidence before me that Mr Mavaddat mislead Mrs Mavaddat as to the nature of the transaction.[112] She knew that documents she signed were for a home loan.[113] She knew that 'Michael was borrowing the money to pay for the property and was giving a mortgage as he had the income'.[114] She did not misunderstand the nature of this transaction.[115] It cannot be unconscionable for HSBC to exercise its rights under the mortgage when Mr Mavaddat ceased to be in a position to service the mortgage.
[112] Contrast for example factual position in Permanent Mortgages [151] ‑ [156], [333].
[113] First F Mavaddat Affidavit [9].
[114] Second F Mavaddat Affidavit [6].
[115] Again, contrast the factual position in Permanent Mortgages [158], [333].
In these circumstances, I do not consider it arguable that:
(a)Mrs Mavaddat was under a special disability in dealing with HSBC with the consequence that there was an absence of any reasonable degree of equality between them; [116] or
(b)if she was under such a special disability, that special disability was sufficiently evident to HSBC to make it prima facie unfair or unconscionable for HSBC to procure, accept or retain the benefit of, Mrs Mavaddat's assent to the impugned transaction in the circumstances in it was procured or accepted; [117] or
(c)HSBC has taken unfair or unconscientious advantage of Mrs Mavaddat in any way.[118]
[116] Louth (637).
[117] Louth (637).
[118] Amadio (462) (Mason J).
Accordingly, I am satisfied that Mrs Mavaddat does not have an arguable defence based on unconscionable conduct under general law.

Does Mrs Mavaddat have an arguable defence based on statutory unconscionable conduct?

Mrs Mavaddat also alleges that she is entitled to relief under the TPA arising out of a contravention of s 51AC. A cause of action under the TPA, and its later iteration the Australian Consumer Law (ACL),[119] accrues when loss or damage is sustained as a result of a contravention.[120] Where the loss is a contingent loss or liability, the time of accrual of the cause of action is when payment is required to be made, recoupment becomes impossible or the contingency is otherwise fulfilled.[121] In the present case, the notices of default were first served in September 2013, that is, after the commencement of the ACL. I thus propose to analyse Mrs Mavaddat case under ACL s 21, the ACL equivalent to TPA s 51AC.
[119] Competition and Consumer Act 2010 (Cth), sch 2.
[120] Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525 (Mason CJ, Dawson, Gaudron & McHugh JJ).
[121] Wardley (532 ‑ 533).
ACL s 21 relevantly provides that a person must not, in trade or commerce, in connection with the supply of services to a person 'engage in conduct that is, in all the circumstances, unconscionable'. The 'services' to which ACL s 21 applies includes a bank loan.[122] ACL s 22 sets out a number of factors that the court may have regard to for the purposes of s 21. One remedy for a contravention of ACL is an order declaring void a contract entered into as a result of the contravention.[123]
[122] Permanent Mortgages [363], with the definition of 'services' now being in ACL s 2.
[123] ACL s 237, s 243.
ACL s 21 is in identical terms to TPA s 51AC, the law in relation to which is again conveniently summarised in the judgment of Murphy JA in Permanent Mortgages:[124]
In s 51AC of the Trade Practices Act, the word 'unconscionable' is not limited to unconscionable behaviour under the general law or s 51AA of the Trade Practices Act: Australian Competition & Consumer Commission v 4WD Systems Pty Ltd[2003] FCA 850; (2003) 200 ALR 491 [183] - [185].
Like s 12CC of the Australian Securities & Investments Commission Act 2001 (Cth), it is intended to build upon, and not be constrained by, the general law: Australian Securities & Investments Commission v National Exchange Pty Ltd (2005) 56 ACSR 131 [30].
The word 'unconscionable' should be given its natural and ordinary meaning, ie 'doing what should not be done in good conscience': ASIC v National Exchange [33], [39].
