Westpac Banking Corporation v Eres
[2025] NTSC 46
•24 July 2025
CITATION:Westpac Banking Corporation v Eres [2025] NTSC 46
PARTIES:WESTPAC BANKING CORPORATION (ACN 007 457 141)
v
ERES, Linda Bernadette
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: Supreme Court exercising Territory jurisdiction
FILE NO:2024-03087-SC
DELIVERED: 24 July 2025
HEARING DATE: 9 April 2025
JUDGMENT OF: Smyth A/AsJ
CATCHWORDS:
MORTGAGES – Default under a mortgage of real property – Application for order for possession – Application for summary determination for possession – Various grounds raised in opposition – Application granted.
Australian Securities and Investments Commission Act 2001 (Cth)
Law of Property Act 2000 (NT) s 89(2)
National Consumer Credit Protection Act 2009 (Cth)
Northern Territory Acceptance Act 1910 (Cth)
Supreme Court Rules 1987 (NT) Rules 9.06, 45.05, 53
Uniform Civil Procedure Rules 2005 (NSW) Rule 6.8Australian and New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11, 748; Australia and New Zealand Banking Group Limited v Oldroyd & Anor [2025] NTSC 20; Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193; Bendigo and Adelaide Bank Ltd v Prichard [2021] QSC 179; Burger King v Hungry Jacks Pty Limited [2001] NSWCA 187; Collis v Bank of Queensland Ltd [2021] VSCA 17; Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42; DKLR Holding Co (No.2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431; Esso Petroleum Co Ltd v Mardon [1976] QB 801; Fancourt v Mercantile Credits Limited [1983] HCA 25; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Heller Financial Services v Solczaniuk [1989] NTSC 36; Kerr v Sheriff of New South Wales (1996) 9 BPR 16,215; Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265; Mabo and Others v Queensland (No. 2) (1992) 175 CLR 1; McLean v Westpac Banking Corporation [2012] WASCA 152; National Australia Bank Ltd v Norman [2012] VSC 14; Outback Civil Pty Ltd & Anor v Francis [2011] NTCA 3; RHG Mortgage Corporation Ltd v Astolfi [2011] NSWSC 1526; Secure Funding Pty Limited v Coughlin [2009] NSWSC 384; Shew & Ors v Police and Citizens Youth Club & Ors [2013] NTSC 15; Sportsbet Pty Ltd v Moraitis [2010] NTSC 24; Walters v Morgan (1861) 43 ER 1056; Westpac Banking Corporation v Mason [2011] NSWSC 1241, referred to.
Croft C & R Hay, The Mortgagee’s Power of Sale (Sydney: LexisNexis, 3rd ed, 2013).
Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019).
Rajapakse P & Senarath S, Commercial Law Aspects of Residential Mortgage Securitisation in Australia (Palgrave Macmillian, 2019), ch 2.Rajapakse R, ‘Assessment of Law Relating to the Transfer of Mortgagee’s Rights to the Trustee Issuer in Mortgage Securitisation’, (2007) 33(1) Monash Law Review.
Lilienthal G & Ahmad N. ‘Colonial Land Title in Australia: a meta-legal critical inquiry’, (2019) 45(2) Commonwealth Law Bulletin.REPRESENTATION:
Counsel:
Plaintiff:R Sanders
Defendant:Self Represented
Solicitors:
Plaintiff:HWL Ebsworth Lawyers
Judgment category classification: B
Judgment ID Number: Smy2507
Number of pages: 36
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINWestpac Banking Corporation v Eres [2025] NTSC 46
No. 2024-03087-SC
BETWEEN:
WESTPAC BANKING CORPORATION (ACN 007 457 141)
Plaintiff
AND:
LINDA BERNADETTE ERES
Defendant
CORAM: SMYTH A/AsJ
REASONS FOR JUDGMENT
(Delivered 24 July 2025)
The Plaintiff makes application for an order of possession in respect to the property at 57 Eaton Place, Karama in the Northern Territory[1] (“the Property”) by originating motion dated 30 September 2024 and summons on originating motion dated 30 September 2024.
As is practice for possession matters, proceedings are commenced pursuant to Rule 45.05 of the Supreme Court Rules1987 (NT) which provides for a special procedure. Although commenced by originating motion, the proceeding is commenced in anticipation of orders being made retrospectively dispensing with the requirement to require an appearance, and authorising the plaintiff to commence the proceeding by originating motion.[2] The relevant orders are designed in part to save time and expense for the parties.
Subject to further explanation below, the Defendant was duly served with the Court proceedings and appeared in person. The Defendant contests the Plaintiff’s application, and the Plaintiff seeks summary disposition. In respect to determining whether the matter was amenable to summary judgment I directed parties to distil their objections, and any replies, into informal documents.[3]
In this proceeding the Plaintiff has relied on the affidavits of: Manesh Fernando promised 30 September 2024, Nora Minassian promised 27 August 2024 and 21 March 2025, Mark Wilson promised 25 November 2024, Alexander Manoel promised 3 December 2024, and Teresa Hall promised 4 December 2024, received de bene esse for the purpose of the application. The Defendant in turn relied on the affidavits of Linda Eres made 4 December 2024, 30 January 2025, 26 February 2025 and 6 April 2025, Bret Eres made 4 December 2024 which are similarly received de bene esse.
Subject to the Defendant’s issues raised below, the facts are set out as follows. The Defendant is the registered proprietor of the Property. On 18 November 2011 the Plaintiff, the Defendant and Brent Henry Eres (Mr Eres), entered into a loan agreement. The loan agreement was secured by a mortgage over the Property[4] in favour of the Plaintiff over the whole of the Property, executed by the Defendant on 21 December 2011. The Mortgage incorporated provisions contained in the Memorandum of Common Provisions (“MCP”) recorded in the Registrar General’s Office as CP No. 372115. Pursuant to the loan agreement the Defendant agreed to make certain monthly repayments. The MCP provides for the circumstances of default and action which would be taken thereafter.
