FEDERAL COURT OF AUSTRALIA

Blakeley v National Australia Bank [2018] FCA 796

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal is dismissed.

2.    The applicants pay the costs of the respondent, to be assessed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER J:

INTRODUCTION

1    Mr Blakeley applies for leave to appeal from a summary judgment given by a judge of this Court: Blakeley v National Australia Bank [2017] FCA 835.

2    The respondent, National Australia Bank objects to the competency of the appeal and seeks summary judgment. For reasons set out below, the Bank is entitled to summary dismissal of the application in its favour. The ‘appeal’ has been referred to me for case management. I hear this application pursuant to s 25(2B)(aa) of the Federal Court of Australia Act 1976 (Cth) (FCA).

THE PRIMARY JUDGMENT

3    Mr Blakeley, on his own behalf and purportedly as trustee of the HTJB Family Trust and the Harold Thomas James Blakeley Family Trust (collectively, the applicants), commenced a proceeding against the Bank, in which they claimed damages in respect of alleged unconscionable conduct by the Bank and other conduct of the Bank alleged to contravene the Australian Securities and Investments Commissions Act 2001 (Cth) and the Australian Consumer Law.

4    In the primary judgment (at [2]-[6]), his Honour set out the relevant aspects of the statement of claim as follows:

2    In a statement of claim filed 22 March 2017, the applicants relevantly plead as follows:

5.    The [Bank] concluded a Mortgage agreement with PMHB Pty Ltd ACN 133 032 667 as trustee for the [Blakeley Family Trust] during or about October 2011 In terms of which:

a.    The [Bank] advanced the sum of $900,000 to the [Blakeley Family Trust] against the registration of a first mortgage over 81 Mandurah Terrace and 62 Sholl Street, Mandurah in the State of Western Australia.

6.    The [Bank] concluded a Loan agreement on the 12th October 2011 with [Mr Blakeley] and with the [HTJB Family Trust] for the development of 81 Mandurah Terrace (the business) and 62 Sholl Street (the Land) Mandurah WA. The material terms of which were that:

a.    The [Bank] advanced the sum of $200,000 to the [HTJB Family Trust and the Blakeley Family Trust];

b.    The loan agreement commenced on the 12th October 2011 and its expiry date was the 31 October 2021.

([Mr Blakeley] will refer to the mortgage and loan agreement at trial for their full terms and effect)

7.    The facilities were as follows:

a.    $900,000 First Mortgage over both properties for the development of the Land and business.

b.    $200,000 loan to the [HTJB Family Trust] for the construction of the business (restaurant).

8.    The Mortgage and loan:

a.    The Registered Mortgage No. L787783 over Certificate of Title 1026 Folio 688, being the property known as 81 Mandurah Terrace Mandurah WA 6210. (The business).

b.    Guarantee and indemnity given by [Mr Blakeley] to secure the loan and mortgage.

c.    At all times material hereto [Mr Blakeley] was the trustee of the [HTJB Family Trust] and currently the Trustee of the [Blakeley Family Trust], the former trustee, PMHB Pty Ltd, having been deregistered.

d.    The [Blakeley Family Trust] leased the business to the [HTJB Family Trust] in terms of a written agreement of lease for a period of ten (10) years.

9.    During or about June 2012 [Mr Blakeley] and the [HTJB Family Trust and the Blakeley Family Trust] asked the [Bank] for permission to sell the business. The request was made in the ' no default' period of the mortgage and loan agreement.

10.    At the time of the request referred to in paragraph 9 above, (June 2012) the business (excluding the land upon which it was built) was valued at approximately $600,000 plus plant and stock, less the loan of $200,000.

11.    The [Bank] verbally refused to permit the sale of the business in June 2012 or at all and in writing through their solicitors confirmed such refusal on 20 December 2013 some 18 months later[.]

12.    [Mr Blakeley] is the current Trustee of the [Blakeley Family Trust] that was the registered owner of the properties at 81 Mandurah Terrace and 62 Sholl Street Mandurah Western Australia 6210.

13.    Between June and December 2012 the [Bank] verbally refused to allow the assignment of the lease of the property, and in writing acknowledged this refusal on the 20 Dec 2013 some 18 months later.

14.    The restaurant business closed its doors and ceased trading at the end of December 2012 and the applicants were unable to minimise their losses by either assigning the lease or selling the business of the restaurant.

15.    The [Bank] by its refusals referred to above kept the applicants in a state of hiatus for 12 months before taking action to foreclose and thereby exacerbated the financial losses suffered by the applicants.

3    In the statement of claim, the applicants then identify two specific claims. The first claim is pleaded in the following terms:

16.    The refusals on the part of the [Bank]:

a.    Prevented [Mr Blakeley] and [the Blakeley Family Trust] from securing the assignment of the lease over the business and thereby preventing the eventual foreclosure by the [Bank];

b.    Prevented the [HTJB Family Trust] from assigning the lease and thereby the repayment of the loan agreement and the release from the 10 year lease agreement.

c.    Resulted in the loss of opportunity for all the applicants to extricate themselves from a foreseeable financial crisis.

d.    Resulted in [Mr Blakeley], [HTJB Family Trust] and the [Blakeley Family Trust] suffering financial loss.

e.    Resulted in the [Bank] accruing penalty interest and other compound interest on both the mortgage and the loan agreement.

17.    The [Bank] foreclosed on the mortgage and loan agreement on the 20th August 2013 with the result that:

a.    [Mr Blakeley] was declared bankrupt;

b.    The [HTJB Family Trust] lost all its assets; and

c.    The [Blakeley Family Trust] lost the land.

18.    The refusals of the [Bank] referred to above were:

a.    Outside the ambit of the mortgage and loan agreement in as much as the said agreements provided for the prohibition of the sale of the land and not the assignment of the lease over the land;

b.    Tantamount to the unilateral imposition by the [Bank] of a condition into the mortgage and loan agreement that neither [Mr Blakeley] nor [the Blakeley Family Trust] had agreed to or had contemplated.

c.    Unconscionable.

19.     But for the refusals of the [Bank] to permit the [HTJB Family Trust] from assigning the lease over the business, it would not have been necessary for the [Bank] to foreclose as aforesaid.

20.    The mortgage was fully paid until the end of January 2013.

21.    Further and /or alternatively, the [Bank’s] refusals above coupled with the [Bank’s] inaction for a period of 18 months after being alerted by [Mr Blakeley] to the foreseeable financial catastrophe resulted in the Applicants suffering heavy financial losses that could and should have been avoided or mitigated.

4    The second claim is pleaded in the following terms:

22.    The [Bank] sold the properties at gross under value without adequate promotion thereby contravening 420 A of the Corporations Act 2001 (Cth).

23.    The land was valued at $1.8million prior to its improvement and valued at $3m after being improved. The [Bank] sold the land duly improved for $1.25 million.

a.    The difference between the market value of the improved land and the value realised by the [Bank] on foreclosure was the sum of $1,750,000.

24.    The [Bank]:

a.    As mortgagee in possession failed to take reasonable care to ensure that the properties were sold at market value

b.    Failed to act in good faith;

c.    Failed to exercise the power of sale with reasonable care and with the objective of not selling the subject property below its market value or in the absence of a known market value, at the best price which was reasonably obtainable, having regard to the prevailing circumstances at the time of sale[.]

5    The applicants then provide what are referred to as “Details of Claim” as follows:

26.    I rely on the Australian Consumer Legislation s.2o, s.21, s.22 and sections 12CA, 12CC, and 12CB of the ASIC Act with regard to unconscionable conduct.

