Mandeville v Better Lending Pty Ltd (No 6)
[2019] SADC 168
•21 June 2019
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MANDEVILLE v BETTER LENDING PTY LTD & ANOR (NO 6)
[2019] SADC 168
Judgment of His Honour Judge McEwen
21 June 2019
CONSUMER CREDIT - CREDIT PROTECTION - GENERAL - OPERATION OF CREDIT LEGISLATION - INTERPRETATION AND DEFINITIONS - LOAN CONTRACT
ESTOPPEL - ESTOPPEL BY JUDGMENT - ANSHUN ESTOPPEL - GENERALLY
EQUITY - GENERAL PRINCIPLES - UNDUE INFLUENCE AND DURESS
On 29 May 2010 Andrew Mandeville (2nd Defendant to action and 1st Defendant to counterclaim) signed a contract to purchase a residential property in Ferny Creek, Victoria. The purchase price was $1,600,000. The unconditional contract required a deposit of $160,000. On 20 August 2010, Deborah Mandeville (Plaintiff to action, and 2nd Defendant to counterclaim) and her then husband signed a loan agreement with Better Lending Pty Ltd (1st Defendant to action, and Plaintiff to counterclaim) to borrow $85,000 for three months. This was part of a suite of documents including mortgages over two properties owned by Mrs Mandeville.
On 2 September 2010 the Mandevilles signed a second loan agreement with Better Lending. The loan amount was for $167,000 of which $85,000 was advanced on 20 August 2010 and $82,000 to be advanced as directed. The final payment date was 19 November 2010. This second loan agreement included a term that, the first loan agreement merged into the second. This second loan agreement was also part of a suite of documents which included mortgages over the two properties.
No payments of principal or interest were ever made on either loan agreement.
The Plaintiff brought the pre-emptive action on the grounds of Anshun Estoppel, abuse of process, duress, undue influence or unconscionable conduct and sought a permanent stay, declarations and other remedies. The First Defendant and Plaintiff to the counterclaim sought relief by way of repayment of principal and interest owing pursuant to the second loan agreement.
Held
1.The Plaintiff’s claim for Anshun estoppel fails and is dismissed.
2.The Plaintiff’s claim for abuse of process fails and is dismissed.
3.The Plaintiff’s claims based upon duress, undue influence or unconscionable conduct fail and are dismissed.
4.The Plaintiff’s claim for an injunction pursuant to s 177 of the National Consumer Credit Protection Act 2009 (Cth) succeeds to the extent of a discretionary grant of a permanent injunction against the defendant, preventing the recovery of any interest on the loan.
5.On the counterclaim, judgment for Better Lending against each of Deborah Mandeville and Andrew Mandeville in the sum of $43,000.
6.I shall hear the parties as to terms of orders, and costs.
National Consumer Credit Protection Act 2009 (Cth) ss 5, ss 128-131, s 177, pt 4.2; Magistrates Court (Civil) Rules 2013 (SA); National Credit Code ss 4-5, s 13, referred to.
Haynes v St George Bank a Division of Westpac Banking Corporation [2018] SASCFC 51; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212; Wong v Minister for Immigration, Multicultural and Indigenous Affairs (2004) 146 FCR 10; Kadkhudayan v British American Tobacco (Australia) Services Ltd (2009) 263 ALR 568; Kadkhudayan & Anor v British American Tobacco (Australia) Services Ltd [2009] SASC 389; Zavodnyik v Alex Constructions Pty Ltd (2005) 67 NSWLR 457; Clout v Klein [2001] QSC 401; Accom Finance Pty Ltd v Mars Pty Ltd [2007] NSWSC 726; LPD Holdings (Aust) Pty Ltd v Russells [2017] QSC 045; Mango Boulevard Pty Ltd v Spencer [2010] QCA 207; Thirteenth Corp Pty Ltd v State (2006) 232 ALR 491, considered.
MANDEVILLE v BETTER LENDING PTY LTD & ANOR (NO 6)
[2019] SADC 168Introduction
Following five separate judgments on a number of preliminary issues, the trial of this matter proceeded on the substantive issues. The previous rulings[1] detail a good deal of the background to this litigation. However, for the purposes of this trial I will need to repeat some of that.
[1] Rulings of Judge Slattery dated 30 June 2017 (in chambers), 10 November 2017 and 6 December 2016. Rulings of Judge McEwen dated 17 August 2018 (in chambers) and 13 September 2018.
The dispute arises from a series of events which commenced in Victoria in 2010. On 29 May that year Andrew Mandeville signed a contract to purchase a residential property at 57 One Tree Hill Road, Ferny Creek, Victoria. The purchase price was $1,600,000. The unconditional contract required a deposit of $160,000. Andrew Mandeville was unemployed and in receipt of Centrelink benefits. He and his wife, Deborah Mandeville, the Plaintiff in this action, had two young children. Deborah Mandeville was working two jobs to support the family. The Mandeville family home at Scoresby was owned by Deborah Mandeville. She also owned an investment property at Ferntree Gully, Victoria. There was limited equity in each of those properties. Andrew Mandeville did not have the funds to meet the deposit. His self-centred, and patently absurd decision to sign that contract, with no rational or realistic prospect of ever complying with it, has resonated right through to this trial, and this decision.
On 20 August 2010 the Mandevilles signed a loan agreement with Better Lending Pty Ltd to borrow $85,000 for three months. This was part of a suite of documents including mortgages over the Scoresby and Ferntree Gully properties.
On 2 September 2010 the Mandevilles signed a second loan agreement with Better Lending. The loan amount was described as:
$167,000 of which $85,000 was advanced on 20 August 2010 and $82,000 will be advanced as directed.
The final payment date was 19 November 2010. This second loan agreement included the following term:[2]
The Borrower acknowledges and agrees that this Agreement constitutes the entire agreement between the parties relating to the subject matter of this Agreement and supersedes all prior representations, arrangements, understandings and agreements made by the parties whether oral or in writing including but not limited to the Loan Agreement between the parties dated 20 August 2010.
[2] Trial Book p158.
In short, the first loan agreement merged into the second. This second loan agreement was also part of a suite of documents which included mortgages over the Scoresby and Ferntree Gully properties.
Unsurprisingly, the Mandevilles never completed the contract for the purchase of the Ferny Creek property. The vendors of that property ultimately re-listed the property for sale, and pursued Andrew Mandeville for losses arising from his failure to comply with the contract. That, of course, is not part of this litigation, but is part of the factual matrix which has led to this dispute.
As to the first and second loan agreements to which I have referred, no payments of principal or interest were ever made.
The Claims and Counterclaims
As Mr Abbott SC noted at the commencement of his opening, this litigation is a little unusual in that the Plaintiff makes pre-emptive claims seeking a permanent stay, declarations, or other remedies. Normally, Better Lending would have been the Plaintiff, seeking to recover the debt for which it counterclaims.
Better Lending’s counterclaim can be succinctly summarised. The principal relief sought by Better Lending is repayment of $1,266,721.78 said to be principal and interest owing pursuant to the second loan agreement.
The Plaintiff, in her Statement of Claim, and Defence to the Counterclaim, sets up various bars or defences to the claim against her and seeks various declarations and remedies. These can be listed under four headings:
1Anshun estoppel;
2Abuse of Process;
3The National Consumer Credit Protection Act 2009 (Cth) and the National Credit Code;
4Duress, Undue Influence or Unconscionable Conduct.
Before turning to the specific issues I shall make some general observations as to the witnesses called.
The Plaintiff gave evidence and called her former husband, Andrew Mandeville. Better Lending called Ashley Del Corral and Andrew Malecki.
Deborah Mandeville
Deborah Mandeville is now divorced from Andrew Mandeville. In the main, I found her evidence as to the general family history and background events to be credible and reliable. Similarly, her evidence as to events following the loans. However, I do not entirely accept her credibility and reliability as to some of the critical events relating to the loans themselves, including the two attendances at Mr Del Corral’s office to sign documents. I accept her evidence as to angry, overbearing, and bullying behaviour both emotional and physical by her husband. However, I consider there has been a degree of exaggeration or re-construction regarding the events surrounding the signing of the documents. I also accept her evidence of her husband’s secrecy and unpreparedness to reveal truthfully his activities at the relevant times. Again however, I consider she has to some degree exaggerated or reconstructed her lack of knowledge about the Ferny Creek purchase, and her lack of autonomy and independent decision making.
I shall return to specific aspects of her evidence as I deal with the issues I need to determine.
Andrew Malecki
Andrew Malecki is the Director of Better Lending Pty Ltd. He has worked in the mortgage industry since 2003, and commenced the Better Lending business in 2008. Better Lending is a licensed credit provider based in South Australia.
It was Mr Malecki who negotiated the two loans with Andrew Mandeville. Mr Malecki then retained the services of Ashley Del Corral, a Victorian solicitor, to draw up the documentation, and have it signed by the Mandevilles.
Mr Malecki subsequently retained the services of solicitor Luke Rowley, to institute proceedings against the Mandevilles in the Adelaide Magistrates Court.
I consider Mr Malecki was largely a credible witness as to the broad sweep of events. However, as will be seen, I have reservations as to some aspects of his evidence, which I shall come to. A further general observation as to his evidence is that I consider there is some defensiveness and reconstruction regarding the detail as to what did or did not occur regarding these loans, and that he masked this, at times, by adopting a fairly bombastic and didactic manner.