On 20 February 2024 the Plaintiff issued, to the Defendant and Mr Eres, the default notice and the exercise of power of sale notice relevant to these proceedings in respect to the Property. Those notices comprised:
(a)A combined default notice dated 20 February 2024 from the Plaintiff’s solicitors indicating a default and demanding payment of $38,368 and notice pursuant to s 88 of the National Credit Code (“NCC”) (if applicable);[5] and
(b)Notice of Exercise of Power of Sale given under s 89(2) of the Law of Property Act 2000 (NT) indicating the amounts owing on the loans at as 15 February 2024 in the same amounts as the s 88 notice.[6]
Mr Fernando deposes that the Defendant has remained in default under the mortgage.[7] Mr Manoel deposes that the Defendant has been in default under the loan agreement and mortgage since the period commencing circa 10 July 2022.[8]
Prima facie, and subject to further discussion below, on the basis of the materials filed by the Plaintiff, in respect to service of the default notices and notice of exercise of power of sale, I find that the Plaintiff would be entitled to an order of possession on its application.
Preliminary Matters
(A)Service of the Proceedings
The Defendant took issue at the hearing with not having been personally served with the Court proceedings, indicating that the only reason she became aware of the proceeding was via the Court list. The affidavit of service, by Mark Wilson made 25 November 2024, indicates service was executed, by delivery of the court proceedings, by attaching them to the Defendant’s premises’ front fence. The Defendant disputes she received notice and insisted that service should have been personal. As I indicated to the Defendant at hearing, by way of initial ruling, whilst personal service is normally required, the Supreme Court Rules provide that an alternate means of service can be agreed as between the parties (see Rule 6.03(1)). Clause 18 of the Loan Agreement (and clause E1 of the MCP) provides that Court documents can be served by leaving them at the property or last known address of the borrower/mortgagor. Thus, there was agreement to alternate service. The Defendant disputed any agreement on the basis that she was challenging the whole validity of the Loan Agreement/Mortgage and therefore should not be taken to have agreed to an alternate means of service. The Defendant’s signature appears on the Loan Agreement and Mortgage, and although there are a considerable number of conditions, I find it sufficient for the purposes of service, that there was agreement for the Court documents to be served in the manner they had. The Defendant was served. If I am incorrect in that regard, as I noted at the outset of the hearing, the Defendant had become aware of the proceeding, had participated in numerous directions hearings and had appeared on the day to put her case. The Defendant was well aware of the proceeding, and had not suffered any detriment by any purported lapse in personal service of the Court proceedings. If there had been a purported failure to personally serve the proceedings I would dispense with the requirement to do so.
(B)The Co-borrower’s application to be joined as Second Defendant
The Defendant had made application for the joinder of the co-borrower as the Second Defendant in the proceeding. The Co-borrower was the Defendant’s husband, and it was argued that his interests were similarly affected by the application for possession such that he should be joined as a party to the proceedings. The mortgage lists the Defendant as sole mortgagor.
These proceedings are commenced by special procedure under Rule 45.05. Unlike, proceedings for recovery of land under Rule 53, there is no specific Rule as to who may be a defendant.[9] Rule 53.03 provides that each person in occupation of the land whose name the plaintiff knows shall be a defendant. Rule 53.03 is similar in that respect to Rule 6.8 of the Uniform Civil Procedure Rules 2005 (NSW) which provides for service of proceedings for possession of land on the occupier, and provides the opportunity to be added as a defendant. For the purpose of this application I am willing to accept that Mr Eres, is living at the Property with the Defendant, at the marital home. The question is whether he should be joined as a person who may be affected by the order for possession.
Although the Defendant and Mr Eres are co-borrowers under the loan agreement, they are each individually liable for the full amount of the loan. The mortgage is a separate agreement under which the Defendant mortgaged her land to the Plaintiff, in order to secure her liability under the loan. In these proceedings the Plaintiff seeks relief only under the mortgage, and does not seek to enforce a term of the loan agreement.[10] As such it is unnecessary to join Mr Eres to be named as a defendant by reason of being a co-borrower.
Furthermore, a person co-residing with a mortgagor need not be named as a co-defendant for that reason. The person currently in possession of the land is the Defendant as the owner in fee simple. A person co-residing with her does so as her guest and derives their rights through her, claiming under her. In discussion of the application of the rights of occupiers, under similar proceedings for possession, Courts have held that an occupier is a person who claims to be in possession and who would have been the sort of person to receive leave to defend an application for ejectment under the old practice. A person claiming under such a defendant was not a person claiming possession. Thus, wives, licensees etc were excluded. In Secure Funding Pty Limited v Coughlin, Schmidt AJ held that the children of the owner were in no different a position to the family members of other occupants, and had no standing as defendants on the basis that they were not occupiers of the property.[11] In Kerr v Sheriff of New South Wales, the Court stated:[12]
The purpose of the "notification to occupier" is to make sure that it is received by the persons who have the right to defend their possession of the property, so that person can intervene in the proceedings. It is not intended that every person whose fate must depend on the fate of the tenant must receive a notice.
In Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd, Young CJ in Eq said:[13]
The general rule is that "wives, children, servants, friends and visitors of tenants or under tenants" (see Cole on Ejectment, (H Sweet, London, 1857) at p84) are not considered occupiers.
Notwithstanding there is no equivalent rule in the Territory, and that proceedings for possession are commenced under the process provided in Rule 45.05 not Rule 53, Rule 9.06 is likely to apply in its ordinary way. That is, is Mr Eres a person who ought to have been joined or whose presence is necessary to ensure that all questions in the proceeding are determined, or whether there is a question arising between Mr Eres and a party connected with a claim in the proceeding which it is just and convenient to determine? In respect to the application for possession, the only basis on which Mr Eres would have to resist the application would be on the basis he was an occupier, or his possession was to be affected.
In this matter, the Plaintiff’s application rests on its rights arising under the Mortgage (incorporating the MCP clause C2(b)) and s 86 of the Law of Property Act 2000 (NT) to take possession of the property on default. The Defendant was the named mortgagor, for the purpose of the exercise of the Plaintiff’s rights. For the purposes of this application I am satisfied that the Defendant is the correct party and it is not necessary for Mr Eres to be joined. Notwithstanding that, I gave Mr Eres the liberty to address the Court on various matters.
