Westpac Banking Corporation v Bongiovanni
[2025] WASC 273
•9 JULY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: WESTPAC BANKING CORPORATION -v- BONGIOVANNI [2025] WASC 273
CORAM: WHITBY J
HEARD: 23 - 25 & 27 JUNE 2025
DELIVERED : 9 JULY 2025
FILE NO/S: CIV 2042 of 2021
BETWEEN: WESTPAC BANKING CORPORATION
Plaintiff
AND
MARIA BONGIOVANNI also known as MARIA BONGIOVANNI-HUGHES
First Defendant
HYWEL GLYN HUGHES
Second Defendant
HYWEL GLYN HUGHES
MARIA BONGIOVANNI also known as MARIA BONGIOVANNI-HUGHES
Plaintiffs by counterclaim
AND
WESTPAC BANKING CORPORATION
Defendant by counterclaim
Catchwords:
Contract law - Enforceability of loan agreement and mortgage - Repayments not made in accordance with terms of loan agreement and mortgage
Misleading and deceptive conduct - Whether plaintiff engaged in conduct in contravention of Australian Securities and Investments Commission Act 2001 (Cth) s 12DA, the 1993 Banking Practice (WA) and/or Consumer Credit (Western Australia) Code (WA)
Limitation periods - Whether claims made by the defendants are time-barred
Legislation:
Australian Securities and Investments Commission Act 2001 (Cth)
Competition and Consumer Act 2010 (Cth)
Consumer Credit (Western Australia) Act 1996 (WA)
Consumer Credit (Western Australia) Code (WA)
Transfer of Land Act 1893 (WA)
Result:
Judgment for the plaintiff
Defendants' counterclaims dismissed
Category: B
Representation:
Original Action
Counsel:
| Plaintiff | : | P Honey & C M Guy |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Solicitors:
| Plaintiff | : | Thomson Geer - Perth |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Counterclaim
Counsel:
| Plaintiffs by counterclaim | : | In person |
| Defendant by counterclaim | : | P Honey & C M Guy |
Solicitors:
| Plaintiffs by counterclaim | : | In person |
| Defendant by counterclaim | : | Thomson Geer - Perth |
Case(s) referred to in decision(s):
Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415
Taco Co of Aust v Taco Bell Pty Ltd (1982) 42 ALR 177
Timms v Commonwealth Bank of Australia [2004] NSWSC 76
Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514
WHITBY J:
On 10 January 2003, Maria Bongiovanni and Hywel Hughes, the first and second defendants respectively, borrowed $255,000 from the Westpac Banking Corporation (Loan), the plaintiff, to purchase 9 Mannite Place, Stirling (Stirling Property). The defendants signed a loan agreement (Loan Agreement) and two mortgages as security for the Loan - one over the Stirling Property (Stirling Mortgage) and the other over 23 Almurta Way, Nollamara (Nollamara Mortgage) - a property owned by the first defendant.
In 2011, the Loan fell into arrears. The defendants have not made any Loan repayments since May 2018. As at 20 June 2025, the total amount owing pursuant to the Loan Agreement was $627,233.58. In October 2021, the plaintiff commenced this action seeking payment of the debt owing and orders for possession of the Stirling Property.
The defendants filed a defence and counterclaim. But for the defence and counterclaim, the action is straightforward. The plaintiff has proved that it lent money to the defendants on the security of the Stirling Mortgage and that the defendants have failed to repay that money as provided for in the Loan Agreement. Absent a common law defence or a statutory remedy, the plaintiff is entitled to repayment of the amount outstanding under the Loan Agreement - including by sale of the Stirling Property, and application of the net proceeds in reduction of the Loan.
The defendants, by their defence and counterclaim, contend that the Loan Agreement and Stirling Mortgage are invalid and/or unenforceable. The defence and counterclaim allege two types of conduct of the plaintiff - firstly, the plaintiff's alleged conduct leading up to and surrounding the execution of the Loan Agreement and the Stirling Mortgage, and secondly, the plaintiff's alleged conduct in managing the Loan. The defendants' counterclaim seeks orders for compensation and damages.
For reasons which follow, the defendants have failed to prove any of their claims. Judgment should be entered for the plaintiff in the amount of $627,233.58, together with interest from 20 June 2025, pursuant to the Loan Agreement and the Stirling Mortgage, and for possession of the Stirling Property. The defendants' counterclaim should be dismissed.
The evidence
The plaintiff largely relied on documentary evidence to prove its claim. The plaintiff adduced evidence from one witness - Rachel Anderson, a recoveries case manager for the plaintiff. Ms Anderson's evidence was primarily directed to the issues raised by the defendants in the defence and counterclaim.
The defendants each gave evidence. Their evidence‑in‑chief was adduced by way of witness statements. Each of the defendants also relied on documentary evidence. Several of the documents that the second defendant sought to tender were not accepted into evidence on the basis that they were documents which included his own notes in the form of submissions. The second defendant also sought to rely upon several spreadsheets that he had prepared for the purpose of this action to establish that the plaintiff's management of the Loan was the cause of the defendants falling into arrears on the Loan. These documents were marked for identification, and I permitted the second defendant to refer to them in his closing submissions.
Self-represented defendants
The defendants represented themselves in the proceedings. I did not permit Mr Hughes to represent Ms Bongiovanni. Ms Bongiovanni was present for the entirety of the trial and adopted Mr Hughes' opening and closing submissions.
As litigants in person, the defendants were afforded a level of flexibility and assistance, having regard to the nature of their case and the defendants' understanding of the case. It was important to ensure that the defendants did not fail to claim rights or put forward arguments that they might have done if they had been represented. At the same time, it was important to ensure that the court did not act unfairly towards the plaintiff. The overriding consideration is to afford all parties a fair and just trial.
I have taken these principles into account in assessing the defendants' defence and counterclaim and their conduct of the proceedings.
