Supreme Court New South Wales Medium Neutral Citation: Trust Co. Fiduciary Services Ltd v Hassarati (No. 2) [2011] NSWSC 1396 Hearing dates: 29 July 2011 Decision date: 30 November 2011 Jurisdiction: Common Law Before: Davies J Decision: (1) On NAB's Motion filed 21 July 2011: (a) Prayer 1 and paragraphs 5 to 8 of the Third Cross-Claim are struck out; (b) otherwise dismiss the Motion. (2) CKM's Motion filed 22 July 2011 is dismissed. Catchwords: PROCEDURE - summary dismissal - defendant alleges unjustness of loan made by Plaintiff and also prior loan paid out by Plaintiff - Collier principle - claim for subrogation and restitution by lender against prior lender - prior lender discharges mortgage when paid out - whether good consideration - whether change of position - whether factual inquiry - not appropriate for summary dismissal. Legislation Cited: Australian Securities and Investments Commission Act 2001 Contracts Review Act 1980 Uniform Civil Procedure Rules Cases Cited: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319 Banque Financiere de la Cite v Parc (Battersea) Ltd [1998] 2 WLR 475 Barclays Bank Ltd v W.J. Simms Son & Cooke (Southern) Ltd [1980] QB 677 Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd [2003] NSWSC 1072 Cochrane v Cochrane (1985) 3 NSWLR 403 Collier v Morlend Finance Corporation (1989) 6 BPR 13, 337; [1989] ANZ ConvR 515; (1989) ASC 55-176; (1989) ANZ ConvR 55-473 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Highland v Exception Holdings Pty Ltd (in liquidation) [2006] NSWCA 318; (2006) 60 ACSR 223 Registrar-General v Gill (unreported - Court of Appeal - 16 August 1994) Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68; (2001) 208 CLR 51 Smith v Federal Commissioner of Taxation (1988) 164 CLR 513 St George Bank Ltd v Trimarchi [2004] NSWCA 120 Trust Co. Fiduciary Services Ltd v Hassarati [2011] NSWSC 577 Category: Procedural and other rulings Parties: Trust Company Fiduciary Services Ltd (formerly known as Permanent Trustee Company Ltd (Plaintiff) CKM (Mortgages) Ltd (Fifth Defendant) National Australia Bank Representation: A A Henskens SC (Plaintiffs) G K Burton SC & P Barham (Fifth Defendant) P Reynolds (National Australia Bank) Gadens Lawyers (Plaintiff/First Cross-Defendant) Gibson Howlin Lawyers (Fifth Defendant) Middletons (Third Cross-Defendant) Tricia Andres (National Australia Bank) File Number(s): 2009/295712 Judgment 1These are possession proceedings brought in respect of a default made under a loan agreement between the Plaintiff on the one hand and Alvera Hassarati and Lily Hassarati on the other hand. I shall refer to them as Alvera & Lily. 2The loan from the Plaintiff to the Defendants refinanced a loan the Defendants had with a company called CKM (Mortgages) Ltd made in November 2003. That loan in turn was a refinance of 2 earlier loans from the National Australia Bank made in February and November 2002. 3Alvera has defended the proceedings, and has brought a cross-claim against the Plaintiff (inter alia) claiming relief under the Contracts Review Act 1980, the Australian Securities and Investments Commission Act 2001 and under the general law on the basis that the contract was unjust and unconscionable. In her Defence and Cross-Claim she asserts effectively that the earlier contract with CKM was unjust, and in her Cross-Claim but not her Defence she asserts the earlier contract with NAB was unjust, presumably a pre-emptive strike against a response from the Plaintiff that, if she obtains relief under any Act, she must give credit for the CKM loan under the principle referred to in Collier v Morlend Finance Corporation (1989) 6 BPR 13, 337; [1989] ANZ ConvR 515; (1989) ASC 55-176; (1989) NSW ConvR 55-473. I shall discuss her pleading in this regard later in this judgment. 4That led the Plaintiff, ultimately, to file a Further Amended Statement of Claim on 15 February 2011 naming (inter alia) CKM Mortgages as a Defendant claiming an entitlement to be subrogated to the rights of CKM under its mortgage of 14 November 2003, and in the alternative seeking restitution from CKM in the sum of $1,635,775.25 being the amount paid to CKM pursuant to the loan agreement between the Plaintiff and the Defendants. 5By reason of those matters on 1 July 2011 CKM filed a third Cross-Claim against NAB seeking a declaration that CKM was entitled to be subrogated to the rights of NAB under its mortgage of February 2002, and in the alternative claiming restitution from NAB in the sum of $839,609.05 together with interest, being the amount paid by CKM to NAB when CKM entered into its loan agreement with the Defendants. 6This judgment concerns a Notice of Motion brought by NAB against CKM to dismiss the third Cross-Claim pursuant to Rule 13.4, alternatively 14.28 UCPR, and a Notice of Motion brought by CKM to strike out that part of the Amended Statement of Claim that pleads a case against CKM in the event that NAB succeeds on its Motion against CKM. Factual background 7Although I detailed some of the factual background in Trust Co. Fiduciary Services Ltd v Hassarati [2011] NSWSC 577 I will repeat it in this judgment so that there is no necessity to refer back to the earlier judgment. 