(C)Summary Judgment
As noted above, the matter proceeded on application by the Plaintiff for a summary determination. The principles to be applied are the same as those which apply in respect to an application for summary judgment, notwithstanding an expedited process was utilised.
Although the principles in respect to summary judgment are well established it is useful to briefly restate them. The starting position is that the power to summarily dismiss an action is an exercise of the court’s inherent jurisdiction, to protect itself from an abuse of process.[14] On hearing the application the Court may give judgment as is appropriate, unless the defendant satisfies the Court of the claim, or part of the claim, there is a question that ought to be tried or there is some other reason to proceed to trial. The process is intended to apply only to cases where it is clear there is no real question to be tried and where there can be no reasonable doubt that the plaintiff is entitled to judgment.[15] The power to order summary judgment must be exercised with exceptional caution[16] and will only be enlivened where the plaintiff’s case is “so clearly untenable that it could not possibly succeed”.[17] As Luppino M (as he was) stated in Shew & Ors v Police and Citizens Youth Club & Ors:[18]
A defendant will be allowed to defend a case if there are facts which, if true, would constitute a defence to the plaintiff’s claim. The Court is reluctant to try a case on affidavit where there are facts in dispute. An important issue is whether the defendant’s account of the facts has sufficient prima facie plausibility to merit further investigation.
The purpose of the process is to prevent a defendant, who has no defence, from defending an action merely to delay the plaintiff in enforcing their rights. Summary judgment is unavailable where relevant facts are in dispute between the parties or some difficult question of law has to be decided, and in such cases the defendant is entitled to trial.[19]
In respect to discretionary relief, in Shew, Luppino M held:
[t]o the extent that discretionary relief is sought, it may be inappropriate to grant that on a summary judgment application because all evidence may need to be heard before the Court can decide whether the grant of discretionary relief is appropriate.
(D)The Defendant’s Opposition to the Application for Possession
The Defendant raises seven points of dispute in respect to resisting the Plaintiff’s application for possession (which is incorrectly described in some of the Defendant’s documents as the Plaintiff’s foreclosure application), which are set out below, under the headings adopted by the parties. The points raised either directly challenge the validity of the Plaintiff’s application, for example by a challenge to the validity of default notices, or indirectly, for example by challenge to the underlying validity of the legal agreements, or more fundamental aspects upon which the application for possession is based.
Omissions in the registered mortgage giving rise to a constructive or resulting trust
It was the Defendant’s case that both she and Mr Eres contributed to the acquisition of the Property and that both executed the underlying mortgage documents with the intention of being listed as co-owners. It was alleged that the intention had been for both the Defendant and Mr Eres to be listed as registered owners. Why the Property was only in the Defendant’s name was unexplained, as the transfer of lot from the previous owner to new owners (i.e. the Defendant) would have been required and should have been executed by both if that had been the intention. For some particular reason, which was unexplained other than it was not their intention, whilst both were co-borrowers, only the Defendant was the registered owner and therefore granted the mortgage. The Defendant claimed that this was some kind of mistake/omission by the Plaintiff, and that now, as a result, Mr Eres at least had an equitable interest given that mistake/omission. Whilst I would accept for the purpose of this application that there may have been joint contributions to the Property in terms of contribution to the purchase price of the Property or loan repayments, the evidence is the Defendant was the sole registered owner of the Property and as result she alone signed the mortgage instrument (as would be expected as the sole registered owner). As stated above, if there was a mistake, the mistake originated in not having the Property transferred into both names originally. It would normally be the role of the purchaser’s conveyancer or solicitor, on instructions from their client, to ensure the Property was properly transferred into their names, not the mortgagee’s role, whose concern would be focused on receiving the security and registering it. The mortgage instrument was signed on the same date as the loan agreement. It would seem that the Defendant’s argument is that co-contribution to the purchase price, or to the mortgage repayments, should be found to have created a trust, the Defendant holding the Property, in part, in trust for Mr Eres.
Constructive trusts are a creation by the Courts, recognised in certain situations, to prevent the person legally holding property from unjustly dealing with the property to the detriment of the trust beneficiaries. They are imposed by law against the wishes of the settlor, which is not the case here. If a trust were to arise it would be a resulting trust.
It was the Defendant’s case that somehow, due to the absence of Mr Eres’ name from the registered title, that a trust should be implied, whereby he held an equitable interest in the Property. Assuming however that a resulting trust arose, the Defendant’s case is that equity would not permit the Plaintiff to enforce a mortgage against the Defendant in a manner that extinguished or disregarded Mr Eres’ equitable interest. Latec Investments Ltd v Hotel Terrigal Pty Ltd was cited by the Defendant in support.[20]
In response, the Plaintiff submitted that the Plaintiff was the registered mortgagee and had indefeasible title (absent exceptions which do not apply). That is correct. Section 188 of the Land Title Act 2000 (NT) provides that a registered proprietor of an interest in a lot holds the interest subject to registered interests affecting the lot but free from all other interests.
Taking the Defendant’s case at its highest, even if Mr Eres had an equitable interest in the Property and even if equity could intervene in these types of proceedings,[21] that interest would be subject to the Plaintiff’s registered interest. Further, even assuming there had been no alleged mistake in the registration of ownership and the parties intentions in respect to joint ownership had been carried out, and Mr Eres had been the joint registered owner and a joint mortgagor, his registered interest as co-owner and as the mortgagor would still have been subject to the registered interest of the Plaintiff affecting the lot. That is, the Defendant and Mr Eres would have been the Defendants to the Plaintiff’s application for possession. That Mr Eres may have an equitable interest, at best, in the Property does not protect that interest from the Plaintiff’s exercise of its rights under its registered interest. Latec Investments Ltd v Hotel Terrigal Pty Ltd, does not assist the Defendant in the circumstances. Even if it were appropriate for these types of proceedings, I see no reason why equity would intervene in what appears to be at best, a case of competing priorities between a registered legal interest and an unregistered equitable interest. The registered legal interest prevails. I do not find, even at its highest, that the Defendant has any defence, in this regard, in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
The Plaintiff’s loss of standing due to securitisation or assignment of its mortgage rights
This aspect relates the claim that the Plaintiff has “securitised” the Defendant’s mortgage. The claim is that the Plaintiff’s beneficial interest in the mortgage has been transferred to a securitisation trust and as a result the Plaintiff had received full or substantial value for the loan. Consequently, it is claimed, the Plaintiff no longer enjoys the substantive right to “foreclose”. In this context I assume the argument is the Plaintiff no longer had a right to exercise its power of sale, or receive an order for possession.