I also note that counsel and the instructing solicitors for the plaintiff provided the defendants with a great deal of assistance during the trial ‑ this included marking up the defendants' witness statements with exhibit references, providing references to exhibits to assist the defendants in oral closing submissions and providing the court with copies of documents referred to by the defendants. This approach assisted in facilitating an efficient and fair trial.
I now turn to make some general observations in relation to each of the witnesses.
Observations of the witnesses
Rachel Anderson
Ms Anderson's evidence was based upon her review of the plaintiff's documents. Her evidence was uncontradicted by the defendants. I accept her evidence.
Maria Bongiovanni
Ms Bongiovanni's evidence‑in‑chief was given by way of her written statement signed on 26 February 2024. Mr Hughes also signed Ms Bongiovanni's statement and stated therein:
I certify that I am the Second Defendant I am self-representing for myself and the First Defendant in this matter. I am primarily responsible for the preparation of this statement …
Ms Bongiovanni confirmed that her witness statement was prepared by Mr Hughes, with her present. Ms Bongiovanni's witness statement contains several identical paragraphs to those contained in Mr Hughes' statement. Ms Bongiovanni was cross‑examined.
Understandably, Ms Bongiovanni did not remember what documents she was provided with at a meeting at Westpac in Whitford City on 10 January 2003. Further, Ms Bongiovanni confirmed that she did not make any repayments to the Loan - the Loan was left to Mr Hughes to manage.
My assessment of Ms Bongiovanni's evidence is that she has very little independent recollection of the 10 January 2003 meeting and no involvement in ongoing management and repayment of the Loan. I therefore find that her evidence should be given no weight.
Hywel Hughes
Mr Hughes gave his evidence‑in‑chief by way of his witness statement signed on 23 February 2024. He also relied on documentary evidence. He was cross‑examined.
Mr Hughes was very respectful in his interactions with the court. He complied, to the best of his ability, with the directions of the court. My observations are that he was an articulate and intelligent man. He was also, in my view, an honest witness who answered questions directly. He presented his case coherently and relied upon his written witness statement and written submissions. He accepted that documents he had prepared by way of submission and referred to in his witness statement could not be adduced as evidence.
Although I found Mr Hughes to be an honest witness, I did not find his evidence to be reliable. Mr Hughes was giving evidence about events, many of which took place over 20 years ago. Mr Hughes gave evidence that:[1]
I have an extremely good memory overall. It is not the same as a photographic memory, it's the ability to remember people, scenarios, conversations, scenes, what was said and what I said, what someone did and what I did and this ability goes as far back as when I was 3/4 years of age. I have always been gifted and blessed with this rare ability to remember and recall such details from my past. This is why if asked I could sit and write this witness statement with all the different aspects covered that span 20 years, detailing step by step what happened, the documents and people relating to the different parts, what was said and by whom without problem, and I could do all this from memory and with pen and paper.
[1] Exhibit D135 [31].
No matter how remarkable Mr Hughes' memory, it is simply not plausible that he could remember with any reliability all that was said to him at the meeting on 10 January 2003. For this reason, I find that the contemporaneous documents are much more reliable indicators of what occurred at that meeting.
Further, Mr Hughes' evidence must be considered in the context of his honestly and firmly held belief that he and Ms Bongiovanni are the victims of fraudulent and dishonest conduct perpetrated against them by the plaintiff. Mr Hughes referred to the 'Banking Royal Commission' on several occasions, indicating that he viewed the plaintiff with distrust and as wholly responsible for the situation in which the defendants find themselves.
Mr Hughes blames the plaintiff for falling into arrears on the Loan, for deliberately slowing down the repayment of the Loan and ultimately, for the breakdown of his and the first defendant's marriage. Mr Hughes alleges that the plaintiff forged signatures on documents, altered documents and made misrepresentations in order to trick the defendants into signing the Loan Agreement, the Stirling Mortgage and the Nollamara Mortgage.
In my assessment, Mr Hughes views himself as a man seeking 'justice' - he describes himself as someone who 'dared to make a complaint', 'dared to demand fairness' and 'dared to demand justice'.[2] Mr Hughes' beliefs pervaded his evidence, making it, in my view, completely unreliable.
[2] ts 115.
Further, Mr Hughes did not raise any issues with the Loan Agreement, the Stirling Mortgage, the Nollamara Mortgage or the repayments of the Loan until 2012 - nine years after entering into the Loan Agreement. This supports the drawing of an inference that Mr Hughes' evidence is more likely to be a reconstruction of what occurred earlier to fit with his narrative of events, rather than an independent recollection of events.
In my view, the most reliable evidence is the contemporaneous documents, assessed against considerations of the inherent probability and plausibility of what occurred.
Ms Stella Paolino not giving evidence
Ms Paolino was the home loan consultant for the plaintiff who dealt with the defendants in late 2002 and early 2003. The defendants gave evidence about the conduct of Ms Paolino, both prior to and on the date of the execution of the Loan Agreement, the Stirling Mortgage and the Nollamara Mortgage. Ms Paolino was not called to give evidence for the plaintiff as to her version of events for the following reasons:[3]
(1)Ms Paolino is no longer employed by the plaintiff; and
(2)her health prevented her from giving evidence.
[3] Exhibit P161.
I do not draw any inference that Ms Paolino's evidence would not have supported the plaintiff's case. That is because the plaintiff has provided an adequate and satisfactory explanation as to why Ms Paolino was not called by the plaintiff to give evidence.
The evidence of Ms Bongiovanni and Mr Hughes as to their interactions with Ms Paolino, although uncontradicted, does not have to be accepted. For the reasons I have outlined, I do not place any weight on Ms Bongiovanni's evidence and I find Mr Hughes' evidence to be unreliable.
I now set out my findings of fact having regard to these general observations of the witnesses.
Findings of fact
I make the following findings of fact relevant to the plaintiff's claim and the defendants' defence and counterclaim.
First defendant purchases Nollamara Property
On 31 August 1995, the plaintiff advanced a home loan to the first defendant for the purchase of 23 Almurta Way, Nollamara (Nollamara Property). This loan was secured by a mortgage over the Nollamara Property (1995 Nollamara Mortgage).