8The following facts are taken from the various pleadings filed in the proceedings. They are assumed to be correct only for the purposes of determining the present application. 9A man called Said (Sid) Hassarati was the owner of a property at 191 Pennant Hills Road, Thornleigh. Sid Hassarati died on 27 December 1976. He appointed one of his children, Tony, to be the executor of his will. He gave to Tony and another child, Josephine, a life interest in the Thornleigh land. Upon the expiry or relinquishment of the life interest the land was to be held by Tony (50%), Josephine (25%), and by each of his other 2 sons George and Raymond (12.5% each). It is not necessary to understand at this stage the basis upon which 2 people were said to have a life interest, upon whose life or lives the life interest depended, or how each of the life tenants was then to be given a remainder on the expiry or relinquishment of the life interest. 10Josephine Hassarati lived at the Thornleigh property. Her life interest was never noted on the title to the land. 11On 15 October 1998 Tony Hassarati died intestate. On 14 December 2001 Alvera obtained Letters of Administration of Tony's intestate estate. Subsequently, Alvera became registered as the owner of the land on 20 December 2001. 12Lily Hassarati was one of the children of Tony and Alvera Hassarati. In about February 2002 Lily borrowed approximately $240,000 from the National Australia Bank. The loan was secured by a first registered mortgage over the Thornleigh property. 13In about November 2002 Lily borrowed a further $626,000 from NAB to purchase a property in Petersham. It seems that the second loan was made collateral to the first loan from NAB with the result that the second loan was also secured over the Thornleigh property in addition to being secured over the Petersham property being purchased. Both of the NAB loans were guaranteed by Alvera. 14In about November 2003 Lily refinanced both of the NAB loans by borrowing approximately $1,588,000 from CKM (Mortgages) Ltd ("the Fifth Defendant). On about 14 November 2003 the sum of $839,600.05 was paid to NAB at the direction of Alvera and Lily to repay the NAB loan and discharge its mortgage. The CKM loan was also used to purchase a shop in Leichhardt. Alvera was the guarantor for this loan from CKM, and the Thornleigh property was again used as part security for it. 15In about April or May of 2004 there was a default under the CKM loan. In January 2005 CKM served a s 57(2)(b) notice which does not appear to have been complied with. 16It was in those circumstances that a loan came to be obtained in about July 2005 from the Plaintiff, Trust Company Fiduciary Services Ltd, then known as Permanent Trustee Company Ltd. The monies borrowed from the Plaintiff were used to pay out the CKM loan but additional funds were provided. Once again the Thornleigh property was mortgaged as security for the loan from the Plaintiff. 17In about October 2008 there was default in respect of the loan from the Plaintiff. There was failure to comply with a s 57(2)(b) notice served in January 2009, and on 31 July 2009 the Plaintiff commenced the present proceedings. The Statement of Claim named Alvera as the First Defendant and Lily as the Second Defendant. It sought possession of the Thornleigh land and a judgment against the Defendants in the sum of $1,743,081.45. Procedural background 18Alvera filed a Defence and a Cross-Claim on 23 October 2009. The Defence did not admit that she had signed any of the documents with the Plaintiff. It otherwise denied the agreements and the defaults alleged, and relied on what was pleaded in her Cross-Claim. 19The Cross-Claim named 6 Cross-Defendants as follows: Trust Company Fiduciary Services Ltd (formerly known as Permanent Trustee Company Ltd - First Cross-Defendant Lily Hassarati - Second Cross-Defendant John Maait - Third Cross-Defendant (Mr Maait acted for Alvera when she obtained Letters of Administration of Tony's estate) Trade Capital Australia Pty Ltd - Fourth Cross-Defendant Stuart Buchan - Fifth Cross-Defendant Joseph Kotowicz - Sixth Cross Defendant (Mr Kotowicz was the solicitor who acted for Alvera in relation to the loan from the Plaintiff) 20The cross-claim by Alvera against the Plaintiff asserted the unjustness of the loan contract relying on the Contracts Review Act . It asserted that the Plaintiff knew or ought to have known that Alvera would have relied on Lily because of the parent-daughter relationship and that Alvera was in a position of special disadvantage. 