There are numerous explanations as to how securitisation works. In general the position appears to be:[22] a bank pools selected housing loans and for a price transfers its rights under the relevant loan agreements (and I presume mortgages) to a special purpose vehicle trust (SPV), which in turn, for a price, issues notes or bonds to institutional investors. The rights transferred by the bank to the SPV include the bank’s right to receive principal and interest payments from the borrower, the bank’s right to exercise its power of sale under the terms of the mortgage and the bank’s right to any mortgage insurance payout in the event of a default by the borrower. The transfer of the bank’s rights can be effected by legal or equitable assignment. If a legal assignment is used, the bank’s rights would be vested absolutely in the SPV. If equitably assigned, the SPV would be recognised in equity as having acquired those mortgage rights, but not at law. At law the bank would remain the legal owner of its mortgage rights, holding them on bare trust for the SPV as trustees for the bond holders. The mortgagor (or borrower) is not a party to the sale agreement and is not notified of its existence. For various commercial reasons banks prefer to equitably assign such rights. That is achieved by assignment of the relevant rights, the debt or chose in action, short of complying with the absolute requirements for a legal assignment.[23]
For the purpose of this application, taking the Defendant’s case at its highest, I will assume, there has been equitable securitisation of the loan and/or mortgage rights. In support I was referred to an extract from an academic[24] and another document[25], citing the case of DKLR Holding Co (No.2) Pty Ltd v Commissioner of Stamp Duties (NSW),[26] the latter case being cited as authority that legal and equitable title cannot be split, and therefore presumably any purported assignment of an equitable interest of the mortgage was not possible. That authority was in the context of stamp duty, it dealt with a party who held an estate in fee simple, who had attempted to transfer the legal interest to another on trust, whilst retaining a beneficial interest. The Court held that an owner in fee simple does not hold two estates, a legal estate and an equitable estate, he only holds the legal estate, and could not transfer to another the “bare” legal fee simple while purporting to retain the equitable fee simple interest. In respect to that authority I note that it deals with an owner of land in fee simple attempting to transfer the legal title to another whilst keeping an equitable interest in himself. It does not address the specific transactions which are subject to securitisation (as described above), namely the assignment of a debt or chose in action (i.e. being certain of the bank’s rights) which falls short of a full legal assignment, resulting in an “equitable interest” vesting the SPV, but the legal interest remaining in the bank. As noted above, academic authors, including the one relied on by the Defendant,[27] suggest that what results from securitisation is an equitable assignment of a chose in action, that is, an assignment of the mortgagee’s rights to the SPV, falling short of the requirement of legal assignment, with the legal interest remaining with the bank who may hold that interest as trustee for the SPV.
The issue of equitable securitisation and its effect on these types of proceedings was recently considered in this Court by Brownhill J in Australia and New Zealand Banking Group Limited v Oldroyd & Anor [2025] NTSC 20, where Her Honour held at [32]-[33]:
Even if Oldroyd were able to establish as a fact that the loan was ‘securitised’, the mortgage was registered and registration conferred on ANZ an indefeasible charge over the Property for the amount due under the loan agreement. There is no evidence before me that ANZ gave the Oldroyds notice of any assignment of the loan agreement or the mortgage, which is a prerequisite to an effective assignment. Consequently, whatever the position between ANZ and any third party so far as any equitable or other interests in the Property is concerned, the legal interests of the parties to these proceedings are governed by the loan agreement and the registered mortgage under which the Property is charged with the debt arising under the loan agreement.
Any ‘securitisation’ of the loan or the mortgage is therefore irrelevant in these proceedings.
A number of interstate authorities support were cited in support of that position.[28] I have reviewed those authorities and agree with them. There is no authority in Australia, which I have been referred to, which has held that, even assuming equitable securitisation, the legal effect would be different than that expressed by Brownhill J (and the other cases) above. There has been no legal assignment of the loan or mortgage as required under the Law of Property Act 2000 (NT). The legal rights, as exercised by the Plaintiff, even if exercised as trustee for the SPV’s bond holders, are not diminished. True it is that the Plaintiff may be required to exercise those rights as trustee, and account to the trust’s beneficiary or beneficiaries, but that is a matter between them. As stated above, whatever the position between the Plaintiff and any third party, so far as any equitable or other interests in the Property is concerned, the legal interests of the parties to these proceedings are governed by the loan agreement and the registered mortgage, under which the Property is charged with the debt arising under the loan agreement. I see no impediment to the exercise of the power of sale by the Plaintiff that would affect the exercise of a discretion to order possession.
I do not find, even at its highest, that the Defendant has any defence, in this regard, in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Consequently, the Defendant’s application for early return subpoenas, filed 25 February 2025, addressed to Westpac Banking Corporation (ACN 33 007 457 141), BNY Trust Company of Australia Limited (Trustee of Series WST Trust) and Westpac Securitisation Management Pty Ltd (Trust Manager of Series WST Trust) in respect to materials relating to the securitisation is dismissed.