It is necessary to show more than unreasonableness, unfairness or simply misleading or deceptive conduct: ACCC v 4WD Systems [185]. The term imports a perjorative moral judgment or moral obloquy: Hurley v McDonald's Australia Pty Ltd [1999] FCA 1728; [2000] ATPR 41-741, 40,585; ASIC v National Exchange [43].
It requires a consideration of whether the conduct is 'contrary to the norm of conscientious behaviour' or 'offends against basic notions of good conscience and fair play': ASIC v National Exchange [44].
Section 51AC(3) provides that the 12 factors referred to therein are factors to which the court may have regard 'without in any way limiting' the matters to which the court may have regard for the purpose of determining whether a contravention of s 51AC has occurred: Australian Competition & Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174; [181]. Further, in considering the potential application of s 51AC, it is not permissible to 'search through the twelve criteria set out … find one that seems to fit the case in hand, and then move to a conclusion of unconscionable conduct': ACCC v Oceana [181]. All of the circumstances must be considered.
[124] Permanent Mortgages [356] ‑ [361].
His Honour's conclusion in relation to TPA s 51AC in factual context of Permanent Mortgages is instructive for present purposes:[125]
Conduct in which a bank lends $192,000 to an elderly lady (aged 85) with no income apart from her pension and no assets apart from her home, who the bank knows has no resources herself to service the loan, and where the bank knows the following - that the property offered for security is her home, that the loan has been orchestrated by a third party (the son) to pay the third party's indebtedness to his creditors who are pressing for payment, that the elderly lady entered into the arrangement on the basis of trust in the third party and without any independent advice, and that the third party, although on the title to the property to be taken as security, contributed no equity to it, does, I think, 'offend basic notions of good conscience and fair play'. Such conduct involves moral obloquy.
[125] Permanent Mortgages [365].
In the present case, in relation to the First Loan Agreement:
(a)there is no evidence before me that HSBC was aware of any English language difficulties which Mrs Mavaddat may have laboured under;
(b)there is no evidence before me that Mr Mavaddat mislead Mrs Mavaddat as to the nature of the transaction;
(c)Mrs Mavaddat knew she was entering into a home loan;[126]
(d)she knew that Mr Mavaddat was borrowing the money to pay for the Property and was giving a mortgage, and that it was his income which would be used to was being used to service;[127]
(e)the loan was for the purchase of a residential property, which Mr and Mrs Mavaddat were going to own and occupy;[128]
(f)the loan to valuation ratio was less than 80%;[129]
(g)the loan was a standard 30 year residential mortgage on a discounted interest rate as the Mavaddats were entitled to the HSBC Premier Package;[130]
(h)the loan fell within HSBC's serviceability guidelines based on Mr Mavaddat's income, and was not an asset lending transaction;[131] and
(i)notwithstanding the Mr Mavaddat's income was being used to service the loan, Mrs Mavaddat was initially a joint tenant and later became the sole registered proprietor of the Property.[132]
[126] First F Mavaddat Affidavit [9].
[127] Second F Mavaddat Affidavit [6].
[128] Second Woods Affidavit (31).
[129] Second Woods Affidavit (31 ‑ 32).
[130] First Woods Affidavit (14).
[131] Second Woods Affidavit (32). Contrast the factual position in Permanent Mortgages [334].
[132] Second Woods Affidavit[14] ‑ [18].
In this factual context, it is not apparent to me how Mrs Mavaddat could establish at trial that the conduct of HSBC in seeking to enforce the First Loan Agreement involves moral obloquy, or otherwise offends basic notions of good conscience and fair play. Accordingly, I do not consider that Mrs Mavaddat has an arguable defence based on a contravention of ACL s 21.

Does Mr Mavaddat have an arguable defence based on irregularities in the loans?

Mr Mavaddat filed a defence on 4 August 2014. It reads:
1. First Defendant denies each and every allegations [sic] made in the statement of claim made by the Plaintiff.
If this was all that was before the court, I would have no hesitation in granting summary judgment against Mr Mavaddat. If summary judgment is not granted, or is granted in part, the defence should be struck out.
