Supreme Court Rejects Application to Strike Out Claims

The court dismissed the defendant's application to strike out certain paragraphs of the claim and allowed the striking out of others in the claim, finding that some paragraphs presented valid causes of action while others did not.

[NAME]: [COMPANY] (in liq) v [COMPANY] [2024] NSWSC 252 Hearing dates: 7, 28 September 2023 and 31 October 2023 Date of orders: 15 March 2024 Decision date: 15 March 2024 Jurisdiction: Equity - Real Property List Before: McGrath J Decision: See [153]–[154] Catchwords: CIVIL PROCEDURE — Pleadings — Striking out —[NAME] estoppel — no reasonable cause of action or defence — tendency to cause prejudice, embarrassment or delay Legislation Cited: Civil Procedure Act 2005 ([NAME]) [NAME] Act 2009 (Cth) Uniform Civil Procedure Rules 2005 ([NAME]) Cases Cited: [COMPANY] v [COMPANY] [2022] NSWSC 1156 [COMPANY] v [COMPANY] (No 2) [2022] NSWSC 1608 [COMPANY] v [COMPANY] (1992) 111 ALR 631 [NAME] v [NAME] [2023] NSWSC 21 [NAME] (1981) 147 CLR 589 [COMPANY] (in liq) v [NAME] (2016) 259 CLR 212; [2016] HCA 44 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 [NAME] v [NAME] (No 2) [2023] NSWSC 1354 Watiwat v Dixon [2017] NSWSC 360 Category: Principal judgment Parties: [COMPANY] ([NAME] and Manager Appointed) (In Liquidation) (ACN 614 700 195) (First Plaintiff/First [NAME]) [NAME] in his capacity as [NAME] and manager of [COMPANY] ([NAME] and Manager Appointed) (In Liquidation) (Second Plaintiff/[NAME]) [COMPANY] (Received and Manager Appointed) (ACN 618 821 837) as trustee for the [COMPANY] (Defendant/[NAME]) Representation: Counsel: [redacted] [NAME] (Solicitor - Defendant/[NAME])

Solicitors: [redacted] [COMPANY] (Defendant/[NAME]) File Number(s): 2023/00042678 Publication restriction: Nil

JUDGMENT

INTRODUCTION 1. These proceedings have been brought by the first plaintiff, [COMPANY] ([NAME] and Manager Appointed), and the second plaintiff, [NAME] in his capacity as [NAME] and manager of [NAME] ([NAME]), against the defendant, [COMPANY] ([NAME] and Manager Appointed) as trustee for the [COMPANY].

2. These proceedings follow on from an ex tempore judgment delivered by Parker J on 29 August 2022 in earlier proceedings brought by [NAME] against [NAME] (Earlier Proceedings), for which written reasons were subsequently published on 14 September 2022: [COMPANY] v [COMPANY] [2022] NSWSC 1156 (Liability Judgment).

3. The basal facts underlying the dispute between the parties in these proceedings and the Earlier Proceedings as recited in the Liability Judgment are as follows: 1. [NAME] carried out lending operations at high interest rates to borrowers as part of the business ventures of [NAME], which also included a company called [COMPANY].

2. In May 2017, [NAME] was incorporated on the instructions of [NAME], with [NAME]'s nephew ([NAME] Al [NAME], who subsequently changed his name to [NAME]) as the sole director. [NAME] became the trustee of a discretionary trust for the benefit of [NAME]'s family.

3. In October 2017, [NAME] made a loan of $1.23 million to [NAME] pursuant to a written loan agreement with an interest rate of 24% per annum and compounding.

4. The purpose of the loan was to fund the acquisition by [NAME] as trustee of the discretionary trust of a townhouse in Surfers Paradise in Queensland (Property). One of the terms of the written loan agreement was for [NAME] to provide a first registered mortgage over the Property to [NAME].

5. On 9 October 2017, the loan was drawn down, the purchase of the Property was completed, and the mortgage over the Property was then registered ([NAME]).

6. On 14 November 2017, [NAME] procured the discharge of the [NAME] over the Property, purportedly on the basis that the loan had been refinanced by [NAME].

1. On 1 July 2019, [NAME] went into receivership.

2. On 3 April 2023, [NAME] went into liquidation.

3. In the Liability Judgment, Parker J found that: 1. during March 2019, [NAME] received payments of the loan principal totalling $1,199,900, comprising the amounts of $350,000 and $600,000, both received on 14 March 2019 and $249,900 received on 18 March 2019 (Liability Judgment at [27]–[30]); 2. interest to be recalculated at the high interest rate of 24% and compounding in the period up to and following June 2018 remained owing by [NAME] for an amount of more than $500,000 (Liability Judgment [8] and [43]–[44]); and 3. [NAME] was entitled to have a mortgage registered as security for the judgment and perhaps the costs of the Earlier Proceedings (Liability Judgment [46]).

1. On 14 September 2022, on the basis of these findings in the Liability Judgment, Parker J made orders including a declaration that for the purposes of the [NAME], the quantum of the "Secured Money", including interest and fees, as at 31 May 2018 was $1,199,900, and a declaration that repayments of the "Secured Money" were made on the following dates: 1. $650,000 and $300,000 on 14 March 2019; and 2. $249,900 on 18 March 2019.

1. Following the Liability Judgment, on 11 November 2022 a [NAME] over the Property was registered ([NAME]).

2. On 24 November 2022, Parker J gave judgment regarding the costs of the Earlier Proceedings, ordering [NAME] to pay the costs of [NAME] on the ordinary basis: [COMPANY] v [COMPANY] (No 2) [2022] NSWSC 1608 (Costs Judgment).

3. After the Liability Judgment and the Costs Judgment, the parties still find themselves in dispute over the same events.

4. These proceedings were commenced by [NAME] by summons filed on 8 February 2023.

5. On 1 March 2023, [NAME] appointed [NAME] as [NAME] and manager of the Property and any and all property or assets secured by the [NAME].

6. On 27 March 2023, [NAME] filed the statement of claim in these proceedings, setting out the basis for the claims now made against [NAME].

7. In the statement of claim, [NAME] alleges that the Liability Judgment did not determine the issue of the quantum of the full amount of the debt owing by [NAME] pursuant to the loan agreement, and seeks the recovery of that debt calculated in the period from 1 June 2018 to the date of judgment in these proceedings.

8. Further, [NAME] alleges in the statement of claim that the terms of the loan agreement are contained in the [NAME], which comprise the terms contained in the Schedule, Schedule A and Schedule B of the [NAME] and expressly incorporate the standard terms of the registered mortgage memorandum no. 718188316 (Memorandum). [NAME] alleges that these terms set out the obligations of [NAME] to pay the "Secured Money" to [NAME], which includes the "Principal Amount" of $1,199,000, "Interest" payable monthly in advance, "Outstanding Interest", "Fees" (comprising the "Loan Management Fee" of $115 payable monthly, and the "Default Loan Management Fee" of $75 per day from the date of default, payable on demand), "Costs and Expenses", and other amounts expressly set out in the definition of "Secured Money". 9. [NAME] alleges that [NAME] was obliged to pay all of the "Secured Money" and has failed to do so despite demand, resulting in "Events of Default" under the [NAME] and the "Secured Money" being due and owing by [NAME].

10. On 1 June 2023, [NAME] filed the defence to the statement of claim and the first [NAME]-claim and statement of [NAME]-claim against [NAME].

11. On 27 July 2023, [NAME] filed a notice of motion seeking an order pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 ([NAME]) (UCPR) that particular parts of the defence be struck out, and an order pursuant to r 13.4(1) of the UCPR that the whole of the [NAME]-claim be summarily dismissed, or alternatively an order pursuant to rule 14.28 of the UCPR that paragraphs 3 to 54 of the [NAME]-claim be struck out (Strike Out Application).

12. On 4 August 2023, [NAME] filed a notice of motion seeking leave to amend the [NAME]-claim (Amendment Application).

13. On 7 September 2023, the hearing of the Strike Out Application and the Amendment Application took place before me. After the reading of affidavits and tendering of evidence, during the course of submissions at the hearing it became apparent that there were difficulties with the form of the defence and [NAME]-claim. It was conceded by [NAME] that these deficiencies needed to be addressed by the reformulation of the defence and [NAME]-claim, including by no longer denying that [NAME] was required to pay compounding interest at 24% per annum.

Accordingly, I gave the parties a period of time within which to agree on the form of orders for the further conduct of the proceedings.

14. On 14 September 2023, I made the following consent orders in chambers (using the defined names of the parties and other relevant definitions set out above in square brackets):

1. On or before 4:00pm on 25 September 2023, [[NAME]] is to file and serve a notice of motion for leave to amend: 1. the [defence]; and 2. the [[NAME]-claim]. 1. [ADDRESS] notes that the subject matter of the proposed Amended Defence and the proposed [NAME]-Claim is to be limited to defences or claims (as the case may be) regarding: 1. the "Loan Management Fee" as defined in Schedule B Item 3 of the [[NAME]]; 2. the "Default Loan Management Fee" as defined in Schedule B Item 6 of the [NAME]; 3. any claim under the National Consumer Protection Act 2009 (Cth); and 4. whether the costs payable by [[NAME]] pursuant to the costs orders made by Parker J in the Proceeding No. 2021/60376 are "Secured Money" as defined in the [NAME]. 1. [[NAME]] to pay [[NAME]'s] costs of and incidental to the [Strike Out Application] and the [Amendment Application], on the ordinary basis.

1. On 25 September 2023, [NAME] filed a notice of motion seeking leave to amend the defence, leave to amend the [NAME]-claim and to strike out parts of the statement of claim.

2. On 31 October 2023, pursuant to leave granted by me, [NAME] filed an amended notice of motion seeking leave to amend the defence, leave to amend the [NAME]-claim and to strike out the parts of the statement of claim which seek the "Loan Management Fee" and the "Default Loan Management Fee" (Second Amendment & Strike Out Application).

3. On 31 October 2023, I heard the Second Amendment & Strike Out Application, which was opposed by [NAME].

4. This judgment determines the Second Amendment & Strike Out Application.

EVIDENCE 1. On 28 September 2023, I ordered by consent that the evidence received in respect of the Strike Out Application and the Amendment Application would be regarded as evidence in the Second Amendment & Strike Out Application.

2. In support of the Second Amendment & Strike Out Application, [NAME] relied on the following evidence: 1. affidavit of [NAME] affirmed 4 August 2023 (part of which was not read) and the exhibit to that affidavit; 2. affidavit of [NAME] affirmed 11 August 2023 and the exhibit to that affidavit; 3. affidavit of [NAME] affirmed on 5 September 2023 (parts of which were not read); 4. affidavit of [NAME] affirmed 16 October 2023 and the exhibit to that affidavit; 5. letter dated 17 October 2017 from [NAME] to the directors of [NAME]; and 6. director's certificate dated 9 October 2017.

1. In opposition to the Second Amendment & Strike Out Application, [NAME] relied on the following evidence: 1. affidavit of [NAME] affirmed 27 July 2023 and the exhibit to that affidavit; 2. affidavit of [NAME] affirmed 4 August 2023 and the exhibit to that affidavit; 3. affidavit of [NAME] affirmed 11 August 2023 and the exhibit to that affidavit; and 4. affidavit of [NAME] affirmed 30 October 2023 and the exhibit to that affidavit. 1. [NAME] appeared for [NAME], instructed by [NAME]. [NAME] of [COMPANY] appeared for [NAME].

LEGAL PRINCIPLES

Summary dismissal or strike out application on the basis of [NAME] estoppel 1. Paragraph 3 of the Second Amendment & Strike Out Application seeks: An order pursuant to rule 13.4(1) of the UCPR or alternatively pursuant to rule 14.28 of the UCPR the Plaintiffs' Statement of Claim filed 27 March 2023 (SOC) be struck out to the extent the Plaintiffs seek to claim from the Defendant the Loan Management Fee and Default Loan Management Fee under the terms of the [NAME] referred to in the SOC which will include inter alia paragraphs 21 to 29 of the SOC and any orders sought pursuant to those paragraphs being struck out.