Ashley Del Corral
Ashley Del Corral has been a solicitor for approximately 20 years. He is a sole practitioner in suburban Melbourne. These transactions are the only work he has carried out for Better Lending.
Mr Del Corral appeared uncomfortable when giving evidence. I do not consider this in any way undermines his credibility or reliability. In my experience it is not unusual for genuine, truthful witnesses to find the experience of giving evidence and being cross-examined a difficult one. By contrast, Andrew Mandeville exuded a confident and comfortable demeanour whilst in the witness box.
Mr Del Corral’s file notes do him some credit in that he took succinct but reasonable notes of the various events. He acted very promptly in carrying out the work that came from a new client out of the blue. He did not pretend to have any specific recollection of these events over and above what is recorded in his file notes and correspondence; and his general practices at the time.
As it will be seen, I was favourably impressed by Mr Del Corral’s credibility and reliability.
Andrew Mandeville
My general assessment of Andrew Mandeville as a witness is that he has no credibility whatsoever. His evidence was largely a conglomeration of statements that were evasive, implausible, internally contradictory, or patently untrue. He came across as confident and at times arrogantly contemptuous of the questions of counsel. He demonstrated a preparedness to say whatever suited him in answer to a question, and to not be the slightest bit perturbed in subsequently giving a completely different version.
Space does not permit me to list all the topics upon which his evidence patently lacked credibility. Nor is this necessary. However, I shall give some representative examples of topics which illustrate this general theme of his evidence.
First illustration: In cross-examination it was put to him that he was fashioning his evidence to suit what he understood to be the case of his former wife. When asked whether he had been provided with a copy of Deborah Mandeville’s affidavit relating to these proceedings he initially responded that it was quite possible. When pressed on this topic there was the following exchange:[3]
[3] T192.13 – T193.9.
Q. When is the last time you read it, if you remember reading it.
A. A few weeks.
Q. Were you told to read it carefully so that you would know what her evidence was.
A. That does ring a bell, yes.
Q. You can remember this quite clearly now, can't you.
A. Yes.
Q. Before when I asked you whether you had a copy of the affidavit and you said 'it's quite possible', were you being deliberately vague because you didn't want the court to know that you had carefully studied her affidavit.
A. No, not deliberate at all, it was just a bit hazy, I just had to remember, that's all.
Q. But now it's very clear to you.
A. Yes.
Subsequently in his evidence, when he was pressed as to how he received the affidavit, he was unable to say; and he then claimed he could not recall whether he had it at all:[4]
[4] T238.30 - .37, T239.29 - .36.
HIS HONOUR
Q. It is not really a trick question, Mr Belperio is just trying to ascertain how it is in the last few weeks you received an affidavit. Can you help him.
A. Your Honour, I can't, I'm sorry.
Q. You can't, you have no idea how you received this affidavit.
A. I am trying to think if I received one.
…
MR BELPERIO Does that jog your memory about the fact that you had received her affidavit.
A. Not at all.
Q. Sorry.
A. Not at all.
Q. So you do know that you have a copy of her affidavit, don't you.
A. Do I have it? I can't recall.
Upon the material before me he plainly was provided with the affidavit by the Plaintiff’s solicitor; was asked to read it carefully; and provided responses to it. This all happened recently; within a matter of weeks prior to the trial. Yet, under oath, he was quite content to flip flop from uncertainty whether he had seen it; A clear recollection of seeing it; then back to possibly never had it at all.
Second illustration: On Andrew Mandeville’s own evidence as to the scheme he was involved in with Geoffrey Lambert, he is plainly either a fantasiser, scammer, or both.[5] According to Mr Mandeville, he and Mr Lambert had arranged for two gentlemen in the Bahamas to provide $138 million for 10 years at two per cent interest with no security. According to Mr Mandeville, the money was actually sent as far as London, and was then fraudulently converted by the trustee. In the meantime, Mr Mandeville’s role in the scheme was to ‘extract cash’ from investors who would pay sums to Mr Mandeville and Mr Lambert, on the basis that they would subsequently be paid interest, and be given loans from the $130 million fund. Mr Mandeville would have the court believe that they raised $10 million from investors. But this was all disbursed:[6]
[5] I tend to think a scammer who has become so adept at persuading others, that he has difficulty distinguishing his scam from reality. But whether that is so, is not something I need to find.
[6] T279.6 - .23.
Q. What happened to that.
A. We had banks to pay, bank fees, lawyers, trustee. The lawyers in London were charging nearly $200,000 a year for insurance. We had to keep our trustee and our lawyers on the road and on planes and accommodation, incidentals, phone bills.
Q. I'm not quite following what you had lawyers for.
A. They had meetings with banks, investors, that sort of stuff.
Q. Anyway, approximately $10 million was garnered into this bank account.
A. Approximately, yes.
Q. At the time the wheels fell off and the investors were chasing their money, that was still sitting in the bank account.
A. No, it had all gone overseas.
Q. The whole $10 million.
A. In fees, it was over quite a few years.
Mr Mandeville would have the court believe that this was not a scam but was a genuine business enterprise which only failed because of the fraudulent conduct of the ‘trustee in London’.
Mr Mandeville also admitted in evidence that when some investors who had provided funds, tried to chase up the whereabouts of their money, and of Mr Lambert, Mr Mandeville falsely told them he did not know of Mr Lambert’s whereabouts:[7]
[7] T225.23 - .35.
Q. Really the first project fell through in 2011. You shredded all the documents so no-one could sue you and the police couldn't come after you.
A. Correct.
Q. In 2012 you started a new project with Mr Lambert.
A. Yes.
HIS HONOUR
Q. You were actively telling fibs to stave off the investors in its first project.
A. Correct.
Q. While you were commencing the second project with Mr Lambert.
A. Yes.
That evidence was not accompanied by a shred of remorse, embarrassment, or regret on his part.
Mr Mandeville would have the court believe that this second enterprise with Mr Lambert has raised $20 million from investors. Again, this entire $20 million has been disbursed into unspecified costs and expenses. Apparently there are no records available to add a shred of credence to his extraordinary claims.
A third example of Mr Mandeville’s lack of credibility relates to what the funds from the Better Lending loan were actually used for. At the time, Mr Mandeville told Mr Malecki he had an urgent need for the funds as he was being pressed by the vendor of the Ferny Creek property. One would expect it to be a simple exercise to demonstrate that the funds were used for that purpose. However, even on this straightforward topic, and even with the assistance of bank statements and other records, Mr Mandeville’s evidence descends into a series of contradictions, implausible, and vague explanations, and unexplained transactions. This has left counsel on each side the unenviable task of attempting to analyse and explain Mr Mandeville’s confusing web of evidence on this topic. The only plausible material is from the documentary trail, although this is indirect and far from satisfactory.
The topics I have briefly dealt with are representative of a theme that ran through Andrew Mandeville’s evidence. He is a totally unsatisfactory witness.
I now turn to the four primary issues that I listed above.
Anshun Estoppel
The Plaintiff’s pleadings raise the issue of Anshun estoppel as follows:[8]
[8] Trial Book dated 10 April 2019, p10.
29.3AFurther, or in the alternative, Better Lending is estopped by an Anshun estoppel from now:
29.3A.1making any of the claims the subject of the Default Notice against Deborah, and, or Andrew;
29.3A.2making any of the Second Loan Agreement Claims against Deborah and, or, Andrew and/or
29.3A.2claiming against Deborah that any moneys are due, owing and payable under the Mortgages and that it is entitled to any remedy for breach of the Mortgages,
in that these claims, and the issues of whether The First Advance was advanced pursuant to the Second Loan Agreement and that the Second Loan Agreement superseded the First Loan Agreement, were so connected with the subject matter of the Previous Magistrates Court Action that it was unreasonable in the context of the Previous Magistrates Court Action for Better Lending not to have made those claims and raised those issues in the Previous Magistrates Court Action.
Better Lending’s pleaded response is as follows:[9]
[9] Trial Book dated 10 April 2019, p23-24.
29.3.3.Insofar as concerns the claim by Deborah in paragraph 29.3A of the Claim:
29.3.3.1. Better Lending repeats the matters pleaded in paragraph 29.2 herein.
29.3.3.2. the Default Judgment is vitiated by a mistake:
i. the Default Judgment was entered by reason of the failure to defend a claim made in respect of the loan agreement referred to in paragraph 8.1 herein;
ii.Better Lending’s rights as against Deborah and Andrew under the First Loan Agreement were expressly superseded by the Second Loan Agreement pursuant to clause 3.2 of the Second Loan Agreement;
iii.the material facts relied upon to found the claim the subject of the Default Judgment did not concern the First Loan Agreement in any way;
ivconsequently, Better Lending had no entitlement to make claim against Deborah and Andrew under the loan agreement or enter the Default Judgment;
v. Better Lending entered the Default Judgment under the mistaken belief that it was entitled to do so;
29.3.3.3. Deborah has not acted on the Default Judgment to her detriment.
29.3.3.4.In the premises, it was not unreasonable for Better Lending to have not raised the issues in these proceedings in the Previous Magistrates Court Action.
Anshun Estoppel: The Principles
The Anshun estoppel principle can be succinctly stated:[10]
An estoppel of this kind, an ‘Anshun estoppel’, will preclude the assertion of a claim or of an issue of law or fact if the claim or issue was so connected to the subject matter of the first proceeding as to make it unreasonable, in the context of the first proceeding, for the claim or issue not to have been made or raised in it.