As I have noted, Mr Mavaddat filed two affidavits in opposition to the application. Mr Mavaddat's evidence is that he has had a history of dealings with HSBC 'which spans over a decade'.[133] He does not deny entering into the First Loan Agreement, the Second Loan Agreement or the Third Loan Agreement.
[133] First M Mavaddat Affidavit [11].
Mr Mavaddat's has concerns about the accuracy of the account balances relied on by HSBC. He is hampered by the fact that his records and banking documentation were lost in a fire at what I understand were his business premises.[134] In November 2014 he requested bank statements and other documentation from HSBC's lawyers. He was not satisfied with the response and so on 12 February 2015 filed a subpoena addressed to HSBC.[135] The practice of a party filing a subpoena in a summary judgment application addressed to the other party is strongly to be discouraged. This is for three reasons. The first is because the summary judgment regime in the RSC is designed to ensure that applications are brought and determined at an early stage in the life of the action, before significant litigation costs have been incurred, as a successful summary judgment application may render those costs unnecessary.[136] The second is because a subpoena addressed to another party may well be an abuse of the processes of the court if it is being used to bypass or undermine the discovery regime set out in RSC O 26 or O 26A.[137] The third is because until the pleadings are settled, the scope of the facts in issue cannot be readily determined, giving rise to the risk that the subpoena will be readily found to be for the improper purpose of 'fishing'.[138]
[134] First M Mavaddat Affidavit [3].
[135] First M Mavaddat Affidavit [8] ‑ [10].
[136] See the discussion at [9] concerning the grant of leave to commence the application. See also: Wookey v Quigley [No 5] [2011] WASC 275 [36] ‑ [37] (Kenneth Martin J).
[137] Darbyshire v Gilbert [2006] WASCA 13; (2006) 31 WAR 558 [15] (Pullin JA, with whom Roberts‑Smith JA agreed); Commonwealth of Australia v Albany Port Authority [2006] WASCA 185 [19] ‑ [22] (Steytler P), [63] ‑ [66], [70] ‑ [73] (Pullin JA); Buswell v Carles [2012] WASC 509 [26] (McKechnie J); Temwell Pty Ltd v DKGR Holdings Pty Ltd [2002] FCA 741 [3] ‑ [6] (Merkel J). The mere issue of a subpoena to a party may not of itself amount to an abuse of process: Hancock Prospecting Pty Ltd v Hancock [2013] WASC 290 [49] (Pritchard J).
[138] Stanley v Layne Christensen Company [2004] WASCA 50 [9] (Judgment of the Court).
Be that as it may, HSBC did provide documents to Mr Mavaddat, both in response to his request and in response to the subpoena, though expressing concerns which mirror mine.[139] In his second affidavit and at the hearing before me on 21 April 2015, Mr Mavaddat expressed concern that HSBC had not fully complied with the subpoena.[140] He sought a further adjournment of the application on that ground. I declined to give the adjournment. I was of the view that, in the context of a summary judgment application in which I am to proceed on the basis that his evidence will be accepted at trial, he had been given more than a sufficient opportunity to obtain documents from HSBC to ensure the just determination of the application.[141]
[139] Second M Mavaddat Affidavit (22 ‑ 23).
[140] Second M Mavaddat Affidavit[8].
[141] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [98], [102] (Gummow, Hayne, Crennan, Kiefel & Bell JJ).
One of the entities through which Mr Mavaddat conducted his business affairs was the FM Trust, the trustee of which was Springtide Nominees Pty Ltd (Springtide). Springtide, as trustee, became the developer of land at Halls Head in Mandurah (Mandurah Property). The Mandurah Property was subsequently sold by HSBC. Mr Mavaddat states that he did not receive a statement of the distribution of the proceeds of sale either from HSBC or the receiver and manager it appointed.[142] He expresses concerns about HSBC's 'improper use of accounts, non‑transparency in dealings and breach of agreements in the Springtide Nominees Pty Ltd trading and term deposits for an on behalf of the FM Family Trust'.[143]
[142] First M Mavaddat Affidavit [15] ‑ [18]; Second M Mavaddat Affidavit [14].