1. Although this paragraph speaks of striking out the relevant parts of the statement of claim, I have taken the references to r 13.4(1) of the UCPR or alternatively r 14.28 of the UCPR to indicate that [NAME] is seeking the summary dismissal of the claim contained in paragraphs 21 to 29 of the statement of claim or, alternatively, the striking out of those paragraphs.

2. I recently summarised the relevant principles in relation to the court's powers to summarily dismiss proceedings pursuant to rule 13.4 of the UCPR and strike out pleadings pursuant to rule 14.28 of the UCPR in [NAME] v [NAME] (No 2) [2023] NSWSC 1354, relevantly stating at [40]–[55]: -- 40 The court's power to summarily dismiss proceedings is contained in r 13.4 of the UCPR. Relevantly, subrr 13.4(1) and (2) provide: 13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings— … (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1). 41 For many decades, the shorthand expression of the applicable principles for the determination of an application to summarily dismiss proceedings has been described as the "General Steel test", which derives from the decision in [COMPANY] v Commissioner for Railways (1964) 112 CLR 125 at 129; [1964] HCA 69, in which it was held by Barwick CJ that: …the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion….The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". 42 In Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57], Gaudron, McHugh, Gummow and Hayne JJ commented on the General Steel test in the following way: Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way. 43 This expression of principle was endorsed in Batistatos v Roads & Traffic Authority New South Wales (2006) 226 CLR 256; [2006] HCA 27, Gleeson CJ, Gummow, Hayne and Crennan JJ at [46] (where it was also said that the General Steel test should not be given "canonical force") and Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28, by [NAME] J at [24]. 44 In [NAME] v State of [NAME] [2012] NSWCA 102, Barrett JA (with whom Beazley, McColl and Macfarlan JJA and McClellan CJ in CL agreed) at [32] elaborated on the relevant General Steel test for summary dismissal as follows: "The question is...whether the claims in question are so obviously untenable or groundless that there is 'a high degree of certainty' that they will fail if allowed to go to trial; and whether this is one of the 'clearest of cases' in which the court may accordingly intervene to prevent the claims being litigated." 45 This assessment is to be made taking the party making the claim at its highest, meaning that the party applying for summary dismissal must accept the truth of all allegations in the claim, and the ranges of meaning which assertions in the claim are capable of bearing: see Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405, Gleeson JA (with whom Beazley P and Barrett JA agreed) at [200], citing [COMPANY] v [NAME] (Court of Appeal ([NAME]), Priestley and Meagher JJA and Wardell AJA, 15 March 1991, unrep); Agius v New South Wales [2001] NSWCA 371 at [24]. 46 The recent Court of Appeal decision in [NAME] v Secretary, Department of Communities and Justice [2023] NSWCA 239 similarly dealt with an interlocutory application for summary dismissal, with Adamson JA observing at [123]: A plaintiff is not obliged to substantiate the allegations made in support of the claim in order to resist summary dismissal of the proceedings. Issues of fact are pre-eminently matters for final hearing. Summary dismissal will be refused if there is a triable issue: Wickstead v Browne (1992) 30 NSWLR 1 at 11 (Handley and Cripps JJA); [1992] NSWCA 272. 47 The power of the court to strike out the whole or any part of a pleading is contained in r 14.28(1) of the UCPR, which provides: The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. 48 In relation to the power to strike out a pleading, the court must give consideration to the importance of pleadings for the conduct of a case, particularly to enable the [NAME] to know the case they have to meet. But the court does not treat them as rigid boundaries beyond which the parties may never stray. 49 In Gould v Mount Oxide Mines Ltd (1916) 22 CLR 490; [1916] HCA 81, [NAME] JJ at 517, wrote (reading past the gender inappropriate use of "[NAME]" from more than 100 years ago): Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no [NAME] ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. 50 These themes were emphasised in [NAME] (in liq) v [COMPANY] (1990) 169 CLR 279; [1990] HCA 11, Dawson J at 296–297, who stated (authorities omitted): It is, of course, the purpose of pleadings to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings upon trial may be conducted in an orderly fashion by reference to those issues. The defined issues provide the basis upon which evidence may be ruled admissible or inadmissible upon the ground of relevance. But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings. It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings. 51 In [NAME], Brennan J added at 288: When the pleadings bring the parties to the issue, the court's function is to determine that issue and to grant relief founded on the pleadings unless the parties are allowed to alter the issues at the trial without amendment of the pleadings… 52 Pleadings not only inform the [NAME] of the case to be met but also facilitate the just, quick and cheap determination of the real issues in the proceedings. 53 These matters were emphasised by Adamson J (as her Honour then was) in [NAME] v [NAME] (No 3) [2018] NSWSC 485 at [36] and [38]-[39]: 36 The importance of pleadings ought not be underestimated. A statement of claim serves a number of functions. It indicates, to the Court and to the defendant or [NAME], the basis of the plaintiff's claim for relief. The statement of claim must set out, in numbered paragraphs, the material facts on which the plaintiff relies (UCPR rr 14.6 and 14.7). Where the rules require that certain matters be particularised (such as allegations of fraud or states of mind), the statement of claim must contain those particulars. It is an aspect of natural justice that the defendant be apprised of the case it has to meet by a properly pleaded statement of claim: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [25] ([NAME], Gummow, Hayne and Kiefel JJ). Where unparticularised allegations of fraud and intention are made, there can be a tendency for the deficient pleading to amount to an abuse of process. Pleadings must be consistent, except where allegations are expressed to be in the alternative: UCPR 14.18. A pleading must not be "embarrassing" in any of the senses set out by Tamberlin J in Shelton v NRMA Ltd [2004] FCA 1393; 51 ACSR 278 at [18]: 'Embarrassment' in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense. … 38 Where a statement of claim is deficient, in that it does not identify the connection between allegations of fact and causes of action alleged; contains a discursive narrative, the relevance of which can only be the subject of conjecture; and makes generalised allegations which could not sensibly be the subject of a response in the defence, it cannot be allowed to stand, if objection is taken. Although there are occasions where a defendant, for forensic reasons, might not take objection to a deficient pleading and prefer to conduct the proceedings on that basis, a defendant who approaches the Court to enforce its rules regarding a pleading is entitled to have the Court require compliance: [NAME] v [COMPANY] (Unreported, Supreme Court of [NAME], Bryson J, 7 March 1995). 39 The matters to be taken into account in determining which order to make are set out in Part 6 of the Civil Procedure Act 2005 ([NAME]), the overriding purpose of which is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings": s 56. A properly pleaded statement of claim is, in my view, a prerequisite for the just, quick and cheap resolution of the real issues in the proceedings. 54 The concept of whether a pleading is embarrassing has also been the subject of extensive judicial consideration, drawn together in [NAME] v The University of [NAME] [2009] NSWSC 1424, Johnson J at [32]–[35], as follows: 32 A pleading may be embarrassing even though it contains allegations of material facts sufficient to constitute a cause of action, if the material facts alleged are couched in expressions which leave difficulties or doubts about recognising or piecing together what is referred to: [NAME] v [COMPANY] (Bryson J, 7 March 1995, [ID] at 5–6). 33 Although the pleading of a conclusion may, in some circumstances constitute a material fact, nevertheless, the pleading will be embarrassing if allegations are made at such a level of generality that the defendant does not know in advance the case it has to meet: Charlie Carter Pty Limited v Shop Distributive and Allied Employees Association (1987) 13 FCR 413 at 417–418. In such a case, the appropriate remedy is to strike out the pleading rather than to order the provision of particulars, as it is not the function of particulars to take the place of the necessary averments in a pleading: Trade Practices Commission v David Jones (Aust) Pty Ltd (1985) 7 FCR 109 at 112–114. 34 Rule 14.28 UCPR provides that pleadings that involve non-compliance are liable to be struck out as an embarrassment. However, generally the Courts recognise that a wide range of discretionary considerations arise where there is a failure to comply with the technical requirements of the pleading rules: Beach Petroleum NL v Johnson (1991) 105 ALR 456 at 466. In many instances, the appropriate order may be to strike out the offending pleading, but grant leave to amend: Rubenstein v Truth & Sportsman Ltd [1960] VR 473 at 476; H 1976 Nominees Pty Ltd v Galli (1979) 30 ALR 181 at 186. 35 It is not the function of the Court to draw or settle a party's pleading. [ADDRESS] is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. Objectionable matter that is so mingled with other matter may lead to the conclusion that the pleading as a whole would tend to embarrass the fair trial of the action ought be struck out: Turner v Bulletin Newspapers Co Pty Ltd (1974) 131 CLR 69 at 72 87–88 and 97–98; [COMPANY] v [NAME] at [57]–[58]; [NAME] v [COMPANY] for the Prevention of Cruelty to [NAME] [2005] NSWSC 926 at [55]. 55 The court may receive evidence on the hearing of an application for a summary dismissal under r 13.4 of the UCPR or the strike out of a pleading under r 14.28 of the UCPR: r 13.4(2) and r 14.28(2) of the UCPR.

1. The basis on which [NAME] seeks the summary dismissal or striking out of the claims made in paragraphs 21 to 29 of the statement of claim is that there is an [NAME] estoppel which operates against the bringing of that claim.

2. An [NAME] estoppel takes its name from [NAME] of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. The [NAME] principle has more recently been restated in Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 (and reinforced in [COMPANY] (in liq) v [NAME] (2016) 259 CLR 212; [2016] HCA 44).

3. In Tomlinson, [NAME], Bell, Gageler, [NAME] explained the operation of [NAME] estoppel in the context of the three forms of estoppel arising from a final judgment, saying at [22] (citations omitted): Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as "cause of action estoppel". Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as "issue estoppel". Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a "judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies". The third form of estoppel is now most often referred to as "[NAME] estoppel", although it is still sometimes referred to as the "extended principle" in [NAME] v [NAME]. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a "true estoppel" and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.

1. In Tomlinson, the majority went on to explain the overlap and distinction between these estoppels and the wider notion of abuse of process, saying at [24]–[26]: 24 To explain contemporary adherence to the comparatively narrow principle in [NAME] v [NAME], it is appropriate also to explain the relationship between the doctrine of estoppel and the doctrine of abuse of process as it has since come to be recognised and applied in Australia. The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding. 25 Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. 26 Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

1. The above description of an [NAME] estoppel in Tomlinson is reinforced in [NAME] at [27], where [NAME], Kiefel, [NAME] said: … An estoppel of this kind, an "[NAME] estoppel", will preclude the assertion of a claim or of an issue of law or fact if the claim or issue was so connected to the subject matter of the first proceeding as to make it unreasonable, in the context of the first proceeding, for the claim or issue not to have been made or raised in it.

1. In [NAME], one of the matters to be taken into account in determining whether an [NAME] estoppel arose was the likelihood of conflicting judgments. [NAME] stated at 603–604: … It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. … … The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By "conflicting" judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction. …

Amendment of defence and [NAME]-claim 1. Section 64 of the Civil Procedure Act 2005 ([NAME]) (CPA) provides: (1) At any stage of proceedings, the court may order— (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. … 1. Section 58 of the CPA relevantly provides: (1) In deciding— (a) whether to make any order or direction for the management of proceedings, including— (i) any order for the amendment of a document, and … the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court— (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant— (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56(3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.

1. As stated above, section 58(2) of the CPA refers to sections 56 and 57 of the CPA.

2. Section 56(1) provides that the overriding purpose of the CPA and the UCPR is 'to facilitate the just, quick and cheap resolution of the real issues in the proceedings'. Section 56(2) mandates that the court must give effect to the overriding purpose when it exercises any power under the CPA or the UCPR, and when it interprets their provisions. Section 56(3) creates a duty for a party to assist the court to further the overriding purpose.

3. Section 57 of the CPA provides: (1) For the purpose of furthering the overriding purpose referred to in section 56(1), proceedings in any court are to be managed having regard to the following objects— (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 1. [NAME] argue that leave for [NAME] to amend the defence and [NAME]-claim should be refused on numerous grounds applicable to different parts thereof, principally on the basis of issue estoppel and [NAME] estoppel (the principles of which are set out in Tomlinson above), and defects which render them liable to be struck out on the basis that they fail to disclose a reasonable cause of action and/or are embarrassing (the principles of which are set out in [NAME] above).