[10] Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212 at 229 [27] (French CJ, Kiefel, Keane and Nettle JJ).
In Port of Melbourne Authority v Anshun Pty Ltd[11] the High Court quoted with approval a passage from Henderson v Henderson:
Where a given matter becomes the subject of litigation in, and of, adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of the litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
[11] (1981) 147 CLR 589 at [598].
In the context of Australian case law the reference to res judicata in the above passage, amounts to a reference to the principle now referred to as Anshun estoppel.
In Port of Melbourne Authority v Anshun Pty Ltd the court went on to explain that the principle does not necessarily apply to every issue which could have been raised by a party in a previous action:[12]
In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it.
[12] Ibid at [602].
In their written outlines and closing submissions counsel have helpfully directed me to a range of authorities which impact upon the principle. I note that the principle is not to be applied dogmatically or mechanically but amounts to a value judgement to be made referable to the proper conduct of modern litigation. It does not turn purely upon the similarities between the issues raised in the first and subsequent litigation, although this is a factor. As noted above, it is a question of whether the matter now sought to be relied upon was so relevant to the subject matter of the first action that it would have been unreasonable not to rely upon it in that action:[13]
Anshun estoppel arises where the issue, now raised for the first time, properly belonged to the subject of the earlier proceeding but, by negligence, omission or accident, was not raised in earlier proceeding…
[13] Wong v Minister for Immigration, Multicultural and Indigenous Affairs (2004) 146 FCR 10 at 17 [37] (Emmett, Conti and Selway JJ). Quoted in Kadkhudayan v British American Tobacco (Australia) Services Ltd (2009) 263 ALR 568 at 573 [18] (Nyland J, with whom Doyle CJ and Duggan J agreed).
Moreover an application of the principle to the facts and circumstances of a particular case, the court has a discretion:[14]
As foreshadowed in Anshun, there will be instances where, even though there is every reason why the matter should have been raised earlier, but was not, there are special circumstances that prevail to permit a party to raise the issue in a subsequent proceeding. The Court therefore has a discretion, if it determines that special circumstances exist, to allow an issue to be raised, even where it is found that the point was unreasonably omitted from the earlier proceeding…
[14] Wong v Minister for Immigration, Multicultural and Indigenous Affairs (2004) 146 FCR 10 at 17 [38] (Emmett, Conti and Selway JJ).
In the South Australian case Kadkhudayan & Anor v British American Tobacco (Australia) Services Ltd[15] is an example of the application of Anshun estoppel principles to a Plaintiff. The Full Court held that:
…having regard to the risk of conflicting judgments, the commonality of the underlying substratum of facts and the losses claimed in both proceedings, it was unreasonable for the appellants not to have pursued their claim in contract in the Federal Court proceedings and an Anshun estoppel arose.
[15] [2009] SASC 389.
The Full Court approved and applied the New South Court of Appeal case of Zavodnyik v Alex Constructions Pty Ltd[16] as follows:
Handley JA concluded in Zavodnyik that there was a substantial if not total overlap in the facts underlying both claims. He considered the amount now sued for was comprised in the earlier claim. There was therefore every reason to require that both be litigated at one time, minimising costs and delay to both parties and demands of court time.
[16] (2005) 67 NSWLR 457.
There has been argument in this matter, as to whether, or the extent to which, Anshun estoppel principles can be applied to a default judgment. I have not been referred to any case which definitively rules out the application of Anshun principles to a default judgment. Rather, Mr Belperio in his written outline refers to cases which suggest that great care must be exercised in considering whether an Anshun estoppel ought to be applied to a default judgment;[17] or that particular care must be taken in applying estoppel to default judgments.[18]
[17] Clout v Klein [2001] QSC 401.
[18] Accom Finance Pty Ltd v Mars Pty Ltd [2007] NSWSC 726.
I need to have regard to all relevant considerations in applying the Anshun principle to the facts and circumstances of this case. One of the relevant considerations is that this was a default judgment. In making the necessary value or evaluative judgment, regarding the conduct of modern litigation, I bear in mind that this was a default judgment
Application of Anshun Principles: The Arguments
As noted in the pleadings quoted above, the essence of the Plaintiff’s argument pursuant to Anshun principles is that Better Lending sued in the Magistrates Court on the first loan agreement; whereas that loan agreement had been merged into the second loan agreement, which Better Lending now wishes to enforce against the Plaintiff. The more detailed chronology of the Magistrates Court proceedings is set out in my preliminary rulings, number four and number five. [19]
[19] Ibid, footnote 1.
In arguing that it was unreasonable for Better Lending to confine its claim in the first proceedings, to the first loan agreement, Mr Abbott SC points to a number of considerations.
First, Mr Abbott SC correctly points out that Better Lending sued on a loan agreement that no longer existed. That loan agreement had been superseded by and merged into, the second loan agreement. Better Lending concede that proposition. It is conceded that at the time the proceedings were brought in the Magistrates Court, there was in fact only one debt, and it was pursuant to the second loan agreement.
Second, not only did Better Lending pursue the debt pursuant to the wrong loan agreement; it did not pursue all of the debt that was owing at that time. All that was pursued in the Magistrates Court was the principal of the first tranche of the loan. Better Lending now seek to recover the second tranche of principal, together with interest on both tranches. However, the Plaintiff argues that insofar as there was default on a valid loan contract at that time,[20] and a debt owing to Better Lending, it was for the entire amount. It was unreasonable for Better Lending to pursue the Plaintiff for part of a total debt which was said to be owed in July 2014. This was not a case where there was some legal or factual demarcation between the first advance and the remainder of the debt said to be owed under the second loan agreement; which included the second advance, together with interest on both advances.
[20] For the moment I am ignoring other challenges to the loan agreement.
Third, Mr Abbott SC points to the evidence as to how it came about that Better Lending sued on the first loan agreement. The affidavit of Luke Rowley, Better Lending’s solicitor for the first proceedings, includes the following:[21]
11. On 24 July 2014, I met with Malecki and suggested to him that rather than commence traditional enforcement proceedings in Victoria, he should give consideration to issuing proceedings in the Adelaide Magistrates Court for the amount advanced under the First Loan Agreement only. I advised him that this would have the benefit of cost saving and likely lead to a more expeditious resolution of issues with the Defendants in respect of repayment of monies owed to Better Lending…
12.On 24 July 2014, I caused proceedings to be issued for and on behalf of Better Lending against the Defendants in Magistrates Court of South Australia Action No. 2984 of 2014 (“First Action”). The First Action pleads only the advance of principal of $75,000 to the Defendants under the First Loan Agreement. It defines this advance as “the First Principal Advance”.
13.At the time of drafting the First Action, I had not at that stage appreciated that the Second Loan Agreement purported to supersede the First Loan Agreement with the consequence effect that any rights of Better Lending under the First Loan Agreement had merged in the Second Loan Agreement.
[21] Exhibit P2, p4.
An email from Luke Rowley to Andrew Malecki dated 24 July 2014 includes the following:[22]
As discussed, for the sake of simplicity we have only issued for the first $75K advanced. This is for the sake of simplicity. My aim is to get judgment in South Australia and register the judgment in Victoria and then enforce it through the sheriff’s office. You have a caveat noting your mortgage interest anyway which means that you would need to go through a similar process over there or over here anyway. Once the sheriff sells you can recover the full amount under your mortgage (notwithstanding you will only have the judgment only for the $75K). As mentioned, doing this is also trying to create a discourse about resolution of this matter.
[22] Exhibit P2, p83.
The Plaintiff argues that this was a deliberate strategy on the part of Better Lending. Based upon the authorities, the fact that there was inadvertence, mistake, or negligence, is no sufficient answer to the argument that it was unreasonable not to pursue the entire claim, and to now seek to pursue the balance of it. The question of reasonableness is not confined to the perspective of the then Plaintiff, Better Lending, but needs to be viewed from the perspective of the interests of justice. An important rationale for the Anshun principle is that the time, expense, and other features associated with litigation, not be unnecessarily duplicated.
Finally, Mr Abbott SC argues that this a ‘paradigm case of conflicting judgments’.
Mr Belperio points to a number of features of this case which he says militate against the application of the Anshun principle.
First, the judgment obtained in the first proceedings was a default judgment. This means that in reality there is no scope, or very limited scope, for conflicting judgments. If the default judgment stands for anything it is merely that a sum of money, in default of any defence having been filed, is payable.
Second, he submits there is nothing unreasonable in the strategy adopted by Better Lending in taking the first proceedings. Various facts and circumstances are raised in the further and better particulars of the Plaintiff’s pleadings, as amounting to ‘improper purpose’.[23] Mr Belperio submits they are no such thing. They are reasons for approbation rather than criticism. It is both proper and reasonable to take steps aimed at cost saving, simplicity, and creating a discourse about resolution of the matter.
[23] Trial Book, p15.
Third, Better Lending points to the evidence as the reason behind the claim made in the Magistrates Court, which was the admitted inadvertence of the solicitor, Mr Rowley. That should not stand in the way of Better Lending now pursuing the balance of principal and interest owing under the loan agreement.