Historic Defects in the Crown Title which constitutes a mere “colour of title”
This aspect of the Defendant’s claim argued that the Crown’s original claim over Australian land, by proclamation and conquest, produced an imperfect chain of title, amounting to mere “colour of title”, and as such did not convey any lawful title.[29] It was argued that the Crown’s title was “legally questionable” and remained at odds with Indigenous sovereignty, which pre-existed and continued independently of colonisation. It follows, that if the Crown’s title was imperfect then so too was everything else that followed, including any estate she owned and the Plaintiff’s right to enforce its security over it. The apparent inconsistency with the Defendant having originally purchased the Property on the basis of the Crown’s legitimacy to grant the land, and under the Torrens system, and having been granted a loan from the Plaintiff on the registration of mortgage security, was explained by the Defendant as having subsequently come to certain realisations since the Co-vid pandemic.[30] The Defendant pointed to a purported lease, said to between her and the Sovereign Tribal Nation of Majagi, said to prevail over any other interests and which reflected the true nature of the arrangement in respect to the land on which the Property was situate.[31]
The Defendant’s argument cannot be sustained, on the basis of legal authority upon which I am bound to follow. In so far as the Defendant’s argument challenges the acquisition of sovereignty by the Crown, and therefore its ability to grant title, as stated in Mabo and Others v Queensland (No. 2) (footnotes omitted):[32]
The acquisition of sovereignty
"The acquisition of territory by a sovereign state for the first time is an act of state which cannot be challenged, controlled or interfered with by the courts of that state."
This principle, stated by Gibbs J. in the Seas and Submerged Lands Case, precludes any contest between the executive and the judicial branches of government as to whether a territory is or is not within the Crown's Dominions. The Murray Islands were annexed by an exercise of the prerogative evidenced by the Letters Patent; a mode of acquisition recognized by the common law as a valid means of acquiring sovereignty over foreign territory. The recognition is accorded simply on the footing that such a prerogative act is an act of State the validity of which is not justiciable in the municipal courts.
The geographic area of what is now the Northern Territory was part of the colony of New South Wales[33] until annexed to South Australia in 1863[34] and subsequently surrendered to and accepted by the Commonwealth in 1910.[35]
Further to that argument, that the Crown’s basis to grant title to land is otherwise questionable or that there is some alternate or other system of land ownership, must be rejected. Again, it was stated in Mabo No. 2:[36]
It is not surprising that the fiction that land granted by the Crown had been beneficially owned by the Crown was translated to the colonies and that Crown grants should be seen as the foundation of the doctrine of tenure which is an essential principle of our land law. It is far too late in the day to contemplate an allodial or other system of land ownership. Land in Australia which has been granted by the Crown is held on a tenure of some kind and the titles acquired under the accepted land law cannot be disturbed….
The radical title is a postulate of the doctrine of tenure and a concomitant of sovereignty. As a sovereign enjoys supreme legal authority in and over a territory, the sovereign has power to prescribe what parcels of land and what interests in those parcels should be enjoyed by others and what parcels of land should be kept as the sovereign's beneficial demesne.
By attributing to the Crown a radical title to all land within a territory over which the Crown has assumed sovereignty, the common law enabled the Crown, in exercise of its sovereign power, to grant an interest in land to be held of the Crown or to acquire land for the Crown's demesne.
In so far as a lease may exist over the Property, it is subject to the priority of any prior registered interest (ie. the Plaintiff’s registered mortgage).
I find this aspect does not raise a defence in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Non-disclosure, good faith and misrepresentation by the Plaintiff
This part of the Defendant’s claim related to securitisation as well. It was argued that the Plaintiff’s failure to disclose the securitisation to the Defendant, constituted a breach of the implied duty of good faith in contractual dealings. The case of Burger King v Hungry Jacks Pty Limited was referred to.[37] Alternatively, it was argued that the failure to disclose securitisation was a misrepresentation, by omission,[38] of the state of affairs in respect to the loan/mortgage in terms of whether it would be securitised (alternatively fraud was alleged). I take the latter to be an allegation that the Defendant was not informed of the securitisation (assuming it happened).
In respect to any contractual breach of an implied duty of good faith, assuming one can be implied, if the Defendant alleges breach of contract then she is entitled to bring an action for such and seek damages. That there may have been a breach of contract does not affect the Plaintiff’s application for possession, given the indefeasibility of the Plaintiff’s mortgage. Additionally for the reasons given below in respect to misrepresentation, and any duty to disclose the alleged securitisation, I do not find there is any credible argument that fraud, in the required sense, would arise as an exception to indefeasibility. Although fraud was referred to by the Defendant, it was referred to in the context of fraud comprising securitising of the mortgage without notifying the mortgagor.[39]
In so far as the securitisation may amount to the transfer of the loan, clause 20 of the Loan Agreement provides that the Plaintiff may transfer the Loan Contract, any security and the debts transferred to anyone else. Further, if the loan is transferred consent is given to the Plaintiff to give the transferee information about the Loan Contract, mortgage and any debts. Similar provision exists in respect to the Mortgage (MCP C8). Those provisions are silent as to whether notice is required. Certainly, in respect to a legal assignment of a chose in action or debt under s 182(1)(c) of the Law of Property Act 2000 (NT) must be complied with, that is, express notice must be given. Thus, provision exists for transfer, the question is, assuming for the sake of this application there was a transfer of rights as part of securitisation, was there non-disclosure significant enough to raise an arguable case in respect to opposing the orders for possession.
A similar issue was raised before the Victorian Court of Appeal in Collis v Bank of Queensland Ltd where the Court held:[40]
The Applicant submits that the First Respondent securitised the mortgages without his knowledge and therefore, the First Respondent is no longer entitled to repayment of the loan. The Applicant submits that the First Respondent committed fraud by selling the mortgages without notifying the mortgagor. The Applicant relies on a public notice issued by Westpac Banking Corporation in which Westpac notifies the public that various Westpac mortgages, including some mortgages from the First Respondent, have been pooled into various trusts to be sold to a third party trustee. The notice goes on to state that the various trusts have hired Westpac to service the loans so that Westpac continues to collect mortgage repayments and interest which it then passes onto the respective trusts. The notice also states that the Westpac customer with a mortgage subject to this scheme will not notice any material change. The Applicant also submits that he is concerned that the titles to the properties subject to the mortgages have been destroyed by the First Respondent.
The First Respondent submits that no evidence was adduced showing that the mortgages, the subject of the proceeding, have been sold or assigned and therefore the ground is without merit and legal basis.
In our opinion, this ground, not raised before the judge, is without merit, as submitted by the First Respondent. No evidence was adduced to support the allegation. In respect of this ground, and many other grounds, the Applicant relied on articles and other publications without adducing the necessary evidence. In any event, even if the loans provided to the Applicant were included in any securitisation plan, this would have no effect on the enforceability of the loans and security with respect to the Applicant’s obligations. The Applicant denied having received any notice of any assignment of the loans and securities, a necessary pre-condition to a legal assignment under s 134 of Property Law Act 1958. If there was indeed an equitable assignment, the correct plaintiff is the original lender and mortgagee, in this case the First Respondent. The proposed ground is without merit and leave to appeal is refused.
