Federal Court of Australia

Clark v Registrar of Titles (No 3) [2026] FCA 1556

ORDERS

THE COURT ORDERS THAT:

1.    The application against the first respondent is dismissed pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth).

2.    There is liberty to the first respondent to apply as to costs of the proceedings.

3.    As to the proceedings against the second respondent, the show cause hearing is adjourned until 10.15 am on 2 December 2026.

4.    On or before 24 November 2026, the applicant shall file and serve any further affidavit or submissions for the purposes of the show cause hearing. Any submissions shall be no more than 10 pages in 12 point font and 1.5 line spacing.

5.    A certificate for legal assistance issue for the applicant. The certificate shall be for legal assistance to advise the applicant as to whether there is a proper basis for a claim of the kind she has alleged and, if so, to assist the applicant in formulating her claim in appropriate terms.

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

REASONS FOR JUDGMENT

COLVIN J:

1    In 2007, Ms Susan Clark mortgaged her home to the Commonwealth Bank of Australia. Some years later, Shada Pty Ltd, a company controlled by Ms Clark, purchased a property as an investment. Shada borrowed funds from the Bank to purchase the property. Ms Clark agreed to guarantee the borrowings by Shada. She also agreed that the existing mortgage over her home would be provided as security for the borrowing by Shada. The precise circumstances in which those events occurred are unclear. They are not yet the subject of evidence. However, Ms Clark has indicated the nature of certain claims that she seeks to make concerning her dealings with the Bank at the time she agreed to the arrangements for the guarantee. As will emerge, those claims assume significance for present purposes.

2    Ms Clark has commenced proceedings in this Court in which she seeks an injunction restraining the Registrar of Titles from transferring the property that is her home. In effect, she seeks relief that would prevent the Bank from effecting a sale of the property pursuant to the mortgage. The Registrar will abide by the outcome of the proceedings. The Bank, having been joined as a party, actively defends the proceedings. The legal basis for Ms Clark's application is obscure. Consequently, orders were made requiring Ms Clark to show cause as to why the proceedings should not be dismissed on a summary basis. The purpose of the hearing was to afford Ms Clark, who is conducting the proceedings as a litigant in person, to identify the basis for her claim. If no basis was articulated then the proceedings would be summarily dismissed. The Bank was excused from appearing at the show cause hearing.

3    Ms Clark has filed a number of affidavits in the proceedings each of which was received for the purposes of the show cause hearing. Ms Clark also filed written submissions. During the oral hearing, Ms Clark was given an opportunity to explain the nature of the factual basis for her complaint about the Bank's conduct. What emerged was an acceptance by Ms Clark that there had been a determination in proceedings in the Supreme Court of Western Australia that she was liable as a guarantor of the loan to Shada. However, Ms Clark alleged that the circumstances in which she had agreed to enter into the guarantee and provide the security over her home for the guarantee had been unfair or improper. She described the Bank's conduct as involving some form of unconscionable conduct or a breach of duty by the Bank in relation to its credit assessment methods.

4    As I will explain, the claims made by Ms Clark lacked the precision required in articulating the basis for a claim against the Bank. Nevertheless, they indicated the possible basis for a claim. In those circumstances, I am persuaded that Ms Clark should be afforded a further opportunity to articulate the factual and legal basis for her alleged claims against the Bank. I am also persuaded that it would be appropriate to issue a certificate for bro bono legal advice to advise Ms Clark as to whether there is a proper basis for a claim of the kind she has alleged and, if so, to assist Ms Clark in formulating her claim in appropriate terms. For that reason, I propose to adjourn the show cause hearing insofar as it concerns the Bank. At the adjourned hearing, Ms Clark will be afforded a further opportunity to explain the basis for her claim. In that regard, it will be necessary for the factual basis for that claim to be explained either by affidavit or by a form of statement of claim. Those factual matters must be shown to be sufficient to support an arguable legal basis for a claim that would impugn the Bank's mortgage.

5    However, as there is no evident basis for the claim against the Registrar, I will order that the proceedings against the Registrar are dismissed with liberty to apply as to costs.

6    To explain my reasons for these conclusions, it is necessary to begin with the previous proceedings between Ms Clark and the Bank.

