Supreme Court New South Wales Medium Neutral Citation: Gunns Finance Pty Ltd (Receivers and Managers Appointed)(in Liquidation) v Sithiravel [2016] NSWSC 1543 Hearing dates: 1 – 2 February 2016; submissions completed 23 August 2016 Decision date: 02 November 2016 Jurisdiction: Equity Before: Robb J Decision: See pars 318 – 322 Catchwords: AGENCY – relationship between financial planner (second cross defendant), and plaintiff and related companies – whether financial planner, as the introducer, had actual authority to act on behalf of the plaintiff and related companies – court considered relationship between the parties – held actual agency relationship not established – whether financial planner had ostensible agency – held there was no holding out by the plaintiff of authority to the extent that justifies the court in finding ostensible agency – no evidence from defendant/cross claimant that he relied upon any representation constituting any holding out – relationship between plaintiff and related companies – whether agency relationship existed – held actual agency relationship not established CONTRACTS – breach of contract – whether representations in product disclosure statements incorporated as terms of contract– held representations not terms of contract TRADE PRACTICES ACT – plaintiff linked credit provider – not established that supplier to whom plaintiff was linked is liable to defendant/cross claimant – defendant/cross claimant not entitled to compensation from plaintiff CONTRACTS REVIEW ACT – whether there was procedural injustice in the manner in which loan agreements were formed – circumstances of how agreements were entered into considered – no evidence from defendant/cross claimant as to what he would have done if circumstances different – plaintiff not aware of the circumstances in which the financial planner assisted the defendant/cross claimant to apply for finance – held court found no injustice – plaintiff innocent in accepting loan application – defendant/cross claimant entitled to compensation from financial planner who is responsible for procedural injustice – held plaintiff entitled to enforce loan agreements against the defendant/cross claimant under the contracts Defendant/cross claimant's claim in respect of all other claims fail on the facts Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth) Civil Procedure Act 2005 (NSW) Contracts Review Act 1980 (NSW) Conveyancing Act 1919 (NSW) Conveyancing and Law of Property Act 1884 (Tas) Corporations Act 2001 (Cth) Trade Practices Act 1974 (Cth) Cases Cited: Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; [1986] HCA 14 Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413; (2002) 11 BPR 20,841 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482 Flexirent Capital Pty Ltd v EBS Consulting Pty Ltd [2007] VSC 158 Global Sportsmen Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 Heilpern v Anasco [2010] NSWSC 317 JJ Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435; [1970] HCA 6 Kowalczuk v Accom Finance Pty Ltd (2008) 252 ALR 55; [2008] NSWCA 343 Nguyen v Taylor (1992) 27 NSWLR 48; [1992] ASC 57 Octapon Pty Ltd v Esanda Finance Corporation Ltd (Unreported, SC (NSW), Cole J, 3 February 1989) Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,639 Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 Small v Gray [2004] NSWSC 97 Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; (2011) 15 BPR 29,699 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 Category: Principal judgment Parties: Gunns Finance Pty Ltd (receivers and managers appointed) (in liquidation) (plaintiff) Suthakaran Sithiravel (defendant) Representation: Counsel: DC Price (plaintiff) PM Barham (defendant) Solicitors: Turks Legal (plaintiff) Richard Mitry Lawyers (defendant) File Number(s): 2013/303465 Publication restriction: None Judgment Introduction 1. The plaintiff, Gunns Finance Pty Ltd (Receivers and Managers Appointed) (in Liquidation) (Gunns Finance), commenced these proceedings by filing a statement of claim in the Local Court of NSW on 9 October 2013, against the defendant, Mr Suthakaran Sithiravel. 2. Gunns Finance claimed an amount of $74,515.24, plus interest, filing fees and solicitor's costs, giving a total of $76,108.54. 3. Gunns Finance sued on three debts that it claimed were owed to it by Mr Sithiravel. The debts related to the acquisition by Mr Sithiravel of lots in three agricultural projects conducted by a company related to Gunns Finance, being Gunns Plantations Ltd (Gunns Plantations). The agricultural projects were known as the "Woodlots Project 2006", the "Winegrape Project 2007", and the "Walnut Project No 3". Following application by Mr Sithiravel, Gunns Finance loaned to Mr Sithiravel the whole of the cost payable by him to Gunns Plantations for the acquisition of the relevant number of lots in each of the projects. 4. Apparently, Gunns Plantations managed the three projects for a period, and Mr Sithiravel complied with his obligations in respect of the loans made to him by Gunns Finance. A time came when Gunns Plantations ceased to conduct the projects, and the lots in the projects apparently became valueless to Mr Sithiravel. After a time, Mr Sithiravel ceased paying instalments of capital and interest to Gunns Finance. Eventually, the receivers and managers of Gunns Finance served notices accelerating Mr Sithiravel's obligation to repay all of the debts, and when he did not make repayment, Gunns Finance instituted the present proceedings. 