2. Additional expressions of what is to be considered an embarrassing pleading in the context of allegations of unconscionable conduct are to be found in a number of decisions, including several of this court. 3. [COMPANY] v [COMPANY] (1992) 111 ALR 631, French J (as the former Chief Justice then was) struck out a pleading of unconscionable conduct against Boral, saying at 638: … I accept, however, the proposition that the pleading is embarrassingly vague in that it fails to adequately disclose the factual foundation upon which Boral's conduct is said to be unconscionable. On the face of it it does not appear that the pleading so far identifies any conduct which would fall within accepted categories of unconscionability. … 1. In Watiwat v Dixon [2017] NSWSC 360, Ward CJ in Eq (as the President then was) at [15]–[22] set out the relevant legal principles regarding the role of pleadings; namely, to state with clarity the case that must be met and define the issues for decision, and thereby minimise the risk of injustice resulting from surprise and reducing expense and delay, concluding at [22]: What is meant by an embarrassing pleading, in the context of an application such as the present, relates to whether the pleading can serve the function of a pleading under the rules; i.e., whether it puts the defendant properly on notice of the real substance of the claim made against it and enables the defendant to know what case it is that the defendant has to meet. A pleading is embarrassing if it is unintelligible, ambiguous or imprecise in its identification of material factual allegations so as to deprive the opposing party of proper notice of the real substance of the claim or defence (Gunns Ltd v Marr [2005] VSC 251 at [14]-[15]) or if it contains inconsistent, confusing or irrelevant allegations (Shelton v National Roads and Motorist Association Ltd (2004) 51 ACSR 278; [2004] FCA 1393 at [18]).

1. In Watiwat, Ward CJ in Eq at [24]–[29] drew particular attention to the failure of the plaintiff in that case to plead the facts, matters and circumstances giving rise to the allegation of unconscionable conduct as the basis for her Honour's finding that the pleading was embarrassing and should be struck out.

2. In [NAME] v [NAME] [2023] NSWSC 21, Ball J dealt with an application to summarily dismiss or strike out a pleading of statutory unconscionable conduct where multiple material facts had not been pleaded, only conclusions. Ball J said at [63]: … Pleadings must be sufficiently intelligible to enable a defendant to know the case it has to meet: UCPR r 15.1(1). It is not enough to "plead a set of facts and a bare conclusion that, in all the circumstances, what has taken place is unconscionable": see [NAME] v [NAME] (No 3) [2018] FCA 2001 at [22] per Bromwich J.

CONSIDERATION

Summary dismissal or strike out application on the basis of [NAME] estoppel 1. In paragraphs 21 to 29 of the statement of claim, [NAME] makes allegations regarding the failure of [NAME] to pay the Loan Management Fee and the Default Loan Management Fee despite demands having been made by [NAME], asserting that this failure is in breach of the obligation to pay the Secured Money as required in the Memorandum containing the terms of the Loan Agreement and the [NAME].

2. Paragraphs 21 to 29 of the statement of claim are in the following form (omitting the particulars): 21 It is a term of the Loan Agreement and the [NAME] that [NAME] covenanted to pay [NAME] a fee described as the: (a) "Loan Management Fee"; (b) "Default Loan Management Fee" 22 The "Loan Management Fee": (a) is a fee required to be paid monthly from the "Commencement Date" (that is, 18 September 2018) in the amount of $115.00 per month for the monthly management of the loan; and (b) is payable monthly on the "Date for the Payment of Interest". 23 [NAME] failed or refused to pay the Loan Management Fee. 24 The failure or refusal by [NAME] to pay the Loan Management Fee is a breach of its covenant to pay the Loan Management Fee under the Loan Agreement and the [NAME]. 25 The "Default Loan Management Fee": (a) is a fee calculated on a daily basis, in the amount of $75.00 per day, once an "Event of Default" occurs or is deemed to have occurred if [NAME] takes any step in connection with a "Recovery Action"; and (b) is payable immediately upon demand by [NAME]. Demands for payment of the Default Loan Management Fees and the Loan Management Fees 26 On 25 November 2022, [NAME] issued a letter of demand to [NAME] (Fees Demand). 27 By the Fees Demand, [NAME]: (a) declared that, by reason of the occurrence of "Events of Default" under the [NAME] was entitled under the [NAME] to charge: (i) the "Default Loan Management Fee" at the rate of $75.00 per day from the date of default, which amount was payable immediately on demand by [NAME]; and (ii) the "Loan Management Fee" from the "Commencement Date" (that is, 18 September 2018) at the rate of $115.00 per month, which fee was payable monthly under the [NAME] on the "Date for the Payment of Interest"; and (b) demanded [NAME] immediately pay: (i) $127,162.50 in "Default Loan Management Fees", being the amount owing as at 25 November 2022 (Default Loan Management Fees Amount); and (ii) $7,015.00 in "Loan Management Fees", being the amount owing as at 25 November 2022 (Loan Management Fees Amount). 28 [NAME] has failed or refused to pay the Default Loan Management Fees Amount or the Loan Management Fees Amount in satisfaction of the Fees Demand or otherwise in respect of its obligations under the Loan Agreement and the [NAME]. 29 The failure by [NAME] to pay the Default Loan Management Fees Amount or the Loan Management Fees Amount is a breach of its covenant in clause 3.1(a)(i) of the Memorandum to pay the "Secured Money" to [NAME] in accordance with the terms of the Loan Agreement and the [NAME] by the end of the "Term". 1. [NAME] says that in the Earlier Proceedings, before the Liability Judgment was given by Parker J on 29 August 2023, there was no claim by [NAME] for the Loan Management Fee or the Default Loan Management Fee as part of the amount said to be owing to [NAME]. [NAME] drew attention to a spreadsheet calculation of the amount claimed by [NAME] attached to an affidavit of [NAME] affirmed 16 August 2022 (served in the Earlier Proceedings) which makes no reference to any Loan Management Fee or Default Loan Management Fee.

2. Instead, the first time a claim or assertion was made for any Loan Management Fee or Default Loan Management Fee was by [NAME] serving an affidavit of [NAME] affirmed 29 August 2022, which attached an amended spreadsheet calculation at the time that Parker J was in the course of delivering the ex tempore Liability Judgment. Subsequently, by updated versions of the spreadsheet calculation of the amount [NAME] claimed was owing by [NAME], as Parker J continued to deliver the Liability Judgment, the Loan Management Fee and the Default Loan Management Fee were claimed. 3. [NAME] candidly admit that each of the Loan Management Fee and the Default Loan Management Fee were not included in any calculation of the amount asserted to be owing by [NAME] at any time prior to the delivery of the Liability Judgment but provide evidence to explain the circumstances. [NAME] has explained (in unchallenged evidence) that the failure to include the Loan Management Fee and the Default Loan Management Fee in the debt calculation which he prepared was an oversight by him in failing to look at the terms of the [NAME] in preparing a recalculation of the debt owing to [NAME]. [NAME] also says that it was only during the course of the recalculation that he discovered that the Loan Management Fee and Default Loan Management Fee had not been included in his calculations and at no time did he make a conscious decision not to seek the payment of them, not to include it, or to waive any right of [NAME] to payment of them. 4. [NAME] says that the failure of [NAME] to raise the Loan Management Fee and Default Loan Management Fee is unreasonable such that an [NAME] estoppel operates to preclude the claim for each of them being made in the statement of claim in these proceedings. [NAME] also argues (at paragraphs 15–16 of its written submissions): 15 In circumstances where [NAME] [Projects] is precluded from seeking to argue that the higher rate of interest of 24% per annum and the monthly compounding of interest were unconscionable, it is unreasonable for [NAME] to now make claims for Loan Management Fees and Default Loan Management Fees. 16 Just as the [sic] [NAME] asserts in its Submissions in Support of their Notice of Motion for Dismissal and Strike Out filed 28 August 2023 (August 2023 Submissions) at [31] that [NAME] made a forensic decision at the trial of the Liability Proceeding to not challenge the entitlement of [NAME] to charge interest at the rate of 24% and a compound basis, [NAME] similarly chose not to include claims for Loan Management Fees and Default Loan Management Fees, and should not now be entitled make [sic] those claims. Perhaps the forensic decision by [NAME] not to challenge the interest at the rate of 24% and on a compound basis, may have been different or at all least [NAME] ought to have been given the opportunity to further assess its decision not to challenge the interest at the rate of 24% and on a compound basis in the Enforcement Proceedings.

1. I reject the [NAME] estoppel submissions by [NAME] for the following reasons:

1. There is no evidence that [NAME] made a forensic decision not to claim the Loan Management Fee and the Default Loan Management Fee at the trial of the Earlier Proceedings. The evidence of [NAME] (which I accept) is that the omission to claim these fees was an oversight by [NAME].

2. There has been no finding in the Liability Judgment that [NAME] is not entitled to claim the Loan Management Fee and the Default Loan Management Fee. Any claim for those fees can be met with appropriate defences from [NAME] on which this court can rule. There is no basis on which it could be said that there is a likelihood of conflicting judgments between the Liability Judgment and any judgment which might be given in these proceedings that [NAME] is or is not entitled to payment of those fees. 3. [NAME]' decision not to challenge the interest rate of 24% and compounding interest in the Earlier Proceedings was a matter for it. So was its decision to concede that it could not do so at the hearing of these proceedings on 7 September 2023, as reflected in the consent orders made on 14 September 2023. There is no relevant link between these decisions made on behalf of [NAME] and the oversight of [NAME] to include the claims for the Loan Management Fee and the Default Loan Management Fee and there is no evidentiary basis to say that there is such a link.

4. The outcome of the Earlier Proceedings as reflected in the Liability Judgment was that the amount owing by [NAME] was required to be recalculated, using a compounding interest rate of 24% as found in the Liability Judgment. Having omitted to do so by oversight, there is no relevant prejudice to [NAME] for [NAME] to now make the claim for the Loan Management Fee and the Default Loan Management Fee as part of those calculations. That [NAME] might be liable to pay those fees does not make it unreasonable for those fees to now be claimed.

5. There is otherwise no basis on which I could conclude that the failure of [NAME] to claim the Loan Management Fee and the Default Loan Management Fee was unreasonable so as to give rise to an [NAME] estoppel.

1. As a result, I dismiss paragraph 3 of the Second Amendment & Strike Out Application.

Amendment of defence 1. [NAME] take issue with the amendment of paragraphs 11 (first occurring), 11A, 11B–16 and 17 of the proposed amended defence. I will deal with each of these paragraphs in turn.

Paragraph 11 1. Paragraph 19 of the statement of claim is in the following terms: The definition of "Secured Money" in the [NAME] includes: (a) "Principal Amount" of $1,199,900 stipulated in Schedule A to the [NAME] (clause 1.1 of the Memorandum); (b) "Interest"; (c) "Outstanding Interest"; (d) "Fees"; (e) "Costs and Expenses"; and (f) such other amounts as expressly set out in the definition of "Secured Money".

1. Paragraph 11 of the proposed amended defence states (omitting the struck-through text proposed to be deleted): The Defendant does not admit paragraph 19 of the Statement of Claim and says that upon a proper construction of the Loan Agreement and [NAME] the Defendant denies that all fees payable as asserted by the Plaintiffs are payable.

1. Paragraph 11 of the defence previously had a set of particulars which contained the basis on which the proper construction of the Loan Agreement and [NAME] was asserted. Those matters which were previously particulars to paragraph 11 of the defence have now become part of a new paragraph 11A of the proposed amended defence (the contested form of which is set out below). 2. [NAME] complain that the removal of these particulars from paragraph 11 has denuded it of any logic and meaning and that it now contains a half-stated conclusion and a bare denial. On this basis they say that paragraph 11 of the proposed amended defence is embarrassing within the meaning of rule 14.28(1)(b) of the UCPR and that leave to amend it should be refused.

3. In my opinion, there is force to this submission if the new paragraph 11A of the proposed amended defence is not permitted to stand. So long as paragraph 11 is accompanied by an allowable paragraph 11A, taken together, there would be a sufficient basis on which paragraph 11 of the proposed amended defence does not transgress the requirements of a permissible pleading.