I note, notwithstanding the above, where the appeal proceeded on the basis that there had been no evidence that the mortgage had been sold or assigned, the Court of Appeal held, even if the loan/mortgage had been included in an equitable securitisation, it would have had no effect on the enforceability of the loan and security with respect to the Applicant’s obligations. I have not been referred to any other legal authority which may assist further. Again, there is academic commentary to the effect that a failure to notify a borrower that the mortgagee rights to their loans have been assigned to the SPV, may constitute a failure to “notify borrowers of a risk that their houses could be sold through no fault of their own, would at seem at least to be unconscionable”.[41] I fail to see how borrowers’ homes could be sold through no fault of their own and without their knowledge, when the exercise of the mortgagee’s rights, relevantly the exercise of a power of sale, requires fault (or default) by a mortgagor[42] and notice to be given. The exercise of the power of sale, even if exercised by the bank as trustee under a securitisation arrangement, would still need to be exercised according to all of the usual legal requirements, including those which protect mortgagors.
In respect to the issue of misrepresentation, as it is understood, the Defendant claims that silence in respect to securitisation of the loan/mortgage, presumably in the circumstances leading up to entering into the loan agreement and mortgage, amounted to misrepresentation which in turn would give her a remedy in respect to the relevant contracts. Generally, a misrepresentation will need to be a positive statement of conduct, and in the absence of a special relationship between the parties, non-disclosure of facts, even material and important facts, is not a misrepresentation. The general principle is, parties to contractual negotiations are entitled to remain silent and disclose nothing unless there is a duty to disclose. It has been said: “The duty is not a duty to disclose all facts which the representee might consider material. It is only a duty to disclose those which, if undisclosed, leave what is said untrue or misleading”.[43] In the limited circumstances of this proceeding, on the limited evidential materials, there was no evidence or allegation that securitisation had been mentioned or referred to at all in negotiations in respect to the loan agreement. In those circumstances there is no prospect, assuming there was securitisation, that the failure to mention it would amount to an actionable misrepresentation. As stated in Walters v Morgan:[44]
The purchaser is not bound to disclose any fact exclusively within his knowledge which might reasonably be expected to influence the price…Simple reticence does not amount to legal fraud, however it may be viewed my moralists. But a single word or… nod or wink, or a shake of the head, or a smile from the purchaser intended to induce the vendor to believe the existence of a non-existing fact which might influence the price…would be sufficient ground for a Court of Equity to refuse a decree for a specific performance of the agreement.
Furthermore, I agree with the Plaintiff’s submission that, in so far as any there is a duty to disclose, there needs to be circumstances giving rise to a reasonable expectation that the information will be disclosed, and there is none. That is, it is not reasonable for a bank to disclose all of its internal security and financial arrangements, to its customers, particularly in respect to where it gets its money to fund its business. I find this aspect does not raise a defence in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Breach of the Privacy Act 1988 (Cth)
The Defendant alleged breaches of the Privacy Act 1988 (Cth). The basis of this claim was not clear. Presumably, it arises through the issue of securitisation and an allegation that, in the process of securitisation, the Defendant’s details would have been provided to the SPV. Taking this allegation at its highest, as noted above, the Loan Agreement and the MCP provide for the provision of information to third parties in the event of transfer of the loan or mortgage. Even assuming those provisions do not apply, a breach of privacy would only give rise to a remedy to make a complaint to the relevant Privacy Commissioner and possibly seek compensation.[45] A breach of privacy would not affect the exercise of the power of sale by the Plaintiff. I find this aspect does not raise a defence in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Issues with Default Notices
This aspect of the Defendant’s claim relates to issues concerning the Default notices issued by the Plaintiff. As noted above, a joint default notice/s 88 of the National Credit Code (“NCC”) and s 89(2) of the Law of Property Act 2000 (NT) Exercise of Power of Sale notice was served on the Defendant. A default notice/s 88 NCC notice was also served on Mr Eres, as the co-borrower. As I understand the Defendant’s argument, the claim is that the notices were defective because they should have been jointly addressed to the Defendant and Mr Eres, rather than separately. There was no issue taken as to the mode of service (other than described above), but rather the form. It was alleged that the failure to jointly address the notice was a breach of the notice provisions of the NCC. In response, the Plaintiff submitted that there was no requirement to serve notices jointly.
Section 88 of the NCC provides for the requirements to be met before a credit provider can enforce a mortgage. In particular, s 88(2) of the NCC provides that a credit provider must not begin possession enforcement proceedings against a mortgagor unless the credit provider has given the mortgagor a default notice. The Defendant is the mortgagor. Mr Eres was not the mortgagor and arguably did not require a s 88(2) NCC notice. The notice provided that it constituted a notice issued under “Section 88 of the National Credit Code (if applicable)”. Given the notices were combined, the Defendant required notice of default and a s 88 notice, and Mr Eres only required a default notice, it makes practical sense that each were provided with a notice separately. There is no legal issue arising in that regard.
In terms of a default notice under the loan agreement, clause 18 of the loan agreement deals with the provision of notices and demands. It provides that “you will be served”. “You” is defined to relevantly mean “any one or more of you, and where that is the case, each of you is individually liable for the full amount”. There is no legal issue in respect to the Defendant and Mr Eres separately receiving default notices.
I find this aspect does not raise a defence in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Lender’s Mortgage Insurance
This aspect of the Defendant’s relates to an allegation that the lender’s mortgage insurance (“LMI”) is capable of having a relevant impact on the Plaintiff’s application. The allegation, as far as can be discerned, is that the Plaintiff’s application for possession somehow ignores the receipt of LMI which has partially or fully compensated the Plaintiff for its loss, and therefore it should not proceed with the exercise of the power of sale. The allegation being that the Plaintiff has already been paid under the insurance for the Defendant’s loan arrears, and further that the insurance would pay out the entire mortgage on default. Furthermore that, somehow, on eventual sale of the Property, having received a payment under the LMI, the Plaintiff would be dishonestly double-dipping. To what end any of the issues about LMI is relevant to the Plaintiff’s right to possession is not clear. The issue of securitisation, which I have found to be irrelevant, is also intertwined.