5. Mr Sithiravel decided to defend the claim and also to file a cross claim against Gunns Finance. He filed a defence and a cross claim in the Local Court on 17 December 2013. In the cross claim, Mr Sithiravel alleged that the loan agreements in relation to the three projects had been terminated due to frustration, non-fulfilment of a contingent condition or fundamental breach; claimed orders that the loan agreements should be avoided under the Contracts Review Act 1980 (NSW); claimed that the loan agreements became voidable for unfairness or unconscionability pursuant to the Australian Securities and Investments Commission Act 2001 (Cth); and claimed that Gunns Finance was liable to pay him damages for breaches of a duty of care that it owed to him. The bases of these claims were not elaborately pleaded. 6. I infer that a resolution for the voluntary winding up of Gunns Finance was made, because Mr Sithiravel found it necessary to make an application under s 500(2) of the Corporations Act 2001 (Cth) for leave to bring a cross claim against Gunns Finance in the Local Court. On 19 May 2014, Brereton J made the following orders in proceedings No 35233 of 2014: Upon the undertaking of the Applicant in the document entitled 'Undertaking to the Court' dated 19 May 2014 the Court orders: 1. The Applicant, Suthakaran Sithiravel, have leave pursuant to s 500 of the Corporations Act to bring a cross claim against the Respondent in proceedings presently pending in the Local Court at Sydney in 2013/303465 upon terms that no judgment recovered on such cross claim be enforced against the Company without leave of the Court first had and obtained. 2. Pursuant to s 140(1) of the Civil Procedure Act, the said proceedings are transferred from the Local Court to this Court. 3. The Court orders costs in the proceedings be costs in the transfer proceedings. 1. By the undertaking that he gave to the court, Mr Sithiravel undertook that he would not, without the leave of the court, seek to amend to make a claim for damages, other than by way of set-off. He also undertook that he would only seek orders for costs against the receivers and managers, and, I infer, the creditor who appointed them. 2. I do not know why the order was made transferring the proceedings to this court. The Local Court had jurisdiction to determine Mr Sithiravel's common law defences and claims. It also had jurisdiction under the Contracts Review Act: see s 4(1)(c). The Local Court also appears to have had jurisdiction to determine the claims that have been made by Mr Sithiravel under the ASIC Act (see s 12GJ(2)(c)); and even the claim that was ultimately made under s 73 of the Trade Practices Act 1974 (Cth) (see the reference to "a court of competent jurisdiction" in s 73(1)(b)). 3. Be that as it may, the order was made transferring the proceedings to this court. That is likely to have been unfortunate, if it could have been avoided. The loan agreements each provide for a relatively high rate of interest, when measured against current rates, and also provide for a default rate. Interest will have been accumulating at a relatively substantial rate, if the loan agreements are found to be enforceable, and Mr Sithiravel's claims in his cross claim fail. There is a strong appearance that the more summary procedures available in the Local Court would have been more appropriate for the determination of this dispute, than those that ordinarily apply in this court. 4. Mr Sithiravel filed an amended defence in this court on 27 February 2015. This is the operative defence. 5. He filed an amended cross claim in this court on 27 February 2015, to which Gunns Finance filed a defence on 30 March 2015. On 1 February 2016, which was the first day of the hearing, Mr Sithiravel was given leave to file in court a further amended cross claim. This is the operative cross claim. For practical reasons, Gunns Finance did not have an opportunity to file a formal defence to this version of the cross claim. However, the amendments made by Mr Sithiravel were relatively inconsequential, and Gunns Finance's defence to the amended cross claim filed on 30 March 2015 is adequate and effective to stand as the defence to the further amended cross claim. 6. In the amended cross claim, and the further amended cross claim, Mr Sithiravel makes a claim against Guardian Royal Financial Services Pty Ltd (Guardian). Guardian acted as a financial adviser or planner, and provided advice and assistance to Mr Sithiravel in relation to the first two investments he made in the projects; being the Woodlots Project 2006, and the Winegrape Project 2007. There is a contest as to whether Guardian was the agent of Gunns Finance, or a related company, or Mr Sithiravel. 7. Guardian has apparently not appeared in the proceedings, and did not contest the claim against it at the hearing. It will be convenient to deal with Mr Sithiravel's claim against Guardian separately below. 8. The submissions delivered by the parties from time to time have some significance to a proper understanding of the issues that were contested between them. In accordance with the court's usual procedure, Gunns Finance delivered an outline opening on 28 January 2016, and Mr Sithiravel responded on the 29 January 2016. 