[143] Second M Mavaddat Affidavit [5].
Mr Mavaddat says that HSBC bank managers had requested blanket authorities to transfer funds from one account to another to pay arrears. As states: 'As there were instances [where] HSBC staff had transferred funds into their own accounts without authority I suspect that there could be additional unauthorised transfers'.[144] The example he provides is that the balance in arrears in the account of Springtide after application of the proceeds of sale was initially $100,000, but was then reduced to $946.89. He does not know where these funds came from.[145] He is evidence is also to the effect that he cannot account for $600,000 of the proceeds of the sale of a property at 817 Canning Highway.[146]
[144] First M Mavaddat Affidavit [19] ‑ [20].
[145] Second M Mavaddat Affidavit [15].
[146] Second M Mavaddat Affidavit [17].
I am satisfied that Mr Mavaddat does not have an arguable defence based on any irregularities in his accounts with HSBC. In order to establish the existence of an issue or question in dispute which ought to be tried, a defendant's affidavit must condescend into particulars.[147] His affidavits do not do so. On the evidence before me, there are only concerns or suspicions. I am conscious that this conclusion may be met with the response that particulars were provided as I did not allow Mr Mavaddat to obtain all the documents he sought from HSBC under the subpoena. However, it is incumbent on Mr Mavaddat to first plead facts which establish an arguable defence;[148] he is then able to seek discovery of all documents relating to the matters in question raised by those facts.[149] He has not put forward such facts. Further, it is not clear what, if any, cause of action Mr Mavaddat would rely on. He says he provided blanket authorities, thereby authorising any transfers made pursuant to those authorities. He does not assert that the authorities were forged or obtained improperly. Nor is it apparent to me that, even if there were transfers between the various accounts held by Mr Mavaddat with HSBC, that this increased the overall level of indebtedness of Mr Mavaddat to HSBC. Finally, Mr Mavaddat's concerns seem to be limited to his business accounts, in particular the accounts of Springtide.
[147] Moscow (113); Westpac Banking Corporation v Ninan [2014] WASC 456 [10] (Chaney J).
[148] RSC O 20 r 8(1), failing which his defence may be struck out as disclosing no reasonable cause of action pursuant to RSC O 20 r 19(1)(a).
[149] RSC O 26 r 1(1).
Mr Mavaddat is not represented. Accordingly, it is appropriate that I approach the documents in which he articulates his defences with some flexibility.[150] He may require, and be given, some leniency in relation to compliance with the rules set out in the RSC.[151] I need to be astute to ensure that, in a poorly expressed or unstructured document setting out his defence, there is no viable defence which, with appropriate amendment or permissible assistance from the court, could be put into proper form.[152] A 'frequent consequence of self‑representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy'.[153] In Re Attorney-General; Ex parte Skyring Kirby J stated:[154]
[I]t is always important for every Judge to keep an open mind in case a person who has been rejected by courts in the past may have, hidden amongst the verbiage of his or her arguments, a point which has not previously been seen and which may have merit… Vigilance, and not impatience, is specially required where that person is not legally represented.
[150] Wentworth v Rogers(No 5) (1986) 6 NSWLR 534, 536 ‑ 537 (Kirby P), 543 (Hope & Samuels JJA agreeing); Smart v Prisoner Review Board (WA) [2012] WASC 48 [10] (Pritchard J).
[151] Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (Reasons of the Court).
[152] Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338 [21] (Beech J); Tobin v Dodd [2004] WASCA 288 [15] (EM Heenan J), [3] (Murray J agreeing), [70] (Le Miere J agreeing); Wentworth (536 ‑ 537).
[153] Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509, 510 [5] (Brennan, Deane, Toohey, Gaudron & McHugh JJ); Ibrahim [21]; Glew [10]; Tobin [14].
[154] Re Attorney-General; Ex parte Skyring [1996] HCA 4; (1996) 70 ALJR 321, 323.