The loan agreement sets out provisions regarding the LMI. A fee for LMI appears in the loan agreement. The Defendant and Mr Eres were charged $7,308.95 for LMI, which is standard practice. Above the execution clause on the Acceptance of the Loan Offer, signed by the Defendant and Mr Eres, are the usual warnings about entering into the agreement. They are not quite the “red hands of Lord Denning” but they are printed in a format that they bring the relevant matters to the borrowers’ attention and are included specifically on the execution page. Included are provisions reminding borrowers to read the contract so that they know what they are entering to and what their obligations are and a statement stating “do not sign this contract document if there is anything you do not understand”. LMI is provided at clause 9(c) under “Costs, Fees and Charges” which states:
Lenders Mortgage Insurance protects us – not you, the borrower. It provides protection in case anything happens which entitles us to sell the security property, and the sale proceeds are insufficient to fully repay your loan. In this case we may incur a loss. We may recover this loss under our Lenders Mortgage Insurance policy. Please note, however, that because you are not protected by Lenders Mortgage Insurance, you are still legally responsible for repaying the insurer the amount outstanding under your Loan Contract and any security.
In response, it was the Plaintiff’s case that, had there been any payments received in respect to LMI they would have been applied to the loan balances, and would have shown up as deductions on such balances, which they did not.[46] Additionally, even if there had been payments made under the LMI, which was denied, such payments would have occurred after mortgagor’s default, and the order for possession was capable of being sought even if subsequent payments were made against the loan (even by a third party), short of, presumably, the entire loan being paid out. I agree. The LMI has no bearing on the issue of whether the Plaintiff is entitled to possession. The Defendant may harbour theories about when the LMI may be paid, and potential double dipping. The Property has not yet been sold and so any assessment as to whether there is a shortfall on the loan as against the value of the Property, and whether LMI applies in accordance with the provision in the loan document, is moot. Additionally, issues as to LMI and payment under insurance policies are matters between the Plaintiff and its insurer. The fact of the matter is, the Defendant had agreed to loan money from the Plaintiff, she offered security for that loan, the loan has been defaulted on, and the security is now in peril. The Plaintiff may have had an insurance policy (which under terms of the loan agreement was paid for by the Defendant), providing for insurance on default, against any shortfall between the sale of the Property and the outstanding loan balance, but that is not something that relevantly bears on the Plaintiff’s right to possession.
I find this aspect does not raise a defence in respect to the Plaintiff’s application for possession. There is no relevant question to be tried on this aspect.
Consequently, the Defendant’s application for early return subpoenas, dated 25 February 2025, addressed to Westpac Banking Corporation (ACN 33 007 457 141) in respect to materials relating to the LMI are therefore dismissed.
Other issues
The Defendant also raised a number of other issues concerning specific provisions of the loan agreement claiming they were “unconscionable and unfair under equity contrary to s 24 of the Australian Consumer Law”. Those provisions included:
(i)Clause C8 “unilateral transfer”: permits the Plaintiff to transfer the loan without notice or consent. Clause C8, entitled “transfer”, is a provision of the MCP not the loan agreement. It provides for the potential transfer of the mortgage, the debt it secures and any secured arrangement.
(ii)Clause 16 “default acceleration”: enables demand for full repayment for minor breaches. This is a clause in the loan agreement. It provides for, on default, the acceleration of the whole loan amount if the default continues for at least 31 days. The clause is subject to requirements of the NCC in respect to acceleration.
(iii)Clause C6 “Excessive Fees”: Imposes disproportionate penalties during default. Clause C6 of the MCP is titled “Set Off” and provides, if the mortgagor has money in any account with the Lender and is in default, the Lender can use it to pay secured amounts under the mortgage. The provision removes the right of the borrower to set off of any moneys the Lender owes the mortgagor against amounts the mortgagor owes under the mortgage.
In respect to the above, it is the Plaintiff’s case that none of the provisions are relied on in respect to the application and therefore the question as to whether they are void or unenforceable does not arise. I agree. In so far as there is an issue with clause C8 of the MCP, the unilateral transfer provision, I do not understand there to have been an actual transfer of the loan or mortgage. If this issue relates to the issue of securitisation, it is dealt with above. In so far as there is an issue with clause 16 of the loan agreement, default acceleration, such a provision is standard in all such contracts and is recognised as a possibility in the NCC,[47] there is no legal basis for claiming such a provision is invalid. In any event, the Plaintiff relies on the failure of the Defendant’s payment of the loan arrears in the relevant default notices, not on any acceleration, for its right to possession. In so far as there is an issue relating to excessive fees (i.e. clause C6), the Defendant has not advanced that argument and the provision referred to does not appear, on its face, to refer to the correct provision.
Disposition
On the above basis, I find that the Defendant does not have a defence in response to the Plaintiff’s application. There should be summary judgment in favour of the Plaintiff, in terms of the summons filed 30 September 2024.
Therefore, I make the following orders:
(1)Pursuant to Rule 45.05(2):
(a) the requirements of Rules 5.03(1) and 8.02 be dispensed with; and
(b) the Plaintiff be authorised to commence this proceeding by originating motion in Form 5C.
(2)The Plaintiff to have possession of the whole of the land comprised in Certificate as to Title Register Book Volume 742 Folio 847 more particularly described as Lot 6179 Town of Sanderson from plan(s) S 81/0850 and known as 57 Eaton Place, Karama in the Northern Territory of Australia.
(3)The Defendants two applications for early return subpoenas, dated 25 February 2025, are dismissed.
(4)I will hear the parties as to costs. If any application for costs is to be made, it is to be made within 4 weeks of this decision, with two weeks following for any reply, and otherwise will be dealt with on the papers.
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[1] Otherwise described as Certificate as to Title Register Book Volume 742 Folio 847 more particularly described as Lot 6179 Town of Sanderson from plan(s) S 81/085C.