9. The proceedings were heard on 1 and 2 February 2016. The brevity of the hearing was somewhat at odds with various complexities that arose concerning the identification of the issues, and an understanding of the parties' various contentions. 10. The parties were given an opportunity to deliver written submissions. Mr Sithiravel did so on 22 February 2016. Gunns Finance responded on 4 March 2015. Mr Sithiravel delivered a reply on 14 March 2016. 11. After the court had reserved judgment, and given some consideration to the submissions that had been received, it appeared that there were questions about whether some of the claims made by Mr Sithiravel could arguably be sustained given his evidence in chief; and also as to whether some of the submissions that had been made on his behalf were within his pleadings. The court invited the parties to reconsider aspects of the case; to identify any claims that were not pressed; and to respond to each other's arguments about what was not available on the pleadings. 12. Mr Sithiravel responded to this invitation on 23 August 2016, and Gunns Finance replied to that response on 26 August 2016. The result was that Mr Sithiravel has informed the court that he no longer presses a number of matters alleged in his pleadings. Mr Sithiravel raised certain questions about whether it would be necessary for him to formally seek leave to make minor amendments to his pleadings. A number of matters remain unresolved; although the responses of the parties have obviated the need for the court to engage in some complex considerations that may ultimately have proved to be wasteful. I will defer consideration of these matters until they can be dealt with in context. 13. This is a case which, in my view, calls for a relatively close analysis of the pleadings, so that the issues for determination by the court may properly be understood. Statement of claim and defence 1. In its statement of claim, Gunns Finance pleaded structurally equivalent claims in relation to the three projects. (Strangely, it reversed the chronological order of the Winegrape Project 2007 and the Walnut Project No 3). 2. In the case of each project, as counsel for Mr Sithiravel observed, Gunns Finance did not allege the existence of the loan agreement in the conventional way, by alleging that, on or about date X the plaintiff and the defendant entered into a loan agreement on certain terms. Rather, Gunns Finance alleged that on date X the defendant executed an application for finance to invest in a particular project, and on date Y the plaintiff sent a letter to the defendant advising that the application had been accepted. As a matter of pleading, I do not think anything turns on this, as in the case of each project, Gunns Finance then pleaded what it described as "the material terms of the agreement". It is sufficiently clear that in each case Gunns Finance pleaded that it had entered into a loan agreement with Mr Sithiravel. 3. Mr Sithiravel admitted that he had executed an application for finance on or about the date alleged in relation to the Woodlots Projects 2006 and the Winegrape Project 2007, and that, on or about the dates alleged, Gunns Finance had sent him a letter advising that his application had been accepted. 4. Mr Sithiravel did not admit the allegation that, on or about 10 June 2009, he executed an application for finance to invest in the Walnut Project No 3. He admitted that, on or about 15 June 2009, Gunns Finance sent him a letter advising that the application had been accepted, but he did not admit that the effect of his receipt of that letter was to create a binding loan agreement. 5. Mr Sithiravel stated in his 23 August 2016 response to the court's enquiry, that he presses all grounds of his amended defence, except pars 15 and 16. 6. As I and counsel for Gunns Finance understand this response (as appears from Gunns Finance's 26 August 2016 response), its effect is to bring Mr Sithiravel's defence concerning the Walnut Project No 3 into line with his pleading in relation to the other projects. 7. The consequence is that Mr Sithiravel accepts that in all cases he applied for the relevant loan, and he received a letter from Gunns Finance advising him that his application had been accepted. 8. Also, in each case, Mr Sithiravel admitted Gunns Finance's allegations concerning the material terms of the agreements. Thus, he admitted the amount of the loan, the interest rate and the default interest rate, the term of the loan, the obligation to make monthly payments of principal and interest, the right of Gunns Finance to give a notice accelerating repayment following a default by Mr Sithiravel, and that in the event of default, Mr Sithiravel would pay Gunns Finance's costs on a full indemnity basis. 9. Mr Sithiravel did not, however, admit the truth of a number of the particulars given by Gunns Finance to its allegations concerning the existence and terms of the three loan agreements. He did not admit that he had received certain of the documents referred to in Guardian Finance's particulars as documents constituting the various loan agreements. 