Evaluating the Competing Arguments
I need to address the various considerations that have been raised insofar as they impact upon the fundamental question of whether the second action was so relevant to the subject matter of the first action that it was unreasonable not to rely on it. In the circumstances of this case that question effectively becomes this: Was it unreasonable for Better Lending to take proceedings to recover the initial principal advance; but to postpone their claim for the second principal advance; and for interest upon both advances?
It is certainly the case that the two claims, as I have formulated them, were closely related to each other. Indeed, they both arise out of the same loan agreement. It is difficult to envisage a matter where two claims could be more closely related, than both arising out of precisely the same written agreement. So the first component of Anshun estoppel is plainly made out.
I turn to the second component, namely, reasonableness. In making an assessment of the reasonableness or otherwise of Better Lending’s strategy, their knowledge and motivation is a relevant consideration. I accept Mr Abbott SC’s submission that it is not the only consideration. I need to have regard to the interests of justice as a whole in applying the Anshun principle. But the knowledge and motivation of Better Lending is one relevant consideration.
Mr Rowley, in his unchallenged affidavit which was tendered by the Plaintiff, states that he had not appreciated, at the time of issuing the first proceedings, that the first loan agreement had merged into the second loan agreement. Mr Abbott SC challenges Mr Rowley’s veracity in this regard. However, that challenge has not been put to Mr Rowley, who was not called; and it was Mr Abbott SC who tendered the affidavit. Upon the evidence before me I do not see any reason to doubt Mr Rowley’s sworn declaration on the topic. True it is that Mr Rowley had been provided with both loan agreements; and he had them for some months before issuing the proceedings. However, I see no reason to reject his claim of inadvertence.
Mr Abbott SC submits that even if I accept inadvertence on the part of Mr Rowley, there cannot have been inadvertence or mistake on the part of Mr Malecki. The evidence establishes that Mr Malecki certainly knew that the second loan agreement had replaced the first. This had been an explicit topic of conversation and emails between Mr Malecki and Mr Del Corral. Mr Malecki’s understanding of the precise legal consequences of that, was not explored. However, at the very least, Mr Malecki was cognisant, at all times, that the second loan agreement was a composite one which included both advances made by Better Lending to the Mandevilles.
Accordingly, Mr Abbott SC argues that, at least on Mr Malecki’s part, there must have been more than inadvertence or mistake; and that the court should not accept Mr Malecki’s evidence that he simply acted on the advice from his lawyer.
The difficulty with this submission is that Mr Rowley’s advice to Mr Malecki was not couched in terms of loan agreements. It was couched in terms of money advanced. Mr Rowley in his email advised Mr Malecki ‘as discussed for the sake of simplicity we have only issued for the first 75k advanced’. It is not necessarily inconsistent for Mr Malecki to know that the second loan agreement had substituted or replaced the first; but to accept advice from his solicitor that the first advance pursuant to that second loan agreement could be separately pursued in the Magistrates Court. I accept that Mr Malecki simply acted on the advice of Mr Rowley.
The Critical Considerations: Anshun Estoppel
The critical considerations as to whether Anshun estoppel is made out, appear to me to be the following:
The subject matter of the two claims are very closely related in that, it turns out, they arise out of the same loan agreement.
This was a default judgment. There is less scope for conflicting judgments where the default judgment stands only for the conclusion that a sum of money is owed. Furthermore, in applying the Anshun principles to the proper and efficient conduct of modern litigation, I consider it is one thing to adopt a certain strategy or stance to obtain a default judgment; it would be quite another if the stance was maintained throughout the lengthy process of pre-trial and trial procedures through to judgment.
The motivation for the strategy was inadvertence on the part of Better Lending’s solicitor, combined with Mr Malecki following the advice of the solicitor to initially pursue the first principal advance only; whilst I accept Better Lending and its solicitor were motivated by inadvertence or mistake, this does not, of itself, stand in the way of the application of Anshun principles. But nor is it necessarily unreasonable, in itself.
In terms of motivation, Mr Abbott SC argues that the court is limited to a consideration of the motivation of the party at the time that the first proceedings were commenced. I have reservations about that submission. It seems to me that insofar as Anshun is an assessment or an evaluation of the reasonableness of a party’s conduct in the context of modern litigation, a court should have regard to the conduct of the parties up to and including the commencement of the second claim. Properly understood, the Anshun principle involves not just an evaluation of the party’s reasonableness in bringing the first claim; it is also an evaluation of the party’s reasonableness in postponing the second claim.
It is difficult for me to ignore the chronology of events. Having realised that the first proceedings were based upon error, Better Lending continued to enforce that judgment. As against that, there is also evidence that Ms Mandeville’s legal advisors appreciated that the default judgment was based upon the wrong loan agreement, but did not take action to set aside the judgment. It appears to have been a choice or strategy on their part, to not challenge the incorrectly obtained judgment, in order to subsequently argue Anshun estoppel. Accordingly, I consider this topic, of subsequent conduct, to be neutral in the circumstances of this case. Balancing the conduct on each side results in this topic effectively being cancelled out as a relevant consideration.
A fact that stands out in this case is the disparity between the two claims. Better Lending’s claim in the Adelaide Magistrates Court was for $75,000.00, being the principal only of the first advance. Having pursued enforcement, and recovered that sum, Better Lending’s subsequent claim is for the principal of the second advance in addition to interest on both advances. This amounts to a current claim of $1,266,721.78 in addition to the $124,000.00 already recovered from the Plaintiff by Better Lending.
As to the total amount owing from time to time, Better Lending’s position has moved around somewhat:
·A loan statement dated 6 May 2013 records the amount owing at that date as $1,589,492.09.
·A loan statement dated 26 March 2015 shows total indebtedness of $478,786.14.
·A loan statement dated 6 May 2019 totals $711,435.75.
·A loan statement tendered during trial seeks $1,266,721.79.
The variations appear in part to depend upon whether default interest is claimed; and whether interest is compounded. The loan statement dated 6 May 2013 appears to be based upon compounding default interest. Interestingly, according to Exhibit D5, Better Lending reserves the right to apply compounding default interest.
The very significant disparity between the two claims; which I have already noted are so closely related to each other in that they both arise out of the same loan agreement, tends to point to unreasonableness on the part of Better Lending to initially claim one arbitrary discrete and relatively small component of the debt; then subsequently commence fresh proceedings for the remaining, much larger, component of the same debt. This is a strong consideration in favour of the Plaintiff’s argument for Anshun estoppel in the circumstances of this case.
Anshun Estoppel: My Conclusion
Having carefully weighed all of the relevant and competing considerations, my conclusion arises from the fact that this was a default judgment.
The authorities show ambivalence as to whether a default judgment is capable of giving rise to Anshun estoppel. The cases that conclude that a default judgment can give rise to Anshun estoppel, urge great care in reaching such a conclusion.[24] In the present case this was a default judgment in the Magistrates Court. The matter had never been before a judicial officer for any judicial determination of issues. The default judgment was for non-compliance with the obligation to file a defence. Pursuant to the Magistrates Court (Civil) Rules 2013 (SA), that non-compliance entitled the Plaintiff to have judgment signed by a court officer and pursue the debt. It could be said that the default judgment stands for nothing more than the defendant is effectively deemed to owe the amount claimed, pursuant to the rules of court, as a result of non-compliance with filing a defence. It follows that in the circumstances of this case, the reality is that there is no meaningful scope for conflicting judgments. In that sense, a very significant rationale for the principle of Anshun estoppel, has no real scope for application in this case.
[24] Clout v Klien [2001] QSC 401; LPD Holdings (Aust) Pty Ltd v Russells [2017] QSC 045; Mango Boulevard Pty Ltd v Spencer [2010] QCA 207; Thirteenth Corp Pty Ltd v State (2006) 232 ALR 491.
For that reason, I decline to find that the Defendant’s counterclaim is barred by the principle of Anshun estoppel.
Abuse of Process
I do not propose to deal with the abuse of process argument in any detail. The rationales underlying the concepts of Anshun estoppel and abuse of process are not the same. However in this case the Plaintiff essentially points to the same facts and circumstances as relied on for the Anshun estoppel argument, to make out its abuse of process argument. I do not consider an abuse of process is made out here.
National Consumer Credit Protection Act
I turn to the Plaintiff’s arguments, and remedies sought, under the National Consumer Credit Protection Act (2009) (Cth) (The Act) and the National Credit Code (The Code). The first issue is whether The Act and The Code are applicable.
In their pleadings, and in their closing submissions, counsel for each party have approached this issue in relation to both the first loan and the second loan. Strictly, I do not consider this is necessary. It is conceded that the first loan was superseded by the second loan. It is pursuant to the second loan that Better Lending seeks to recover principal and interest. However, it may be that the question of whether The Act and The Code applied to the first loan, while it existed, has some relevance to the question I need to determine which is whether they applied to the second loan.
I am mindful of the presumption created by s 13(1) of The Code. Initially, however, I shall simply consider the merits of the evidence on the topic, without regard to any presumption.
Regulated Credit Contracts
The National Credit Code includes the following provisions which are relevant to the issues in this case:[25]
[25] The National Credit Code ss 4, 5.
4Meaning of credit contract
For the purposes of this Code, a credit contract is a contract under which credit is or may be provided, being the provision of credit to which this Code applies.