27.    I also rely on section 18(1) and Division 1Part 3-1 of the Australian Consumer Legislation.

28.    I also rely on s12DA and/or s12DF of the Australian Securities and Investment Commission Act 2001, for deceptive and misleading conduct.

29.     I also rely on 420A (1) (a) of the ACL.

30.     I also rely on the law for failure to abide by the law relating to quiet enjoyment identified in the Western Australian Torrens Legislation Section S 116 of the Transfer of Land Act 1893-1978 (WA).

6    The applicants finally specify claims for damages, costs and interest in the following terms:

a.    General damages of $1.5m for [Mr Blakeley];

b.    Special Damages of $1.5m for the [HTJB Family Trust];

c.    Special Damages of $1,750,000 for the [Blakeley Family Trust] being the difference between the market value and the sale price of the property;

d.    Costs and interest at the legal rate of Judgement to the date of payment.

e.    Aggravated damages of $3m by reason of the contumelious conduct of the [Bank’s] unconscionable, misleading and deceptive conduct by failing to take into consideration:

•    the relative bargaining strength of the parties

•    the conditions imposed on the weaker party that were not reasonably necessary to protect the legitimate interests of the stronger party

•    the use of undue influence, pressure or unfair tactics by the stronger party

•    the requirements of applicable industry codes

•    the willingness of the stronger party to negotiate the extent to which the [Bank] should have acted in good faith.

•    lack of explanation and assistance when necessary

•    whether the [Bank] had the right to unilaterally change contract terms.

5    The pleading did not refer to the fact that the applicants and the Bank had executed a Forebearance Deed on or about 5 March 2013, in turn, varied by variation letter dated 11 April 2013 and further varied by variation letter dated 27 May 2013. By that Forebearance Deed, the Bank was released from any claims that the applicants had or may have against it. The Bank sought summary judgment against the applicants pursuant to s 31A(2) of the FCA and/or r 26.01 of the Federal Court Rules 2011 (Cth).

6    The issues arising on the application before his Honour were:

(1)    Whether, in light of the Forbearance Deed and release by the applicants of any claims they had or may have had against the Bank, the applicants could now maintain the proceeding.

(2)    Whether Mr Blakeley had standing to pursue any claims in his own right given he was a discharged bankrupt whose claims against the Bank before his bankruptcy vested in the Official Trustee.

(3)    Whether any claims PMHB Pty Ltd ACN 133 032 667 had against the Bank on its own behalf vested in the Commonwealth, and any claims on behalf of the Blakeley Family Trust vested in the Australian Securities and Investments Commission (ASIC) upon its deregistration and so could not be pursued by Mr Blakeley, if he was the trustee of the Blakeley Family Trust.

7    The primary judge noted that the Forebearance Deed was made between the Bank, Mr Blakeley, as trustee of the HTJB Family Trust, PMHB, in its own capacity and as trustee for the Blakeley Family Trust, and Mr Blakeley on 5 March 2013.

8    His Honour dealt with the contents of the Forebearance Deed as follows (at [12]-[25]):

12    The background to the [Forebearance Deed], recited before cl 1 of the [Forebearance Deed], states as follows:

A    [The Bank] provided financial accommodation to the Borrowers in the form of the Facilities.

B    [The Bank] holds the Securities to secure repayment of the Amount Owing.

C    A default has occurred and is continuing under one or more Facilities.

D    As a result of the default, [the Bank] has matured the HTJB Trust Facility and the Family Trust Facility.

E     [The Bank] has agreed on the terms and conditions in this document to forbear from taking further enforcement action (including commencing the Proceedings to allow the Borrowers and Guarantors an opportunity to repay the Amount Owing to [the Bank]).

13    Clause 1 provides relevant definitions and interpretation, including the following:

Amount Owing means all monies outstanding at any time under the Facilities and includes Costs and any further amounts outstanding under the Facilities or Securities, including enforcement costs, and under this document.

...

Borrowers means each of the borrowers described in Schedule I of this document.

...

Default means:

(a)    failure by any of the Borrowers or Guarantors to comply with any of their obligations under this document, the Facilities, Securities or Guarantees or any other agreement with [the Bank];

(b)    if any of the Borrowers or Guarantors are placed, or resolve to enter into, insolvent administration, liquidation, receivership or any agreement or composition with creditors under the Bankruptcy Act or the Corporations Act.

Facilities means each of the facilities provided by [the Bank] described in Schedule I of this document.

Guarantees means each guarantee and indemnity set out in the definition of Securities in this document.

Guarantors means each of the parties that have provided the Guarantees.

Proceedings means any proceedings to be commenced by [the Bank] against the Borrowers or Guarantors in the Supreme Court of Western Australia seeking vacant possession of any of the Secured Property under the terms of the respective Securities.

…

Securities means each of the securities described in Schedule 2 of this document.

Secured Property means each real property the subject of the Securities.

Settlement Date means 31 May 2013.

...

14    Clause 1.2(m) of the forbearance deed provides as follows:

(m)    a particular person includes the person's administrators, executors, successors and permitted substitutes (including persons taking by novation) and assigns; and

15    Schedule 1 to the forbearance deed specifies each relevant “Borrower”, Facility” and “Account No./Facility Limit”, and the “Facility Short Name”. The borrowers include Mr Blakeley as trustee for the HTJB Family Trust and PMHB as trustee for the Blakeley Family Trust.

16    Schedule 2 to the forbearance deed identifies the “Securities” by their short name and more detailed description, and comprises the Family Trust Facility; the HTJB Trust Facility, Bank Guarantee, Business Card; and the HTJB Trust Facility, Bank Guarantee, Family Trust Facility and Business Card.

17    Clause 2 of the forbearance deed specifies certain conditions precedent. There is no suggestion or evidence to show that these conditions were not satisfied.

18    Clause 3 specifies “Acknowledgements” which are in the following terms:

The Borrowers and Guarantors each acknowledge and agree that:

(a)    the Facilities and Securities are in default and continue to be in default;

(b)    the Facilities, Securities and Guarantees are valid, binding and enforceable;

(c)    the securities secure the Amount Owing;

(d)    any notices issued by [the Bank]to the Borrowers and Guarantors demanding repayment of the Amount Owing and which entitle [the Bank]to enforce any Securities are valid and enforceable;

(e)    as at 8 February 2013 the Amount Owing (excluding Costs and Taxes) is as follows:

(i)    Bank Guarantee Default Account- $22,927.05;

(ii)    HTJB Trust Facility- $197,337.00

(iii)    Family Trust Facility- $911,993.00;

(f)    the Amount Owing will continue to increase with accruing interest, Costs and Taxes in accordance with the terms of the Facilities until it is repaid to [the Bank];

(g)    [The Bank] is entitled to issue notices to the Borrowers and Guarantors demanding repayment of the Amount Owing and enforcing the Securities; and

(h)    nothing in this document acts to reinstate the rights of the Borrowers with regard to the cancellation of the whole or any part of any Facilities pursuant to notices issued by [the Bank];

(i)    [The Bank] is under no obligation to extend or renew any Facilities or to provide any new financial accommodation to the Borrowers;

(j)    each of the Borrower's and Guarantors enter into this document:

(i)     having first obtained independent legal advice;

(ii)    having independently assessed this document;

(iii)    willingly and without reliance on any written or verbal statement or communication by or on behalf of [the Bank];

(k)    the provisions of this document reasonably accommodate each of the Borrowers' and Guarantors' current circumstances and they are each able to comply with the provisions of this document; and

(l)    by entering into this document, [the Bank] does not waive any of its rights in connection with any notices issued by [the Bank], any defaults or any events of default which have occurred in respect of the Facilities or Securities.