10. More significantly, Mr Sithiravel pleaded that he either did not admit, or did not know and could not admit, the allegations made by Gunns Finance in respect of each loan agreement that, on or about a particular date, it had loaned Mr Sithiravel the amount that he had applied for in his application for loan, and which Gunns Finance had accepted. 11. In essence, Mr Sithiravel put Gunns Finance to proof of its allegation that it had made each of the three loans to him. He did so on the basis that no money was paid by Gunns Finance to him. Rather, the arrangement was that Gunns Finance was to pay to Gunns Plantations the price owed by Mr Sithiravel to Gunns Plantations for the lots in the projects that he had agreed to acquire. It was Mr Sithiravel's case that the evidence did not establish, on the balance of probabilities, that Gunns Finance had paid the required amounts to Gunns Plantations; and in that case Gunns Finance was not entitled to repayment of the alleged debts by Mr Sithiravel. 12. In the case of each of the loan agreements concerning the three projects, Mr Sithiravel admitted the allegations made by Gunns Finance concerning failure by him to pay an instalment; the delivery of a demand by Gunns Finance in respect of the default; the delivery of a notice accelerating repayment of the whole of the debt; and his failure to repay the whole of the debt. Mr Sithiravel's position was that these admissions were irrelevant, because the debts were not payable by him. 13. Therefore, the effect of Mr Sithiravel's amended defence is that the only issue that arises on Gunns Finance's statement of claim is whether the debts claimed are not payable by Mr Sithiravel, because Gunns Finance has not proved that it paid to Gunns Plantations the amount that it agreed to pay on Mr Sithiravel's behalf, as the price for the issue by Gunns Plantations of lots in the three projects to Mr Sithiravel. 14. Ultimately, there was no issue that Gunns Plantations had in fact issued the lots in each of the projects to Mr Sithiravel; and that he had received tax invoices and certificates of investments from that company evidencing his entitlement to the investments. 15. An additional argument concerning the creation of the loan agreements in relation to the Woodlots Project 2006 and the Winegrape Project 2007 emerged for the first time in Mr Sithiravel's final written submissions dated 22 February 2016, at pars 27 to 36. Putting the argument simply, Mr Sithiravel noted (taking the documents concerning the Woodlots Project 2006 as an example) that Part E of the document issued by Gunns Plantations called "Woodlot Finance Package" provided for the execution by Mr Sithiravel of the application for finance as a deed. Part E contains the following "acknowledgement": "3. The application for finance is subject to approval by Gunns Finance Pty Ltd and Gunns Finance Pty Ltd reserves the right to decline the application. Gunns Finance only becomes bound by the Loan Terms on the execution of Part E – Acknowledgements". The document in evidence was not executed by Gunns Finance in the position in Part E for execution of the document by that company. 16. It must be noted in relation to the equivalent document in Mr Sithiravel's application for finance concerning the Winegrape Project 2007, that Part E does appear to have been signed on behalf of Gunns Finance by a director and the secretary (see court book p 286). 17. The same issue could not arise in relation to the Walnut Project No 3, as the equivalent part of the application for finance to Part E in the earlier financial packages is Part D, and while it provides that the application has been executed as a deed by Mr Sithiravel; and also provides that the application for finance is subject to approval by Gunns Finance, it does not say that Gunns Finance only becomes bound by the loan terms on execution of Part D. 18. Mr Sithiravel's first argument was that Gunns Finance's contract claim failed because "the agreement was to have been concluded by the execution of a deed. The deed was never executed by the plaintiff" (written submissions par 28). 19. Mr Sithiravel's submissions then explore a complex, and with respect somewhat impenetrable, argument that depended upon a finding as to where any agreement would have been made, if valid, and the differential application of s 38 of the Conveyancing Act 1919 (NSW), and s 63 of the Conveyancing and Law of Property Act 1884 (Tas). 20. In my view, this argument is not available to Mr Sithiravel on his pleadings; it is in any event misconceived; and it would be an unnecessary distraction for the court to examine the argument in detail. 21. Mr Sithiravel did not raise this issue in his defence. He said nothing about it being a requirement of the creation of valid loan agreements that each party had executed and delivered to the other a deed; and that Gunns Finance had not done so. On the contrary, Mr Sithiravel responded to allegations to the effect that he had entered into three loan agreements with Gunns Finance in the nature of simple contracts by admitting all of the allegations; save for his declining to admit that Gunns Finance had made the agreed advances to him by paying the necessary sums to Gunns Plantations. 22. In its submissions in response, Gunns Finance took the issue that the argument was not available to Mr Sithiravel because it was inconsistent with his pleadings. Gunns Finance was entitled to take that stand. 