4. During the hearing, [NAME] conceded that paragraph 11 required amendment so that it would read (additional text underlined): The Defendant does not admit paragraph 19 of the Statement of Claim and says that upon a proper construction of the Loan Agreement and [NAME] as set out in paragraph 11A below, the Defendant denies that all fees payable as asserted by the Plaintiffs are payable. (T10.40-11.11)

1. Subject to the matters raised in relation to paragraph 11A, which are dealt with below, [NAME] agreed that such a change would address the issues regarding paragraph 11 (T10.40-11.9).

2. I have, however, reached the conclusion that paragraph 11A should not be allowed for the reasons set out below. As a result, I consider that paragraph 11 of the proposed amended defence (even in the further amended form set out above) should not be permitted either, because without a reference to an allowable paragraph 11A, there is no logical meaning in paragraph 11.

Paragraph 11A(a)–(d)

1. Paragraph 11A of the proposed amended defence also responds to paragraph 19 of the statement of claim. The form of paragraph 11A(a)–(d) is as follows: (a) Although the Fees are defined in the Memorandum 'as specified in Schedule B (column A)', Schedule B refers to (i) a Loan Management Fee and (b) a Default Loan Management Fee. (b) As to the Loan Management Fee: (i) Clause 1.1 definition in the Memorandum does not define Loan management fee but refers to a Loan Management Fee Percentage means the percentage specified in Schedule A as the '"Loan Management Fee Percentage". (ii) There is no Loan Management Fee Percentage referred to in Schedule A and Schedule B refers to a Loan Management Fee but not a Loan Management Fee Percentage. (c) As to the Default Loan Management Fee it is not referred to the Memorandum. (d) The Indicative Letter of Offer from [NAME] to the Defendant provided in September 2017 does not refer to a Loan Management Fee nor a Default Loan Management Fee. 1. [NAME] make two principal complaints in relation to the form of paragraph 11A(a)–(d). The first of their principal complaints relates to subparagraphs 11A(a)–(c) and the second of their principal complaints relates to subparagraph 11(d). I will deal with each in turn.

2. First, they submit that subparagraphs 11A(a)–(c) fail to disclose a reasonable defence because although [NAME] pleads that the terms of the Loan Management Fee and the Default Loan Management Fee are not defined in the Memorandum, it has failed to state what it contends is the effect of that pleading and, on that basis, it is embarrassing. They also say that in any event, the definition of Fees in the Memorandum is as follows: "Fees" means the fees listed and described in Schedule B (column A) which are payable by the [NAME] to the [NAME] as specified in Schedule B (column C) and which fees form part of the Secured Money until they are paid to the [NAME] in full.

1. The definition of "Schedule B" is Schedule B to the Memorandum which forms part of the [NAME]. Both the Loan Management Fee and the Default Loan Management Fee appear in Schedule B, respectively stated as follows:

1. Loan Management Fee - a fee to be paid by the [NAME] to the [NAME] for the monthly management of the loan, the amount being $115.00 per month, the date for the payment of the fee being monthly on the Date for the Payment of Interest.

2. Default Loan Management Fee – a fee calculated on a daily basis once an Event of Default occurs or is deemed to have occurred if the [NAME] takes any step in connection with a Recovery Action, the amount being $75.00 per month, the date for the payment of the fee being immediately upon demand by the [NAME]. 1. [NAME] say that there is a disconnect between the Memorandum and the [NAME] because there is no Schedule B to the Memorandum, only a Schedule B to the [NAME].

2. While I am very conscious of not curtailing issues concerning the proper construction of the Memorandum and the [NAME] which might be raised by [NAME] at the trial, I agree with [NAME] that subparagraphs 11A(a)–(c) fail to disclose a reasonable defence and are also embarrassing. They cannot be sustained in light of the plain provisions of the Memorandum and the [NAME]. The [NAME] states: [[NAME]] covenants with [[NAME]] in terms of the attached schedule and standard terms document 718188316 and charges the estate or interest described in item 1 with the repayment/payment to the [NAME] of all sums of money referred to in item 5.

1. It is pellucidly clear that the "standard terms document 718188316" is the Memorandum, which is to be read with the [NAME], including Schedule B to the [NAME].

2. As a result, allowing subparagraphs 11A(a)–(c) to form part of the amended defence and create an issue in the proceedings when there is no reasonably arguable basis for them would not adhere to the dictates of justice in line with s 58 of the CPA, which include facilitating the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

3. Second, [NAME] submit that subparagraph 11A(d) fails to disclose a reasonable defence because [NAME] makes no attempt to plead what it contends is the legal effect of the Indicative Letter of Offer in circumstances where it was superseded by the [NAME] and then the [NAME], and where the express terms of the Indicative Letter of Offer demonstrate with clarity that its terms are to be supplanted by any loan facility into which the parties enter, being the following: This indicative letter of offer (offer) does not represent a formal offer of a loan facility. Until formal credit approval is obtained and a facility agreement is issued, we do not offer to provide you with a loan facility. The terms and conditions detailed in this offer are not exhaustive and are necessarily general in nature. Any subsequent facility agreement would comprehensively detail the terms and conditions on which the loan facility is offered. … E. In the event of inconsistency between this offer and the formal legal documentation, the legal documentation will prevail to the extent of the inconsistency.

1. I agree that subparagraph 11A(d) fails to disclose a reasonable defence and is also embarrassing because it does not state with any reasonable clarity what the effect of the Indicative Letter of Offer is, and how it is that the express terms of it could provide a defence based on a proper construction that is put forward by [NAME]. It should not be permitted to form part of the amended defence when it is not reasonably arguable, and so does not accord with the dictates of justice in s 58 of the CPA, including by not facilitating the just, quick and cheap resolution of the real issues in the proceedings as per s 56 of the CPA.

Paragraph 11A(e)–(f)

1. Paragraph 11A(e)–(f) of the proposed amended defence also responds to paragraph 19 of the statement of claim and states (additions underlined): (e) Seeking to include the charge for a Loan Management Fee in the Loan Agreement and [NAME] is unconscionable conduct on the part of the first plaintiff and is unenforceable by the first plaintiff against the defendant. PARTICULARS i. [NAME] held superior bargaining power to dictate the terms of the Loan Agreement; ii. [NAME] knew or ought to have known that [NAME] was not able to understand the onerous terms of the Loan Agreement of (i) charging a monthly Loan Management Fee of $115.00 per month and (ii) charging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; iii. [NAME], director of [NAME], exerted undue pressure and/or influence upon [NAME] given his relationship to [NAME], the sole director of [NAME] at the time of entering into the Loan Agreement. (f) Seeking to include the charge for a Default Loan Management Fee in the Loan Agreement and [NAME] is unconscionable conduct on the part of the first plaintiff and is unenforceable by the first plaintiff against the defendant. PARTICULARS i. [NAME] held superior bargaining power to dictate the terms of the Loan Agreement; ii. [NAME] knew or ought to have known that [NAME] was not able to understand the onerous terms of the Loan Agreement of (i) charging a monthly Loan Management Fee of $115.00 per month and (ii) charging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; iii. [NAME], director of [NAME], exerted undue pressure and/or influence upon [NAME] given his relationship to [NAME], the sole director of [NAME] at the time of entering into the Loan Agreement.

1. These paragraphs plead an allegation of unconscionability. [NAME] conceded that the matters contained in the particulars should really be in the pleading proper and that what had been attempted to be stated was a claim of unconscionable conduct in equity (T15.37–16.23). But the problem is that the allegations in both the pleading and the particulars are absent any material facts. As the decisions in [NAME] remind me, allegations of unconscionable conduct must be founded on a set of material facts and not be expressed with opaque generality or as a set of conclusions.

2. As a matter of fairness to [NAME], the purpose of providing material facts in the pleading is to give reasonable clarity of the case that is required to be met. The form of the pleading set out in paragraph 11A(e)–(f) does not provide such clarity and cannot be allowed to stand. For that reason alone, it is embarrassing and cannot be permitted as an amendment to the defence in its current form. Allowing it in its current form does not accord with the dictates of justice in s 58 of the CPA, including by not facilitating the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA. 3. [NAME] also say that an [NAME] estoppel applies to a claim of unconscionability regarding the entry into the [NAME]. [NAME] and [NAME] assert that from three out of the four witnesses for [NAME] who gave evidence at the trial in the Earlier Proceedings regarding the circumstances of [NAME]' entry into the [NAME], it appears [NAME] intends to introduce that factual issue into these proceedings and it should not be permitted to do so because of a resulting prejudice to [NAME]. Because of the view that I have formed that the pleading in paragraph 11A(e)–(f) should not be permitted, it is not necessary for me to express any view about that complaint.

4. In the circumstances, if [NAME] wishes to replead the defence based on unconscionable conduct, it will need to make an appropriate application for leave to do so.

Paragraphs 11B–17 1. Paragraphs 20–26 of the statement of claim are as follows: 20 "Fees" is defined in clause 1.1 of the Memorandum as "the fees listed and described in Schedule B (column A) which are payable by the [NAME] to the [NAME] as specified in Schedule B (column C) and which fees form part of the Secured Money until they are paid to the [NAME] in full". 21 It is a term of the Loan Agreement and the [NAME] that [NAME] covenanted to pay [NAME] a fee described as the: (a) "Loan Management Fee"; (b) "Default Loan Management Fee". Particulars Schedule B to the Loan Agreement and the [NAME] 22 The "Loan Management Fee": (a) is a fee required to be paid monthly from the "Commencement Date" (that is, 18 September 2018) in the amount of $115.00 per month for the monthly management of the loan; and (b) is payable monthly on the "Date for the Payment of Interest". Particulars Item 3, Schedule B to the Loan Agreement and the [NAME] (column A) , (column B) and (column C) and the definition of "Date for the Payment of Interest" in clause 1.1 of the Memorandum and in Schedule A to the Loan Agreement and the [NAME]. 23 [NAME] failed or refused to pay the Loan Management Fee. 24 The failure or refusal by [NAME] to pay the Loan Management Fee is a breach of its covenant to pay the Loan Management Fee under the Loan Agreement and the [NAME]. Particulars Item 3, Schedule B to the Loan Agreement and the [NAME] (column A), (column B) and (column C), clause 1.1 definition of "Obligation" and clause 3.1 (b) of the Memorandum. 25 The "Default Loan Management Fee": (a) is a fee calculated on a daily basis, in the amount of $75.00 per day, once an "Event of Default" occurs or is deemed to have occurred if [NAME] takes any step in connection with a "Recovery Action"; and (b) is payable immediately upon demand by [NAME]. Particulars Item 6, Schedule B to the Loan Agreement and the [NAME] (column A), (column B) and (column C) and the definitions of "Event of Default" and "Recovery Action" in clause 1.1 of the Memorandum. … 26 On 25 November 2022, [NAME] issued a letter of demand to [NAME] (Fees Demand). Particulars The Fees Demand is in writing and comprises the letter from [NAME] (Corrs) to [NAME], copied to [COMPANY], dated 25 November 2022.

1. Paragraphs 11B–17 of the proposed amended defence (starting from what appears at page 4 of the document as the mistaken second occurring paragraph 11, but which [NAME] submitted should be renumbered as paragraph 11B) respond to paragraphs 19–26 of the statement of claim. They are in the following terms (omitting the struck-through text proposed to be deleted): 11B The Defendant does not admit paragraph 20 of the Statement of Claim and repeats paragraph 11A above. 12 The Defendant denies paragraph 21 of the Statement of Claim and repeats paragraph 11A above. 13 The Defendant denies paragraph 22 of the Statement of Claim and repeats paragraph 11A above. 14 The Defendant admits paragraph 23 of the Statement of Claim and denies the Loan Management Fee is payable by the Defendant and repeats paragraph 11A above. 15 The Defendant denies paragraph 24 of the Statement of Claim and repeats paragraph 11A above. 16 The Defendant denies paragraph 25 of the Statement of Claim and says the Default Loan Management Fee it is not referred to the Memorandum and repeats paragraph 11A above. 17 The Defendant admits the Fee Demand referred to paragraph 26 of the Statement of Claim was issued by [NAME].