19    Clause 4 deals with “Forbearance” and is in the following terms:

Subject to the Borrowers and Guarantors complying with the terms of this document, [the Bank] agrees to:

(a)    forbear from taking any further action to enforce its rights arising under the Facilities and Securities until the Settlement Date;

b)    adjust the default rate for the HTJB Trust Loan and the Family Trust Loan to 10%, from 7 February 2013 until the Settlement Date.

For the avoidance of doubt, the default rate will revert to the default rate specified in the Facilities agreements for the HTJB Trust Loan and the Family Trust Loan if an event of default occurs under this Deed, from the date that the event of default occurs.

20    Clause 5 sets out the obligations of the borrowers in the following terms:

(a)    The Borrowers will execute and exchange contracts for sale of the Secured Property in accordance with clause 6 of this Deed by 30 April 2013;

(b)    On or by the Settlement Date, the Borrowers will repay the Amount Owing under the Facilities.

21    Clause 6 deals with the sale of a securited [sic] property in the following terms:

In any sale of a Secured Property, the Borrowers and Guarantors agree that:

(a)    they will obtain express written consent from [the Bank] prior to signing any lease agreement;

(b)    they will provide [the Bank] with a sworn valuation for bank purposes from a valuer acceptable to and instructed by [the Bank];

(c)    they will provide [the Bank] with a copy of the agency agreement and marketing campaign for the Secured Property;

(d)    they will authorise the selling agent to discuss the sale of the Secured Property, including progress to sale and uptake of the selling agent's recommendations, with [the Bank’s] representatives;

(e)    they will provide fortnightly updates on progress of the sale of the Secured Property;

(f)    they will obtain [the Bank’s] prior consent to the sale price of the Secured Property prior to exchange of contracts or sale at auction (unless the sale price less any costs of sale to be deducted exceeds the Amount Owing);

(g)    they will provide to [the Bank] a complete copy of the contract for sale of the Secured Property within 5 business days of exchange of contracts;

(h)    they will ensure any contract of sale is unconditional;

(i)    they will ensure that the terms of the contract for sale provide that a deposit of 10% will be paid on exchange of contracts and settlement must take place within 35 days of the date of exchange of the contract of sale, unless otherwise agreed to by [the Bank] in writing;

(j)    they will provide [the Bank] with a copy of any document related to the sale of the Secured Properly within 3 days of [the Bank's] request;

(k)    at settlement of the sale of the Secured Property, [the Bank] is to receive the full sale proceeds, less any deductions consented to by [the Bank];

(l)    [The Bank] is not obliged to discharge its mortgage over any Secured Property at settlement of a sale by the Borrowers and Guarantors if this clause has not been complied with;

(m)    [The Bank] will apply the net sale proceeds received by [the Bank] to the Amount Owing at its discretion;

(n)    [The Bank] will provide a discharge of mortgage over the Secured Properly at settlement of a sale of the Secured Property provided this clause is complied with; and

(o)    [The Bank] is not obliged to discharge any Securities at settlement of a sale of the Secured Properly if the Borrowers or Guarantors do not comply with this clause.

22    Clause 7 deals with the maintenance of the secured property.

23    Clause 8 deals with consequences of default in the following terms:

If a Default occurs, [the Bank] will be entitled to immediately and without further notice:

(a)    enforce any Facilities and Securities to obtain full payment of the Amount Owing;

(b)    commence the Proceedings;

(c)    at its discretion, give notice to the Borrowers and Guarantors requiring the Borrowers and Guarantors to deliver [the Bank] vacant possession of the Secured Property within 3 Business Days of receiving notice from [the Bank]; and

(d)    the Borrowers and Guarantors each acknowledge that upon receiving notice to vacate the Secured Property, the relevant Borrowers and Guarantors will deliver vacant possession of the Secured Properly to [the Bank] in good order and condition including

(i)    removing all possessions and chattels from the Secured Property to the extent that those items are not subject to any Securities in favour of [the Bank]; and

(ii)    delivering all keys to the Secured Property to [the Bank] in accordance with any direction given by [the Bank].

24    Clause 9 deals with proceedings in the following terms:

Subject to the terms of this document, the Borrowers and Guarantors each acknowledge and agree that [the Bank] does not waive or give up any of its rights in relation to its rights to continue with enforcement action with respect to the Facilities, Guarantees and the Securities, including commencing the Proceedings after the Settlement Date, if there is an event of Default under this document.

25    Clause 10, upon which the Bank specifically relies in its summary judgment application, provides as follows:

The Borrowers and Guarantors each immediately, unconditionally and absolutely release [the Bank] and its Representatives from all claims which the Borrowers or Guarantors have or may have against [the Bank] and its Representatives, whether individually or jointly, in respect of each of the Facilities, Securities and Guarantees. This document may be pleaded and tendered by [the Bank] as an absolute bar and defence to any claim brought by the Borrowers or Guarantors in respect of any matter referred to in this clause.

(emphasis added)

9    The primary judge noted that Mr Blakeley signed as a director and company secretary on behalf of PMHB, his own capacity, and as trustee for the Blakeley Family Trust in accordance with s 127 of the Corporations Act 2001 (Cth), and also in his own capacity and as trustee for the HTJB Family Trust.

10    The contentions before his Honour were similar to those now advanced, including the contention that the Forebearance Deed was not relevant to the claims Mr Blakeley identified in the proceeding, described in the pleading above.

11    The primary judge rejected that submission and gave summary judgment in favour of the Bank. His Honour observed (at [27]) that plainly the various claims Mr Blakeley wished to pursue against the Bank were within the wide language of cl 10 of the Forebearance Deed, namely, claims ‘in respect of each of the Facilities, Securities and Guarantees’, as those terms were further defined in cl 1.1 of the Forebearance Deed.

12    His Honour noted that cl 10 made it clear that the Bank may plead the Forebearance Deed as an ‘absolute bar and defence to any claim brought by the [applicants] in respect of’ any claim in relation to Facilities, Securities and Guarantees (at [28]). His Honour accepted the submission by the Bank, having regard to the terms of cl 1.2(m) of the Forebearance Deed, that the release was binding on subsequent trustees of the Blakeley Family Trust, including Mr Blakeley, if he was indeed a trustee of that Trust.

13    The primary judge recognised that the claims that the applicants wished to pursue concerned unconscionable conduct, deceptive and misleading conduct, failure to abide by the law relating to quiet enjoyment and other alleged contraventions of Commonwealth legislation, but noted that these would all arise in connection with the Bank’s exercise of its rights pursuant to the Facilities, Securities and Guarantees as defined by the Forebearance Deed. They were all claims within the contemplation of the parties at the time when the release was given and were covered by the release. His Honour followed Commonwealth Development Bank of Australia Limited v Kok [2003] FCA 90.

14    Any conditions precedent set out at cl 2.1 before the Forebearance Deed had been satisfied or waived as had the conditions precedent to the variation letter dated 11 April 2013 and the variation letter dated 27 May 2013. His Honour had evidence from the Bank supporting that proposition.

15    The primary judge also noted that Mr Blakeley asserted that the Forebearance Deed was executed in circumstances of duress and undue influence, but observed that there was no evidence at all advanced by the applicants to support that allegation. Rather, as the Bank submitted, it was mere assertion.

16    In any event, the primary judge accepted (at [33]) the Bank’s submission that such an allegation was inconsistent with:

(1)    the express acknowledgements in the Forbearance Deed that the borrowers and guarantors (as defined in the Forbearance Deed) entered into the Forebearance Deed:

(a)    'having first obtained independent legal advice': clause 3(j)(i) of the Forbearance Deed; and

(b)    'willingly and without reliance on any written or verbal statement or communication by or on behalf of [the Bank]': clause 3(j)(iii) of the Forbearance Deed; and

(2)    the terms of the variation letters dated 11 April 2013 and 27 May 2013, which record variations to the terms of the Forbearance Deed requested by the applicants.