23. I am not persuaded by the argument given by Mr Sithiravel in his reply, as to why he was entitled to rely upon this ground of defence, notwithstanding the terms in which his amended defence had been completed: see pars 2 and 3. I do not accept his submission that the fact that Gunns Finance pleaded each of the loan agreements by pleading the offer, the acceptance and then the material terms is a justification for Mr Sithiravel not to have introduced the argument based upon the alleged requirement for deeds until in his final written submissions. 24. The parties did not, in their written submissions, address the issue of whether the new argument only introduced a legal issue that would not have been capable of being defeated by any different forensic step that Gunns Finance could have taken, if given proper warning of the argument in the pleadings. I would not accept without the issue having been properly addressed, particularly by Mr Sithiravel, that the argument should be available to Mr Sithiravel without undue prejudice and unfairness to Gunns Finance. The terms of s 56 of the Civil Procedure Act 2005 (NSW) militate against allowing Mr Sithiravel to put the argument, given the circumstances in which it was first raised. 25. The argument based upon the alleged need for deeds is in my view, in any event, misconceived. 26. It is true in relation to Part E of the application for finance for the Woodlots Project 2006, that there was provision for the application to be executed as a deed, apparently by all parties. It is also true that the document was not executed by Gunns Finance. However, the document as a whole did not have the effect that there would be no loan agreement unless Gunns Finance executed the document as a deed, and delivered it to Mr Sithiravel. Paragraph 3 did provide that Gunns Finance would only become bound by the Loan Terms on the execution of Part E, but in my view that provision did not have the effect that there would be no loan agreement if Gunns Finance chose to signify its acceptance of Mr Sithiravel's application by some other communication; such as the sending of the letter dated 30 June 2007, which Mr Sithiravel admitted he received. Furthermore, once Gunns Finance had paid the amount of the loan to Gunns Plantations (assuming that occurred), and Mr Sithiravel had accepted the benefits of the making of the loan by Gunns Finance, on the basis that the terms of the loan were governed by the application for finance, Mr Sithiravel could not be heard to say that there was no loan agreement because Gunns Finance had not delivered a deed to him. Cross claim and defence to cross claim 1. I will deal separately below with the claim made by Mr Sithiravel in his cross claim against Guardian. 2. It is not necessary to consider in any detail the terms of Gunns Finance's defence to the cross claim, as it is almost entirely a series of non-admissions and denials. 3. Mr Sithiravel seeks orders against Gunns Finance in his cross claim to the effect that the three loan agreements are void or unenforceable pursuant to s 7 of the Contracts Review Act; and also possibly s 12GM of the ASIC Act. 4. He qualified this claim in his final written submissions to limit his claim to the loan agreements relating to the Woodlots Project 2006 and the Winegrape Project 2007 (for the reason that Guardian was only involved in the applications for those loans; and Mr Sithiravel dealt directly with Gunns Finance in relation to the Walnut Project No 3). 5. Mr Sithiravel also confined his claim in his written submissions to the contention that declarations should be made that the two loan agreements are void or unenforceable "because of the way in which [they were] made", to use the words of McHugh JA (as his Honour then was) in West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 620. Mr Sithiravel's case is that his entry into the two loan agreements involved "procedural injustice" as a result of "the unfairness of the methods used to make" the two loan agreements; again to use the words of McHugh JA. Mr Sithiravel does not claim that the terms of either loan agreement are unjust or that there has been "substantive injustice". 6. Mr Sithiravel claims damages against Gunns Finance on a number of grounds. As noted above, the amount of the damages claimed in these proceedings has an upper limit of the amount that Mr Sithiravel would be required to pay to Gunns Finance, if the court finds that Mr Sithiravel would otherwise be liable to that company under the three loan agreements. 7. The damages claims are based upon s 73 of the former Trade Practices Act, as it applied at the times each of the loan agreements were made. This claim is based upon the contention that Gunns Finance was a linked credit provider to Gunns Plantations, so that it is jointly and severally liable with that company in respect of loss or damage suffered by Mr Sithiravel, as a consumer, as a result of misrepresentation, breach of contract, or failure of consideration in relation to contract, by reason of the conduct of Gunns Plantations. 