1. In light of the view that I have formed that paragraph 11A of the proposed amended defence cannot be permitted, paragraphs 11B–16 of the proposed amended defence cannot be permitted either because each of them contains a pleading which [NAME]-references to paragraph 11A. Paragraph 17 of the proposed amended defence is in a different category as it is an admission without [NAME]-reference to any disallowed part of the proposed amended defence.

2. If [NAME] wishes to apply to replead paragraph 11A in permissible form, then the reference to it in each of paragraphs 11B–16 might also form part of that application.

Amendment of [NAME]-claim 1. [NAME] also take issue with paragraphs 3–31, 35–36 and 39–54 of the proposed amended [NAME]-claim and consequently paragraphs 5, 6, and 7A–7D of the relief sought in the proposed amended [NAME]-claim.

2. By the Strike Out Application, [NAME] applied for the whole of the [NAME]-claim to be summarily dismissed or, alternatively, an order pursuant to rule 14.28 of the UCPR that paragraphs 3 to 54 of the [NAME]-claim be struck out. Many of the problems with the [NAME]-claim to which [NAME] drew attention at the hearing of the Strike Out Application persist in the proposed amended [NAME]-claim. For this reason, where paragraphs of the proposed amended [NAME]-claim are in exactly the same form as they appeared in the [NAME]-claim that has been filed and are the subject of challenge by [NAME] in opposition to the Second Amendment & Strike Out Application, I will deal with those paragraphs on the basis that there is an application by [NAME] to strike them out of the [NAME]-claim as well as not permit them to remain in the proposed amended [NAME]-claim.

3. I will deal with each of the disputed paragraphs in turn.

Paragraphs 3–31 of the proposed amended [NAME]-claim and paragraphs 5 & 6 of the relief 1. [NAME] assert that the pleading in paragraphs 3–31 of the proposed amended [NAME]-claim is defective. Those paragraphs are in the following terms (additions underlined, grammatical errors left uncorrected and particulars excluded unless relevant): 3 [NAME] was at all material and relevant times was the registered proprietor of 2 and [ADDRESS], [NAME] in the State of [NAME] being the land contained in certificates of title, folio identifiers (Fl) 6 & 7/31050 ([NAME]). 4 At all material times the [NAME] had first registered mortgages against the titles to Westpac Banking Corporation being mortgages registered AM330112 over Fl 6/3150 (being [ADDRESS], [NAME], $590,000 borrowed) and AK580795 over Fl 6/3150 (being [ADDRESS], [NAME], $440,000 borrowed) through mortgage manager, [NAME]. 5 In or about May 2017 [NAME]'s interests, through her son [NAME] ([NAME]), were looking to purchase a property to be identified and for this purpose obtained approval to borrow the amount of $800,000 from [COMPANY] by providing the [NAME] as security and on or about 22 June 2017 the [NAME] and [NAME] entered into mortgage with [COMPANY] to borrow $800,000 providing the [NAME] as second mortgage as security. 6 On or about 10 July 2017 [COMPANY] registered Caveat AM549917 over the [NAME] claiming a "Mortgage of Estate in Fee Simple" over the [NAME]. 7 On about 17 August 2017 [COMPANY] registered Mortgage AM653083 (PF Mortgage) over the [NAME]. 8 On 27 August 2017 the GEM Trust was created by deed dated 27 August 2017 appointing the defendant as the trustee of the GEM Trust. 9 On or about 31 August 2017 [NAME] in its capacity as trustee of the GEM Trust entered into a contract to purchase the Property for a purchase price of $1,250,000.00 with a deposit paid of $60,000.00. This contract provided for settlement 60 days from the date of the contract (or sooner), so by 30 October 2017. 10 On 1 September 2017 [NAME] was advised that [NAME] did not have sufficient funds to enable [NAME] to settle the purchase of the Property. 11 [NAME] sought and [NAME] offered to lend [NAME] $1,230,000 to complete the purchase of the Property. 12 On or about 14 September 2017 [NAME] issued to [NAME] an Indicative Letter of Offer which contained the (inter alia) following Summary of Terms: (a) Facility Limit : $1,355,000.00 [Fees included]; (b) Term: 6 months; (c) Discount Interest rate - the amount of interest you will pay if you pay us interest on time.: 12.00% per annum; (d) Interest rate - the amount of interest you will pay if you don't pay us interest on time.: 24.00% per annum; (e) Fees and charges: (i) Establishment Fee - A fee paid by you to us for approving the loan: $4,010.00 (incl. GST); (ii) Risk Management Fee - A fee paid by you to us for managing the risk of the loan.: waived; (iii) Brokerage & its associated Fees - A fee payable by you to your broker for obtaining you this loan: N/A; (iv) Legal Fee - A fee paid by you to our solicitors for production of loan documents and registration of our interests on the Security.: $990.00 (GST incl.); 13 This Indicative Letter of Offer did not refer to [NAME] charging: (a) [struck-through] (b) Loan Management Fee - a fee to be paid by the [NAME] to the [NAME] for a monthly management for the monthly management of the loan: $115.00 per month; (c) Default Loan Management Fee - a fee calculated on a daily basis once an Event of Default occurs or is deemed to have occurred if the [NAME] takes any step in connection with a Recovery Action: $75.00 per day. (d) [struck-through] 14 At the time of entering into the Loan Agreement and [NAME] in October 2017, [NAME] ([NAME]) who was born 21 April 1991 and then 26 years old, was the sole director of [NAME] and continued to be the sole director of [NAME] until 3 November 2017. 15 [NAME] is the son of [NAME] ([NAME]) who was the sole director of [NAME] from 19 July 2018 to 10 December 2018 and has been and continues to be the sole director of [NAME] since 5 June 2019. 16 [NAME] is the brother of [NAME] and the uncle of [NAME]. 17 [NAME] and his wife [NAME] were appointed directors of [NAME] from 3 to 22 November 2017. 18 On 22 November 2017 [NAME] ceased to be a director of [NAME] and [NAME] remained as the sole director of Casual Projects until 19 July 2018 when [NAME] replaced her as the sole director. 19 At the time of entering into the Loan Agreement and [NAME] in October 2017, [NAME] was a director of [NAME] and has been the sole director of [NAME] since 28 September 2018. 20 On or about 26 September 2017 [NAME] entered into an agreement to borrow the principal amount of $1,230,000 from [NAME] to complete the purchase of the Property and signed a mortgage to [NAME] of the Property to secure that loan in anticipation of the purchase of the Property with a Lower Rate of Interest of 12% per annum and Higher Rate of Interest of 24% if not paid on time for a 6 month term. 21 On 26 September 2017 [NAME] registered security interest on the Personal Property Securities Register (PPSR) over [NAME]. 22 On about 6 October 2019 [NAME] entered into a loan agreement with [COMPANY] to borrow the amount of $1,400,000 at a standard interest rate of 12% per annum reducing to 8% per annum if not in default. 23 On about 9 October 2017 [NAME] completed the purchase of the Property from funds advanced to it by [NAME] and on 11 October 2017 became the registered proprietor of the Property and on 11 October 2017 [NAME] registered mortgage 718326158 ([NAME]) over the title of the Property. 24 The BF Mortgage incorporated the terms of the loan made by [NAME] to [NAME] and the mortgage security provided, which included the following: (a) Schedule "A" and Schedule "B" to the Mortgage; (b) Standard terms registered document no. 718188316 (Standard Terms Document) (called the "Loan Agreement" and the "[NAME]"). 25 Schedule "A" of the Loan Agreement inter alia states as follows: Higher Rate of Interest 24% per annum Lower Rate of Interest 12% per annum Minimum Interest Amount 6 month's interest calculated on the Principal Amount Principal Amount $1,230,000.00 Specified Interest Regime Interest Regime A (clause 5.11) Principal Amount $1,230,000.00

26 Schedule "B" of the Loan Agreement inter alia states as follows: Loan management fee - a fee to be paid by the [NAME] to the [NAME] for the monthly management of the loan $115.00 per month. Monthly, on the Date for the Payment of Interest Default Loan Management Fee - a fee calculated on a daily basis once an Event of Default occurs or is deemed to have occurred if the [NAME] takes any step in connection with a Recovery Action $75.00 Immediately upon demand by the [NAME]

27 The Standard Terms Document provides (amongst other things) as follows: Clause 1.1 Definitions "Higher Interest Rate" means the higher rate of interest specified in Schedule A as the '*Higher Rate of Interest"; "Interest Regime A" means the interest regime referred to in clause 5.11; "Lower interest Rate" means the lower rate of interest specified in Schedule A as the "Lower Rate of Interest" "Principal Amount" means the amount stipulated in Schedule A as the principal amount advanced by the [NAME] to the [NAME], the repayment of which is secured by this Mortgage and, if no amount is specified in Schedule A as the '"Principal Amount", that expression shall mean any amount advanced by the [NAME] to the [NAME], or to any other person at the [NAME]'s direction, on any transaction or any amount advanced, whether directly or indirectly associated with the grant of this Mortgage; "Specified interest Regime" means any one of: (a) Interest Regime A as referred to in clause 5.11; Clause 5.3 states: The Interest to be paid by the [NAME] shall at all times be the Higher Interest Amount unless the [NAME] notifies the [NAME] that the Lower Interest Amount is payable by the [NAME] for any Interest Period. Clause 5.11 states: If the Specified Interest Regime applicable to this Mortgage is Interest Regime A: (a) the [NAME] shall pay Interest to the [NAME] monthly in advance on the Date for the Payment of Interest; (b) and, the [NAME] fails to pay Interest on the Date for the Payment of Interest, then: (i) The [NAME] shall be liable to pay Interest on the Outstanding Interest at the Higher Interest Rate compounding monthly on the Date for the Payment of Interest until the Outstanding interest is paid in full; and (ii) the Interest on the Outstanding Interest compounded on the basis specified in paragraph (i) above shall, become part of the Secured Money as soon as it compounds. (c) Interest once accrued for a month shall be liable for the whole of the month and shall not be refundable or adjustable after the Date for the Payment of Interest. 28 Schedule A (to the [NAME]) does not include any reference to the Loan Management Fee nor the Default Loan Management Fee. The Loan Management Fee and the Default Loan Management Fee are only referred to in Schedule B (to [NAME]). 29 The Loan Management Fee is not defined correctly in Standard Terms Document as the definition is: "Loan Management Fee Percentage" means the percentage specified in Schedule A as the "Loan management fee percentage". 30 Schedule B of the Mortgage refers to the Loan Management Fee as $115.00 per month and is not expressed as a percentage. 31 [NAME] is not entitled to the Loan Management Fee nor the Default Loan Management Fee as to do so is unconscionable conduct on the part of [NAME]. Particulars (a) [NAME] held superior bargaining power to dictate the terms of the Loan Agreement; (b) [NAME] knew or ought to have known that [NAME] was not able to understand the onerous terms in the Loan Agreement of … (iii) charging a monthly Loan Management Fee of $115.00 per month and (iv) charging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; (c) [NAME], director of [NAME], exerted undue pressure and / or influence upon [NAME] given his relationship to [NAME], the sole director of [NAME] at the time of entering into the Loan Agreement.

1. Although it is by no means clear, it appears that paragraphs 5 and 6 of the relief claimed in the proposed amended [NAME]-claim are said to arise out of the conclusionary pleading of unconscionable conduct in paragraph 31 of the proposed amended [NAME]-claim. Paragraphs 5 and 6 of the relief claimed are in the following form: 5 Declaration that the provisions of the Loan Agreement insofar as its provisions require payment by the Defendant of Loan Management Fee and Default Loan Management Fee have no operative function in the Loan Agreement or alternatively those charges are unconscionable. 6 Order that the Loan Agreement be read and construed as if any reference to payment by the Defendant of Loan Management Fee and Default Loan Management Fee were deleted from the Loan Agreement. 1. [NAME] submit that paragraphs 3 to 31 and paragraphs 5 and 6 of the relief claimed are defective for the following reasons:

1. No attempt is made to connect any of the pleaded facts in these paragraphs to any cause of action; they are simply loosely assembled facts unconnected to any cause of action. As a result, they fail to disclose a reasonable cause of action or are embarrassing.