Even allowing Mr Mavaddat the flexibility which I am required to as a litigant in person, I am not satisfied that Mr Mavaddat has an arguable defence based on irregularities with his accounts with HSBC.

Does Mr Mavaddat have an arguable defence based on his claim against HSBC?

The counterclaim asserted by Mr Mavaddat relates to the sale of the Mandurah Property by HSBC. Mr Mavaddat asserts that the Mandurah Property was sold by HSBC in breach of an agreement reached with him at a meeting on 25 January 2011, which caused subsequent losses of more than $1.5 million.[155] He asserts that the losses caused by breach of agreement entered into with HSBC as per meeting of 25 January 2011 is in excess of what it claims in arrears.[156]
[155] First M Mavaddat Affidavit [17].
[156] First M Mavaddat Affidavit [26].
The position put forward by Mr Mavaddat appears to be that there was a meeting on 25 January 2011 between him and five managers of HSBC at which some unspecified agreement was entered into. As best as I can discern, the agreement was to extend various facilities and loans while Mr Mavaddat attempted to sell the Mandurah Property. The breach was the appointment of Grant Thornton as receivers and managers to sell the property. There is also a suggestion that the Mandurah Property was sold at an undervalue.[157]
[157] Second M Mavaddat Affidavit [12].
Again, Mr Mavaddat's affidavits do not descend into the particulars of the agreement said to have been made with HSBC at the meeting on 25 January 2011, nor as to how the sale of the Mandurah Property was in breach of this agreement.[158]
[158] Moscow (113); Ninan [10] (Chaney J).
Beyond this there are three further reasons why the evidence put forward by Mr Mavaddat does not disclose an arguable defence to the claim brought by HSBC in the present action. The first is that the present claim is brought against him personally, and not against Springtide. If there was loss suffered as he describes, it was by Springtide. Any cause of action would only be able to be brought by Springtide.
The second is that even if I were to assume that Mr Mavaddat, and not Springtide, suffered a loss of around $1.5 million as a result of a breach of contract by HSBC, that would not be sufficient to give rise to an arguable defence to the present claim. This is because it would be in the nature of an unliquidated claim which did not impeach the claim of HSBC so as to be able to be asserted by way of equitable set‑off.[159] It could only be raised as a counterclaim amounting to a cross‑action, which does not provide a defence to the claim of a plaintiff so as to prevent the award of summary judgment.[160]
[159] Ninan [26] (Chaney J); Westwind (84 ‑ 85); Goh v First Industries Corp [2002] WASCA 341 [16] (Wheeler J, Templeman J & Rolfe AJ agreeing).
[160] McDonnell & East Ltd v McGregor [1936] HCA 28; (1936) 56 CLR 50, 57 ‑ 58 (Dixon J); Field Camp Services [6].

The third is that the amount of damages said to have been suffered by Springtide are not set out with sufficient particularity to allow the court to make some assessment of the likely quantum of the claim, As the court stated in Field Camp Services:[161]
In seeking to resist an application for summary judgment based on an equitable set-off, the defendant must not only establish that it has an arguable claim on breach, but must also put before the court sufficient evidence to enable the court to make some assessment of the likely quantum of the defendant's claim. A defendant will not, in seeking to resist a summary judgment application, establish an arguable defence of set-off if the evidence in support of the quantum of its claim is so vague, uncertain and lacking in substance, that the court is unable to make any informed assessment of its likely quantum and whether the quantum is likely to reach or exceed the level of the plaintiff's claim in debt.
[161] Field Camp Services [7].
Again, even affording Mr Mavaddat the flexibility he is entitled to as a litigant in person, I am not satisfied that the facts he has placed before the court give rise to an arguable defence which he may assert against HSBC based on a counterclaim against it.[162]
[162] Field Camp Services [4].

Is there 'some other reason' not to award summary judgment to HSBC?