21On 17 March 2010 Alvera filed a second Amended Cross-Claim which, apart from an inconsequential amendment to the pleading against Lily, added cross-claims against Simon Konstantinidis, the employer of Joseph Kotowicz and the principal of the firm Konstan Lawyers, against CKM and against NAB. The claim against Mr Konstantinidis was entirely related to the cross-claim already made against Mr Kotowicz. The cross-claims against CKM and NAB asserted that the loans made by them were unjust within the meaning of the Contracts Review Act. 22On 30 September 2010 Alvera filed a Third Amended Cross-Claim. This pleading made some amendments to the cross-claim pleaded against the Plaintiff to add assertions that the Plaintiff had engaged in unconscionable conduct. It made similar amendments to the claim against NAB. 23Thereafter Alvera filed a Fourth Amended Cross-Claim on 18 February 2011 which discontinued the cross-claims against Trade Capital and Mr Buchan, against CKM and NAB, and against Mr Capogreco. This was, apparently, as a result of my judgment in Bank of Western Australia Ltd v Tannous [2010] NSWSC 1319. The cross-claim against Mr Maait remained unaltered. 24In addition, the Plaintiff filed with leave a Further Amended Statement of Claim on 15 February 2011 which added Royal Guardian Mortgage Corporation Pty Ltd and Anthony Tomazin (who appear to have been mortgage originators in respect of one or more of the earlier loans) and CKM. The claim against CKM was effectively a contingent one for restitution of the monies paid by the Plaintiff to CKM to discharge its loan in the event that Alvera was successful in establishing that the CKM loan was unjust within the meaning of the Contracts Review Act . The net effect of the amendments was that CKM remained in the proceedings but as a Defendant to the Plaintiff's claim rather than as a Cross-Defendant in Alvera's cross-claim. 25It was the naming of CKM as a Defendant to the Plaintiff's claim which led to CKM filing the third Cross-Claim referred to in para [5] above. 26Alvera filed what was called an Amended Defence on 10 March 2011 in answer to the Further Amended Statement of Claim. This Amended Defence is a strange document because it contains underlining and struck out passages, all suggesting that she had previously filed a Defence in a similar form other than the underlined passages. In fact, the only earlier Defence was the first one filed 23 October 2009 (para [18] above). The matter has some significance for NAB's motion because the passages struck out in para 16 refer to the unjustness of the NAB mortgage. 27Para 16 reads as follows: 16. In answer to paragraph 22 of the Further Amended Statement of Claim, the First Defendant says: a. She admits 22(a) She received no benefit from the CKM Mortgage (paragraph 22(a)) or the NAB Mortgage (paragraph 22(b)) ; b. She does not admit 22(b) and 22(c) and further says that: c. She received no benefit from the CKM Mortgage; d. Any monies advanced by CKM or NAB (and secured by their mortgages) were used for the purposes of the Second Defendant; e. She was a guarantor (not borrower) on the CKM and NAB loans; f. Each of The CKM and NAB loans, guarantees and mortgages are unjust (within the meaning of that term in s7 Contracts Review Act ); and g. Otherwise denies the paragraph. The submissions 28NAB submits that there is no utility to the declaration sought by CKM about subrogation. NAB says that no other orders are sought that are said to flow from such a declaration. NAB says that in this way there is no justiciable issue between NAB and CKM. In that regard NAB submits that such a declaration is of academic interest only and would amount to the answering of an abstract or hypothetical question: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582. 29Next, NAB says that if there is a subrogation point it is one that ought to be pleaded against the party intended to be bound by the finding. That is not NAB but is in fact the most recent lender (the Plaintiff) by virtue of what appears in Tannous at [43]. 30In relation to the claim in restitution, NAB first submits that the basis of CKM's claim is the unjustness of NAB's mortgage (because CKM repeats various paragraphs of Alvera's Cross-Claim) whereas Alvera does not make such an assertion. In this regard para 16 of Alvera's Amended Defence is said to be relevant because it expressly removes NAB from assertions of unjustness although leaving CKM the object of such a claim. NAB further submits that any claim under the Contracts Review Act is statute-barred. 