[2] As provided by Rule 45.05(4) the relevant order under Rule 45.05(2) may be made on application after the proceeding is commenced. This type of expedited procedure does not prevent full consideration of matters in dispute as illustrated in Australia and New Zealand Banking Group Limited v Oldroyd & Anor [2025] NTSC 20.
[3] Known as Points of Dispute and Reply to Points of Dispute.
[4] Registered Mortgage 766266.
[5] Issued to both the Defendant and Mr Eres.
[6] Issued to the Defendant only.
[7] Affidavit of Fernando made 30 September 2024 at paragraph [24].
[8] Affidavit of Manoel made 3 December 2024 at paragraph [5].
[9] Rule 53.03 provides:
Who to be defendant
(1)Each person in occupation of the land whose name the plaintiff knows shall be a defendant.
(2)If the plaintiff does not know the name of a person in occupation, the proceeding may be commenced without naming a person as defendant.
[10] The right to the order of possession arising under terms of the mortgage and s 86 of the Law of Property Act 2000 (NT).
[11] Secure Funding Pty Limited v Coughlin [2009] NSWSC 384.
[12] Kerr v Sheriff of New South Wales (1996) 9 BPR 16,215 at 16,216
[13] Bankstown Airport Ltd v Noor Al Houda Islamic College Pty Ltd [2002] NSWSC 193, Young CJ in Eq at [64]-[69].
[14] Consolidated Press Holdings Ltd v Wheeler (1992) 84 NTR 42.
[15] Fancourt v Mercantile Credits Limited [1983] HCA 25 at [99].
[16] General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130.
[17] Outback Civil Pty Ltd & Anor v Francis [2011] NTCA 3 at [10].
[18] Shew & Ors v Police and Citizens Youth Club & Ors [2013] NTSC 15 (“Shew”) at [9] citing Sportsbet Pty Ltd v Moraitis [2010] NTSC 24 per Southwood J.
[19] Heller Financial Services v Solczaniuk [1989] NTSC 36 at [9].
[20] Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 265.
[21] Which have been described as common law proceedings. Rather the Defendant would likely need to bring application for an injunction restraining the exercise of the power of sale or for some order for relief. Australian and New Zealand Banking Group Ltd v Comer (1993) 5 BPR 11, 748; Also see Croft C & R Hay, The Mortgagee’s Power of Sale (Sydney: LexisNexis, 3rd ed, 2013) at p 90: “As the action for possession is a common law proceeding”.
[22] see Rajapakse R, ‘Assessment of Law Relating to the Transfer of Mortgagee’s Rights to the Trustee Issuer in Mortgage Securitisation’, (2007) 33(1) Monash Law Review.
[23] As required for example under s 182 of the Law of Property Act 2000 (NT).
[24] Rajapakse P & Senarath S, Commercial Law Aspects of Residential Mortgage Securitisation in Australia (Palgrave Macmillian, 2019), ch 2.. Also see Rajapakse P, ‘Assessment of Law Relating to the Transfer of Mortgagee’s Rights to the Trustee Issuer in Mortgage Securitisation’, (2007) 33(1) Monash Law Review.
[25] Authored by Leon Ashby entitled “Quick Summary of the Repossession Rights Scam in Securitisation”.
[26] DKLR Holding Co (No.2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431 (“DKLR”).
[27] See Rajapakse R, ‘Assessment of Law Relating to the Transfer of Mortgagee’s Rights to the Trustee Issuer in Mortgage Securitisation’, (2007) 33(1) Monash Law Review at 155-156.
[28] See Westpac Banking Corporation v Mason [2011] NSWSC 1241 at [29] per McCallum J, where a defence based on ‘securitisation’ of the loan and registered mortgage was rejected and summary judgment granted to the bank. Similarly, it was held in RHG Mortgage Corporation Ltd v Astolfi [2011] NSWSC 1526 at [15] per Davies J that any defence to a bank’s claim to enforce its mortgage based on securitisation must inevitably fail. See also McLean v Westpac Banking Corporation [2012] WASCA 152; National Australia Bank Ltd v Norman [2012] VSC 14; Bendigo and Adelaide Bank Ltd v Prichard [2021] QSC 179.
[29] I was referred to an article, Lilienthal G & Ahmad N. ‘Colonial Land Title in Australia: a meta-legal critical inquiry’, (2019) 45(2) Commonwealth Law Bulletin, pp 231-256.
[30] Transcript at p 30.
[31]Affidavit of Linda Eres made 26 February 2025, Annexure A, dated 1 August 2022.
[32] Mabo and Others v Queensland (No. 2) (1992) 175 CLR 1 at 31 per Brennan J (“Mabo No. 2”).
[33] Geographically established through instructions to Governor Phillip in 1787 and Governor Darling’s Commission of 1825, and the fixing of the boundary of South Australia in 1836, through letters Patent establishing the Province of South Australia in 1836, and Letters Patent erecting the Colony of Queensland in 1859, and Letters Patent altering the western boundary of Queensland in 1862.
[34] By Letters Patent dated 1863.
[35] Northern Territory Acceptance Act 1910 (Cth).
[36] Mabo No. 2 at pp 47-48 per Brennan J.
[37] Burger King v Hungry Jacks Pty Limited [2001] NSWCA 187.
[38] Citing Esso Petroleum Co Ltd v Mardon [1976] QB 801.
[39] See Transcript p 37.
[40] Collis v Bank of Queensland Ltd [2021] VSCA 17 at [111]-[113].
[41] The author makes mention of action under the Trade Practices Act 1974 (Cth). Rather, any proceeding would likely commence under s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth).
[42] As required by s 89 of the Law of Property Act 2000 (NT).
[43] See Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019), p 563.
[44] Walters v Morgan (1861) 43 ER 1056 at 723-724.
[45] See s 25 of the Privacy Act 1988 (Cth).
[46] See affidavit of Fernando made 30 September 2024, annexure E which is details of the loan balance as at 20 June 2024, with arrears of $47,667.
[47]See s 93 of the NCC which requires certain things to be done by a credit provider before it can enforce an acceleration clause.
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