Lead up to the Loan Agreement and mortgages
In October 2002, the first defendant spoke to Ms Paolino about obtaining a loan for the purchase of a new property by the defendants.
In November 2002, Westpac pre‑approved a home loan of $250,000 to the defendants.
On 21 November 2002, a hard copy loan application signed by the second defendant was received by an employee of the Whitford City branch of the plaintiff by facsimile. The defendants dispute that they completed this application form. The defendants say that it was completed by Ms Paolino and contained incomplete or inaccurate information. I do not accept the defendants' evidence. In any event, nothing turns on the information contained in the loan application as the defendants do not contend that they could not service the Loan.
On 15 December 2002, the defendants entered into a contract to purchase the Stirling Property for $259,000. The contract was subject to finance, that needed to be obtained within 14 days from acceptance, being 29 December 2002. Settlement for the Stirling Property was scheduled for 7 February 2003. The defendants were getting married on 8 March 2003 and purchased the Stirling Property with the intention of moving in the day after they were married. The second defendant gave evidence that losing the Stirling Property would have been a 'disaster' for the defendants and that it was critical that they obtained finance in time for settlement.
On 18 December 2002, the first defendant contacted Ms Paolino and informed her that the defendants had entered into a contract to purchase the Stirling Property and asked the loan amount to be increased to $255,000.
On 23 December 2002, the plaintiff approved a loan for $255,000, subject to it being secured by a mortgage over the Nollamara Property and the Stirling Property.
On 24 December 2002, the plaintiff sent a letter of offer (Offer) and a booklet of standard terms and conditions (Booklet) to the defendants at their then residence, the Nollamara Property. The defendants did not receive the Offer and Booklet in the mail until sometime in February 2003.
On 9 January 2003, Ms Paolino called the first defendant to arrange for the defendants to come into the plaintiff's Whitford City branch to sign the Loan documentation.
10 January 2003 meeting
On 10 January 2003, the defendants attended the plaintiff's Whitford City branch. At the meeting and prior to signing any documentation, the defendants provided the plaintiff with the following information in relation to their financial capacity:
(1)1 x recent payslip for the first defendant;
(2)2 x recent payslips for the second defendant; and
(3)a letter from the second defendant's employer confirming that he was employed on a full‑time basis, earning a salary of $80,000 per annum.
The plaintiff was satisfied that the defendants met its lending criteria. The defendants do not dispute that they had the financial capacity to service the Loan.
At the meeting, Ms Paolino provided the defendants with the following documents:
(1)the Offer (referred to in the document as the Loan Offer - Premium Option Home Loan)[4];
(2)the Stirling Mortgage; and
(3)the Nollamara Mortgage.
[4] Exhibit P21.
There is a factual dispute as to whether the Booklet and the document referred to in the Stirling Mortgage and the Nollamara Mortgage as the 'Memorandum of Common Provisions' were provided to the defendants at the 10 January 2003 meeting. The defendants say that they were not provided with these documents and therefore, that they are not bound by their terms.
However, I find that both the Booklet and the Memorandum of Common Provisions were provided to the defendants at the 10 January 2003 meeting. I make this finding having regard to the following:
(1)the Offer was replete with references to the Booklet, by way of example, the Offer contained the following references to the Booklet:
(a)On page 1:
All the terms and conditions of the Lender's offer to you are set out in:
·This Letter; and
·The accompanying Booklet of Standard Terms and Conditions, version chal.015 (the Booklet).
…
If you accept your Loan Offer, the terms and conditions of your contract with the Lender are set out in this Letter and the Booklet(s).
…
Some of the more important terms and conditions are set out in the following table. Some words used in this offer have special meanings set out in Part 5 of the Booklet, Reading this Booklet and the Letter.
…
(b)On page 9 of the Offer:
(2)The Stirling Mortgage contained the following reference to the Memorandum of Common Provisions:
(3)The Nollamara Mortgage contained the following reference to the Memorandum of Common Provisions:
(4)the defendants' evidence is that Ms Paolino took them to a small office and gave them a 'pile' of loan paperwork and told them to sign and date the documents and that she would be back in 15 minutes and then left them in the office and closed the door. I find that the defendants were provided with an opportunity to read the documents before signing them;
(5)the defendants did not ask any questions about the documentation, did not refuse to sign the documents and did not ask for more time to read the documents;
(6)the defendants do not dispute that they signed the Offer and the Stirling Mortgage and that the first defendant signed the Nollamara Mortgage;
(7)the conduct of the defendants must be judged by what they wrote and did, not by their subjective states of mind. The defendants signed the documents, which indicated that they had read and understood them; and
(8)in all these circumstances, I am satisfied on the balance of probabilities that the plaintiff did provide the defendants with the Booklet and the Memorandum of Common Provisions at the 10 January 2003 meeting.
I find that the Offer and the Booklet together comprise the Loan Agreement and that both the Stirling Mortgage and the Nollamara Mortgage incorporate the terms of the Memorandum of Common Provisions. The defendants are bound by the terms and conditions of the Booklet and of the Memorandum of Common Provisions.
The Offer included the following terms:
(1)the Loan was a 'Premium Option Home Loan' with an annual fixed package fee for the 'Premier Advantage Package' - as at 2003 that fee was $300, and was subject to a 0.7% discount per annum on the variable interest rate;
(2)the stamp duty fee and the first package fee of $300 was to be charged to the loan for the Stirling Property (Stirling Loan Account) and was to be paid by the defendants prior to them drawing the Loan; and
(3)the annual ongoing package fee of $300 was to be paid from the Stirling Loan Account if the defendants wished to continue the Premier Advantage Package and the fee would be debited automatically from the Stirling Loan Account each year.
At the 10 January 2003 meeting, the defendants opened a 'Classic Plus' transactional account (Classic Plus Account) for the purpose of making direct debits to the Stirling Loan Account.