8. As I understand the way the claim for relief in the cross claim is pleaded, Mr Sithiravel also claims damages from Gunns Finance on the ground of its own conduct, or on the basis that Gunns Plantations or Guardian were its agents, under ss 12BB and 12GF of the ASIC Act and s 82 of the Trade Practices Act. 9. An understanding of the factual basis of Mr Sithiravel's claims for relief will be assisted by a consideration in outline of the structure of the allegations pleaded in his cross claim. Mr Sithiravel alleged: 1. Guardian was the agent of Gunns Finance: pars 3 to 5. The particulars of the agency are given following par 5. 2. Further or alternatively, Guardian was the agent of Gunns Plantations: par 6. 3. Further or alternatively, Gunns Plantations was the agent of Gunns Finance: par 10 (there are no pars 7 to 9). 4. To the extent that there was not a direct agency relationship between the three entities, there was a sub-agency relationship between them: par 12 (there is no par 11). There is no elaboration of the meaning of this allegation. 5. If there was no relationship of agency between Gunns Plantations and Gunns Finance, or between Guardian and Gunns Plantations, there was actual authority on the part of Gunns Finance in favour of Gunns Plantations, and on the part of Gunns Plantations in favour of Guardian "to make representations with respect of the projects": par 13. 6. If Guardian did not have actual authority to make representations on behalf of Gunns Finance, or Gunns Plantations; if Gunns Finance did not have actual authority to make representations on behalf of Gunns Plantations; and if Gunns Plantations did not have actual authority to make representations on behalf of Gunns Finance, the former in each case had ostensible authority to do so on behalf of the latter: pars 14 to 17. (The reason for the allegation that Gunns Finance had ostensible authority to make representations on behalf of Gunns Plantations is obscure, as this allegation does not fit into the structure of the events alleged in the cross claim at all). The particulars to the allegations in pars 12 to 17 are given in par 18, by means of the repetition of the allegations in pars 4, 5 and 10. This global approach to the provision of particulars is embarrassing and unsatisfactory, as it requires Gunns Finance, and the court, to pick through all of the allegations in order to consider whether any of them are capable of sustaining the allegations made concerning actual or ostensible authority. 7. Gunns Finance was a linked credit provider of Gunns Plantations; each of the loan agreements was a tied continuing credit contract; and each of the loan agreements was a tied loan contract within the meaning of s 73 of the Trade Practices Act. Furthermore, Mr Sithiravel was a consumer for the purposes of that Act. 8. The circumstances in which Mr Sithiravel acquired lots in the three projects from Gunns Plantations, and entered into the loan agreements with Gunns Finance, are alleged in pars 20 to 34. The structure of the allegations is the same for each of the three projects. Relevantly, Mr Sithiravel applied for a loan from Gunns Finance; the application was partly completed in the offices of Guardian; the application was made in this State and acceptance of the application was notified in this State, and the contract made in this state; and Guardian provided Mr Sithiravel with the relevant product disclosure statement (PDS), provided the loan application form and assisted with its completion, and provided verbal advice to Mr Sithiravel. (The allegations concerning the involvement of Guardian in the Walnut Project No 3 are plainly an error, as it is clear that Guardian was not involved in Mr Sithiravel's investment in that project). 9. The documents and advice provided to Mr Sithiravel by Guardian in relation to each of the projects were provided as agent of Gunns Finance and/or Gunns Plantations and/or "Gunns"; the last mentioned entity being the holding company of the Gunns group (which had not otherwise featured in the cross claim): pars 35 to 37. 10. Each of the three loan agreements was a financial product within the meaning of s 12BAA of the ASIC Act: pars 38 to 40. Particulars of this allegation are given after par 40. 11. Gunns Plantations provided a financial service by dealing in a financial product within the meaning of s 12BAB of the ASIC Act: par 41. 12. Gunns operated registered schemes, being the projects: par 42. 13. Gunns Plantations operated registered schemes, being the projects: par 43. 14. Gunns Plantations, by itself and its servants and agents, Gunns Finance and Guardian provided financial product advice within the meaning of s 12BAB of the ASIC Act: par 44. 15. Gunns Finance, by itself and its agent Guardian, provided financial product advice within the meaning of s 12BAB of the ASIC Act: par 45. 16. Then, in par 47, Mr Sithiravel alleges that the "literature" concerning each of the projects contained listed representations. Mr Sithiravel had earlier defined the literature to be "brochures, advertising material, loan application forms and PDSs" provided to Guardian by Gunns Finance and/or Gunns and/or Gunns Plantations: par 5 particular (a). These representations are defined as "the written representations". It is sufficient to note that, while there is scope for argument about the extent to which all of the written representations were representations as to future matters, or in some cases perhaps statements of opinion, in substance all of those representations (which were made in the PDSs) were in substance representations as to what would happen over the life of the particular project (20 of the 25 written representations are described using the word "would"). 