Previous proceedings

7    The Bank brought proceedings in the Supreme Court of Western Australia in which it obtained summary judgment against Ms Clark in respect of an amount of almost $550,000 plus interest, being the balance due under the loan to Shada as well as an order for possession of the property that is Ms Clark's home: Commonwealth Bank of Australia v Shada Pty Ltd [2025] WASC 200 (Gething J): at [61]. An appeal by Ms Clark was dismissed: Clark v Commonwealth Bank of Australia [2025] WASCA 127 (Mitchell and Vaughan JJA). In those proceedings, one of the defences raised by Ms Clark was based on the alleged application of the National Credit Code (as brought into effect by the National Consumer Credit Protection Act) to the borrowing. As to that claim, it was determined that the Code did not apply to the borrowing by Shada or to the agreement by which Ms Clark agreed to guarantee the obligations of Shada and provide her home as security for those obligations by the terms of the mortgage already granted: Commonwealth Bank of Australia v Shada Pty Ltd at [37]-[48] and Clark v Commonwealth Bank of Australia at [23]-[35].

8    Ms Clark then brought proceedings in this Court. In those proceedings she was legally represented. She again sought to rely upon the provisions of the Code. She also claimed that there had been misleading and deceptive conduct by the Bank in combining investment credit and residential credit into one credit arrangement. In effect she claimed that she had been misled into believing that the Code applied to the borrowing by Shada, even though it was for investment purposes. She also advanced a claim that there was a requirement that the loan agreement be registered in order for the mortgage to be enforceable as to the borrowing by Shada.

9    The Bank brought an application for summary judgment. The main basis for its application was the principles of estoppel and abuse of process. The Bank's application was upheld and the proceedings were dismissed: Clark v Commonwealth Bank of Australia [2026] FCA 940. In the reasons for upholding the summary judgment application, the defences advanced by Ms Clark in the Supreme Court proceedings were summarised in the following terms (at [6]):

(1)    The Bank did not claim to be the true lender of the money;

(2)    The Bank could not enforce the agreements the subject of the action as it had not complied with the National Credit Code which was said to apply to the loan agreement and the guarantee;

(3)    The Mosman Park Mortgage could not be enforced as the Bank had not complied with provisions of the Transfer of Land Act 1893 (WA) (it being unclear as to which of the Act's provisions were said not to be complied with);

(4)    The debt the subject of the Bank's claim could not be enforced because it has not been registered in the Personal Property Security Register, being a register maintained pursuant to the requirements of the Personal Properties Securities Act 2009 (Cth).

10    Therefore, neither in the Supreme Court proceedings nor in the previous proceedings in this Court was any claim raised which addressed the circumstances in which Ms Clark came to enter into an agreement by which the mortgage over her home came to be applied to the borrowing by the Shada. The position of the Bank as to the defence based upon the application of the Code was that the Code did not apply. As that position was upheld, the issue of compliance with the Code did not arise and was not adjudicated. Consequently, without determining whether principles of estoppel and abuse of process may apply to attempts by Ms Clark to now raise claims based upon the nature of those dealings, there is at least room for the possibility of argument as to whether those principles would apply to the kinds of claim that Ms Clark now seeks to advance.

The nature of the claims that Ms Clark seeks to raise

11    As presently formulated, Ms Clark's application seeks to claim that the Code applies to the mortgage in some way that means that there cannot be any dealing registered by the Registrar based on the mortgage. due under the mortgage. At the show cause hearing, Ms Clark did not seek to support a claim of that kind. That was a prudent course. Rather, Ms Clark focussed upon the requirement to consider whether there was no reasonable prospect of her successfully prosecuting her proceeding, an inquiry that was to be distinguished from whether the terms in which her case was pleaded were deficient: Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [22]-[23] (French CJ and Gummow J) and at [41] (Hayne, Crennan, Kiefe and Bell JJ). It is also necessary to bring to account the need for exceptional caution in exercising the power to summarily dismiss a proceeding.

12    Broadly speaking, Ms Clark maintained that she was entitled to a form of injunctive relief that would prevent the Bank from registering any transfer of her home based upon the mortgage applying to her guarantee of the debt. Her contentions focussed upon the circumstances in which her agreement to the guarantee (and the provision of the mortgage as security for her guarantee obligation) had been obtained.