17    His Honour noted, citing Johnson v Buttress (1936) 56 CLR 113, that the relationship between a borrower and lender is not a relationship historically recognised by the law as raising a presumption of undue influence, and evidence must be adduced that the transaction was the outcome of such undue influence over the mind that it cannot be considered to be a free act. There was also no evidence before the primary judge as to any special disability, which it was alleged was suffered by the applicants at the time, nor was there any evidence as to any circumstances by which it was alleged that the disability would have been sufficiently evident to the Bank, nor was there any evidence of any terms of the Forebearance Deed, which were alleged to be unconscionable.

18    Mr Blakeley also raised a question of whether his sole signature was sufficient to bind the companies, but the primary judge concluded that s 198E(1) of the Corporations Act dealt with that situation. See also s 127(4) and s 129 of the Corporations Act.

Standing

19    Although it was unnecessary for his Honour’s decision, the primary judge also accepted that Mr Blakeley’s claim was incompetent and should be dismissed as he did not have standing to pursue it.

20    Mr Blakeley became bankrupt on 9 August 2013, and was discharged from that bankruptcy by operation of law as of 10 August 2016. Any claims he had against the Bank, including, but not limited to, the claims he would press in this proceeding vested in the Official Trustee on his bankruptcy pursuant to s 58(1) of the Bankruptcy Act 1966 (Cth). Those claims did not revert to him on his discharge from bankruptcy: see Samootan v Shea [2010] NSWCA 371 per Campbell JA (with whom Beazley and Hodson JJA agreed) (at [67]-[100]).

21    Mr Blakeley attempted to take advantage of an exception to the above described vesting, on the basis he was pursuing a claim for a ‘personal injury or wrong’ within the meaning of s 116(2)(g)(i) of the Bankruptcy Act. The primary judge did not accept that the proposed proceeding fell within that category, as the substantial right of action he sought to pursue was direct pecuniary loss to his property or estate status as a bankrupt (at [41]). That right to sue passed to the trustee, notwithstanding that it may have produced personal inconvenience to him: Faulkner v Bluett (1981) 52 FLR 115 per Lockhart J (at 119). See also Luck v Chief Executive Officer of Centrelink (2017) 251 FCR 295 (at [19]-[24]) and Rogers v Asset Loan Co Pty Ltd [2006] FCA 1708 (at [52]).

22    The primary judge also accepted the Bank’s submission that there was no evidence to support the statement made in the pleading filed by Mr Blakeley that he had authority to act as trustee of the Blakeley Family Trust. The trustee of the Blakeley Family Trust during the relevant period of alleged contravention was PMHB, which was deregistered by ASIC on 29 October 2014 and remained deregistered at the time of the primary judge’s consideration. Any property, including a chose in action that was held by PMHB on trust immediately before deregistration vested in the Commonwealth or ASIC in accordance with s 601AD(1A) and (2) of the Corporations Act.

NOTICE OF APPEAL

23    The appeal which Mr Blakeley seeks to pursue, if leave is granted, contains the following grounds:

1.    His Honour erred in Law, Fact and Natural Justice in relation to [the Bank] Forbearance Deed (The Deed) dated 5 March 2013, in that:

2.    His Honour failed in adequately dealing with [Mr Blakeley’s] Address to the Court where [Mr Blakeley] said from approximately October 2012 [Mr Blakeley] started to suffer heightened anxiety due to the pressure being applied by the bank and at the end of December 2012 was confined to bed for three months with a psychological breakdown and from that period to now [Mr Blakeley] has not been able to function in the work or social world and has become a recluse which should have alerted His Honour to an arguable case to declare the [Forebearance Deed] void on the grounds of [Mr Blakeley’s] incapacity being monitored by Dr Manners MBBS MRCPsych DPM FRANZCP and medicated accordingly[.]

3.    His Honour erred in Law in that he failed to take into account the alleged duress/undue influence by [the Bank] that would have rendered the [Forebearance Deed] unjust, unnecessary and or void had His Honour followed the sequence of events in the Third Affidavit, the Statement of Claim and the First Affidavit.

4.    His Honour erred in Law in relation to [Mr Blakeley’s] "Standing", in that[.]

5.    [Mr Blakeley’s] action was for personal injury and wrong damages which he retains under the Bankruptcy Act sec. 116 - 2 (g) (1) and does not become part of any Bankrupt Estate. [Mr Blakeley’s] claims damages against the bank for an unusual degree and extent of physical and mental inconvenience, excessive time taken to resolve the situation, humiliation, and interference with the proposed [Mr Blakeley’s] expectation of enjoyment and peace of mind together with loss of opportunity due to the unconscionable conduct and bankruptcy caused by the actions of the [Bank]. This matter does fall within this category as the unlawful actions of the bank caused the above conditions in [Mr Blakeley]. See Actuaries Institute 10-12 November 2013 Gold Coast Page 3 and similar to that the Financial Ombudsman would pursue.

6.    His Honour erred in fact in that the [Blakeley Family Trust] action was in a "Trustee Capacity" which came into effect by a "Deed" dated 26 Nov 2016, in evidence and tendered to the Court by an Affidavit of [Mr Blakeley] dated 9 June 2017 which His Honour disregarded and or failed to fully understand.

7.    His Honour erred in law, fact and natural justice by ignoring the Statement of Claim, laws, rules, Affidavits and evidence filed and concentrated on standing, the Forbearance Deed and its contents that are specifically identified in the decision from no.7 until no. 26 and is in [Mr Blakeley’s] claim that it is invalid as it was signed under duress/undue influence which would have been obvious to the court if a comprehensive evaluation was carried out.

8.    His Honour erred in law, fact and natural justice for failing to identify the reason for the Forbearance Deed's existence as was to try to legitimise their unlawful behaviour by not abiding by their security documentation as requires by law and an argument exists that it may be an unconscionable act.

9.    Courts will not enforce contracts dealing with illegal and/ or unlawful acts or contracts specifically created to hide and/or try to justify previous illegal and/or unlawful acts if the reason for their existence is an attempt to legally bind the weaker party by the use of unconscionable conduct and duress forcing the other party into dealing from a position of weakness into signing a document they would not normally entertain. See Contracts Review Act 1980 No. 48 Second Affidavit.

10.    His Honour erred in law, fact and natural justice by noting the [Forebearance Deed] is very specific in relation to the Facilities, Securities and Guarantees that are paramount in the [Bank’s] case but ignored the fact that the said Security documents are also very important to [Mr Blakeley] as they identify their rights in the Mortgage Documents that are important for the progress of the business plan identified in the Third Affidavit no. 11-29 where the Mortgage document specifically identifies the lease and the option specifically required by [the Bank] and [Mr Blakeley].

11.    His Honour erred in law, fact and natural justice by not identifying evidence where [the Bank] decided that this lease was not now appropriate and made [Mr Blakeley] aware verbally that the lease could not be assigned thereby sending the business to the wall.

12.    The letter from [the Bank] dated 18 December 2013[.]

13.    [The Bank] has considered the allegations raised in your letter carefully. [The Bank’s] position is that your request for [the Bank] to consent to the proposed lease of the mortgaged premises was considered in accordance with [the Bank’s] procedure, initially by the banker, and on a second occasion by the Strategic Business Service Team, and there was nothing improper in [the Bank] declining to consent. See Third Affidavit Annexure HB-5 page 18.