2. The paragraphs are embarrassing as the facts pleaded have no apparent relevance to an issue in these proceedings and it is unclear what is alleged against [NAME].

3. If the paragraphs are pleaded in an attempt to revisit the issue of what amount was owing by [NAME] as at 31 May 2018, the paragraphs are an abuse of process as an issue estoppel applies by virtue of what was found in the Liability Judgment at [45] and orders 3 and 4 made in the Earlier Proceedings, which was a judicial determination by Parker J of what amount was owing by [NAME] as at 31 May 2018.

4. Paragraphs 28, 29 and 30 of the proposed amended [NAME]-claim are observations in the form of submissions regarding the [NAME].

5. There is no attempt to plead a single material fact which might justify a conclusion that [NAME]'s conduct was unconscionable as expressed in paragraph 31 and to the extent those facts are contained in the particulars to paragraphs, they should be expressed in the pleaded paragraph, not in particulars.

6. An [NAME] estoppel operates against [NAME] contesting matters that relate to the circumstances of the entry into the [NAME]. 1. [NAME] says that the factual matters establishing the background to it entering into the loan with [NAME] are critical to the claims for relief for unconscionable conduct that are made by [NAME] in the [NAME]-claim, including by setting up the relationship between the parties. [NAME] also says that the purpose of pleading all of the matters contained in paragraphs 3 to 30 of the [NAME]-claim is not to attempt to try and subvert what was decided by Parker J in the Earlier Proceedings, particularly the declaration that the quantum of the "Secured Money", including interest and fees, as at 31 May 2018 was $1,199,900.

2. Applying the principles in [NAME], in my view paragraphs 3 to 31 of the proposed amended [NAME]-claim are deficient because they fail to link the factual matters that are expressed in paragraphs 3 to 30 to the pleading of unconscionability that appears in paragraph 31. It is incumbent on [NAME] to state clearly the case it is making and to set out the substratum of material facts on which it relies for the claim that [NAME] is not entitled to claim the Loan Management Fee or the Default Loan Management Fee because it would be unconscionable conduct for it to do so. In addition, material facts cannot reside in the particulars in the form that they are set out in paragraph 31 of the proposed amended [NAME]-claim. All of those failings mean that the pleading does not accord with the dictates of justice per s 58 of the CPA, including by its failure to facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA. 3. [NAME] conceded that the pleading was missing the necessary link between the matters contained in paragraphs 24 to 30 and the conclusion expressed in paragraph 31 and indicated that a new paragraph 30A was required to plead that link (T24.49-25).

4. My conclusion is that paragraphs 3 to 31 of the proposed amended [NAME]-claim are embarrassing and cannot be permitted in their current form. Unless supported by an appropriately drafted claim, paragraphs 5 and 6 of the relief claimed do not disclose a reasonable cause of action, are embarrassing, and cannot be permitted.

5. I do not think that either an issue estoppel or an [NAME] estoppel arises in relation to the claim of unconscionability that is made. The unconscionable conduct that is identified in paragraph 31 (albeit in impermissible form) is limited to the entitlement to the Loan Management Fee and the Default Loan Management Fee. Although the particulars to paragraph 31 would suggest that the claim being made is that the entry into the loan agreement was unconscionable conduct, the form of paragraph 31 itself is more confined. [NAME] readily concede that they have not previously made a claim for the Loan Management Fee or the Default Loan Management Fee. For the reasons expressed above, I have found that no [NAME] estoppel operates to prevent them making the claim for those fees.

6. In those circumstances, I cannot see how an issue estoppel arises to prevent [NAME] from defending itself to a claim for those fees on the basis that it would be unconscionable for [NAME] to do so. As expressed in Tomlinson at [22], an issue estoppel operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. There is no such ultimate issue which was necessarily resolved as a step in reaching the Liability Judgment because there was no claim for the Loan Management Fee or the Default Loan Management Fee in the Earlier Proceedings. If [NAME] was seeking to set aside the entry into the loan agreement and the [NAME] on the basis that they were the result of unconscionable conduct by [NAME], clearly there would be an issue estoppel because the whole of the Liability Judgment is predicated on the validity of those arrangements.

7. Similarly, I consider that an [NAME] estoppel has not arisen to prevent [NAME] from defending itself to a claim for the Loan Management Fee and the Default Loan Management Fee on the basis of unconscionable conduct by [NAME], so long as that defence does not seek to set aside the loan agreement or the [NAME]. As expressed in Tomlinson at [22], an [NAME] estoppel arises where a claim or issue is so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The lack of any claim for the Loan Management Fee or the Default Loan Management Fee in the Earlier Proceedings means that it is not unreasonable for [NAME] to assert that the claim for them in these proceedings is unconscionable.

8. If [NAME] wishes to replead the defence based on unconscionable conduct, it will need to make an appropriate application for leave to do so.

Paragraph 36 1. Paragraph 36 of the proposed amended [NAME]-claim states: Clause 5.11 of the Standard Terms Document provides that if [NAME] fails to pay Interest on the Date for the Payment of Interest, then [NAME] is liable to pay interest at the Higher Interest Rate of 24% per annum, compounding monthly until the Outstanding Interest is paid in full. 1. [NAME] object to paragraph 36 on the basis that it pleads matters relating to the higher interest rate of 24% and that [NAME] conceded at the hearing of the Strike Out Application that it was not permitted to make such a claim.

2. In my opinion, paragraph 36 raises a matter concerning the interest rate of 24% which is not the subject of challenge in these proceedings, as indicated by order 2 of the consent orders made on 14 September 2023. In those circumstances, paragraph 36 of the proposed amended [NAME]-claim is not permitted.

Paragraphs 35 and 39 1. Paragraphs 35 and 39 of the proposed amended [NAME]-claim state: 35 On about 11 October 2017 [NAME] entered into a loan agreement with [COMPANY] (Partner Invest) to lend Partner Invest the principal sum of $170,000 at a standard interest rate of 36% per annum reduced to 19.06% per annum if not in default. … 39 On about 11 October 2017 [NAME] entered into a loan agreement with [COMPANY] (Partner Invest) to lend Partner Invest the principal sum of $170,000 at a standard interest rate of 36% per annum reduced to 19.06% per annum if not in default.

1. These paragraphs are in exactly the same form and [NAME] concedes that only paragraph 35 should remain, with paragraph 39 omitted (T26.32–34). 2. [NAME] assert that they are defective on the basis that the facts pleaded in those paragraphs have no apparent relevance to an issue in these proceedings; that it is unclear what is alleged against [NAME]; and that they are, therefore, embarrassing. [NAME] submits that the facts in these paragraphs form a background but accepts there is no claim against [NAME] in relation to them. During submissions, the following exchange took place (T26.18–30): HIS HONOUR: But it's got to be background [to] a claim. [NAME]: Yes. HIS HONOUR: Which claim is it a background [to]? Because it doesn't form part of your construction argument. It doesn't form part of the unconscionability facts. Which claim and [NAME]-claim does it relate to? Does it form part of the [NAME] claim? [NAME]: I don't know it's that relevant, but it could be. I think it could be, given to establish that claim we need to set out the background of what was going on and the dealings that the parties had had together. It's on that basis, it should tie into that. But that's as high as I can put it.

1. I consider that the pleading of facts which on their face are irrelevant to any claim that might be made is embarrassing. The pleading of irrelevant matters is not in keeping with the dictates of justice in s 58 of the CPA, nor does it facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

Accordingly, I do not permit paragraphs 35 and 39 of the proposed amended [NAME]-claim.

Paragraphs 40–46 and 53 1. Paragraphs 40–46 and 53 of the proposed amended [NAME]-claim are as follows (particulars omitted and grammatical errors left uncorrected): 40 [NAME] repaid money borrowed from [NAME] as follows: (a) On 3 November 2017 an the amount of $804,181.00 paid to [NAME] pursuant to a transfer from [NAME] to or for the benefit of [NAME]; (b) $800,000.00 was to reduce the amount of principal loan amount owed to [NAME] reducing the principal owed to $430,000. (c) The amount of $4,181.00 was paid for the loan establishment fee payable by the defendant to [NAME]. (d) On 6 November 2017 [NAME] caused the amount of $1,077.55 to be repaid to [NAME] pursuant to a transfer from [COMPANY] to [NAME] for payment of their legal costs in discharging the mortgage to [NAME]; 41 On about 3 November 2017 the amount of $170,000 was lent by [NAME] to Partner Invest. 42 On 14 November 2017 [NAME] through its solicitors pursuant to a power of attorney executed a Release of Mortgage and discharged the BF Mortgage and by orders made by the Supreme Court of [NAME] in these proceedings on 14 September 2022 the [NAME] was reinstated. 43 [NAME] made payments of interest and other payments pursuant to the Loan Agreement as follows: (a) On 9 November 2017 the amount of $12,300.00; (b) On 11 December 2017 the 2017 the amount of $12,300.00; (c) On 9 January 2018 the amount of $12,300.00; (d) On 26 April 2018 the amount of $35,000.00. 44 As the PPS Registration was still registered on the PPSR, on 21 February 2019 [NAME] sent an email to [NAME]'s lawyers, [NAME] requesting a payout figure for the defendant over the Property. 45 [NAME], being solicitors acting on behalf of [NAME], sent a [NAME]'s Certificate pursuant to Clause 24 dated 21 February 2019 notifying [NAME] that the Payout Figure, for money owed by [NAME], based on the facts, matters and circumstances known to [NAME] at the time of issuing the certificate was $1,199,684.13 as at the Expiry Date of 21 February 2019. 46 [NAME] did not agree the Payout Figure of $1,199,684.13 was owed to [NAME] but in order to have the PPS Registration removed from the PPSR to permit the Property to be used as security for obtaining additional finance, steps were taken by [COMPANY] and [NAME] to pay $1,199,684.13 to [NAME]. … 53 In addition to the money owed to [NAME] which was repaid by [NAME] as set out in paragraph 40 above, [NAME] has also received additional payments amounting to $1,200,584.13 as referred to in paragraph 46 above. 1. [NAME] submit that these paragraphs are: 1. embarrassing as the facts pleaded in them have no apparent relevance to an issue in these proceedings and it is unclear what is alleged against [NAME]; and 2. an abuse of process if they are pleaded in an attempt by [NAME] to revisit the issue of what amount was owing by [NAME] as at 31 May 2018. 1. [NAME] submit that these facts are, again, "background". But it is entirely unclear what claim they support. They are bereft of connection with any claim expressed in the proposed amended [NAME]-claim. They certainly cannot support a claim that might seek to cavil with the finding in the Liability Judgment that the quantum of the "Secured Money", including interest and fees, as at 31 May 2018 was $1,199,900 because there is an issue estoppel in respect of that finding and it would be an abuse of process for that finding to be challenged in any way in these proceedings.