The position I have reached so far in the analysis is that:
(a)Mrs Mavaddat does not have an arguable defence in relation to the First Loan Agreement (and the mortgage to extent that it is used in relation to the First Loan Agreement);
(b)Mrs Mavaddat has an arguable defence in relation to the Second Loan Agreement and the Third Loan Agreement (and the mortgage to the extent that it is in relation to these loans);
(c)Mr Mavaddat does not have an arguable defence based on irregularities in the loan accounts; and
(d)Mr Mavaddat does not have an arguable defence based on a counterclaim against HSBC.
As I have noted, Mrs Mavaddat supports her husband's claim that he has a counterclaim in excess of the claim by HSBC and that there are irregularities with the accounts which warrant further investigation. However, it follows from (c) and (d) above that Mrs Mavaddat also does not have an arguable defence based on these allegations.
It is convenient to deal with the issue of whether there is 'some other reason' not to award summary judgment to HSBC in relation to both Mr and Mrs Mavaddat.
On an application pursuant to RSC O 14, the court may decline to award summary judgment if the defendant satisfies the court 'that there ought for some other reason to be a trial of that claim'.[163] In Miles v Bull, Megarry J said with reference to this phrase:[164]
If the defendant cannot point to a specific issue which ought to be tried but nevertheless satisfies the court that there are circumstances that ought to be investigated, then I think that those concluding words are invoked. There are cases when the plaintiff ought to be put to strict proof of his claim, and exposed to the full investigation possible at a trial; and in such cases it would, in my judgment, be wrong to enter summary judgment for the plaintiff.
This passage was endorsed by O'Brien DCJ in Fremantle Port Authority v DP World Australia Ltd[165] and by me sitting as the Acting Master in Helmers v Como.[166]
[163] RSC O 14 r 3(1).
[164] Miles v Bull [1969] 1 QB 258, 265 ‑ 266.
[165] Fremantle Port Authority v DP World Australia Ltd [2007] WADC 202 [48].
[166] Helmers v Como [59] ‑ [61].
I do not consider that the evidence supporting Mr Mavaddat's concerns or suspicions about irregularities in HSBC's recording keeping and accounts practise is sufficient to warrant investigation by the court. They do not constitute 'some other reason' for not awarding summary judgment to HSBC.
The fact that I am not prepared to award summary judgment against Mrs Mavaddat in relation to the Second Loan Agreement and the Third Loan Agreement (and the mortgage to the extent that it is sought to be relied on in relation to these loans) is not 'some other reason' for declining to enter summary judgment against Mr Mavaddat in relation to both these loans. The arguable defences raised by Mrs Mavaddat are personal to her.
The other argument which both Mr Mavaddat and counsel for Mrs Mavaddat raise in relation to the alleged counterclaim is that the issues raised in it are linked to the overall liability of the Mavaddats to HSBC. This is said to be because if the alleged impugned conduct had not occurred, there would have been surplus funds available to discharge the liabilities the subject of the present action. Thus the argument may be framed that the existence of the counterclaim is also 'some other reason' not to award summary judgment in relation to the First Loan Agreement. I do not agree. In addition to the reasons set out above ([87] ‑ [90]), the proposed counterclaim is so poorly articulated, and at such a premature stage in its development, that it would not just to make HSBC wait to enforce its judgment in relation to the First Loan Agreement pending its determination. Judgment against Mr and Mrs Mavaddat in this action is no legal bar to Springtide commencing a separate action in relation to the alleged counterclaim.
For the same reasons, I am also not prepared to stay execution of the judgment in relation to the First Loan Agreement pending determination of the balance of the present action and/or the determination of the proposed counterclaim.[167]
[167] The court has the power to do so under RSC O 14 r 3(2).
There is a further reason why I am not persuaded that there is 'some other reason' not to award summary judgment in relation to the First Loan Agreement. This is because if Mrs Mavaddat was successful in setting aside the First Loan Agreement, either in equity or under the ACL, her remedy would be rescission of the agreement. In seeking rescission, a plaintiff must do equity. This requires that a plaintiff should not 'be left with the fruits of the transaction of which [she] complain[s]'.[168] 'In the case of a secured loan, the party seeking rescission should do equity by repaying the money it received, secured by the mortgage, plus interest'.[169] This is equally the position if a statutory power is used.[170]
[168] Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449, 475 (Brennan CJ, Gaudron, McHugh & Gummow JJ); Permanent Mortgages [391].