31Next, NAB raises what must be regarded as pleading issues including a failure to articulate clearly the mistaken belief concerning when payment was made and the matter of detriment to CKM. It asserts that as a matter of causation CKM's loss was caused by defects in its own loan contract with Alvera. It says good consideration was provided by discharging Alvera's mortgage, and it points to a change of position by doing so. 32CKM was in the unusual position of needing to support NAB's arguments so that it could employ them against the Plaintiff but, at the same time, to argue against them in case, for some other reason, the Plaintiff was permitted to maintain its claim against CKM with the result that CKM would wish to maintain its Cross-Claim against NAB. 33Without doing any injustice to the Plaintiff's submissions, Mr Henskens (who appeared for the Plaintiff) submitted that those matters, which NAB and CKM put to be clear summary judgment points (especially the good consideration and the change of position arguments), when properly analysed involved issues of fact that would need to be dealt with at trial. Is summary dismissal appropriate? 34It should be said at the outset of any consideration of the arguments that the issues raised appear to be novel in the context of claims for possession being defended in reliance on standard defences involving the Contracts Review Act and unconscionability. St George Bank Ltd v Trimarchi [2004] NSWCA 120 appears to be the first case (certainly at appellate level, and perhaps at all) which deals with the position where a borrower raises the unjustness of a prior loan agreement to avoid or minimise the effect of the Collier principle. Drawing on Trimarchi , my judgment in Tannous sought to clarify the question of who were the appropriate parties in such a case. 35The present claims based on the doctrine of subrogation, but particularly, restitution, would appear to be the next logical step in the adjustment of rights between the borrower/guarantor and both present and past lenders. That this moves into unchartered waters suggests that a summary determination of the claims made would be unwise or inappropriate or both. Nevertheless, if, as NAB asserts, and CKM (wearing one hat) agrees, the application of existing doctrines and principle unarguably points in one direction (using the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125) that is the path which ought to be followed. (a) Subrogation 36The matter of subrogation can be most easily dealt with. The principles are set out in the judgment of Santow JA (with whom Giles JA and Hodgson JA agreed) in Highland v Exception Holdings Pty Ltd (in liquidation) [2006] NSWCA 318; (2006) 60 ACSR 223 at [90] - [106]. Unlike the law in the United Kingdom where subrogation is a remedy premised on the prevention of unjust enrichment ( Banque Financiere de la Cite v Parc (Battersea) Ltd [1998] 2 WLR 475 at 487), at the heart of the doctrine in Australia is the concept of unconscionability, whether it is an advantage obtained, a double recovery, an inequitable discharge of a debtor's liability, or some other unconscionable result: Registrar-General v Gill (unreported - Court of Appeal - 16 August 1994); Cochrane v Cochrane (1985) 3 NSWLR 403 at 405; Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd [2003] NSWSC 1072 at [50]; Highland at [103]. 37NAB says that the declaration sought by CKM in relation to subrogation ought not to be directed at NAB but at the party sought to be bound by such declaration. That person is likely to be Alvera because it was she who was bound by the NAB mortgage in respect of which CKM seeks subrogation. In my opinion, this argument is correct. CKM has sought the declaration against the wrong party. 38It emerged, during the course of the Plaintiff's submissions, that CKM appeared to have wrongly assumed that paragraphs 19-21 of the Further Amended Statement of Claim (in conjunction with prayer 8 in the relief sought) were directed at CKM rather than at Alvera. Certainly, by their placement in the pleading, CKM could be excused for so thinking. In any event, when it became clear that subrogation was sought by the Plaintiff to CKM's rights against Alvera, Mr Burton of Senior Counsel for CKM indicated that he was likely to obtain instructions not to pursue the subrogation claim against NAB. In my opinion, he was correct to do so. 39CKM's subrogation claim against NAB is doomed to failure and should not be allowed to go forward. (b) Restitution 40The claims in restitution are not so easy to resolve. This is partly because both NAB and CKM have, on the strength of payment to each, discharged their mortgages. Part of the difficulty involves the doctrine of indefeasibility of title under the Torrens system and how that can be affected (if at all) by a claim for money had and received. So, both NAB and CKM argue that the prima facie liability to repay money that would amount to an unjust enrichment will be displaced if there is good consideration such as the discharge of a debt: Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673. 