5Provision of credit to which this Code applies
(1) This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into:
(a)the debtor is a natural person or a strata corporation; and
(b)the credit is provided or intended to be provided wholly or predominantly:
(i)for personal, domestic or household purposes; or
(ii)to purchase, renovate or improve residential property for investment purposes; or
(iii)to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes; and
(c)a charge is or may be made for providing the credit; and
(d)the credit provider provides the credit in the course of a business of providing credit carried on in this jurisdiction or as part of or incidentally to any other business of the credit provider carried on in this jurisdiction.
(2) If this Code applies to the provision of credit (and to the credit contract and related matters):
(a)this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and
(b)this Code continues to apply even though the credit provider ceases to carry on a business in this jurisdiction.
(3) For the purposes of this section, investment by the debtor is not a personal, domestic or household purpose.
(4) For the purposes of this section, the predominant purpose for which credit is provided is:
(a)the purpose for which more than half of the credit is intended to be used; or
(b)if the credit is intended to be used to obtain goods or services for use for different purposes, the purpose for which the goods or services are intended to be most used.
Haynes v St George Bank A Division of Westpac Banking Corporation[26] was decided under the previous statutory regime. However, the principles applied in that case are applicable to the current Act and The Code. I need to have regard to the substance and reality of the loan transaction and make an objective assessment of whether the credit was for a ‘coded purpose’.[27]
[26] [2018] SASCFC 51.
[27] A phrase used in this trial to mean a credit contract with a consumer as defined in The Act and Code.
The First Loan Agreement
The initial email to Andrew Malecki regarding this loan was on 12 August 2010. It was in the following terms:[28]
[28] Exhibit P1, Tender Book, p35A.
Hi Andrew
Could you please have a look at this asap.
Regards Damo
Andrew Mandeville and wife Debbie and buying a house in Melbourne for $1.6m.
They currently own 2 properties – investment property $380,000 owe $192, 000
-owner occupied residences $600,000 owes $385,000
The investment property was is on the market and has a contract on it however it has passed its settlement date which has intern effected the purchase of their new place of residence.
They need $75,000 asap to complete the purchase or the vendor will impose a court writ on them.
What else do you need ?
Regards, Damo
Damo is a reference to Damien Caveney, a loan broker known to Mr Malecki.
Following that email Mr Malecki contacted Andrew Mandeville and had several telephone conversations with him. The terms of the first loan were negotiated.
Mr Malecki was cross-examined about the initial email he received:[29]
[29] T427.2 - .21.
Q.This email at p.35(a) tells you that the Mandevilles are buying a house in Melbourne for $1.6 million.
A.Correct.
Q.They need $75,000 ASAP to complete the purchase or the vendor will impose a court writ on them.
A.Yes.
Q.You must have known as soon as you read this email that this loan was for domestic purposes within the meaning of s.5 of The Act.
A.On the first reading, yes, it would appear that.
Q.What about on a second reading.
A.The second reading is that I made further inquiries and, as I mentioned previously, that Mr Mandeville had said that he had used business funds to make a deposit and he was looking to replace business funds for that purpose. So when you are looking to replace business funds, then the predominant purpose of the loan is for business and therefore it is not regulated.
Q.That was your opinion at the time, was it.
A.Yes.
Mr Malecki’s evidence included:[30]
Q.How were you satisfied that the Mandevilles would be able to repay the loan.
A.In the first loan my assessment was there was sufficient equity in the property given the term that the settlement was expected to occur, the amount of funds borrowed and the approximate sale price.
Q.Was there any discussion between you and Andrew Mandeville as to the purpose for which the funds for the first loan were going to be used.
A.Yes. At the time he said that they had used funds to pay for the deposit for a purchase of the property, which he'd taken out of his business and this was required to replace the business funds.
Q.Did you form a view on whether the first loan would be subject to the code or not.
A.Yes, I did. As it was replacing business funds the majority of that under the code states that it would not be regulated.
[30] T398.15 – .32.
Mr Malecki was somehow referred to Ashley Del Corral, and retained his services to prepare the loan documentation. The text messages and emails show that the Mandevilles, or specifically Andrew Mandeville, was pressing to have the documents completed and receive the money as a matter of urgency.[31] Mr Malecki spoke to Mr Del Corral by telephone on 20 August; he emailed him the same day confirming the instructions to prepare the documentation. The Mandevilles attended Mr Del Corral’s office that same day to sign the documents, and Mr Del Corral then lodged a caveat at the Victorian Lands Titles Office.
[31] Exhibit P1, Tender Book, p37 and p230C.
Mr Del Corral reported those events to Mr Malecki by letter dated 30 August 2010.[32] That letter included the following:[33]
As you are aware, both properties are encumbered by a first mortgage and we have not been requested nor have we provided you with any advice in relation to whether there is sufficient equity in each of the properties to cover the loan in the event of default. We have assumed and prepared the loan documents on the basis that the loan is not governed by the Consumer Credit Code…
[32] Exhibit P1, Tender Book, p75.
[33] Exhibit P1, Tender Book, p76.
The Second Loan Agreement
Later in August 2010 Andrew Mandeville again contacted Mr Malecki to negotiate a further loan.
As to the second loan, Mr Malecki’s evidence was as follows:[34]
[34] T401.5 – 403.2.
Q.Aside from The Actual date, do you remember what was discussed.
A.Basically, Mr Mandeville represented that he had been 'gazumped', was a term that he used, it was not one I was familiar with, that he needed to come up with additional funds to be able to purchase the property and, on that basis, was requesting the additional funds.
Q.What did you think he meant by 'gazumped' based on the context in which he used it.
A.The context that I understood was that somebody else had come in with a slightly higher offer and he needed to match or better that offer.
Q.Did you discuss with him the same things that you spoke about before that you would need to discuss about a loan such as interest rate, amount, value.
A.Yes. The issue was that the loan terms would be the same. I actually recall giving him a discount on the fee. You'll notice the fee the second time was lower and that was reflecting the fact of the work that had already been done by Mr del Corral and that's why that fee was lower.
Q.When was the first time you considered in relation to this loan whether it would be regulated by the code or not.
A.My first recollection was there was a conversation with Mr del Corral, I think he had a conversation with Mr Mandeville earlier on and because the amount of funds were being used for the purchase of the new owner-occupied property that it was probably best that it was a consumer-regulated loan. As I said at the time the requirement was, if it was a business loan, 50% or more had to be for business purposes. It wasn't clear exactly how much, but given where the funds had gone and how much we were putting through, then, yes, I understood that it was probably appropriate to have it represented as a code-regulated loan.
Q.Was it your suggestion or Ashley del Corral's suggestion or someone else's as to why the second advance incorporates both advances, if you know what I mean, the second set of loan agreements is expressed as being for the whole amount.
A.My recollection would be that was made by Mr del Corral and my belief was it was more of an administrative matter to just make things clearer or more consolidated.
Q.Could I ask you to turn to p.81. This is a file note by Ashley del Corral of a conversation with you.
A.Yes.
Q.Take your time just to familiarise yourself with this document and I'm going to then ask you if you remember having this conversation.
A.I recall that there were a couple of conversations. My recollection is that originally there was a smaller amount requested for the second loan and then that increased to 75,000. I think between the smaller amount, the additional amount of the loan, we were looking at whether it was greater than or larger than 50% for regulation purposes.
Q.How did you satisfy yourself in relation to this second advance that the Mandevilles would be able to pay the loan back.
A.Effectively this was treated as a bridging asset loan. It is standard practice for bridging loans to be serviced on end debt. Given that the Scoresby property and the Ferntree Gully, I think it is, property would become investment properties and there had already been an expressed interest for their sale, there was sufficient equity in those properties to discharge the loan and costs associated.
Q.Scoresby was where they were living at the time.
A.Correct.
Q.Why was that to become an investment property.
A.Because they were purchasing an owner-occupied property which was the $1.6 million property that was referenced in the original email.
In a telephone conversation with Ashley Del Corral on 31 August 2010, Mr Malecki advised Mr Del Corral that he was not fully aware of what the loan was for. Mr Del Corral advised that it should be a coded loan, and his file note records that Mr Malecki agreed ‘probably best just to enter into a new loan agreement’.
This conversation was confirmed by email from Andrew Malecki to Ashley Del Corral on 31 August 2010 as follows:[35]
Hi Ashley
Further to our conversation regarding the above please go ahead with drafting a new loan agreement as previously with additional loan amount of $57,000 added (single sum). This will need to be a coded loan.
Disbursement is $50,000 to client, $5,000 to broker (Dynamic Loans Financial Services Pty Ltd) and $2,000 Better Lending Application Fee inclusive of all legals.
Again, many thanks for your assistance.
Kind regards
Andrew Malecki
[35] Exhibit P1, Tender Book, p83.
The second advance was subsequently increased to $82,000, as evidenced by the email from Andrew Malecki to Ashley Del Corral dated 1 September 2010.[36]
Hi Ashley
I have spoken to the client and he wishes to have the loan amount disbursed to him increased to $75,000 (Loan increase amount $82,000.00). This is fine but he is looking to sell one of the security properties well prior (Sept 7) to the repayment of the debt as he is still looking for a 3 month term.
I think it would be advisable for me to also have security on his about to be purchased property. Are you able to contact the client tomorrow (on 0407 111 195) to obtain these details, copy of purchase contract etc and add these to the loan agreement. I appreciate that there will be additional charges and this is not a problem,
Given that there will now be 2 disbursements I would like your advice on how repayments should be structured or reflected in the loan documents.
Please call me if there are any issues or concerns.