17. Guardian made seven further "verbal representations" to Mr Sithiravel in respect of the three projects: par 48. (This allegation must be misconceived in relation to the Walnut Project No 3, in which Guardian had no involvement). 18. The written and verbal representations were made in trade or commerce: pars 49 and 50. 19. The written representations were made by Gunns and/or Gunns Plantations and/or Gunns Finance: par 51. (An allegation in this form is embarrassing, as while Gunns Finance may be liable for its own misrepresentations, or for Gunns Plantations' misrepresentations under s 73 of the Trade Practices Act, it would have no liability if the misrepresentations were made by Gunns). 20. The verbal representations were made by Guardian on its own behalf and as agent for Gunns Plantations (note, not Gunns Finance): par 52. 21. The written and verbal representations were "false and/or misleading" within the meaning of ss 12DA and 12DC of the ASIC Act: pars 53 to 55. Particulars of the falsity are given in pars 55 and 56, in the form of bare assertions that the truth was the direct opposite of the facts, forecasts or opinions stated in the representations. 22. Mr Sithiravel entered into all the loan agreements in reliance on the written and verbal representations: pars 57 and 58. 23. Mr Sithiravel suffered loss and damage as a result of relying upon the misrepresentations: par 59. 24. Mr Sithiravel pleads a claim under s 12BB of the ASIC Act in respect of the written and verbal representations, on the basis that they were representations as to future matters, and the maker of the representations did not have reasonable grounds for doing so: pars 60 to 63. Mr Sithiravel merely alleges, in 62 and 63, that there were no reasonable grounds for the making of the representations, without any indication of why that is alleged to be so. (This may be problematic in view of the fact that s 12BB(3)(b) provides that the stipulation in s 12BB(2) that a party is not taken to have had reasonable grounds for the making of a representation unless evidence is adduced to the contrary, does not have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making it). The only particulars of unreasonableness given (following par 63) is a repetition of the allegations of falsity in pars 55 and 56 which, as noted, do no more than to assert that the representations were false. 25. Mr Sithiravel then pleads a breach of contract case, based upon contracts between himself and Gunns Plantations: pars 64 to 70. The claim is that each of the written representations made in the PDSs in relation to each of the projects constituted a term of the contract between Mr Sithiravel and Gunns Plantations. All of the terms were breached, because the representations were false: par 68. (Strangely, Mr Sithiravel also alleges that the breaches constituted a failure of consideration: par 69(b)). Mr Sithiravel suffered the same loss and damage as result of the breach of contract as he suffered as a result of relying upon the misrepresentations: par 70. 26. Mr Sithiravel pleads that Gunns Finance is jointly and severally liable with Gunns Plantations "as a result of the misrepresentations…the breaches of contract and failure of consideration" under s 73 of the Trade Practices Act (par 71), and he sets up his entitlements under that section as a defence to Guardian Finance's claim (par 72). 27. Mr Sithiravel pleads a negligent advice claim against Guardian in pars 73 to 95. 28. Mr Sithiravel's claim under the Contracts Review Act is pleaded in pars 96 to 117. (In pars 102, 103, 105, 112 and 117 Mr Sithiravel makes allegations concerning what is described as the "Timbercorp investment". Having regard to the balance of the cross claim, these allegations are entirely mystifying. Guardian was involved in an investment that Mr Sithiravel made in an agricultural project offered by a group called Timbercorp, but that had nothing to do with the Gunns group). The allegations relevant to the Contracts Review Act claim will be considered in more detail below. It is sufficient to note that all of the conduct and knowledge said to have given rise to procedural injustice in relation to the making of the loan agreements was the conduct and knowledge of Guardian. There is no allegation concerning the conduct and knowledge of Guardian Finance personally that would be capable of making Guardian Finance personally responsible or involved in any procedural injustice. Procedural injustice could only be sheeted home to Gunns Finance if Guardian was its agent, or its sub-agent through an agency of Gunns Plantations, or for some other reason Gunns Finance should be held responsible for Guardian's conduct. (As noted above, Mr Sithiravel now only presses his Contracts Review Act claim in relation to the first two loan agreements, as Guardian was not involved in the making of the last loan agreement). 