There is a factual dispute as to whether the defendants executed a direct debt authority form authorising the Loan repayments to be made fortnightly from the Classic Plus Account. The defendants gave evidence that, although their signatures appear on the direct debit authority form, they did not sign the direct debit authority, and it is a forgery. I do not accept the defendants' evidence that they did not sign this document. The second defendant accepted, in cross‑examination, that the Classic Plus Account was opened at this meeting for the purpose of making repayments to the Loan. The direct debit authority is consistent with his evidence. The direct debits from the Classic Plus Account to the Stirling Loan Account appeared on bank statements until 2010, bank statements which the second defendant accepts he received. It is implausible that the second defendant would not have questioned the direct debit payments if he had not signed the direct debt authority.
Settlement of the Stirling Property
On 7 February 2003, settlement of the Stirling Property was completed. The Loan was advanced to the defendants.
On 10 February 2003, the Stirling Mortgage and the Nollamara Mortgage were registered with Landgate.
Defendants receive documents from the plaintiff by post
By early February 2003, the defendants received copies of the Offer, the Booklet, the Stirling Mortgage, the Nollamara Mortgage and the Memorandum of Common Provisions from the plaintiff in the post.
The defendants did not contact the plaintiff to dispute the enforceability of the terms and conditions contained in the Booklet or the Memorandum of Common Provisions, or advise the plaintiff that they had not been provided with these documents on 10 January 2003.
On 12 February 2003, the plaintiff wrote to the defendants confirming that the Stirling Loan Account had been drawn in the amount of $255,000 and:
(1)the stamp duty fee of $637.50 had been paid;
(2)the annual package fee of $300 had been paid; and
(3)a fortnightly payment of $696 was being paid by direct debit.
This letter was received by the defendants.
Defendants get married
On 8 March 2003, the defendants got married. They moved into the Stirling Property.
Package fees charged to Stirling Loan account
On 5 March 2004, the annual package fee of $300 was charged to the Stirling Loan Account.
On 7 March 2005, the annual package fee of $300 was charged to the Stirling Loan Account.
On 7 March 2006, the annual package fee of $395 was charged to the Stirling Loan Account.
On 7 March 2007, the annual package fee of $395 was charged to the Stirling Loan Account.
On 7 March 2008, the annual package fee of $395 was charged to the Stirling Loan Account.
On 6 March 2009, the annual package fee of $395 was charged to the Stirling Loan Account.
On 5 March 2010, the annual package fee of $395 was charged to the Stirling Loan Account.
Defendants vary Loan repayments
In April 2005, the defendants varied the Loan repayments due to the first defendant going on maternity leave from 30 March 2005 to 30 March 2006.
In April 2005, the fortnightly payment required to meet the interest repayments on the Stirling Loan Account was $734.77 ($1,469.54 per month).
Pursuant to the new arrangement, from 7 May 2005 until 7 October 2005, the monthly repayments were reduced to $816.
Unpaid interest continued to accrue to the Stirling Loan Account and was capitalised on the Loan amount. On 7 October 2005, the defendants requested that the direct debit repayments be changed to weekly repayments of $370.
On 29 November 2007, the second defendant telephoned the plaintiff and requested that the plaintiff postpone the direct debits from the Classic Plus Account to the Stirling Loan Account. The plaintiff postponed the direct debits until 14 December 2007.
On 14 December 2007, the second defendant telephoned the plaintiff and requested the plaintiff re‑active a weekly direct debit.
On 16 April 2008, the second defendant requested the plaintiff to change the weekly direct debits to fortnightly direct debits. The plaintiff changed the direct debits to fortnightly at this time.
The sale of the Nollamara Property
On 24 November 2008, the first defendant sold the Nollamara Property. The plaintiff discharged the Nollamara Mortgage. An amount of $303,958.18 was deposited into the Classic Plus Account.
Second defendant cancels direct debit repayments
On 21 December 2010 the second defendant requested, and the plaintiff granted, a cancellation of the direct debit payments from the Classic Plus Account to the Stirling Loan Account.
Loan falls into arrears
As at 7 February 2011, the defendants were in arrears on the Stirling Loan Account in the amount of $411.77.
Plaintiff provides the defendants with hardship assistance
In 2012, the plaintiff approved hardship assistance to the defendants. The defendants' repayments to the Stirling Loan Account were reduced to $900 per month for a period of six months. The defendants defaulted on the payment arrangement.
As at 7 February 2013, the defendants were in arrears on the Stirling Loan Account in the amount of $6,965.77.
In 2013, the plaintiff provided the defendants with further hardship assistance. On 19 February 2013, the plaintiff capitalised the arrears on the Stirling Loan Account.
Loan converted to Rocket Repay Home Loan
In April 2013, the defendants converted the Loan from a Premium Option Home Loan to a Rocket Repay Home Loan. This was done to change the repayments from principal and interest to interest only for a period of two years, as this option was not available on the Premium Option Home Loan.
The Rocket Repay Home Loan was eligible for an offset account. However, an offset account was not selected by the defendants on the signed request document for the Rocket Repay Home Loan.
Loan continues in arrears
As at 7 March 2014, the defendants were in arrears on the Stirling Loan Account in the amount of $10,674.28.
As at 6 March 2015, the defendants were in arrears on the Stirling Loan Account in the amount of $22,066.27.
Defendants lodge a complaint with the Financial Ombudsman Service (FOS)
On 16 May 2013, the defendants made a complaint to the FOS.
On 30 June 2015, the FOS issued its determination.
On 2 October 2015, the FOS closed the complaint.
Loan continues in arrears
As at 23 October 2015, the defendants were in arrears on the Stirling Loan Account in the amount of $30,595.90.
Plaintiff issues default notice
On 23 October 2015, the plaintiff issued a notice of default to the defendants requiring the defendants to remedy the default by 30 November 2015.
Loan continues in arrears
As at 18 January 2016, the defendants were in arrears on the Stirling Loan Account in the amount of $29,958.37.