Kind regards,
Andrew Malecki
[36] Exhibit P1, Tender Book, p88.
Of course, the reference to the ‘about to be purchased property’ is a reference to Ferny Creek. Mr Malecki was plainly aware, throughout both transactions, that the loans were part of the process of purchasing a new residential property: Firstly relating to the deposit, then relating to an increase in the purchase price or deposit. Mr Belperio submits that notwithstanding the evidence outlined above, the second loan may not have been a coded loan. This is because it included the previous advance which, arguably, was for business purposes, because the principal advanced, was to be paid into the business account. It follows, according to Mr Belperio’s submission, that half of the second loan was for business purposes, therefore the second loan was not predominantly; that is more than half; for domestic purposes. I reject this argument. If the essence of a credit contract is to provide funds for a deposit to purchase domestic residential premises I do not consider it matters that the principal is paid (or is proposed to be paid) into a business account which has already been used to pay or contribute to the deposit. In the circumstances of this case I consider that would be a totally artificial and unrealistic categorisation of the purpose for which the loan was provided.
Interestingly, Mr Malecki’s own evidence in cross-examination reveals the flaw in this submission, that the first loan was not regulated because it was said to be needed to replenish the business account which had been used to pay the deposit. In effectively arguing his case with Mr Abbott, Mr Malecki said:[37]
A.You asked me the question making a payment to Mr Mandeville's father was a regulated purpose or not.
Q.All right, what do you want to say about that.
A.Who the payment is made to is not what is used as the basis for determining whether it's regulated or not. It is the purpose of the fund…
[37] T435.24 - .29.
I have set out above the evidence as to the stated purpose of the loan which related to the deposit and purchase price of the proposed residence at Ferny Creek. Not surprisingly, that led Mr Del Corral and Mr Malecki to conclude that the second loan should be coded. It is also my objective assessment that this was a coded loan.
Alternatively, the presumption created by s 13(2) of The Code has not been displaced.
My analysis and conclusion above, is based upon the stated purpose of the loan: namely to pay the deposit. As the court held in Haynes v St George Bank:[38]
In the great majority of transactions there would be no difficulty in determining the relevant purpose by reference to the terms of the application for credit and of the approval. If the borrower requests credit for a stated purpose and the lender approves the request and makes the loan, there should be no difficulty in concluding that the purpose for which the loan was made was the purpose for which it was requested.
[38] [2018] SASCFC 51.
However, the defendant argues that there is an issue in this case as to whether the loan was really applied to that purpose. True it is, that Andrew Mandeville’s evidence on the topic is less than satisfactory. However, upon the whole of the documentary evidence before me, as thoroughly analysed in the Plaintiff’s written submission, I find the loan was applied to the deposit: if not entirely, at least predominantly. Accordingly, insofar as actual use of the loan is relevant, the substance and reality of the transaction, is for a coded purpose.
Compliance
The next issue is whether The Act and The Code have been complied with in the provision of the second loan.
The Act imposes obligations on credit providers as follows:[39]
[39] National Consumer Protection Act 2009 (Cth) ss 128 – 131.
128Obligations of credit providers before entering credit contracts or increasing credit limits
A licensee must not:
(a) enter a credit contract with a consumer who will be the debtor under the contract; or
(b) increase the credit limit of a credit contract with a consumer who is the debtor under the contract;
on a day (the credit day) unless the licensee has, within 90 days (or other period prescribed by the regulations) before the credit day:
(c) made an assessment that:
(i)is in accordance with section 129; and
(ii)covers the period in which the credit day occurs; and
(d) made the inquiries and verification in accordance with section 130.
Civil penalty: 2,000 penalty units.
129Assessment of unsuitability of the credit contract
For the purposes of paragraph 128(1)(c), the licensee must make an assessment that:
(a) specifies the period the assessment covers; and
(b) assesses whether the credit contract will be unsuitable for the consumer if the contract is entered or the credit limit is increased in that period.
Note: The licensee is not required to make the assessment under this section if the contract is not entered or the credit limit is not increased.
130Reasonable inquiries etc. about the consumer
Requirement to make inquiries and take steps to verify
(1) For the purposes of paragraph 128(1)(d), the licensee must, before making the assessment:
(a)make reasonable inquiries about the consumer’s requirements and objectives in relation to the credit contract; and
(b)make reasonable inquiries about the consumer’s financial situation; and
(c)take reasonable steps to verify the consumer’s financial situation; and
(d)make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and
(e)take any steps prescribed by the regulations to verify any matter prescribed by the regulations.
Civil penalty: 2,000 penalty units.
(2) The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a), (b) or (c).
131When credit contract must be assessed as unsuitable
Requirement to assess the contract as unsuitable
(1) The licensee must assess that the credit contract will be unsuitable for the consumer if the contract will be unsuitable for the consumer under subsection (2).
Note: Even if the contract will not be unsuitable for the consumer under subsection (2), the licensee may still assess that the contract will be unsuitable for other reasons.
Particular circumstances when the contract will be unsuitable
(2) The contract will be unsuitable for the consumer if, at the time of the assessment, it is likely that:
(a)the consumer will be unable to comply with the consumer’s financial obligations under the contract, or could only comply with substantial hardship, if the contract is entered or the credit limit is increased in the period covered by the assessment; or
(b)the contract will not meet the consumer’s requirements or objectives if the contract is entered or the credit limit is increased in the period covered by the assessment; or
(c)if the regulations prescribe circumstances in which a credit contract is unsuitable—those circumstances will apply to the contract if the contract is entered or the credit limit is increased in the period covered by the assessment.
Civil penalty: 2,000 penalty units.
(3) For the purposes of paragraph (2)(a), it is presumed that, if the consumer could only comply with the consumer’s financial obligations under the contract by selling the consumer’s principal place of residence, the consumer could only comply with those obligations with substantial hardship, unless the contrary is proved.
Information to be used to determine if contract will be unsuitable
(4) For the purposes of determining under subsection (2) whether the contract will be unsuitable, only information that satisfies both of the following paragraphs is to be taken into account:
(a)the information is about the consumer’s financial situation, requirements or objectives, or any other matter prescribed by the regulations under paragraph 130(1)(d) or (e);
(b)at the time of the assessment:
(i)the licensee had reason to believe that the information was true; or
(ii)the licensee would have had reason to believe that the information was true if the licensee had made the inquiries or verification under section 130.
The inquiries made or information gathered by Better Lending were absolutely minimal. They amounted to Mr Malecki concluding that this was a short-term loan for which there was an ‘exit strategy’. What Mr Malecki meant by ‘exit strategy’ is that, on the material available, there was sufficient equity in the Scoresby residence and the Ferntree Gully investment property, to meet the principal and interest on the loan. As Mr Malecki explained, this assessment included the proposition that by the time the loan became due, Scoresby would no longer be a residential property, but would be an investment property, because the Mandevilles would have settled on, and moved into, the new residential property at Ferny Creek.
A number of observations or criticisms can be made regarding the nature and extent of the inquiries or assessment made by Better Lending.
Firstly, as Mr Abbott SC correctly submits, this was simply an assessment of whether Better Lending’s money was sufficiently secured. It was not an assessment of the suitability or unsuitability of the credit contract for the consumers.
Secondly, it falls well short of amounting to reasonable inquiries about the topics enumerated in s 130 of The Act. The information that Better Lending had as to the consumers’ requirements and objectives was no more than that they were purchasing the new residential property at Ferny Creek. There were no inquiries about their financial situation beyond the brief emailed material about the equity in the Scoresby and Ferntree Gully properties. Even for a short-term loan, that does not amount to reasonable inquiries about the consumers’ financial situation. Moreover there were certainly no steps taken to verify anything. The very scanty information that was provided by Andrew Mandeville, was taken at face value.
Thirdly, there were some specific features here that pointed strongly to the need for further inquiries and verification of the information that had been provided. It was apparent that the Mandevilles were purchasing a $1.6 million residential property. It was also apparent that they required last minute, high interest, bridging finance to stave off being sued for the deposit. True it is, as Mr Malecki pointed out in his evidence, Better Lending was not financing the purchase of the new property in its totality. It was providing credit for the deposit and for something, not fully understood, to do with the Mandevilles having been gazumped. However, the circumstances here, underlined the need to comply with The Code. Reasonable inquiries, in these circumstances needed to be more extensive than simply a rudimentary assessment of the available equity.
Fourthly, there is an inherent contradiction in Mr Malecki’s evidence as to whether the exit strategy amounted to sufficient inquiries pursuant to The Code, and in particular the issue of substantial hardship.[40] At the time the credit was provided, the exit strategy, (in other words enforcement of the security if that became necessary) would have entailed selling both the Scoresby and Ferntree Gully properties. Scoresby at that time was the Mandevilles’ family home. On the one hand, Mr Malecki took the view that it was unnecessary to make any inquiries about whether the Mandevilles had any prospect whatsoever of completing on the contract for the new home at Ferny Creek. On the other hand, unless they were able to settle on that contract, implementation of Better Lending’s exit strategy would have entailed enforcing the mortgage over Scoresby; in other words, turning them out of their home.
[40] See s 131(3).
In the totality of the circumstances here, the assessment, inquiries, or verification made by Better Lending were all but non-existent, or minimal, and fell well short of what is required by The Act.