41However, I should first deal with NAB's argument that there is no pleading that its loans were unjust. In paragraph 9.2 of the Third Cross-Claim CKM pleads: For the purposes of this Claim only and to the extent that they are established by the First Cross-Claimant (the First Defendant), CKM makes the same allegations against NAB in relation to the first NAB loan, the second NAB loan, the Thornleigh mortgage and the mortgage over ... Petersham...as are made in paragraphs 31,32,33 and 42A (in so far as they make allegations against NAB) of the Fourth Amended Cross-Claim, and for those reasons says that at the time it paid the NAB discharge sum the first NAB loan, the second NAB loan, the Thornleigh mortgage and the Petersham mortgage and each of them was liable to be found to be unjust within the meaning of section 7 of the Contracts Review Act 1980 (NSW) and pursuant to that finding or otherwise under the law was liable to be set aside, held to be void or voidable. 42Paragraphs 31, 32, 33 and 42A of the Fourth Amended Cross-Claim read: 31. Between around early 2002 and July 2005, the Second Defendant entered into four separate loan agreements (collectively "the Loans"): a. In or around early 2002 the Second Defendant borrowed approximately $240,000 from the National Australia Bank ("NAB")("the First NAB Loan"); b. The first NAB Loan was secured by a first registered mortgage over the Land ("the NAB Mortgage") c. In or around November 2002, the Second Defendant borrowed a further $626,000.00 from the NAB, such funds were used to purchase a block of land at Petersham. This loan was made collateral to the First NAB loan ("the Second NAB loan"); d. The second NAB Loan was secured by a first registered mortgage over the property known as 77 Palace Street, Petersham being the whole of the land comprised in Certificate of Title Folio Identifier: 1/1035566 and was made collateral to the mortgage given as security over the land in respect of the First NAB Loan. e. At the time of the registration of the NAB mortgages, the First Defendant (namely, Alvera Hassarati) was the registered proprietor of the Land. f. In or around November 2003, the Second Defendant refinanced the First NAB Loan and the Second NAB Loan and borrowed a total of approximately $1.588M from CKM (Mortgages) Ltd ("the CKM Loan") for the term of 1 year. As well as paying out the First NAB Loan and the Second NAB Loan, funds from this loan were also used to purchase the property known as Shop 44, Italian Forum, 19 29 Norton Street, Leichhardt by the Second Defendant. g. In or around February 2005, the CKM Loan was varied to, inter alia, extend the term. h. The CKM Loan was in part secured by a first registered mortgage over the Land ("the CKM Mortgage") i. At the time of the registration of the CKM Mortgage, the First Defendant (namely Alvera Hassarati) was the registered proprietor of the Land. j. As well as paying out the First NAB Loan and the Second NAB Loan, funds from the CKM Loan were also used to purchase the property known as Shop 41, Italian Forum, 19-29 Norton Street, Leichhardt by the Second Defendant; k. In or around July 2005 the Second Defendant refinanced the CKM Loan with the loan from the Plaintiff which is the subject of these proceedings. 32. The Second Defendant applied the funds borrowed pursuant to the Loans for her own purposes. ... 33. The First Defendant received no benefit from the Loans. ... 42A In the event that the Agreement and the Mortgage are found to be unjust within the meaning of s7 Contracts Review Act , the First Defendant says that she received no benefit from the Loans (as defined in paragraph 31 above). Particulars At the time of each of the Loans, the NAB and CKM knew or ought to have known that: i. The First Defendant was the mother of the Second Defendant and was likely to rely on the Second Defendant to act in her best interests ii. The Second Defendant was a dominant party in a relationship of presumed undue influence with the First Defendant iii. The funds advanced pursuant to the Loans were to be used by the Second Defendant in her business, Sweet Lily's iv. The First Defendant was a volunteer v. The First Defendant did not understand the documents relating to the Loans (and the mortgages and guarantees) vi. The First Defendant did not receive any independent legal or financial advice vii. The First Defendant was a pensioner and had no capacity to meet the payments on the Loan or to repay pursuant to the guarantees; viii. By reason of the matters in paragraph 5 and in particulars i-vii above, the First Defendant was in a position of special disadvantage. ( punctuation in original) 43Mr Patrick Reynolds of Counsel for NAB submits that these paragraphs, and in particular 42A, do not allege unjustness in relation to the NAB loans. He further points to the striking through of references to NAB in paragraph 16 of the Amended Defence as support for that submission. 