14.    [The Bank] is referring mainly to two claims in [Mr Blakeley’s] letter of the 3 December 2013 and they are:

15.    [The Bank] and/or the manager of my accounts Mr Ming Chye have used their positions to take control of my former properties business affairs in contravention of their security documentation prior to any event of default by refusing to allow the sale of an existing business on site which would have serviced the bank's loans. See third Affidavit See Third Affidavit. Annexure HB-4 page 14.

16.    At the end of December 2012 I was aware of a pending problem as [the Bank] had informed me on various occasions that they would not accept a new tenant into the property so that we could maintain our payments to the bank. See Third Affidavit Annexure HB-4 page 15[.]

17.    In no.32 of His Honour erred in law, fact and natural justice failed to identify appropriate evidence in the Statement of Claim, evidence and Affidavits and is not mere assertion but supported by evidence.

18.    No. 34 His Honour identified deceptive and misleading conduct that is specifically identified at the end if my Statement of Claim and identified in my First Affidavit, Annexure HB-1 page 9 of Third Affidavit Being the Code of Banking Practice Page 25 no. 50 of Second Affidavit.

19.    Quiet enjoyment is identified in my Second Affidavit Page 26 Residential Tenancies Act and the fact that the NM interfered in security documentation to the detriment of [Mr Blakeley’s] business.

20    In the Third Affidavit [Mr Blakeley] pleaded:

21.    No. 45 His Honour erred in law and fact failed to see that the Trust document is prima faci [sic] evidence [Mr Blakeley] has authority to act as Trustee of the [Blakeley Family Trust]. See Annexure HB-8 Page 22[.]

22.    His Honour erred in Law and fact as there is no evidence supplied by the [Bank] that shows the Commonwealth or ASIC has a chose in action in my Trust whereas [Mr Blakeley] has asked ASIC for four years to take on the case but they have refused. See Third Affidavit Page 4 no. 7.

23.    ASIC web page says once a company is deregistered it ceases to exist as a legal entity. The legal proceedings, so far as they relate to the deregistered company, ended upon the company's deregistration. Anyone wishing to continue the proceedings against the company will need to have it reinstated. ASIC does not now assume conduct of the matter on behalf of the deregistered company. ASIC cannot execute any court document on behalf of the company.

24.    If the deregistered company is the plaintiff/applicant ASIC is not substituted as the plaintiff and will not pursue a cause of action on behalf of the deregistered company.

25.    See THORN DEVELOPMENTS PTY LTD V THORN, Supreme Court of Queensland, 11 June 2015[.]

26.    The Honourable Justice did not address the sale of the properties under price.

27.    I therefore say on evidence supplied that His Honour was not correct in his assessment and there is an arguable case for this matter to proceed to Litigation Assistance.

Orders Sought.

28.    That the judgement [sic] and orders of [the primary judge] dated 25 July 2017 be set aside.

29.    That this Honourable Court gives orders that the [applicants] be given a Certificate for Referral for Litigation Assistance.

OBJECTION TO COMPETENCY

24    The Bank initially objected to competency as no leave had been sought to file an appeal. The Bank did not object to my making an order treating the appeal as being an application for leave to appeal. I proceeded to treat the appeal as a draft and the appeal as an application for leave to appeal.

25    The Bank initially took exception to the unexplained delay in pursing the application, but ultimately focussed primarily on the merits of the application, contending that there was no appellable error.

THE PRINCIPLES

26    The task before the primary judge was to determine the Bank’s application under s 31A of the FCA which, relevantly, provides:

31A    Summary judgment

…

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is defending the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)    hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

…

(emphasis added)

27    In Wang v Anying Group Pty Ltd [2009] FCA 1500, Foster J said (at [43]):

The critical words of s 31A(1), when applied to the present case, require me to be satisfied that the respondents have “… no reasonable prospect of successfully defending the proceeding …”. The following principles may be extracted from the authorities:

(a)    The moving party does not have to demonstrate that the defence is hopeless or unarguable;

(b)    The Court must consider the pleadings and the evidence with a “critical eye” in order to see whether the respondent party has evidence of sufficient quality and weight to be able to succeed at trial (Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at [23] (p 382) (per Finkelstein J));

(c)    The respondent party is not obliged to present its whole case in order to defeat the summary judgment applicant but must at least present a sufficient outline of the evidence in order to enable the Court to come to a preliminary view about the merits for the purpose of considering the statutory test in s 31A(1)(b) (Jefferson Ford Pty Ltd 167 FCR 372 at [22] (p 382) (per Finkelstein J)); and

(d)    The test may require greater scrutiny of the pleadings and evidence in some cases than in others. In my judgment, the words of s 31A(1) compel a flexible approach. The real question in every case is not so much whether there is any issue that could arguably go to trial but rather whether there is any issue that should be permitted to go to trial. This seems to be the approach of Finkelstein J in Jefferson Ford Pty Ltd 167 FCR 372 and of Gordon J in the same case (as to which see [123]–[134] (pp 406–409)), although Rares J in that case at [73]–[74] (p 394) and in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720 esp at [45] (p 731) favoured a test which is much closer to the older test articulated in authorities decided under Rules of Court expressed in terms different from the language of s 31A(1)).

28    It is true that a party does not need to show that they will probably succeed at trial. Nonetheless, a ‘real prospect’ means the case must be stronger than merely arguable: JBS Southern Australia Pty Ltd v Westcity Group Holdings Pty Ltd [2011] VSC 476 per Croft J (at [44]). The object is to avoid the cost and time of proceeding to trial, rather than consuming almost equivalent costs in a summary judgment application.

29    In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372, Gordon J made the following observation (at [127]):

… No particular hard and fast rules can be set down, only general principles. One principle is that the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success (see Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328 at 333). As noted earlier, however, s 31A has lessened the standard that must be met. In that regard, it must be emphasised that once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion: see Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [22]. In other words, it is inappropriate in defence of a claim for judgment under s 31A of the Federal Court Act to seek to defend by merely putting a claimant to formal proof: Vans Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 at [12]. This is not a new concept. It finds earlier reflection in ss 190(4) and 191 of the Evidence Act 1995 (Cth) and O 33, 34 and 34B of the Federal Court Rules 1979 (Cth).

30    In the Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256 Reeves J (at [58]) noted the numerous judgments of this Court endorsing Gordon J’s observation.

31    The evidence in response to an application must, in form and content, descend to some admissible particularity in circumstances where the party moving for summary judgment has established, to a prima facie standard, that the opponent has no reasonable prospect of success. The onus shifts to the opponent to identify specific factual or evidentiary disputes to make a trial necessary. Generalised assertions will not be sufficient in that instance to defeat the summary judgment motion: see the discussions in Jefferson Ford per Gordon J (at [122]-[135]) and Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 per French J (at [20]).

32    Even under the old regime, which imposed a higher bar for obtaining summary judgment (White Industries Aust Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 per Lindgren J (at [50]-[60])), it was insufficient to defend an application for summary judgment by merely making vague assertions. Before, under the former Federal Court Rules 1979 (Cth), it was necessary for the deponent to place before the Court real evidence on which he or she relied, not assertions of general principle. The deponent was required to state clearly and precisely what the defence was and what facts were relied upon as supporting it: r 20.1 of the Federal Court Rules 1979.

EVIDENCE

33    The Bank relied upon an affidavit from its solicitors explaining the interlocutory steps taken. Nothing turns on this content.