Consequences of Breach of The Code
Division 2 of The Act includes the following:
Division 2—Power of the court to grant remedies
177 Injunctions
(1) If, on the application of ASIC or any other person, the court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute:
(a)a contravention of this Act; or
(b)attempting to contravene this Act; or
(c)aiding, abetting, counselling or procuring a person to contravene this Act; or
(d)inducing or attempting to induce, whether by threats, promises or otherwise, a person to contravene this Act; or
(e)being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f)conspiring with others to contravene this Act;
the court may grant an injunction on such terms as the court considers appropriate.
(2) If an application for an injunction under subsection (1) has been made, the court may, if the court considers it appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the court is satisfied that the person has engaged, or is proposing to engage, in conduct of a kind referred to in subsection (1).
(3) The court may, if the court considers it appropriate, grant an interim injunction pending determination of an application under subsection (1).
(4) The court may revoke or vary an injunction granted under subsection (1) or (3).
(5) The power of the court to grant an injunction restraining a person from engaging in conduct may be exercised:
(a)whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind; and
(b)whether or not the person has previously engaged in conduct of that kind; and
(c)whether or not there is an imminent danger of substantial damage to another person if the person engages in conduct of that kind.
(6) The power of the court to grant an injunction requiring a person to do an act or thing may be exercised:
(a)whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and
(b)whether or not the person has previously refused or failed to do that act or thing; and
(c)whether or not there is an imminent danger of substantial damage to another person if the person refuses or fails to do that act or thing.
(7) If ASIC applies to the court for the grant of an injunction under this section, the court must not require ASIC or another person, as a condition of granting an interim injunction, to give an undertaking as to damages.
(8) If the court has power under this section to grant an injunction against a person, the court may, either in addition to or in substitution for the grant of the injunction, order the person to pay damages to another person.
Pursuant to s 5 of The Act:
engage in conduct means:
(a) do an act; or
(b) omit to perform an act.
In accordance with the findings I have made, Better Lending has engaged in conduct that constitutes a contravention of The Act. Specifically, Better Lending entered into the credit contract, namely the second loan agreement, without making an assessment in accordance with s 129; and without having made the inquiries and verification in accordance with s 130. Specifically, in relation to that credit contract, Better Lending did not make an assessment as to whether the credit contract would be unsuitable for the consumers as required by s 129(b). Further, Better Lending did not make reasonable inquiries about the consumers financial situation as required by s 130(1)(b) and Better Lending did not take reasonable steps to verify the consumers’ financial situation as required by s 130(1)(c).
Section 177 grants a broad discretion to the court to grant an injunction where there has been a contravention of The Act. I was not referred to any cases which limit, or inform, the exercise of this discretion.
In considering what, if any, relief I should grant the Plaintiff arising from Better Lending’s contraventions of The Act I have regard to the following:
·My findings that Better Lending contravened The Act do not entail dishonesty on the part of Better Lending. Rather, I find there was a failure to make the required assessments, inquiries or verification pursuant to Division 3 of The Act. This failure appears to have been due to a failure by Better Lending to appreciate the extent of the assessment, inquiries and verification required by The Act. There was no dishonesty.
·As I have found, the assessment, inquiries, and verification carried out by Better Lending were virtually non-existent. Better Lending’s entire focus was upon whether their money was protected by security. Despite a good deal of ex post facto reasoning and rationalisation by Mr Malecki, and despite the explicit discussion at the time with Mr Del Corral to treat the second loan as coded, Better Lending cannot point to any assessment, inquiries or verification beyond the ‘exit strategy’. This rather misses the point of consumer protection legislation.
·Andrew Mandeville materially and significantly contributed to Better Lending’s contravention of The Act regarding the second (merged) loan transaction. This included that he knowingly provided false information as to the sale of the investment property; failed to provide the contract as requested (there was not one); and caused or manufactured the urgency relating to each of the loan transactions.
·Andrew Mandeville also led Better Lending to believe that he would be able to source funds to complete the Ferny Creek purchase when, as I have found, there was no such prospect.
·The Plaintiff was aware of Andrew Mandeville’s misleading of Better Lending at least to the extent of knowing that he had told Better Lending there was a contract over the Ferntree Gully property with a pending settlement date. She also knew that each loan advance related to the deposit which was required for the Ferny Creek contract. It must have been apparent to Ms Mandeville that they had no prospect of completing this contract.
Part 4.2 of The Act provides for a range of remedies. However, in order to determine an appropriate outcome in this case I do not need to go beyond s 177 of The Act. I am satisfied that Better Lending has engaged in conduct that constitutes a contravention of The Act. Accordingly, a court may grant an injunction on such terms as the court considers appropriate. As I have noted, this amounts to a broad discretion. I do note the overall scheme of the legislation. One of the objects of The Act and The Code is to protect consumers from unsuitable credit contracts.
If Better Lending had complied with The Code, the futility of this entire transaction would have been readily apparent. Any reasonable investigation and assessment would have revealed that there was no prospect of completing the purchase of Ferny Creek. The loan would never have been made. Better Lending would not have advanced the principal, and the Mandevilles would not have incurred any interest. Accordingly, I consider the appropriate exercise of the broad discretion I am required to exercise, is to do what I can to return the parties to that position; A position that would have been maintained, had Better Lending Complied with The Act. The best I can do to revert to that position is by enabling Better Lending to recover the balance of the principal, but no interest. I acknowledge that minds could differ on how the discretion should be exercised here. In my view, that is the most appropriate way to balance the various facts and circumstances, in accordance with the overall objects of The Act, and having regard to the nature and extent of the breaches by Better Lending.
I shall grant a permanent injunction against Better Lending recovering any interest on the loan. I shall hear the parties as to the precise terms of the order.
Duress/Undue Influence/Unconscionable Conduct
The Plaintiff’s defence to the counterclaim pleads in relation to each loan agreement and accompanying suite of documents, that there was duress or undue influence exercised by Andrew Mandeville over Deborah Mandeville. For each suite of documents the Plaintiff pleads that Better Lending, through its solicitor, knew, or should have known, that the Plaintiff signed the documents under duress or undue influence of her husband. As with the National Consumer Credit Act pleadings, again, it appears to me that the pleadings are misconceived in this regard. Better Lending does not dispute that its only valid claim is pursuant to the second suite of documents. The issue before me is the validity and enforceability of those documents, not the earlier suite of documents. The only relevance of the earlier suite of documents is the extent to which it may assist in determining the issue regarding the subsequent documents. That is the way the trial has proceeded.
Andrew Mandeville signed the contract to purchase the Ferny Creek property on 29 May 2010. Deborah Mandeville’s evidence was that she knew he had been looking at real estate, and wanted to buy a house when the money came in from some business enterprise or project he was apparently doing with Geoffrey Lambert. She understood they had investors who were putting money in.
As to the purchase of the house, her evidence was that Andrew Mandeville told her that morning that he was going to an auction just to watch. Later that night, when she asked about it, he said he had actually bid on the house and that he had won. He said he had bid $1.6 million and signed an unconditional contract. At some point he told her that he was going to borrow money from his parents to meet the deposit.
As to the first loan, Andrew told her that he had googled and found a short-term lender, to pay back his parents. He told her he had organised to go down to the offices of a solicitor to get this loan and he wanted her to come along. She assumed it was just for support. As to actually signing the documents, Deborah Mandeville’s evidence was:[41]
[41] T58.32 – T59.13, T59.32 – T60.11.
Q.What happened then.
A.del Corral put paperwork in front of Andrew and myself and it was then that it dawned on me that it was me that was going to be signing papers as well.
Q.You mentioned paperwork, just tell his Honour in detail what happened, what was this paperwork as far as you could see.
A.It had 'Loan Contract' on the front of it, that's the only part I read. I actually looked at Andrew and said 'What's this? I thought you were getting this loan from your parents' and he became agitated and then just said to me 'Just sign it'.
Q.Could you use his exact words if you can remember them.
A.He actually swore at me and said to 'Just sign -', like he's basically saying that I was being stupid -
Q.No, just tell his Honour what he actually said to you.
A.He said 'Just sign the f'ing thing', yeah, 'Just sign it otherwise there will be consequences'.
Q.Mr Corral, where was he when Andrew said this to you.
A.He was still at the table, like halfway up.
…
Q.What happened then.
A.I just turned to the pages and signed it. I did what I was told to do, I was under duress, I was told by Andrew to sign it and I knew that if I didn't do as he told me I would be hit by him.
Q.You mentioned that the top page said 'Loan Agreement', do you remember saying that.
A.Yeah ...
Q.So, did you understand you were signing a loan agreement.
A.Well, that's the only bit that I read, that's the only portion of the documents I read. I wasn't thinking about what I was doing, I was thinking about what would happen to me if I didn't do as Andrew told me to do.
Q.Did you read any other parts of this bundle of documents.
A.I didn't read any of it, I just signed where I had to sign it, I just wanted to get out.
The principal of the first loan agreement was paid into her bank account. She was the only one who could operate that account. She agreed that the documents show that $10,000 of that principal was used to pay off her credit card although she does not remember doing that.
As to the second loan agreement, Andrew told her that he still did not have enough funds to make the 10 per cent deposit on the house and needed to again go to the same solicitor’s office. She told him that this was ridiculous but he insisted she go with him. She does not remember a telephone conversation with Ashley Del Corral while they were in the car. She agreed that she knew this second loan would require security. In cross-examination her evidence was:[42]
[42] T127.22 – T128.9.