Plaintiff issues demand notice
On 18 January 2016, the plaintiff issued the defendants a demand notice stating that the whole balance of the Stirling Loan Account, being $259,982.95, was immediately due and payable, but if the defendants paid the overdue amount within seven days, the plaintiff would treat the remaining balance as no longer immediately due and payable.
The defendants did not remedy the default or the demand.
On 2 February 2016, the plaintiff sent a request to the defendants to deliver up vacant possession of the Stirling Property.
The defendants did not deliver up vacant possession of the Stirling Property to the plaintiff.
Plaintiff provides defendants with hardship assistance
In February 2016, the second defendant sent an email to the plaintiff attaching a statement of financial position form and requested an arrangement pursuant to which the outstanding arrears on the Stirling Loan Account would be capitalised if repayments were met for a period of six months.
The plaintiff approved this request.
Defendants make last repayment to the Stirling Loan Account
On 17 May 2018, the defendants made their last repayment to the Stirling Loan Account.
Loan continues in arrears
As at 18 June 2021, the defendants were in arrears on the Stirling Loan Account in the amount of $44,656.54.
Plaintiff issues default notices to the defendants
On 29 June 2021, the plaintiff issued default notices to the defendants requiring repayment of the outstanding amounts under the Loan Agreement within 31 days (Default Notices). The Default Notices stated that if the default was not rectified all amounts owing under the Loan Agreement and secured by the Stirling Mortgage would become due and payable and the plaintiff may take possession of and sell the Stirling Property.
The Default Notices were sent by registered post to the first defendant and the second defendant to the Stirling Property address. The defendants say that they did not receive the Default Notices and contend that they were not validly served.
The Loan Agreement (by cl 16 of the Booklet) and the Stirling Mortgage (by cl E1 of the Memorandum of Common Provisions) provide that a notice may be served if it is sent by mail to the place where the defendants live and that, if it is sent by post, it will be regarded as having arrived when it would have been delivered in the ordinary course of post, even if it never arrives. Further, the Default Notices were served in accordance with s 106(2)(b)(i) of the Transfer of Land Act 1893 (WA) by sending it by registered post to the address of the defendants.
I find that the Default Notices were validly served on the defendants.
Plaintiff commences proceedings against the defendants
As at the beginning of October 2021, the defendants owed the plaintiff a total amount of $309,352.73.
On 7 October 2021, the plaintiff commenced these proceedings against the defendants.
On 29 October 2021, the defendants filed a defence and counterclaim.
Since the commencement of these proceedings, the defendants have not paid any monies to the plaintiff in reduction of the amount alleged to be owing under the Loan Agreement.
As at 20 June 2025, the amount owing to the plaintiff pursuant to the Loan Agreement was $627,233.58, with interest accruing at a rate of 7.63% per annum (being $131.21 per day).[5]
[5] Exhibit P160.
Having made these findings of fact, I now turn to consider whether the plaintiff has made out its claim.
The plaintiff's claim
The plaintiff's case is straightforward.
Pursuant to the Loan Agreement:
(1)an amount of $255,000 was to be advanced to the defendants;[6]
(2)the defendants were required to pay interest on the Loan at the Variable Housing Rate (which was, at the time of the Loan Agreement, 6.57%);[7]
(3)the term of the Loan was 30 years;[8]
(4)the defendants were required to make 360 monthly repayments of $1,508, with the final payment being $1,620.25;[9]
(5)the defendants were required to pay the fees and charges set out therein;[10]
(6)the plaintiff was entitled to notify the defendants if they failed to pay an amount due under the Loan Agreement and that failure continued for at least seven days;[11]
(7)if the failure continued for at least 31 days after service of the notice, then the plaintiff was entitled to require the defendants to pay all amounts under the Loan Agreement that would not otherwise have been immediately payable;[12]
(8)if the defendants were in default of the Loan Agreement, a default interest rate of 2% per annum more than the Variable Housing Rate would apply;[13] and
(9)the defendants' obligations under the Loan Agreement were secured by the Stirling Mortgage.[14]
[6] Offer - Amount of Credit clause.
[7] Offer - Annual Percentage Rate clause.
[8] Offer - Term clause.
[9] Offer - Repayments and Payment Due Dates(s) clause.
[10] Offer - Credit Fees and Charges clause; Booklet - cl 8(a).
[11] Booklet - cl 14.
[12] Booklet - cl 14.
[13] Offer - Default Interest clause.
[14] Offer - Security clause; Booklet- cl 11(a).
Pursuant to the Stirling Mortgage:
(1)the defendants promised that they would pay the plaintiff the amounts owing under the Loan Agreement;[15]
(2)if the defendants failed to pay the plaintiff the amounts owing under the Stirling Mortgage and the failure continued for at least seven days, the plaintiff was entitled to serve on the defendants a notice;[16] and
(3)if the failure continued for at least 31 days after service of the notice, then the plaintiff was entitled to:
(a)require the defendants to pay the plaintiff all money secured by the Stirling Mortgage; and
(b)take possession of the Stirling Property.[17]
[15] Memorandum of Common Provisions - cl B1.
[16] Memorandum of Common Provisions - cl C2.
[17] Memorandum of Common Provisions - cl C2.
As at 18 June 2021, the defendants were in arrears in the sum of $44,656.54. That failure continued for at least seven days. On 29 June 2021, the plaintiff issued the Default Notices. The default the subject of the Default Notices was not remedied by the defendants within 31 days as required by the Default Notices.
As the defendants were in default under the Loan Agreement and the Stirling Mortgage and failed to remedy the default as required by the Default Notices:
(1)all amounts owing under the Loan Agreement and as secured by the Stirling Mortgage become immediately due and payable; and
(2)the plaintiff was entitled to take possession of and sell the Stirling Property.
As at the commencement of these proceedings, the amount owing under the Loan Agreement was $309,352.73. Interest has continued to accrue on that amount at the applicable variable rate in accordance with the terms of the Loan Agreement. As at 20 June 2025, the amount owing under the Loan Agreement was $627,233.58, with interest accruing at a rate of 7.63% per annum.[18]
[18] Exhibit P160.