34    Mr Blakeley, in this application (not in the hearing before the primary judge), filed an affidavit explaining (to the extent it was admissible) that:

(a)    he was self-represented. He said he suffered from a cognitive disability, making it difficult for him to concentrate and grasp new concepts quickly, which had affected his ability to clearly verbally state his legal position. When he filed his originating application, he was not aware that he needed to have evidence ‘at the ready’. He did not know what evidence he would be required to provide or have to have documents formally admitted as evidence. He was still trying to find counsel to represent him. On his attendance at Court for the hearing on the summary judgment application, he believed that the application had to do with his application for orders for a referral for legal assistance. He did not realise the legalities of summary judgment, nor that he would have to provide evidence and case law to back up his arguments. Although there was no application, he indicated in his affidavit that he sought the leave of the Court to submit further evidence that he now understands he should have referred to and adduced during the summary judgment hearing;

(b)    the Forebearance Deed should not be an absolute bar. This section of his affidavit was a submission, which was repeated in his written submissions;

(c)    his claim was, in fact, a personal injury claim. He made, what were essentially, submissions in relation to that aspect of his argument;

(d)    he has a:

strong case that it was the [Bank’s] actions when it would not allow him to sell the […] restaurant business and assign the lease to the incoming franchisee that led to his financial ruin and exacerbate[d] [his] cognitive disability.

(emphasis added)

35    At para 20 of his affidavit, Mr Blakeley said:

(a)    the bank officer verbally informed me that I could not sell the restaurant and assign a lease.

i.    The evidence that there was an existing lease is within the [Bank’s] Business Letter of Offer (dated 12 October 2011) and the letter from Peel Legal Barristers & Solicitors (dated 10 January 2012) who forwarded a signed copy of the lease to Liquor Licencing WA[.]

(b)    the bank manager knew that it was within my contemplation that I would sell the restaurant franchise business after establishing it, I expected to have enough sales to ensure the sale could proceed after about six months of operation. The Sales Report (for the period 19/12/2011 – 20/3/2012) shows that even without a liquor licence, the restaurant had an adjusted gross income of $269,800.00[.]

i.    A lender can be vicariously liable if an employee is negligent in their authorised conduct conduct; see Pacific Carriers Ltd v Banque Nationale de Paris [2001] NSWSC 900 - in that case the decision was overturned because the employee did not have the authority to sign the amended document; however, in my case, the bank officer had the authority and duty to inform me in writing of the [Bank's] decision in a reasonable amount of time. Since the refusal to allow me to assign the lease was not in writing I found myself hoping to be able to get approval and proceed with my original plan. Section 3.1(e) of the Code of Banking Practice states:

[We will] communicate with you and/or your representatives in a timely and responsible manner whether by written or electronic communications (including by telephone)[.]

36    Mr Blakeley noted that the Bank did not notify him in writing that it would not allow him to sell the business for some 18 months. He said that he also had a claim for loss of a chance since the Bank’s actions deprived him of an opportunity to make a second business a success. That business also failed and he was forced to close the restaurant to mitigate his losses. He repeats that his claim includes a claim for damages for stress and mental harm suffered because of the Bank’s actions.

THE BANK’S SUBMISSIONS

37    The Bank filed written submissions and also presented oral submissions at the hearing. As Mr Blakeley was unable to keep up with the Bank’s submissions made orally at the hearing, I permitted an adjournment of the hearing and provided the transcript to him to enable him an opportunity to respond in writing to the Bank’s submissions. Mr Blakeley, assisted by a Mackenzie Friend (who is, according to Mr Blakeley, a recently admitted solicitor), filed written submissions in opposition.

38    The Bank contends that whilst it is recognised that Mr Blakeley is a litigant in person and disappointed in the outcome, the applicants have failed to identify any legal, factual or discretionary errors in the primary judgment. As the Bank points out, the grounds of appeal affectively constitute a series of assertions that the primary judge erred in ‘fact, law and natural justice’ by failing to agree with the applicants’ arguments.

39    The Bank contends that the primary judge correctly identified the issues in the judgment, as outlined above, and then carefully evaluated the evidence (or absence thereof) before concluding that the claims did not have any reasonable prospects of success.

40    Further, the Bank contended that leave to appeal should not be granted as no substantial injustice would result if leave were sought and not granted. Specifically, the Bank argued that:

(a)    any claims Mr Blakeley had against the Bank were released by the Forebearance Deed;

(b)    Mr Blakeley does not have standing to pursue the claims for reasons found by the primary judge;

(c)    even if that were wrong, the right to bring proceedings against the Bank was not compromised by Mr Blakeley’s bankruptcy, if the Official Trustee in Bankruptcy considered that it was in the interest of creditors to bring proceedings against the Bank, it had the right to do so;

(d)    Mr Blakey’s bankrupt estate has now been fully administered and finalised; and

(e)    any claims PMHB had against the Bank:

(i)    on its own behalf vested in the Commonwealth; and

(ii)    on behalf of the Blakeley Family Trust vested in ASIC upon deregistration and, consequently,

cannot be pursued by Mr Blakeley, even if he is now the trustee of the Blakeley Family Trust.

41    In oral submissions the Bank, through counsel, expanded on those contentions. As to the grounds of appeal, the Bank, through counsel, distilled the apparent grounds of appeal and put forth submissions as to why each should fail.

42    The first ground was that the case was not suitable for summary judgment. Counsel touched on the difference between s 31A FCA and the previous regime considered by the High Court in Dey v Victorian Railways Commissioners (1949) 78 CLR 62. Counsel observed that the test in s 31A was held in Spencer v Commonwealth of Australia (2010) 241 CLR 118 per Hayne, Crennan, Kiefel and Bell JJ (at [53]), to depart ‘radically’ from the test considered in Dey, requiring a different inquiry from earlier procedural regimes.

43    In Spencer, there were questions of public, constitutional law and potential complex questions of fact. That was not so in this instance, according to counsel. The applicants had released all their claims made against the Bank pursuant to the Forebearance Deed and there was no evidence before the Court to suggest that the Forebearance Deed could not be relied upon. There was no evidence before the primary judge and there was no evidence before this Court (if it were admissible) to support any of the applicants’ contentions, according to counsel. The primary judge had conducted a very detailed analysis of the Forebearance Deed.

44    There was no evidence at all to support unconscionability at any time. Although the applicants relied on Blomley v Ryan (1956) 99 CLR 362, that was a case involving an elderly man of failing intellect who was debilitated by alcohol, who signed a contract at a substantial undervalue on terms that were unfair and concluded with undue haste. In that case, the counterparty was aware of the signatory’s condition and took advantage of it. There was no evidence at all before the Court to demonstrate such matters in the case of Mr Blakeley. Similarly, there was no evidence of economic duress, other unconscionability, or relationship that gave rise to a presumption of undue influence.

45    As to the alleged failure on the part of the primary judge to consider the argument of s 116(2)(g)(i) of the Bankruptcy Act, that Mr Blakeley’s chose in action did not become part of his bankrupt estate, counsel contended that it was unarguable for Mr Blakeley to contend that the loss he suffered constituted a ‘personal injury or wrong’ on the authorities cited by the primary judge.

46    As to the complaint that the primary judge incorrectly held that Mr Blakeley did not have standing to bring the action, counsel submitted that there was no evidence at all to demonstrate that Mr Blakeley was relevantly authorised.

47    As to the allegations regarding the conduct of the Bank in relation to provision of the facilities and enforcement of the securities, there was no evidence supplied at any time in the application before the primary judge.

48    In addition, as counsel observed, and correctly in my view, the applicants also sought to raise further claims not raised in the initial proceedings of unlawful interference with trade and business and loss of a chance to run an independent second business. Again, at no stage was any admissible evidence supplied to support any of those claims.

49    In relation to the applicants’ claim for damages for stress and mental harm because of the Bank’s actions and ongoing cognitive impairment, again, there was no evidence in support of that claim whatsoever.

MR BLAKELEY’S ARGUMENTS

50    Mr Blakeley’s written submissions, filed with leave after the hearing, were:

…

2.    The legal standard imposed by most jurisdictions requires that in order for a summary judgment be granted by the court, the party moving for summary judgment must demonstrate that there are "no genuine issues of material fact"[.]