Q.And so you must have known that in the suite of documents you were being asked to sign would be some form of security documentation, particularly given your experience in the banking industry; is that right.
A.The second time, yes.
Q.So you agree with me on the second time but I suggest the second time you knew that in the car, in the car you knew you were going to be signing at least a loan and mortgage documents, didn't you.
A.Yes, but I was under duress.
Q.Yes, we'll get to that part about whether or not you were under duress, I just want to ask if you understood what was happening.
A.I understood I was being driven to a solicitor's office to sign paperwork, yes.
Q.And that paperwork included at least a loan agreement and security documentation.
A.Yes.
Q.So that was for the second time. For the first time you say in the car you didn't know what was happening but when you got there and the documents were put in front of you and you were told to sign them, you knew then, didn't you, that you were being asked to sign a loan agreement and security documentation.
A.I don't - I don't recall what I was thinking at that time.
As to The Actual signing of the second suite of documents, her evidence in chief was:[43]
Q.Did you read through either that document or any of the others in the bundle.
A.No. I just remember hesitating and Andrew had already signed his and I remember saying - like Andrew saying to me 'What are you doing? What are you waiting for?' and I remember saying 'My guts are telling me not to do this' and he sworn at me and like come right up, leaned right over and just said 'Just sign the effin thing now' and I looked up at Del Corral and I said 'Aren't we allowed to take this away and get some sort of advice or something?' and I was hoping that you know he was going to allow that but he didn't. He said 'Well, I need to get down to the land titles office this afternoon to lodge a caveat' so it was like I - I was trying to - I didn't want to sign anything again and I was trying to I guess ask him for help.
Q.So what did you do then.
A.I just signed it.
[43] T69.22 – T70.2.
Ashley Del Corral’s evidence was that he did not have a specific recollection of these transactions at all. However, he has located and provided a copy of his entire file. His evidence largely amounted to an explanation and interpretation of the contemporaneous file notes and email correspondence. He came across to me as giving a credible and genuine account of the transactions, as evidenced in his file. Although he agreed he had no specific recollection of either transaction, his evidence was that if anything untoward had come to his attention he would have brought it to a stop, and contacted the client.
As to the signing of the first suite of documents Mr Del Corral’s evidence was:[44]
Q.If it had appeared to you as though Deborah were being forced to sign the documents by Andrew, what would you have done.
A.I would have just stopped the meeting and rung up my client and said 'Look, I'm uncomfortable witnessing this. You may want to get more instructions from the borrowers and see what their position is'.
[44] T349.27 – .33.
As to the second suite of documents his evidence was:[45]
[45] T352.8 – .30.
Q.Do you remember now anything of this meeting that you had with Andrew and Deborah on 2 September.
A.No. A recollection just out of the blue, I don't have the recollection out of the blue, no. I can go through the file note but that's the best I can do.
Q.Do you remember Deborah saying to Andrew 'My guts are telling me that this is not right', do you remember that.
A.No.
Q.And do you remember Andrew responding aggressively 'Just sign the fucking thing'.
A.I would have remembered anything like that. No, I don't remember anything like that.
Q.So your answer, though, if that had happened you think you would remember it, is that what you said.
A.Yes, if something untoward happened it would probably be on my file note and I would have contacted the client.
Q.Do you recall Deborah asking you 'Aren't we allowed to take this away and get some sort of advice?'
A.No.
Q.If she had said that, what would your response have been.
A.'By all means'.
Mr Del Corral was skilfully cross-examined by Mr Abbott SC. He agreed there was urgency associated with each of the transactions, especially the first. However, he denied this may have led to him overlooking any sort of argument or heated discussion. He said it is a small office, and if anything like that occurred he would have seen and heard it, and would have noted it on the file, and contacted his client.
He was cross-examined as to the telephone conversation that occurred on 2 September 2010 at 10.48am. He agreed that his handwritten file note of that telephone call recorded it as a call with Andrew Mandeville not with both of them. The email he sent at 11.21am that day commences with:[46]
I have spoken to Andrew and Deborah (they were in the car at the time) and they advised that the Ferntree Gully Road property is being sold on 7 September 2010 and at settlement they intend to repay the loan.
[46] Exhibit P1, p91.
Mr Del Corral was adamant that he would not have couched the email in those terms unless that is what had happened. He interpreted the handwritten note as reflecting the fact that he had dialled Andrew Mandeville’s number. I note that the content of the handwritten note is consistent with the email and makes references to ‘they’.
As already noted, I found Mr Del Corral to be a genuine and credible witness whose evidence accords with, and was largely given from, contemporaneous documentation. I accept his evidence to the effect that if anything untoward had occurred at his office on either occasion, he would have called a stop and contacted the client. I accept his evidence as to the telephone call when the Mandevilles were in the car.
Analysis of Evidence on Duress/Undue Influence/Unconscionable Conduct
On the issue of what did or did not occur during the two meetings at Mr Del Corral’s office, I prefer the evidence of Mr Del Corral to that of Deborah Mandeville. This is, firstly, because of what I have already said about finding Mr Del Corral to be a genuine and credible witness. Second, even without the conflicting evidence of Mr Del Corral, which I accept, I found Ms Mandeville’s evidence on this critical topic to be implausible. Without wanting to be unduly critical of Ms Mandeville, I need to state succinctly why this is so.
Her evidence as to other topics, such as her work history or their family life, came across as genuine and credible. It struck me as a truthful narrative of events that occurred many years ago, as best she could recall them. In contrast to that, her evidence as to her knowledge of, and what occurred in relation to, the two loans, came across as somewhat forced, and mantra like. It came across as a recitation rather than genuine recollection.
I consider that she downplayed her knowledge of each of the loans. I certainly accept that Andrew Mandeville was routinely deceitful, and withheld things from her as and when it suited him. That accords with his performance as a witness. I further accept that he may not have kept her in the picture as to the negotiations for the loan. However, she knew he had signed an unconditional contract and needed what she estimated to be 10 per cent for the deposit. She knew he had googled a bridging finance lender. She knew any loan would require security. She knew she was the registered owner of their residential and investment properties. She must have been aware, even for the first loan, that Andrew had no prospect of obtaining a bridging finance loan, without security, and that the only available security was the properties she owned. She agreed in cross-examination that at least on the second occasion she knew that she would be signing a loan and mortgages.
I certainly accept that Andrew Mandeville was the driver of this entire folly, and that Deborah Mandeville was either opposed, or reluctant, all along. Andrew Mandeville may well have brought pressure to bear upon her. Deborah Mandeville repeated on a number of occasions that she signed the documents because Andrew wanted her to. I accept her evidence to that extent. However, I find it totally implausible that Andrew Mandeville would have acted in an openly aggressive manner in front of Mr Del Corral and that Mr Del Corral would not have stopped the process and advised Ms Mandeville to seek independent advice.
I consider that Deborah Mandeville has also to some extent, overstated her lack of autonomy relating to financial and related matters. Whereas I accept that Andrew Mandeville was physically and emotionally aggressive and controlling in the marriage, I also accept that Deborah Mandeville was in the unenviable and totally unsatisfactory situation of having to go along with her husband’s demands in order to keep the peace. I have already outlined my impressions and findings as to Andrew Mandeville’s conduct. However, whilst Deborah Mandeville may well have felt powerless or disinclined to rein in her husband, I consider she had at least a basic knowledge of the transactions that were negotiated on her email account and processed through her bank account. Going along with her husband’s wishes, even reluctantly, in the interests of keeping the peace in terms of her marriage, or their domestic family life, does not amount to duress or undue influence.
I do not consider the Plaintiff has made out the pleaded duress or undue influence in the form of aggressive conduct at the time of the signing of either tranche of documents. It follows that I do not consider the Plaintiff has established any knowledge or awareness on the part of Better Lending or its solicitor Mr Del Corral of any conduct of that nature. I do not consider the Plaintiff has established any basis for remedies under this topic of duress, undue influence, or unconscionable conduct.
The Counterclaim
As noted earlier, a feature of this trial is that the roles are reversed. The Plaintiff’s claims, in a sense, amount to a defence to the counterclaim.
As a result of my findings upon the various issues raised by the Plaintiff, I allow the Defendant’s counterclaim to the extent of recovering the balance of the principal of the loan.
The total principal was $167,000. Better Lending has received $124,000. Accordingly, I find in favour of the Defendant on the counterclaim to the extent of $43,000.
The Second Defendant by counterclaim, Andrew Mandeville, has taken no steps to defend the matter. However, in view of the conclusions I have reached, the judgment against him should be in the same terms as against the First Defendant by counterclaim.
Determinations and Orders
The Plaintiff’s claim for Anshun estoppel fails and is dismissed.
The Plaintiff’s claim for abuse of process fails and is dismissed.
The Plaintiff’s claims based upon duress, undue influence or unconscionable conduct fail and are dismissed.
The Plaintiff’s claim for an injunction pursuant to s 177 of the National Consumer Credit Protection Act 2009 (Cth) succeeds to the extent that in the exercise of my discretion I shall grant a permanent injunction against the defendant preventing the recovery of any interest on the loan. I shall hear the parties as to the precise terms of that injunction.
On the counterclaim, judgment for Better Lending against each of Deborah Mandeville and Andrew Mandeville in the sum of $43,000.
I shall hear the parties as to terms of orders, and costs.
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