44Whilst it is true that paragraph 42A does not, in so many words, say that NAB's loans and mortgage were unjust, it sets out, in a rather unsatisfactory way, facts including what NAB (inter alia) is alleged to have known at the time of entry into its facilities and mortgage. Some of those matters are considerations that would be taken into account when assessing unjustness or unconscionability. On one view of the rules of pleading (a view I do not necessarily share) it is not necessary to plead the legal conclusion from the material facts. Additionally, it is difficult to see what other purpose paragraph 42A could serve than to be asserting unjustness (or something similar) in relation to the NAB and CKM contracts. I also take into account that the Fourth Amended Cross-Claim was filed shortly after, and consequent upon, the decision in Tannous . None of this is intended to endorse the pleading in paragraph 42A but Alvera did not appear at the hearing of these Notices of Motion to defend the form of pleading nor to explain what follows. 45The reason for the strange form of pleading contained in paragraph 16 of the Defence is unknown. What is clear is that paragraph 22 of the Further Amended Statement of Claim refers only to CKM, so that an answer that deals only with CKM is explicable. Indeed, were it not for the struck out sections, paragraph 16 of the Defence would be an unremarkable answer to what is alleged in paragraph 22 of the Claim. Particularly in the light of paragraph 42A of the same Defendant's Cross-Claim, I do not consider that I should conclude that the struck out sections in paragraph 16 lead to the inference that previously the Plaintiff considered the NAB contracts unjust but now does not do so. 46The next matter raised by NAB concerns limitation provisions in the Contracts Review Act . Section 16 provides: 16 Time for making applications for relief An application for relief under this Act in relation to a contract may be made only during any of the following periods: (a) the period of 2 years after the date on which the contract was made, (b) the period of 3 months before or 2 years after the time for the exercise or performance of any power or obligation under, or the occurrence of any activity contemplated by, the contract, and (c) the period of the pendency of maintainable proceedings arising out of or in relation to the contract, being proceedings (including cross-claims, whether in the nature of set-off, cross-action or otherwise) that are pending against the party seeking relief under this Act. 47NAB's submission in relation to this section was somewhat bound up with its submission that in fact no application had been made for relief by Alvera in respect of NAB's contracts. NAB's submission was, therefore, that none of paragraphs (a), (b) or (c) applied because no relief was being sought against NAB. In the first place, one might have thought that if no application for relief was being made then no question of a time limitation would arise. The result must be, therefore, in such circumstances, that the question of the unjustness of NAB's loans could be raised without being subject to any limitation period. 48It is clear, for example, that CKM's claim against NAB does not seek relief under the Act. It is important to see how the issue of NAB's contracts properly arise for consideration from a pleading perspective. Alvera, in her Cross-Claim would raise the Act and seek relief under it in respect of the Plaintiff's contracts. One defence from the Plaintiff to that application for relief would be reliance on the Collier principle. Alvera's answer by way of a Reply would be that the Collier principle does not apply because the loan paid out by the Plaintiff (CKM's) and any earlier loans down the track (including NAB's) should similarly be regarded as unjust. Although that is not the form of the pleading in the present case, that is, in substance, the way the justiciable issue about the unjustness of NAB's contracts has been raised. The position would remain as it is in the present case that relief is not being sought under the Act in respect of the earlier loans. 49If I am wrong about no relief being sought, and what is raised in connection with the earlier loans is an application for relief under the Act, it seems to me that s 16(c) applies. If Alvera is seeking relief under the Act then there are maintainable proceedings that are in relation to the NAB contract (the phrase is of wide import: Smith v Federal Commissioner of Taxation (1988) 164 CLR 513 at 530), as well as being in relation to the Plaintiff's contract and CKM's contract. Accordingly, Alvera's claim is within the time stipulated in s 16(c). 50Although the issue was not discussed in Trimarchi , it seems clear that the only way the 2 earlier loans could there have properly been considered was that, for whatever reason, the claims in relation to those loans were not statute barred. 