For these reasons, they cannot be permitted because they do not meet the dictates of justice in s 58 of the CPA, including by their failure to facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

Paragraphs 47–52 1. Paragraphs 47–52 of the proposed amended [NAME] claim state: 47 On 29 August 2022, Justice Parker delivered an ex tempore judgment in Supreme Court of [NAME] proceeding numbered 2021/60376 (Liability Proceeding) in favour of [NAME] against [NAME]. 48 On 14 September 2022, Parker J published written reasons for judgment in the Liability Proceeding having citation [COMPANY] v [COMPANY] [2022] NSWSC 1156 (Liability Judgment). 49 Pursuant to the Liability Judgment made on 14 September 2022, and based upon the business records of [NAME], it was found that on 14 May 2018 a draw down of $800,000 was advanced by [NAME] to or for the benefit of [NAME] increasing the principal amount then owed to [NAME] by [NAME] back to the amount of $1,230,000.00 less the advance interest paid on 26 April 2018 in the amount of $35,000.00 thereby reducing the principal amount down from $1,230,000.00 to $1,230,000.00 minus the $35,000.00 = $1,195,000.00. 50 Orders were made pursuant to the Liability Judgment to the effect that: (a) in October 2017, Business. Finance made a loan of $1.23 million to [NAME] pursuant to a written loan agreement (Loan Agreement); (b) on 14 November 2017, [NAME], a director of [NAME], procured the discharge of the mortgage over the Property ([NAME]); (c) the amount of $1,199,900 received in March 2019 was a repayment of principal on the Loan Agreement being the payments referred to in in paragraphs 46(i) to 46(iii) above; (d) [NAME] was entitled to have a [NAME] registered over the Property as security for any money owed by [NAME] to the [NAME] and the [NAME] was granted by the [NAME] in accordance with the orders made in the Liability Proceedings ([NAME]). (e) [NAME] continues to owe interest to [NAME] pursuant to the Loan Agreement which needs to be recalculated which is the purpose of the these proceedings before the Court. 51 Also on 14 September 2022, Parker J made orders to give effect to the Liability Judgment (Orders). The Orders included: (a) a declaration that for the purposes of the [NAME], the quantum of the "Secured Money" (as defined in the Memorandum), including interest and fees, as at 31 May 2018 was $1,119,900; and (b) a declaration that repayments of the "Secured Money" (as defined in the Memorandum) were made in the amounts of $650,000 and $300,000 on 14 March 2019 and in the amount of $249,000 on 18 March 2019. 52 The Liability Judgment did not determine the issue of the quantum of the amount of the: (a) debt owing by [NAME] pursuant to the Loan Agreement in the period from 1 June 2018 to the date of judgment in these proceedings; (b) "Secured Money" owing by [NAME] and secured by the [NAME] in the period from 1 June 2018 to the date of judgment in these proceedings. 1. [NAME] complain that paragraphs 47, 48, 51 and 52 of the proposed amended [NAME]-claim repeat verbatim paragraphs 4, 5, 7 and 8 of the statement of claim without any indication of what is intended to be alleged by the repetition of those facts, which makes the paragraphs embarrassing. 2. [NAME] submit that paragraph 49 of the proposed amended [NAME]-claim is defective because it is difficult to understand as it mixes a pleading of what Parker J is said to have found in the Liability Judgment (without referring to particular paragraphs of the Liability Judgement) with references to evidence and then makes an allegation regarding a payment of $35,000 which is not expressly referred to in the Liability Judgment.

3. They further complain that in any event paragraph 49 of the proposed amended [NAME]-claim is erroneous because Parker J did not make a finding that the debt amount was $1,195,000 as at 31 May 2018, but that the finding in the Liability Judgment was that the principal amount owing as at 31 May 2018 was $1,199,900 and that the interest and fees needed to be recalculated.

4. At the hearing, [NAME] conceded that paragraph 49 of the proposed amended [NAME]-claim would be removed (T32.28–47). 5. [NAME] contend that paragraph 50 of the proposed amended [NAME]-claim is defective because although it pleads the effect of the orders made on 14 September 2022 arising from the Liability Judgment, it is unclear what is being alleged against [NAME] and it does not otherwise assist [NAME] in obtaining the relief sought in the proposed amended [NAME]-claim. 6. [NAME] submitted that all of paragraphs 47 to 52 (excluding paragraph 49, which is to be removed) of the proposed amended [NAME]-claim were required to make the pleading comprehensible and understandable, and if they were to be removed then anyone reading the pleading would not understand what was going on.

7. While there is no problem per se with [NAME] repeating verbatim in its own pleading material facts which are stated in the pleading against it by [NAME], the real vice with the form of paragraphs 47 to 52 of the proposed amended [NAME]-claim is that they do not identify any connection between the matters stated in them and any cause of action which is alleged. [NAME] are entitled to have that connection identified so that they can understand the case that they are required to meet. The failure to do so makes this form of pleading embarrassing because it does not adhere to the dictates of justice in s 58 of the CPA, including including insofar as it does not facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

8.

For these reasons, paragraphs 47 to 52 cannot be permitted.

Paragraphs 52A 1. Paragraphs 52A of the proposed amended [NAME]-claim states: 52A [NAME] was in breach of section 21 of The Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth), in trade or commerce, in connection with Goods or services, engaged in conduct that is, in all the circumstances, unconscionable. Particulars (a) [NAME] held superior bargaining power to dictate the terms of the Loan Agreement; (b) [NAME] knew or ought to have known that [NAME] was not able to understand the onerous terms in the Loan Agreement of (i) charging a monthly Loan Management Fee of $115.00 per month and (ii) charging a monthly Default Loan Management fee varying between $2,325 and $2250 per month; (c) [NAME], director of [NAME], exerted undue pressure and/or influence upon [NAME] given his relationship to [NAME], the sole director of [NAME] at the time of entering into the Loan Agreement. 1. [NAME] complain that the pleading of statutory unconscionable conduct is defective for the same reasons as that the pleading of unconscionable conduct in subparagraphs 11A(a)–(f) of the proposed amended defence is defective, which is that it expresses a legal conclusion without setting out any of the material facts on which that conclusion is based. 2. [NAME] conceded at the hearing that the same problems exist with paragraph 52A (T33.40–49).

3. Applying the principles in [NAME], allegations of unconscionable conduct must be founded on a set of material facts and not be expressed with opaque generality or as a set of conclusions.

Accordingly, the form of paragraph 52A is embarrassing for failing to set out the case to be met, does not meet the dictates of justice in s 58 of the CPA, including by its failure to facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA, and cannot be permitted.

Paragraph 52B 1. Paragraphs 52B of the proposed amended [NAME]-claim states: 52B [NAME] repeats paragraphs 5 to 31, 35, 36 and 39 to 46 and 52C above of this First [NAME]-Claim. 1. [NAME] submit that paragraph 52B is defective because no attempt is made to connect the pleaded facts with any cause of action, the repetition of these paragraphs has no apparent relevance to an issue in these proceedings, and it is unclear what is alleged against [NAME]. 2. [NAME] submits that it is seeking to tie those facts into the claim which appears in paragraph 52D of the proposed amended [NAME]-claim (dealt with below).

3. In my view, paragraph 52B is embarrassing and cannot be permitted. If it is proposed that the facts stated in paragraph 52B are to be tied into the pleading in paragraph 52D, then this must be explicitly stated. Failure to do so means that the pleading in its current form lacks sufficient clarity so as to enable [NAME] to know the case that it has to meet. It does not adhere to the dictates of justice in s 58 of the CPA, including by its failure to facilitate the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

Paragraph 52C 1. Paragraph 52C of the proposed amended [NAME]-claim is as follows: 52C In entering into the Loan Agreement with [NAME]: (a) [NAME] held superior bargaining power to dictate the terms of the Loan Agreement; (b) [NAME] knew or ought to have known that [NAME] was not able to understand the onerous terms in the Loan Agreement of (i) charging a monthly Loan Management Fee of $115.00 per month and (ii) charging a monthly Default Loan Management fee varying between $2,325 and $2250 per month; (c) [NAME], director of [NAME], exerted undue pressure and/or influence upon [NAME] given his relationship to [NAME], the sole director of [NAME] at the time of entering into the Loan Agreement. 1. [NAME] contended that paragraph 52C appears to repeat the particulars to paragraph 52A and attempts to plead elements of unconscionability but is defective because it contains a series of conclusions without alleging any material facts which might justify the conclusions. There is also no actual allegation of unconscionability alleged in the paragraph, making its relevance to any pleaded claim and what is alleged against [NAME] unclear. 2. [NAME] did not attempt to support paragraph 52C in submissions.

3. In any event, it suffers from the same problems that I have identified above in relation to paragraph 52A and therefore cannot be permitted.

Paragraphs 52D–52J 1. Paragraphs 52D to 52J are in the following form: 52D In entering into the Loan Agreement with [NAME] was required to be the holder of an Australian Credit Licence pursuant to the provisions of the [NAME] Act 2009 (Cth) ([NAME]) but at all relevant times [NAME] was not the holder of an Australian Credit Licence. 52E [NAME] repeats paragraphs 5 to 31, 35, 36 and 39 to 46 and 52C above of this First [NAME]-Claim. 52F As a result of not being the holder of an Australian Credit Licence the Court may make such orders pursuant to section 180(1) of the [NAME] as the Court considers appropriate against the [NAME] to prevent the [NAME] from profiting from [NAME] or to compensate [NAME], in whole or in part, for any loss or damage suffered as a result of the [NAME]'s conduct, to prevent or reduce the loss or damage suffered or likely to be suffered, by [NAME] as a result of the [NAME]'s conduct and to compensate [NAME], in whole or in part, for any loss or damage suffered by [NAME] as a result of the [NAME]'s conduct. 52G The whole of the terms of the Loan Agreement claiming: (a) charging in a monthly Loan Management Fee of $115.00 per month; (b) charging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; (c) the Establishment Fee for approving the loan in the amount of $4,010.00 (inclusive of GST); and (d) any legal costs charged including the amount of $1,077.55 (GST inclusive) or any other costs and expenses: are void and are unenforceable by the [NAME] against [NAME]. 52H As a result pursuant to sections 180(2)(d) and 180A(2) of the [NAME] Act 2009 (Cth) [NAME] seeks orders that the [NAME] be directed to refund to [NAME] an amount determined by the Court by removing from an amount claimed by the [NAME] an amount for the Loan Management Fee of $115.00 per month and the monthly Default Loan Management Fee varying between $2,325 and $2,250 per month which is also to be determined: (a) Less the following payment by [NAME]: (i) on 14 March 2019 the amount of $350,000.00; (ii) on 14 March 2019 the amount of $600,000.00; (iii) on 18 March 2019 the amount of $249,900.00; (iv) on 18 March 2019 the amount of $684.13 by two payments of $402.28 and $281.85, (b) Less rent on the Property paid to the [NAME] on or about 19 December 2022 in the amount of $2,430.00; 52I [NAME] was forced to sell the Property which was sold on about 14 April 2023 for the amount of $1,900,000.00 and after adjustments the [NAME] received the amount of $1,797,799.73 plus the deposit of $95,000.00 which totals $1,892,799.73 (less payment of the agent's commission and legal costs on the sale) 52J [NAME] claims damages against the [NAME] pursuant to sections 180(2)(e) and 180A(2) of the [NAME] Act 2009 (Cth) that the [NAME] has suffered in connection with the [NAME]'s conduct as assessed by the Court.

1. Paragraph 52D of the proposed amended [NAME]-claim is the commencement of allegations made in the pleading in relation to the operation of the [NAME] Act 2009 (Cth) ([NAME] Act) and attempts to set up the jurisdictional prerequisite to the matters contained in paragraphs 52E to 52J. I am satisfied that if the allegations made in paragraph 52D are to be struck out, then all of paragraphs 52E to 52J must also be struck out. 2. [NAME] contend that paragraph 52D contains a conclusion without alleging any material facts to justify the conclusion contained in it and also makes no attempt to plead the statutory provisions of the [NAME] Act that enlivens the requirement to hold an Australian credit licence, and should not be allowed because it is embarrassing.

3. The principal submission made by [NAME], however, is that all of these paragraphs fail to disclose a reasonable cause of action because the terms of the [NAME] Act do not apply to the [NAME] for the following reasons:

1. Section 29 of the [NAME] Act provides that: [a] person must not engage in a credit activity if the person does not hold a license authorising the person to engage in the credit activity.

1. Section 6 of the [NAME] Act sets out the conditions in which a person is to be taken as engaging in a "credit activity", which includes reference to: 1. with respect to "credit contracts": a person who is a credit provider under a credit contract, a person who carries on a business of providing credit to which the National Credit Code applies, or a person who performs the obligations, or exercises the rights, of a credit provider in relation to a credit contract; 2. with respect to "mortgages": a person who is a [NAME] under a mortgage, or a person who performs the obligations, or exercises the rights, of a [NAME] in relation to a mortgage.

1. The Dictionary contained in s 5 of the [NAME] Act defines "credit contracts" as having the same meaning as in section 4 of the National Credit Code; "[NAME]" to mean [NAME] under a mortgage; and "mortgage" as a mortgage to which the National Credit Code applies.