[169] Permanent Mortgages [391]; Maguire (474 ‑ 477); Perpetual Trustee Company Ltd v Burniston [No 2] [2012] WASC 383 [397] ‑ [406] (Edelman J).
[170] Perpetual Trustee Company [397] ‑ [406].
In Maguire v Makaronis the respondents obtained an order that a solicitors' mortgage which they executed with their solicitors (the appellants) was liable to be set aside on the ground that their solicitors breached their fiduciary duties towards them, in particular by not disclosing their identify as mortgagees. The High Court was of the view that the equity of the appellants 'was to have the whole transaction rescinded and, so far as possible, the parties remitted to their original position'. The mortgage would only be set aside conditional upon repayment of the principal and interest, lest the respondent 'be left with the fruits of the transaction of which they complain'. [171]
[171] Maguire (475) (Brennan CJ, Gaudron, McHugh & Gummow JJ), (499) (Kirby J agreeing).
In some cases, equity will not demand that the entirety of the funds advanced be repaid as a condition of rescission. In Permanent Mortgages a mother entered into a loan agreement secured over her retirement unit. Part of the funds were used to discharge an existing mortgage with NAB over the retirement unit. The substantial balance was paid to her son. Murphy JA found that the mortgage should be set aside on the basis that it was obtained by unconscionable dealing and/or in conduct on contravention of TPA s 51AC. In his Honour's view, 'at a minimum, equity would not allow the bank to enforce the loan agreement or the mortgage against the mother, subject to her doing equity'.[172] Equity in that case required that the mortgage be set aside subject to the mother repaying the amount she received to discharge the prior mortgage, with interest. In supplementary reasons, his Honour concluded:[173]
I have found … that the mother would not have entered into the transaction in the first place had she been properly advised, rather, she would have refinanced the approximately $43,000 outstanding under the NAB loan. The bank would not have obtained the benefit of the loan agreement and mortgage at all. Subject to the mother doing equity, it seems to me that, prima facie, the bank should not be permitted to retain the benefit of the mortgage and use it to exercise rights with respect to the property at the expense of the mother.
The mother must do equity, by restoring the benefit she received, which, I have found, is the sum applied to discharge the NAB loan, plus interest.
[172] Permanent Mortgages [393].
[173] Permanent Mortgages Pty Ltd v Vandenbergh [2010] WASC 10 (S) [42] ‑ [43] (Permanent Mortgages (S)).
His Honour reached the same conclusion under both TPA s 87(2) and the general law.
In Elkofairi Mrs Elkofairi jointly owned the property mortgaged with her husband. Part of the loan obtained was used to pay an existing debt secured against the property, and part was used for Mr Elkofairi's business purposes. Beazley JA (with whom Campbell JA agreed) found that the loan should be set aside on the ground of equitable unconscionability. The court set aside the mortgage subject to Mrs Elkofairi repaying half the sum initially advanced to discharge the existing debt on the property.[174]
[174] Elkofairi [85] ‑ [86].