I am satisfied that the plaintiff has proven that the defendants defaulted under the Loan Agreement. I am satisfied that, absent a defence to the plaintiff's claims, the plaintiff has proved that, as at 20 June 2025:
(1)an amount of $627,233.58 was due and owing to the plaintiff by the defendants;
(2)that amount plus interest remains due and payable to the plaintiff; and
(3)that the plaintiff is entitled to possession of the Stirling Property.
Defendants' claims
I address the defendants' claims by reference to the second defendant's seventh amended defence and counterclaim dated 24 July 2024 (Defence and Counterclaim), the second defendant's written opening submissions, written closing submissions and written supplementary closing submissions. The first defendant adopted the Defence and Counterclaim and the second defendant's written submissions.
The defendants' claims can be divided into two categories - firstly, those that relate to the lead up to, and the execution of, the Loan Agreement and the Stirling Mortgage and secondly, those that relate to the operation of the Stirling Loan Account.
Defendants' claims relating to the lead up to and the execution of the Loan Agreement and the Stirling Mortgage
Breach of the Banking Code
The defendants plead that the plaintiff breached the Banking Code.[19]
[19] Defence and Counterclaim [4], [6], [9], [11].
The Banking Code is a voluntary code of conduct published by the Australian Bankers Association which the plaintiff adopted in 1993. The plaintiff does not dispute that it has contractual force.
Although not specifically pleaded by the defendants, the defendants appear to be claiming that the plaintiff breached the Banking Code by failing to comply with its obligation of disclosure and by failing to assess or verify the defendants' financial situation and capacity to repay the Loan.
Starting with the failure to disclose, s 2.1 of the Banking Code requires the plaintiff to provide the defendants in writing any terms and conditions applying to the Loan (including the Booklet). Pursuant to s 2(v) of the Banking Code, those terms and conditions were to be provided at the time of or before the Loan Agreement was executed, except where it is impracticable to do so, in which case the terms and conditions were to be provided as soon as practicable after the provision of the Loan.
The defendants allege that the plaintiff did not provide the Booklet and/or the Memorandum of Common Provisions to the defendants before they signed the Offer and the Stirling Mortgage. However, I have found, for reasons set out earlier, that the plaintiff did provide the Booklet and Memorandum of Common Provisions to the defendants on 10 January 2003 before they signed the Offer, the Stirling Mortgage and the Nollamara Mortgage. I have also found that the defendants were provided with sufficient opportunity to read and ask questions about these documents before they signed them.
Turning to the failure to assess the defendants' financial situation. Section 15 of the Banking Code requires the plaintiff, in considering whether to provide the Loan, to take into account the range of factors it considered relevant to the defendants and the Loan to establish whether, in the plaintiff's view, the defendants had the capacity to repay the Loan.
The defendants do not dispute that they had the capacity to repay the Loan. Given this, the plaintiff did not breach the Banking Code where it also considered that the defendants had the capacity to repay the Loan.
I find that the defendants have failed to prove that the plaintiff breached the Banking Code.
However, even if there was conduct on the part of the plaintiff that is capable of amounting to a breach of the Banking Code, the cause of action accrued on the date of the breach, that being on 10 January 2003 at the latest. Section 13 of the Limitation Act 2005 (WA) (Limitation Act) provides that any action on a cause of action cannot be commenced if six years have elapsed since the date the cause of action accrued. The limitation period expired on 11 January 2009, years before these proceedings were commenced. Therefore, any cause of action for breach of the Banking Code would be time‑barred.
Breach of the Consumer Credit Code
The defendants plead that the plaintiff breached the Consumer Credit Code.[20]
[20] Defence and Counterclaim [9], [11], [25], [32], [39].
The Loan Agreement was entered into and the Stirling Mortgage and the Nollamara Mortgage were granted on 10 January 2003. The legislative scheme in force at that time was the Consumer Credit (Western Australia) Act 1996 (WA) (WA Consumer Credit Act) and the Consumer Credit (Western Australia) Code (WA) (WA Consumer Credit Code).
Section 144 of the WA Consumer Credit Code provides that the plaintiff must not make a false or misleading representation in relation to a matter that was material to entry into the Loan Agreement or attempt to induce the defendants to enter into the Loan Agreement.
Although not specifically pleaded by the defendants, the defendants appear to be claiming that the plaintiff breached the WA Consumer Credit Code by making false and misleading representations to the defendants prior to them entering into the Loan Agreement. The defendants say those representations were made to them by Ms Paolino on 10 January 2003 and were to the effect that:
(1)the package fee of $300 and stamp duty fee would be charged to the loan account for the Nollamara Property (not the Stirling Property); and
(2)if the defendants did not enter into the Loan Agreement they risked losing the Stirling Property as there was not enough time to find an alternative lender.
In relation to the first alleged misrepresentation, the Offer expressly provided that the package fee and stamp duty would be charged against the Stirling Loan Account. The defendants do not dispute that they were provided with the Offer and that they both signed the Offer. The applicable fees and charges were made clear to the defendants in the Offer. These are the only fees and charges that were actually charged to the defendants.
In relation to the second alleged misrepresentation, accepting that Ms Paolino did say words to that effect to the defendants, they are not misleading because, in my view, they were true. The contract for the sale of the Stirling Property was subject to finance and it was due to settle on 7 February 2003. If the defendants did not obtain finance from the plaintiff, there was in fact a risk that they would lose the Stirling Property.
I find that the plaintiff did not make false or misleading representations. The defendants' claims for breach of the WA Consumer Credit Code fail.
However, even if there was conduct on the part of the plaintiff that is capable of amounting to a breach of the WA Consumer Credit Act or the WA Consumer Credit Code, those claims are also time‑barred by virtue of s 13 of the Limitation Act.
The latest point in time at which any cause of action based on non‑disclosure accrued was when the defendants accept they received complete copies of the Loan Agreement (including the Booklet), the Stirling Mortgage, and the Nollamara Mortgage (including the Memorandum of Common Provisions) in February 2003. The limitation period expired in February 2009.