2. Section 4 of the National Credit Code (which is located in Schedule 1 to the [NAME] Act) provides that "[f]or the purposes of this Code, a credit contract is a contract under which credit is or may be provided, being the provision of credit to which this Code applies".

3. Section 5(1) of the National Credit Code provides: This Code applies to a provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of pre-contractual obligations) is proposed to be entered into: (a) the [NAME] is a natural person or a strata corporation; and (b) the credit is provided or intended to be provided wholly or predominantly: (i) for personal, domestic or household purposes; or (ii) to purchase, renovate or improve residential property for investment purposes; or (iii) to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for inverted investment purposes; and (c) a charge is or may be made for providing the credit; and (d) the credit provider provides the credit in the course of the business of providing credit carried on in this jurisdiction or as part of or incidentally to any other business of the credit provider carried on in this jurisdiction.

1. Each of the elements in s 5(1)(a) to (d) need to be satisfied before the National Credit Code applies because of the use of the conjunction "and" between each of them.

2. The "[NAME]" for the purposes of the loan agreement between [NAME] and [NAME] is a corporation (being [NAME]) and therefore is neither "a natural person or a strata corporation". As a result, [NAME] cannot satisfy the precondition in s 5(1)(a) of the National Credit Code, with the result that the loan agreement is not governed by the National Credit Code, is not a "credit contract" as defined in s 5 of the [NAME] Act, and did not involve [NAME] engaging in a "credit activity" as defined in s 6 of the [NAME] Act.

3. Section 7(1) of the National Credit Code provides: This Code applies to a mortgage if: (a) it secures obligations under a credit contract or a related guarantee; and (b) the mortgagor is a natural person or a strata corporation.

1. As with s 5(1), each of the elements in s 7(1) need to be satisfied before the National Credit Code applies due the use of the conjunctive "and" between each of them.

2. Because the loan agreement is not a "credit contract", the [NAME] does not secure obligations under a "credit contract", meaning that the first element in s 7(1)(a) is not satisfied. Further, the "mortgagor" for the purposes of the [NAME] between [NAME] and [NAME] is a corporation (being [NAME]) and is therefore neither "a natural person or a strata corporation", which means that the second element in s 7(1)(b) is not satisfied. As a result, the [NAME] is not governed by the National Credit Code, is not a "mortgage" as defined in s 5 of the [NAME] Act, and does not involve [NAME] engaging in a "credit activity" as defined in s 6 of the [NAME] Act.

3. The result is that [NAME] was not required to hold a licence under the [NAME] Act to engage in the loan agreement and the [NAME] (it being conceded that [NAME] did not hold such a licence at the relevant time).

4. It follows that paragraph 52D of the proposed amended [NAME]-claim fails to disclose a reasonable cause of action and leave to amend should be refused. 1. [NAME] submits that the "[NAME]" under the loan agreement and the [NAME] was [NAME], pointing to an unregistered form of the [NAME] which was executed by [NAME] in his stated capacity as sole director and sole secretary of "[COMPANY] in its corporate capacity and as Trustee for [COMPANY]" as the "Borrower/[NAME]/Mortgagor" on 26 September 2017, and witnessed by [NAME]. In Schedule A to that document, the "[NAME](s)" are listed as "[COMPANY] in its corporate capacity and as Trustee for [COMPANY] [NAME]" and the "Guarantor" is listed as "[NAME]".

2. In response to this argument, [NAME] say that there is no evidence that the form of the [NAME] signed by [NAME] (in which his name appears as one of the "[NAME](s)" and as the "Guarantor" in Schedule A) was ever signed by [NAME]. They also say that neither the [NAME] (which was registered and signed by [NAME] and [NAME]) nor the [NAME] (which was registered and signed by [NAME]) contain any such mention of [NAME].

3. I have looked closely at the registered [NAME] (dealing number 718326158, registered 11 October 2017) and the registered [NAME] (dealing number 722101942, registered 11 November 2022). As I have mentioned above, they are signed by both parties.

4. The mortgagor in the [NAME] is listed as "[COMPANY] 618 821 837 in its corporate capacity as Trustee for [COMPANY]". The mortgagor in the [NAME] is listed as "[COMPANY] 618 821 837 as Trustee for [COMPANY]". The [NAME] is signed by [NAME] as sole director and sole company secretary of [NAME] on 26 September 2017. The [NAME] is signed by [NAME] as sole director and sole company secretary of [NAME] on 3 November 2022.

5. The [NAME] is signed by [NAME] for [NAME] on 29 September 2017. The [NAME] is signed by [NAME] for [NAME] on 8 November 2022.

6. There is absolutely no mention of [NAME] being a [NAME] or guarantor in either the [NAME] or the [NAME]. I cannot put any reliance on the unregistered form of the Original Document which refers to [NAME] as the [NAME] and guarantor. Nor is there any evidentiary value in the letter dated 17 October 2017 from [NAME] to [NAME] which refers to [NAME] as the "Guarantor" and extends the "Portfolio Obligor" to include him in that capacity by reference to some unidentified document. The director's certificate dated 9 October 2017 does not advance the submission put by [NAME] either.

7. In these circumstances, I agree with the analysis provided by [NAME] that the [NAME] Act has no application to the loan agreement, the [NAME], or the [NAME]. As a result, I consider that paragraphs 52D to 52J of the proposed amended [NAME]-claim do not disclose a reasonable cause of action and should not be permitted. Allowing those paragraphs to remain would not adhere to the dictates of justice in s 58 of the CPA, including by not facilitating the just, quick and cheap resolution of the real issues in the proceedings as stated in s 56 of the CPA.

8. Even if I had not reached that view, I consider that there are separate bases on which paragraphs 52D to 52J of the proposed amended [NAME]-claim should not be permitted as was submitted by [NAME]. These are:

1. Paragraph 52D: This paragraph contains a conclusion about the requirement of [NAME] to hold an Australian Credit Licence under the [NAME] Act without reference to the material facts for that conclusion and for that reason, it is embarrassing.

2. Paragraph 52E: This paragraph repeats a whole series of paragraphs from earlier in the proposed amended [NAME]-claim, none of which I have permitted to remain, and is therefore embarrassing.

3. Paragraph 52F: This paragraph builds on the unsupported conclusion stated in paragraph 52D without pleading any material facts and for that reason it is embarrassing.

4. Paragraph 52G: This paragraph contains a conclusion regarding certain terms of the loan agreement being void and unenforceable without reference to any supporting material facts and for that reason it is embarrassing.

5. Paragraph 52H: This paragraph rests on the jurisdictional conclusion stated in paragraph 52D which is unsupported by material facts and for that reason it is embarrassing.

6. Paragraph 52I: This paragraph contains a conclusion that [NAME] was forced to sell the Property, without pleading any material facts which might support that conclusion. For that reason, it is embarrassing.

7. Paragraph 52J: This paragraph also rests on the jurisdictional conclusion stated in paragraph 52D which is unsupported by material facts and, therefore, this paragraph is also embarrassing.

Paragraph 53 1. Paragraph 53 of the proposed amended [NAME]-claim states: 53 In addition to the money owed to [NAME] which was repaid by [NAME] as set out in paragraph 40 above, [NAME] has also received additional payments amounting to $1,200,584.13 as referred to in paragraph 46 above. 1. [NAME] submit that there is no attempt in paragraph 53 to explain how those allegations have any relevance to the issues in dispute in these proceedings. Moreover, it is unclear what is being alleged against [NAME]. For those reasons, this paragraph is embarrassing.

2. During the hearing, I repeatedly pressed [NAME] to identify what relevance the matters pleaded in paragraph 53 had to any claim made in the proposed amended [NAME]-claim, but it was unable to do so (T47.39–48.41).

3. In my view, paragraph 53 is untethered to any cause of action contained in the proposed amended [NAME]-claim and is therefore embarrassing and not in accordance with the dictates of justice in s 58 of the CPA, including by its failure to facilitate the just, quick and cheap determination of the real issues in the proceedings as expressed in s 56 of the CPA.

Accordingly, it should not be permitted.

Paragraph 54 1. Paragraph 54 of the proposed amended [NAME]-claim is as follows (omitting the struck-through text proposed to be deleted): 54 Alternatively, when the Property was sold on about 14 April 2023 [NAME] owed the amount of $641,376.22 to [NAME] less any rental payments on the Property received by [NAME] or on its behalf since 19 December 2022, or as calculated as part of the settlement of the sale of the Property. 1. [NAME] submit that paragraph 54 is defective because there is an issue estoppel which prohibits [NAME] from relitigating the amount of the debt as at 31 May 2018; there are no material facts which could be said to justify the debt figure alleged to be owed; and there is a failure to plead any material facts as to how and why the debt figure is to be further reduced by unspecified "rental payments on the Property received by [NAME]" and by some process described as "calculated as part of the settlement of the sale of the Property". They say that for these reasons, paragraph 54 is embarrassing.

2. During the hearing, I also repeatedly pressed [NAME] to identify what relevance the matters pleaded in paragraph 54 had to any claim made in the proposed amended [NAME]-claim, but it was unable to do so (T47.39–48.41).

3. I am satisfied that paragraph 54 should not be permitted because it is embarrassing for the reasons given by [NAME], although I express no view on the submission that there is an issue estoppel because it is not clear to me when the unspecified payments were made.

Paragraphs 7A–7D of the relief 1. Paragraphs 7A to 7D of the relief sought in the proposed amended [NAME]-claim are as follows (additions underlined): 7A Declaration the first plaintiff, in breach of section 21 of The Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth), in trade or commerce, in connection with goods or services, engaged in conduct that is, in all the circumstances unconscionable so to make void the following provisions of the Loan Agreement: (a) Charging a monthly Loan Management Fee of $115.00 per month; and (b) Charging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month. 7B Order pursuant to section 180 of the [NAME] Act 2009 (Cth) that the whole of the terms of the Loan Agreement claiming: (a) charging a monthly Loan Management Fee of $115.00 per month; (b) harging a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; (c) Establishment Fee for approving the loan in the amount of $4,010.00 (inclusive of GST); and (d) any legal costs charged including the amount of $1,077.55 (GST inclusive) or any other costs and expenses: are void and unenforceable by the [NAME] against [NAME]. 7C Order pursuant to section 180(2)(d) and 180A(2) of the [NAME] Act 2009 (Cth) that the [NAME] is not entitled to claim from the defendant and is restrained from: (a) charging the Defendant a monthly Loan Management Fee of $115.00 per month; (b) charging the Defendant a monthly Default Loan Management Fee varying between $2,325 and $2,250 per month; (c) Less the proceeds from the sale of the Property in the amount of $1,892,799.73. 7D Order pursuant to sections 180(2)(e) and 180A(2) of the [NAME] Act 2009 (Cth) that the [NAME] pay damages to [NAME] has suffered in connection with the [NAME]'s conduct as assessed by the court.

1. As all of the causes of action on which the relief claimed in paragraphs 7A to 7D are not permitted, those paragraphs must also fall from the proposed amended [NAME]-claim.

Accordingly, paragraphs 7A to 7D are also not permitted.

CONCLUSIONS 1. In summary, I have concluded that: 1. [NAME] has failed in its application to summarily dismiss or strike out paragraphs 21 to 29 of the statement of claim; 2. [NAME] has failed in its application for leave to amend paragraphs 11, 11A and 11B–16 of the defence; 3. [NAME] has failed in its application to amend all parts of the [NAME]-claim that it wished to add; and 4. [NAME] have succeeded in their application to strike out paragraphs 3 to 31, 35, 36, 39 to 52, 53 and 54 of the [NAME]-claim, leaving only paragraphs 1 and 2 remaining (paragraphs 32, 33, 34, 37, 38 already proposed to be removed), in which case the whole of the [NAME]-claim should be struck out.

ORDERS 1. Based on my conclusions, I make the following orders: 1. The amended notice of motion filed 31 October 2023 by the defendant/[NAME] is dismissed. 2. The statement of [NAME]-claim filed 1 June 2023 is struck out. 3. The defendant/[NAME] is to pay the costs of the plaintiffs/[NAME] of the notice of motion filed 25 September 2023 and the amended notice of motion filed 31 October 2023.

********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 March 2024