However, in the present case, there is no justification for an order that Mrs Mavaddat only be required to prepay a portion of the amount lent as she was only a joint owner of the Property at the time the money was lent. This is because the other joint owner, Mr Mavaddat, is also liable on the First Loan Agreement. HSBC provided just under 80% of the acquisition price of the Property, which Mrs Mavaddat now owns as sole registered proprietor. There is no evidence of her having provided any consideration for this transfer. There is no evidence of her personally having ever paid the interest on the First Loan Agreement, nor having ever repaid any capital. If she was entitled to have the First Loan Agreement rescinded, then, without more, she would be in the position of having had the fruits of the $1.16 million advanced by being the sole registered proprietor of the Property which the funds were used to purchase (subject to the claims in relation to the Second Loan Agreement and Third Loan Agreement). It would be an entirely inequitable outcome if HSBC was not permitted to recover the funds lent pursuant to the First Loan Agreement which Mrs Mavaddat has had the benefit of for the past 10 years. Consistent with the decisions in Maguire and Permanent Mortgages Mrs Mavaddat would be required to do equity by restoring the benefit she received, being the funds advanced pursuant to the first mortgage plus interest. The interest rate under the First Loan Agreement was HSBC's standard variable rate, less a discount whilst the 'HSBC Premier Package' applied. This does not appear exorbitant.[175] There may be some penalty interest which would may have to be rebated. But in effect, she would be in more or less the same position as if judgment were awarded against her in relation to the First Loan Agreement on the ground that she has no arguable defence to that claim. In other words, even if successful, Mrs Mavaddat would have had to repay the sums advanced under the First Loan Agreement, with interest.
[175] Maguire (477); Permanent Mortgages (S) [55].
The position is different in relation to the Second Loan Agreement and the Third Loan Agreement as it is clearly arguable that Mrs Mavaddat did not retain any of the fruits of the money disbursed, the money being used in Mr Mavaddat's business.
In any event, I have found that Mrs Mavaddat does not have an arguable defence to the claim in relation to the First Loan Agreement. The analysis in the preceding paragraphs simply reinforces the conclusion that I have reached that there is no 'other reason' to either decline to award HSBC judgment or stay execution of the judgment so awarded.

What final orders are appropriate?

The power to order summary judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.[176] It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted.[177] The overall legal burden of persuasion to establish that summary judgment is warranted is on HSBC as the applicant for summary judgment.[178] I am satisfied that the matters Mr Mavaddat raises by way of defence are so clearly untenable that they cannot possibly succeed.[179] I am satisfied that the defences raised by Mrs Mavaddat in relation to the First Loan Agreement are also so clearly untenable that they cannot possibly succeed. I have the high degree of certainty required as to the ultimate outcome of the action to make it appropriate to order summary judgment in favour of HSBC in relation to all claims against Mr Mavaddat and against Mrs Mavaddat in relation to the First Loan Agreement. Mrs Mavaddat may have leave to defend the balance of the claim.
[176] Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99 (Mason, Murphy, Wilson, Deane & Dawson JJ); SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 [20] (Judgment of the Court).
[177] Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57] (Gaudron, McHugh, Gummow & Hayne JJ); Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46] (Gleeson CJ, Gummow, Hayne & Crennan JJ); Hee [47].
[178] Morgan [4].
[179] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 129 ‑ 130 (Barwick CJ); Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24] (French CJ & Gummow J), [54] ‑ [57] (Hayne, Crennan, Kiefel & Bell JJ); Alcoa of Australia Ltd v Apache Energy Ltd [2012] WASC 209 [113] (Le Miere J).
My preliminary view is that orders along the following lines are appropriate to give effect to the reasons set out above:
1.The plaintiff have leave to apply for summary judgment against the first and second defendants.
2.There be judgment for the plaintiff against the first defendant on all claims, with costs to be taxed.
3.There be judgment against the second defendant in relation to the First Loan Agreement in the amount at which is owing at the date on which judgment is entered.
4.The second defendant deliver up vacant possession of the Property within 28 days of the date of this order.
5.The balance of the proceeds of the sale of the Property after deduction of the costs of sale, payment of the amount in par 3 and other costs and expenses permitted under the First Loan Agreement be paid into court pending the determination of this action, or otherwise secured with the agreement of the parties.
6.There be liberty to apply as to the amount of the costs and expenses deducted from the net sale proceeds.
7.The second defendant have leave to defend the balance of the action.
8.Within 28 days of the date of this order, the second defendant file and serve a defence and any counterclaim.
9.The costs of the application for summary judgment be in the cause.
I will hear from counsel and Mr Mavaddat as to the final form of the orders and, if required, on costs.