Any cause of action based on false or misleading representations accrued upon execution of the Loan Agreement, and pursuant to s 13 of the Limitation Act, expired on 11 January 2009.
Negligence
The defendants plead that the plaintiff was negligent.[21]
[21] Defence and Counterclaim [1] - [3], [5], [40], [43].
To establish a claim for common law negligence, the defendants are required to prove that the plaintiff owed them a duty of care, that the plaintiff breached that duty and that there is a causal connection between the breach of duty and the loss suffered by the defendants.
The defendants do not plead that the plaintiff owed them a duty of care or the scope of any duty of care. It is also not clear what facts the defendants allege give rise to a breach of any duty of care.
However, doing my best to interpret the Defence and Counterclaim, it appears that the defendants allege that the plaintiff breached a duty of care owed to the defendants by failing to make any reasonable enquiries into their financial history or obligations prior to approving the Loan. The defendants do not say, as is common in actions such as this, that they could not afford to make the Loan repayments, rather the defendants say that they were better off financially than what the plaintiff understood. The defendants allege that, had the plaintiff made appropriate enquiries, the plaintiff had a duty to offer them an opportunity to select from other home loan products that the plaintiff offered - products that would have been more suitable and appropriate for the defendants' needs.
The defendants did not adduce any evidence of the alternative home loan products that they say were available or the benefits that those home loan products would have offered. They also did not adduce any evidence of any loss and damage suffered as a result of entering into the Loan Agreement, as opposed to another loan product.
Notwithstanding this, the defendants' claims in negligence fail for this fundamental reason - the plaintiff does not owe a general common law duty to provide commercial advice to a prospective borrower, in this case the defendants.[22]
[22] Timms v Commonwealth Bank of Australia [2004] NSWSC 76 [174] - [176].
Further, even if there was conduct on the part of the plaintiff that is capable of amounting to negligence, those claims are also time‑barred by virtue of s 13 of the Limitation Act.
A cause of action for negligence accrues when all the facts have occurred which the defendants must prove in order to succeed.[23] Therefore, a cause of action in negligence only accrues when actual loss or damage is sustained.[24]
[23] Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415 [31].
[24] Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525.
The negligent conduct alleged by the defendants relates to the defendants' decision to execute the Loan Agreement, the Stirling Mortgage and Nollamara Mortgage. Therefore, any loss and damage was suffered by the defendants upon their execution of those documents on 10 January 2003. The limitation period expired six years later, on 11 January 2009.
Misleading and deceptive conduct
The defendants allege that Ms Paolino, on behalf of the plaintiff, engaged in misleading or deceptive conduct contrary to s 18 of the Competition and Consumer Act 2010 (Cth) sch 2 (ACL) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).
The ACL does not apply to the Loan Agreement because the Loan Agreement is defined as a 'financial product' and the plaintiff's conduct in providing a financial product is defined as a 'financial service'. The relevant provision is s 12DA of the ASIC Act.
Pursuant to s 12DA of the ASIC Act, a person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or likely to mislead or deceive. Conduct will be misleading or deceptive if it induces or is capable of inducing error.[25]
[25] Taco Co of Aust v Taco Bell Pty Ltd (1982) 42 ALR 177, 200.
The defendants allege that Ms Paolino made the following misleading and deceptive statements to them on 10 January 2003:
(1)the Loan was a fee free staff product;
(2)the 1995 Nollamara Mortgage had to be extinguished and a new home loan for the Nollamara Property opened at the same time as the Stirling Loan Account so that the Nollamara Property could be used as security for the Loan;
(3)the second defendant's name had to be included on the new home loan for the Nollamara Property and this meant that the Nollamara Property would be jointly owned by the second defendant;
(4)that an offset account would be set up and activated by Ms Paolino;
(5)there would not be two lots of fees charged for the annual package and the stamp duty - only one set of fees would be charged against the Nollamara Mortgage and that would be paid out of the rental income generated;
(6)there was more chance that the defendants would sell the Nollamara Property and if that happened, there would be no annual package fee, but the benefits would still apply to the Stirling Loan Account for the life of that account; and
(7)failure to sign the loan documentation on 10 January 2003 would cause the defendants to lose their $10,000 deposit for the Stirling Property, settlement would collapse, and the defendants would not be able to move into the Stirling Property after they were married.
The defendants submit that they were induced by these representations to enter into the Loan Agreement and, but for these representations, they would not have entered into the Loan Agreement.
I do not accept that Ms Paolino made these representations to the defendants (save for the last one which I have already found to be a representation of truth). That is for the following reasons:
(1)the Offer sets out clearly the fees and charges that would apply to the Stirling Loan Account;
(2)the defendants had time to read the Offer before they signed it;
(3)the defendants did not ask any questions or seek to clarify any terms of the Offer;
(4)the defendants signed the Offer;
(5)the defendants were not required to open a new home loan for the Nollamara Property;
(6)the defendants were only charged one set of fees, those being in relation to the Stirling Loan Account;
(7)the Offer did not provide for an offset account; and
(8)it is inherently improbable that Ms Paolino would tell the defendants that they would be entitled to the package benefits for the life of the Stirling Loan Account (that being potentially 30 years) if they sold the Nollamara Property and would not be required to pay the package fee.
In cross‑examination the second defendant accepted that, if he was told that the package fee and stamp duty would be charged to the Stirling Loan Account, he still would have signed the Loan Agreement.
I find that the pressure that the defendants felt to sign the Loan Agreement, the Stirling Mortgage and the Nollamara Mortgage was their self-imposed pressure to settle on the Stirling Property before they were married. In their own words, the loss of the Stirling Property would have been a 'disaster'. I find that Ms Paolino, on behalf of the plaintiff, did not exert pressure on the defendants to sign the documents.