13    Before considering those submissions, I emphasise that they were advanced at a hearing where the Bank was not present and they concern allegations to which the Bank has not been afforded an opportunity to respond. They were, in effect, the matters that Ms Clark now sought to rely upon as the basis for her claim. The matters advanced by Ms Clark in submissions to support her claim included the following:

(1)    In 2005 (two years before entering into the loan agreement for her home), Ms Clark had purchased an investment property in Mandurah;

(2)    Ms Clark borrowed funds from the Bank to purchase the property in Mandurah;

(3)    In 2006, Shada purchased an investment property in Karratha;

(4)    Shada borrowed funds from the Bank to purchase the property in Karratha;

(5)    In 2007, Ms Clark purchased her home, again borrowing funds from the Bank;

(6)    In 2009, Ms Clark sold the Mandurah property at a profit;

(7)    The Bank refused to discharge its mortgage over the Mandurah property unless additional funds were provided to the Bank;

(8)    The Bank's position was based upon a fall in the loan to value ratio for the Karratha property;

(9)    The Bank required $100,000 in additional funds at that time and offered a credit card with a limit of $50,000;

(10)    The Bank's position delayed settlement on the Mandurah property and caused Ms Clark to incur penalty interest on that dealing;

(11)    Ms Clark was overseas and under pressure to settle the sale of the Mandurah property;

(12)    Ms Clark borrowed funds from other sources to provide the funds required by the Bank to allow the settlement of the sale to proceed 'knowing full well I'd have to pay that money back four months later';

(13)    Some four months after the settlement of the sale of the Mandurah property, Ms Clark entered into a refinancing transaction which included the guarantee secured by the mortgage over her home;

(14)    Ms Clark makes allegations about the way in which loan to value ratio information was presented to her at the time and about demands said to have been made by the Bank at the time to the effect that it would sell the Karratha property if there was no refinancing; and

(15)    Ms Clark says that the refinancing left her in a position where she was liable to make repayments that she could not afford and her financial circumstances were known to the Bank at the time.

14    In addition, Ms Clark makes an allegation that the Bank had agreed to comply with the Code of Banking Practice when it came to the guarantee. She alleges that there was a failure to conform to the Code of Banking Practice when it came to the extent of her liability to make repayments.

15    Ms Clark says that she has a basis for a claim that the Bank has engaged in unconscionable conduct in connection with the supply of financial services contrary to s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth). She also seeks to invoke the principles of unconscionable conduct in equity.

16    In her written submissions, Ms Clark placed particular reliance upon the reasoning in Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 276 CLR 1 which concerned a type of lending known as asset-based lending which was based entirely on the value of assets securing the loan rather than an assessment of the capacity of the borrower to meet repayments. The appellant had been the guarantor of a corporate borrower advanced funds on an asset-based lending transaction. There was a dangerous nature to the lending because of the prospect of resort to the properties secured (including those of the guarantor) in order to secure repayment when there was a failure to meet repayments by a borrower who had no demonstrated capacity to meet those repayments.

17    In that case, Keifel CJ, Keane and Gleeson CJ found that the unchallenged findings by the primary judge as to the extent to which the individual conducting the lending for the respondents knew and appreciated that the loans were dangerous from the appellant's point of view and suspected that the appellant did not truly receive independent advice had significance for the claim of unconscionable conduct in equity. In those and other circumstances relating to the appellant's financial naivete, their Honours found that 'the conduct on behalf of the respondents amounted to the unconscientious exploitation of the appellant's special disadvantage' and it was not necessary to consider whether the appellant also succeeded pursuant to s 12CB: at [43]-[52]. Gordon J agreed with their Honour's conclusion, but also found that the conduct was unconscionable contrary to s 12CB: at [94]. Steward J upheld the appeal on the basis that the respondents were unable to rely upon the certificates of advice that had been provided as part of the system of lending and that equitable relief from the unconscionable conduct should have been granted: at [173].

18    The analysis in that case shows that claims of unconscionable conduct in equity or pursuant to s 12CB are highly factually dependent. They may be established in circumstances where the lender knows that the corporate borrower does not have access to funds to meet the required repayments, the guarantor does not have access to its own funds to meet repayment obligations, the guarantor is providing security over the guarantor's home, the guarantor is financially unsophisticated and the guarantor has not received independent advice. I express no view as to whether these matters may be established in the present circumstances. However, the matters to which Ms Clark referred to in her oral submissions point to the possibility of a claim of that kind.