51The objections of NAB to the form of pleading by CKM in relation to mistaken belief and countervailing detriment cannot be matters that determine the issue of summary judgment. Without accepting the correctness of NAB's submissions in relation to the pleading, they cannot prevent CKM's claim going forward if it is not otherwise liable to be struck out. 52Causation of the detriment sustained by CKM must ultimately be a matter of fact to be determined at the trial. Causation is concerned with the mistake: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 377. If the only issue concerning causation is what caused the payment to be made by CKM the answer would appear to be the belief of CKM (set out in paragraph 9.3 of the Third Cross-Claim) that the NAB mortgages were valid and enforceable. On the other hand, if the issue is wider, as NAB appears to assert in directing attention to the defects in CKM's own contracts, then causation becomes a factual matter which cannot be decided on a summary dismissal application. 53That leads to the factually closely related matters (in this case) of the provision of good consideration and a change of position by NAB. 54These 2 defences appear in the formulation of Goff J in Barclays Bank Ltd v W.J. Simms Son & Cooke (Southern) Ltd [1980] QB 677 at 695 (1) If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. (2) His claim may however fail if (a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith, or is deemed in law to have done so. This passage was approved by the High Court in David Securities at 379-380 subject to the court's determination in David Securities that the principle applies in relation to a payment made under a mistake of law also. 55NAB's argument is that good consideration was given by NAB as a result of the release of the debt owed by Alvera and Lily, and a discharge of the mortgage held from them by NAB. 56The question of consideration, however, must be seen in the context of its having been established that CKM's loan and NAB's loans were unjust. It is only in such circumstances that the question of restitution arises. That leaves open a possibility, which is scarcely farfetched or fanciful in a case where Alvera's claim is based on the fact that she was simply a guarantor and received no benefit from the loans made to Lily, that NAB never had a valid and enforceable mortgage nor loan agreements with her. If that is so, NAB did not provide good consideration for CKM's payment. 57Moreover, the High Court made clear in David Securities at 383-383 that in some cases it will not be necessary to show a total failure of consideration for the restitution principle to operate - see also Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68; (2001) 208 CLR 516 at [24]. Whether, and to what extent, that will play out in the present case must await a factual determination of the extent of the unjustness (if any) of both the NAB and CKM contracts. 58A similar position obtains in relation to the change of position defence. As I understand it, the change of position is the release of the debt owing by Alvera and the discharge of the mortgages given by her. Were it to be shown that the NAB contracts were unjust wholly or partly, the release and discharge to that extent would no longer amount to a change of position because the effect of such a finding would be that NAB had no such entitlement. 59It seems to me also to be significant that the basis of the action for money had and received is the unconscientious retention of money, and hence the reference to unjust enrichment: Roxborough at [24]-[26] and [89]. Whether, and to what extent, restitution will be ordered in this case will be determined by an enquiry into the unjustness not only of the Plaintiff's contracts but also those of CKM and NAB. Without such a factual determination it cannot be said that the matter is so clear that either or both of the Plaintiff and CKM cannot succeed in obtaining restitution in whole or in part for the moneys they have paid. 60A result that enabled NAB and CKM to retain moneys paid to them only as a result of contracts they made with Alvera, that were held to be unjust in whole or part, would be surprising. That would be so whether Alvera was only a guarantor (as she asserts) or was also a borrower (as the Plaintiff asserts). Any answer that the indefeasibility principle, arising from the registration of the mortgages, is sufficient must be rejected. In many cases decided under the Act and at general law orders are crafted that overcome problems otherwise governed by the indefeasibility of the register. For example, an order can be made that a party discharge a mortgage, or a personal equity may be found. 61These reasons, and the caution I expressed in para [34] above, lead me to the view that I should decline to strike out the Plaintiff's claim against CKM and CKM's claim against NAB except CKM's claim with regard to subrogation. Conclusion 62Accordingly, I make the following orders: (1) On NAB's Motion filed 21 July 2011: (a) Prayer 1 and paragraphs 5 to 8 of the Third Cross-Claim are struck out; (b) otherwise dismiss the Motion. (2) CKM's Motion filed 22 July 2011 is dismissed. ********** 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: 30 November 2011