Even if there was conduct on the part of the plaintiff that is capable of amounting to misleading and deceptive conduct, the cause of action accrued on the date of the breach, that being on 10 January 2003. Pursuant to s 12GF of the ASIC Act, the limitation period is six years and expired on 11 January 2009. Therefore, any cause of action for misleading and deceptive conduct is time‑barred.
Defendants' claims relating to the operation of the Stirling Loan Account
The central theme of the defendants' allegations in relation to the operation of the Stirling Loan Account is that it was the fault of the plaintiff that the defendants fell into arrears, because the plaintiff was responsible for transactional errors on the Stirling Loan Account.
The second defendant prepared his own spreadsheets setting out the transactions on, and the running balance of, the Stirling Loan Account.[26] The second defendant prepared these spreadsheets based on information provided to him by the plaintiff.[27]
[26] MFI P144 - P149.
[27] Exhibit D136.
During the second defendant's oral closing submissions, the second defendant submitted that there were occasions that the plaintiff processed the direct debit too early from the Classic Plus Account, which meant that there were insufficient funds to cover the direct debit (as the second defendant's salary had not yet been deposited into the Classic Plus Account).
However, the only occasion on which this occurred, according to the second defendant, was on 28 March 2008. The Classic Plus Account statement for March 2008 shows that weekly direct debits of $415.38 were transferred to the Stirling Loan Account on 7 March, 14 March, 25 March and 28 March 2008.[28]
[28] Exhibit P134, page 1950.
The second defendant submits that the direct debit on 28 March 2008 was taken only three days from the last direct debit, not seven days as it should have been. The flaw with the second defendant's submission is this - the direct debit should have been transferred to the Stirling Loan Account on 21 March 2008, however, this was Good Friday. This meant that the direct debit for 21 March 2008 was transferred on the next business day, being four days later on 25 March 2008. The direct debit for 21 March 2008 was transferred later than it should have been. The 28 March 2008 direct debit was not transferred on an earlier date as the second defendant submitted. The statement for the Classic Plus Account shows that the 28 March 2008 direct debit was dishonoured because the Classic Plus Account had insufficient funds.[29]
[29] Exhibit P134, page 1960.
I find that the evidence establishes that the defendants fell into arrears on the Stirling Loan Account because of a combination of the following reasons:
(1)the defendants drew down additional funds from the Stirling Loan Account throughout the term of the Loan (for example, a draw down on 6 February 2006 for $352, on 4 April 2008 of $770, on 10 October 2008 of $500, and on 6 November 2008 of $500);
(2)the second defendant cancelled the direct debits from 21 December 2006 to 14 January 2007. No payments were made to the Stirling Loan Account for that period;
(3)the Stirling Loan Account went into arrears in March 2008 due to the surplus available Loan funds in the Stirling Loan Account being eroded - this was when the direct debit from the Classic Plus Account on 28 March 2008 was dishonoured;
(4)a direct debit of $880.15 was dishonoured on 18 November 2008 due to insufficient funds in the Classic Plus Account;
(5)deposits into the Stirling Loan Account were insufficient to make up for the draw downs, the cancelled direct debits and the dishonoured direct debits;
(6)the defendants cancelled the direct debits from the Classic Plus Account to the Stirling Loan Account in December 2010 - the last direct debit was for $778.62 on 10 December 2010;
(7)the defendants made deposits manually into the Stirling Loan Account after 10 December 2010; and
(8)the defendants have not made any payments to the Stirling Loan Account since 17 May 2018.
I am satisfied, based on the second defendant's own calculations prepared from exhibit D136, that the direct debits to the Stirling Loan Account were sufficient to pay the monthly repayments and the annual package fee for the Stirling Loan Account. The Stirling Loan Account fell into arrears through the defendants' conduct detailed above, not through any fault of the plaintiff.
The defendants have not adduced any evidence to establish that an offset account would have prevented the Stirling Loan Account from falling into arrears. The onus is on the defendants to prove their loss and damage, and they have not discharged their onus. In any event, I have found that the defendants were either not entitled to an offset account under the terms of the Loan Agreement, or did not elect an offset account when they applied to switch the Loan to a Rocket Repay Home Loan in March 2013.
The defendants also allege that there are two missing payments that ought to have been deposited to the Stirling Loan Account - $415 on 7 December 2007 and $860 on 19 December 2007. In relation to the first payment, the defendants requested that direct debits cease over this period - there is no missed payment. In relation to the second payment, the second defendant alleges that this is a payment directly from his employer to the Stirling Loan Account. However, the second defendant accepts that he did not question his employer about whether the payment was made. The second defendant has not adduced any evidence to establish that the absence of this payment is attributable to the plaintiff, as opposed to his employer.
Further, the defendants' claims relating to transactional errors are time‑barred. Any cause of action accrued on the date that the error is alleged to have occurred, the latest of which is March 2013 - when the defendants allege that the plaintiff failed to set up an offset account. The limitation period at the latest expired in March 2019, before these proceedings were commenced.
Conclusion
The plaintiff has made out its claim. The defendants have not made out any of the claims in their Defence and Counterclaim. Judgment should be entered for the plaintiff in the amount of $627,233.58, with interest from 20 June 2025. The defendants' counterclaim is dismissed.
I make the following orders:
(1)Within 28 days of this order, the first and second defendants do give up and deliver up to the plaintiff vacant possession of the property known as 9 Mannite Place, Stirling, Western Australia which is more particularly described as Lot 241 on Plan 11846 and being the whole of the land comprised in Certificate of Title Volume 1461 Folio 416.
(2)In respect of the Loan Agreement, the first and second defendants pay the plaintiff:
(a)$627,233.58; and
(b)interest on the sum of $627,233.58 at a rate of 7.63% per annum from 20 June 2025, until the date of payment in full, pursuant to the Loan Agreement and the Stirling Mortgage.
The plaintiff, having been wholly successful in these proceedings, is entitled to its costs of the action. The plaintiff is requested to file a minute of proposed orders in relation to the costs orders that it seeks.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CS
Associate to the Hon Justice Whitby
9 JULY 2025
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