19    In addition, she made the following written submission:

The present circumstances requiring investigation include that:

(a)    the corporation not the Applicant personally, was the borrower;

(b)    the Applicant personally guaranteed the corporate debt;

(c)    the refinanced and further increased corporate facility substantially refinanced the Second Respondent’s existing exposure;

(d)    its own contemporaneous guarantor material identifies both information available and information absent;

(f)    the actual servicing assessment has not presently been identified; and

(g)    later sale of the investment property was materially concerned with LVR and collateral value.

20    As matters presently stand, it is not possible to evaluate whether there is no reasonable prospect of Ms Clark successfully prosecuting a proceeding based upon alleged unconscionable conduct. In order to evaluate whether Ms Clark does have a claim of that kind it will be necessary for an affidavit to be provided setting out the factual circumstances upon which reliance is to be placed or for a verified form of pleading to be filed specifying the material facts.

21    Given Ms Clark's status as a litigant in person and her lack of understanding of the precise procedural requirements that must be met at a show cause hearing, I consider it appropriate to adjourn the show cause hearing to afford that opportunity and for a pro bono certificate to issue to see whether legal advice may be available to assist Ms Clark to that extent.

22    Ms Clark also relied upon the reasoning in Doggett v Commonwealth Bank of Australia [2015] VSCA 351 to support a claim based upon an alleged failure to meet the standard of care and skill required of a diligent and prudent banker by the Code of Banking Practice. As to whether there may be a separate basis for some form of claim that there was a failure to meet an obligation that formed part of the guarantee which required the Bank to comply with the Code of Banking Practice, a claim of that kind would depend upon the terms of the guarantee. Those terms were not the subject of evidence or submissions in the present proceedings. If that aspect is to be pursued by Ms Clark then further details would be required to support a contention that there was a reasonable basis for a claim of that kind.

23    Otherwise, I record that some other aspects of Ms Clark's written submissions may be readily disposed of when it comes to whether they might be the basis for a claim that her proceedings had prospects.

24    First, Ms Clark sought to distinguish between her original borrowing in 2007 and the subsequent borrowing by Shada. She contended that her personal home loan had not been adjudicated as a separate loan transaction. That may be so. However, the Bank has not sought possession of Ms Clark's home based upon her personal loan. Rather, it has relied upon the guarantee by Ms Clark of the debt owed by Shada and a claim that the liability under the guarantee is secured by the mortgage. In order for Ms Clark to obtain relief that would prevent the Bank from exercising its rights under the mortgage, she needs to demonstrate an arguable basis for a claim that would impugn the aspect of her dealings with the Bank that gave rise to the provision of the mortgage as security for borrowings by Shada.

25    Second, Ms Clark relied upon the decision in Perpetual Trustees Victoria Ltd v Tsai [2004] NSWSC 745 which distinguished between the mortgage and the obligation which it secures. In effect, it was said that a mortgage that was void could not be enforced according to some aspect of the reasoning in Tsai. It was also submitted that the mortgage did not have 'a charging instrument or annuity as per Tsai'. Significantly, it was not suggested that monies were not advanced to Shada. In those circumstances, I do not understand how the reasoning in Tsai might provide the foundation for a claim against the Bank to the effect that the mortgage is not enforceable as security for the guarantee given by Ms Clark.

26    Third, respectfully claims in the written submissions that referred to the provisions of the Transfer of Land Act 1893 (WA) provided no intelligible foundation for a cause of action against the Bank.

27    Finally, no basis has been demonstrated for the claim against the Registrar. Any claim against the Bank based upon alleged unconscionability or alleged failure to conform with the Code of Banking Practice would be a claim to relief against the Bank which would have consequences for the enforceability of the mortgage. However, there is no demonstrated or suggested arguable basis for a claim against the Registrar. There is no suggested basis upon which the Registrar might be required, independently of success by Ms Clark against the Bank, to take some action in respect of registration of dealings on the title to Ms Clark's home. The only relief for which there is suggested to be the possibility of an arguable basis is relief against the Bank. I regard the Registrar as defending the proceedings for the purposes of s 31A of the Federal Court of Australia Act 1976 (Cth) even though the Registrar does not actively oppose the orders sought. That is because the Registrar does not concede the claim. As no basis for the claim against the Registrar has been demonstrated, the proceedings against the Registrar should be dismissed. Even though the Registrar has indicated a willingness to abide by the outcome, there is the prospect that some costs have been incurred in considering the claims made by Ms Clark and in responding to them. I will reserve liberty to the Registrar to apply in relation to costs.

Associate:

Dated:    20 October 2026