3.    The [Bank] repeatedly said there was no evidence which if applied contradicts the moving party's version of the facts. See evidence in Affidavit 16 June 2017.

4.    Senior counsel and counsel have scrutinised the Statement of Claim and have come to the conclusion that a prima facie case exists because of certain actions and inactions that constitute unconscionable conduct including deceptive and unfair conduct.

5.    This case and the Forbearance Deed would not exist if it wasn't for the inactions and the actions of the [Bank] that required [Mr Blakeley] to shut the businesses and [Mr Blakeley] to go bankrupt thereby creating a condition where all dealings of [Mr Blakeley] with the [Bank] were done under extreme pressure being duress/undue influence in an endeavour to survive. See evidence in Affidavit 16 June 2017.

6.    This conduct is identified in specific evidence filed in this action being Affidavit WAD75/2017 1-9 filed l6 June 2017[.]

7.    Documented evidence of an attempt to alter security conditions. See Affidavit 16 June 2017.

8.    The [Bank] will notice in their security documentation in Additional Covenants and Undertakings the following obligation that was fulfilled; "Within thirty days of the first drawdown, a copy of the signed leased agreement for 81 Mandurah Terrace, Mandurah between the HTJB Family Trust and the [Blakeley Family Trust] is to be provided and is to reflect a minimum lease term, inclusive of renewal option, of no less than ten years".

9.    This covenant and undertaking was tested in evidential letter dated 18 Dec 2013 in response to evidential letter dated 3 Dec 2013. See affidavit 16 June 2017.

10.    There is an action failure by the [Bank] to help [Mr Blakeley] as required by the Banking Code of Practice identified in affidavit 22 February 2017 No. 30 - 36.

11.    The most significant features of the Banking Code of Practice form part of the contract between the bank and its customer (clause 10.3) where banks will be contractually bound by the Code provisions and potentially liable in damages for any breach.

12.    Section 12CC of the Australian Securities and Investment act 2001 Cth) [sic] sets a different threshold test to the Code by prohibiting unconscionable conduct towards businesses in the context of the supply of financial services by the Court in relation to an application for relief under this Act.

13.    The test is whether the [Bank] adversely altered the Applicants business position and personal life detrimentally by the use of unconscionable conduct or other by contravening the laws and conduct. See evidence in affidavit 16 June 2017.

14.     There is evidence to show that the [Bank] repossessed the property prior to default and identified only one property. See evidence in Affidavit 16 June 2017.

15.    Had the [Bank] interfered in the property prior to default? See evidence in affidavit 16 June 2017.

16.    The [Bank] wrote to [Mr Blakeley] saying they were going to perform certain actions but instead took possession of the property(s) as identified in evidence in Affidavit 16 June 2017.

17.    Does this letter of undertaking nullify the possession and default letter and is it unlawful conduct? See evidence in Affidavit 16 June 2017.

18.    Why [the HTJB Family Trust] wasn't addressed in [primary judge’s] Judgement.

19.    Why the sale of the property wasn't dealt with in the judgement.

20    It is important to note that a document created to hide unlawful acts cannot be valid.

21.    I believe an argument can be made that the Forbearance Deed amounts to an unfair contract under the ASIC Act 2001 12BG (1) (c) (2) (c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on) signed under duress/undue influence and other that the [Bank’s] arguments reinforce the Applicants position with regard to the ASIC Act above.

22.    If a person goes from being a business person to a bankrupt as a direct result of unlawful acts in evidence then they have legal redress. See evidence Affidavit 16 June 2017. ·

23.    His Honour erred in Law, Fact and Natural Justice in that [Mr Blakeley’s] action is for personal injury and wrong damages which he retains under the Bankruptcy Act sec. 116 2 (g) (i) and does not become part of any Bankrupt Estate.

(g)    any right of the bankrupt to recover damages or compensation:

(i)    for personal injury or wrong done to the bankrupt, the spouse or de facto partner of the bankrupt or a member of the family of the bankrupt; recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person;

24.    The [Bank’s] counsel asked for the ASIC letters and was given them at the previous hearing.

ASIC's position in their letter.

25.    "ASIC has no direct knowledge of the specific circumstances or background of this matter." Letter dated 30 August 2017.

26.    "ASIC does not intend taking any steps on behalf of the company to assert, exercise, enforce or waive any rights the company may have. If the· company itself wishes to do so, the former officeholders must firstly reinstate the company. A copy of this letter may be provided to the Court so it is aware of ASIC's position."

27.    "On the strict understanding that no orders are sought against, or directly affecting, ASIC/the Commonwealth does not wish to be heard and does not wish to be joined as a party to the proceeding. Again, a copy of this letter may be provided to the Court so that it is aware of ASIC's position."

Precedents applicable in Affidavit filed 15 May 2017

28.    In Violet Home Loans Pty Ltd v Schmidt (2013) 93 ACSR 205;[2013] VSCA 56, the Court of Appeal of Victoria (Warren CJ, Cavanough and Ferguson AJJA) also considered an appeal by a mortgage originator in a case that also involved a borrower and a fraudulent intermediary. The Court agreed (at [58]) with Hargraye J in Director of Consumer Affairs Victoria v Scully (No. 3) [2012] VSC 444 at [31] that: "[T]he conduct in question must be more than negligent. It will usually involve some deliberate wrongdoing, although there may be cases where recklessness will suffice. For example, cases involving wilful blindness. Ultimately, as the cases demonstrate, each case must depend on its own circumstances and the court must make a value judgement as to whether to characterise the conduct with "the opprobrium of unconscionability”.

29.    In Scully (No. 3), as the Court of Appeal noted, Hargrave J rejected a contention by the Director that "moral obloquy" is not required. Before distinguishing the facts from those in Tanto, the joint reasons proceeded to state (at [59]) that: "In our view, little is to be gained by a close factual analysis of the myriad of cases that have considered whether particular conduct was unconscionable. While there are sometimes factual similarities between the cases, inevitably there are differences. Similarly, we do not find it of assistance to consider whether conduct is unconscionable simply because of the type of lending that is involved, for example, asset based lending. Rather, the task requires a more synthesised approach which takes into account all of the facts relevant to the impugned conduct and determines whether, in all the circumstances; that particular is unconscionable" (emphasis added).

30.    The Full Court of the Federal Court handed down its decision in ACCC v Lux Distributors [2013] FCAFC 90. s 21 of the ACL, Allsop CJ (at [23]) observed that: If, as the Court of Appeal has said, "little is to be gained by a close factual analysis of the myriad of cases"; and if, as Allsop CJ and French J have said, the provisions now contained in ss 21 and 22 and ss 12CB and CC prescribe "a standard rather than a rule" which is a "normative standard of conscience''; and if one must search Forebearance Deed and find "moral obloquy" or "moral turpitude" in the conduct of a prospective defendant.

31.    [The Bank’s counsel] at 30 of the transcript said that [Mr Blakeley] would like the case reviewed on its merits which is correct as my Appeal Document identifies the discrepancies in [the primary judge’s] Judgement as evidence in affidavit 16 June '2017 was not identified and trialable issues of fact ignored.

32.    In my Outline of Arguments I mention at the end I also rely on the filed Appeal document that takes into account evidence filed 16 June 2017.

33.    I have supplied extract evidence in Affidavit l6 June 2017 that shows that a trustee is appointed that should have alerted His Honour that a Deed must exist.

34.    His Honour said to [the Bank’s counsel] "Just-you've said several times that no evidence was put forward, but really this is a summary judgement application. The ·point is that your submission is that no evidence was put forward before the primary judge to which [the Bank’s counsel] replied that is correct and .... "

35.    This is an attempt by the [Bank] to mislead the court again as happened where the [Bank] said ASIC had the "chose of action" and was taken as fact by the court even though the [Bank] presented no evidence to show this to be so.

36.    [The Bank’s counsel] at 15 of the transcript said again there was no evidence to show the Forbearance Deed was unconscionable but again this is misleading the court as evidence exists. See evidence in affidavit 16 June 2017.

37.    At 40 of the transcript [the Bank’s counsel] .. believed the "[Bank] was acting within their rights" saying she hasn't seen evidence. See evidence in affidavit 16 June 2017.

38.    [Mr Blakeley] believes if evidence was applied in the initial hearing it would show how and why I reached my conclusions in contrast to that of [the primary judge].

39.    There are also significant trialable issues of fact that have been ignored by the first Judge and the [Bank] identified herein then summary judgement [sic] must be denied as to the cause of action.

40.    So I say in summary [the Bank’s counsel’s] submission is flawed as vital evidence and trialable issues were ignored in an endeavour to obtain a favourable outcome for the [Bank].

(emphasis in submissions)

CONSIDERATION

51    It is to be noted first that leave to appeal is usually to be determined on whether there was an error on the evidence and materials before the primary judge. Even if there were an appellable error in this case (and there is not), it is not open, absent leave being given, to rely on subsequent evidence as to, for example, duress. It was not before the primary judge. Given that Mr Blakeley is a litigant in person, I have tried to take a lenient view as to the rules and the law, but not so as to prejudice the Bank, which did not initiate this litigation. I would treat the additional ‘evidence’ filed by Mr Blakeley as being evidence he would seek to adduce in the appeal and as being ‘evidence’ that he did not know he should adduce in the original application. But even then, it is clear that the evidence goes nowhere near satisfying the tests discussed above in relation to resisting summary judgment, which relies primarily on the Forebearance Deed and the issues concerning Mr Blakeley’s standing. Moreover, in many instances it is inconsistent with the established facts.

52    As is apparent from the materials, contrary to the contentions raised by Mr Blakeley, Mr Blakeley chose to seek bankruptcy by his own petition. There was no admissible evidence whatsoever to support a submission that the Bank ‘required’ him to enter into bankruptcy, nor is there evidence or an explanation as to why the Bank would ‘seek that he enter into bankruptcy’. In fact, Mr Blakeley was made bankrupt on 9 August 2013, some six months, after entry into the Forebearance Deed and eight months after the business closed. The Forebearance Deed was executed on or about 5 March 2013 and varied in April and May 2013. The business ceased trading on December 2012. In those circumstances, it is impossible to conclude that the Forebearance Deed was the cause of either the closure of the business or Mr Blakeley’s bankruptcy. By the time of execution of the Forebearance Deed, both those events had already occurred. More importantly, by that argument, the Bank gave greater, not lesser latitude to Mr Blakeley.

53    Mr Blakeley contends that there is evidence to show that the Bank repossessed the property prior to default and ‘identified only one property’. He refers to his affidavit of 16 June 2017, before the primary judge. This proposition is inconsistent with the Forebearance Deed, as by cl (3)(a) of the Forebearance Deed, the applicants acknowledged that they were in default of (all) the facilities and securities and continued to be in default.

54    At the time of entering into the Forebearance Deed, the applicants were still in possession of ‘Secured Property’. This is evidenced by cl 7 of the Forebearance Deed, requiring the applicants to maintain the Secured Property and allow the Bank access on notice.

55    Mr Blakeley contends that there was unconscionable conduct by the Bank in the sense addressed in the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and/or the Banking Code of Practice. This is now in addition to other claims of unconscionability, duress etc. This was a mere allegation without any admissible evidence or logical, probative material to support it. The primary judge was clearly correct to reject contentions of unconscionability, which were both contrary to such evidence as there was before him and unsupported by any form of other admissible evidence.

56    Further, I accept the Bank’s submission that in addressing the matters outlined in s 12CC of the ASIC Act (being the matters the Court may have regard to for the purposes of s 12CB of the ASIC Act), the following matters are relevant:

(a)    the Forbearance Deed was in plain English and clearly drafted. The operative clauses comprised only nine pages;

(b)    the Forbearance Deed was entered into and varied at the request of the applicants;

(c)    there was no admissible evidence the Bank exerted undue pressure or influence in order to coerce the applicants to sign Forbearance Deed or otherwise. The applicants acknowledged at cl 3(j) that they entered into the Forbearance Deed willingly, after having first obtained independent advice and having independently assessed the document;

(d)    there was no admissible evidence that the Bank employed unfair tactics in its dealings with the applicants either in relation to the Forbearance Deed, or at all. Indeed, the impression is to the contrary as the Bank provided concessions to the applicants including allowing them additional time to repay the debt, and applying a lower default interest rate;

(e)    one of the purposes of the Forbearance Deed was to allow the applicants time to obtain financial services from another supplier;

(f)    there was no admissible evidence that the Bank did not comply with the Banking Code of Practice;

(g)    the Bank did not seek to conceal its intended conduct if the applicants breached the Forbearance Deed. Clause 8 sets out the consequences of a failure to comply with the terms of the Forbearance Deed or to repay the amount outstanding within the agreed timeframe;

(h)    the Forbearance Deed was tailored to the circumstances of the applicants and the Forbearance Deed was varied on two occasions to allow the applicants additional time to comply;

(i)    the Forbearance Deed could not be unilaterally varied; and

(j)    there was no admissible evidence to suggest that the Respondent did not act in good faith.

57    Over and above these observations, there is a further difficulty in that the Forebearance Deed is not an ‘unfair contract’ within the meaning of s 12BG of the ASIC Act because the unfair contract provisions apply only to consumer contracts and small business contracts. The Forebearance Deed could not be considered a consumer contract because the facilities, securities and guarantees to which it relates were not acquired wholly or predominantly for personal, domestic or household use or consumption as required by s 12BF(3) of the ASIC Act. Further, it is not a ‘small business contract’ because the facilities advanced exceeded $1 million, being the upper limit for small business contracts designated by s 12BF(4) of the ASIC Act. Further, the Forebearance Deed was entered into in March 2013 and varied in April and May 2013. The provisions of the ASIC Act relating to standard form contracts with small businesses only applied to contracts entered into on or after 12 November 2016 or terms which were varied after that date. This is clear by s 290A of the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth).

58    Mr Blakeley, perhaps with assistance, has merely catalogued a list of prospective defences for debtors in such circumstances and has, to a limited extent, attempted to outline the law which applies to such defences, but nowhere at all was there, or is there now, admissible evidence to support any such defence. The Forebearance Deed is self-explanatory and was closely assessed by the primary judge, as were the other claims and bare assertions made by Mr Blakeley.

59    One can readily accept that the events surrounding certain business facilities have resulted in stress and dissatisfaction on Mr Blakeley’s part, but this does not mean that the Bank was the cause of these problems. The timeline would suggest quite to the contrary. The Bank did, in fact, clearly ‘forbear’, but in return, Mr Blakeley gave up any right to pursue actions such as the one from which he presently seeks to appeal. There is no evidence that his cognitive impairment (assuming he suffers from such condition) meant that he did not understand the terms and effect of the Forebearance Deed, which was concise and clearly expressed. Further, the other conclusions by the primary judge as to the Bankruptcy Act and Mr Blakeley’s standing in relation to the Trusts were clearly correct and preclude any cause of action.

CONCLUSION

60    An appeal from the primary judge’s decision has no prospect of success and the application for leave to appeal must be dismissed with costs.

Associate:

Dated:    31 May 2018