1. It will be clear from this analysis of the terms of Mr Sithiravel's cross claim that many aspects of the pleading have been pleaded in an entirely unsatisfactory and in some cases embarrassing way. The problem stems partly from the manner in which Gunns Finance, Gunns Plantations and Guardian have been alleged to be agents or subagents of the other, without sufficient discrimination, and partly from the bare assertion that many representations made in the PDSs were misrepresentations for the simple reason that they were wrong, and that all such representations were terms of the contracts between Mr Sithiravel and Gunns Plantations, and were breached for equally uninformative reasons. No indication was given as to why there was no reasonable basis for the majority of the representations that concerned future matters. It was alleged that Gunns may have been responsible for the "literature", which, if true, would undermine the whole basis of Mr Sithiravel's cross claim. The cross claim appears to have been pleaded in an omnibus way in the hope that some evidence would be accepted by the court that would enable Mr Sithiravel to make a successful case at the end of the trial. 2. Of more significance is the fact that Mr Sithiravel's evidence in chief disclosed that he did not read any of the three PDSs. This led to the need for Mr Sithiravel to concede, in his 23 August 2016 response to the court's enquiry as to the aspects of his case that he maintained, that he cannot recover under a cause of action for misrepresentation in relation to representations upon which he did not rely: par 6. 3. Mr Sithiravel explained his new position in pars 6 to 10 of his response. The position appears to be: 1. Mr Sithiravel no longer relies upon any of the written representations directly. 2. He says, however, that some of the written representations were repeated as oral or written representations by Guardian in the course of the advice that it gave to him. Mr Sithiravel relies upon the remaining representations, on the basis that Guardian made the representations as agent for Gunns Finance (insofar as some of the written representations were repeated by Guardian). He relies upon the verbal representations in so far as they were made as agent for Gunns Plantations, and he claims that Gunns Finance is jointly and severally liable in respect of those representations under s 73 of the Trade Practices Act. 3. Mr Sithiravel does not make any misrepresentation case against Gunns Finance in relation to the Walnut Project No 3. 4. Mr Sithiravel maintains the whole of his breach of contract claim on the basis that all of the representations were terms of the contract between Mr Sithiravel and Gunns Plantations, and Gunns Finance is jointly and severally liable for breaches of those terms under s 73 of the Trade Practices Act. 5. Mr Sithiravel appears (in par 9) to accept that, "to the extent that representations in paragraph 47 have been abandoned, the corresponding breaches [meaning allegations of misrepresentations] alleged in paragraph 55 are also abandoned". 6. Mr Sithiravel provided a table in par 9 of his response that lists the sub-paragraphs of the cross claim in which representations are alleged in respect of which Mr Sithiravel maintains his claim. They are: 1. Woodlots Project 2006 – par 47 (a) to (g), (i) and (j); and par 48 all except for (d). 2. Winegrape Project 2007 – par 47 (n), (p), (q) and (r); and par 48 all except for (d). 3. Walnut Project No 3 – none. 1. Mr Sithiravel's misrepresentation case therefore requires that he prove that Guardian made what I will call the remaining representations, and it either did so as agent for Gunns Finance or Gunns Plantations (and in the latter case, that Gunns Finance is liable under s 73 of the Trade Practices Act). 2. In relation to all of the representations alleged, in respect of the three projects, Mr Sithiravel maintains a breach of contract claim; which in the first instance will depend upon him establishing that all of the representations were terms of the contract between himself and Gunns Plantations. 3. The only claim that Mr Sithiravel now makes concerning the Walnut Project No 3 project is the breach of contract claim. 4. All of the remaining claims (other than the claim under the Contracts Review Act that the first two loan agreements should be avoided, or declared to be unenforceable) will require Mr Sithiravel to establish the quantum of his damages. Claim against Guardian 1. As noted above, Mr Sithiravel makes a claim in his cross claim for damages against Guardian for negligent advice and misrepresentation. As also noted, Guardian has not filed an appearance and did not defend the claim against it at the hearing. 2. Mr Sithiravel said little in his final written submissions concerning the claim against Guardian. That claim apparently includes a claim in relation to what is described as the Timbercorp loan. It also includes a claim for damages in relation to the Walnut loan, although, as noted above, Mr Sithiravel concedes that Guardian had no involvement with the Walnut Project No 3. 3. Mr Sithiravel submits, in par 115 of his written submissions, that he is entitled to judgment by default against Guardian. The damages claimed against Guardian are in respect of quantified amounts of repayments by Mr Sithiravel in relation to the projects (except for the Timbercorp project, as to which the claim is not quantified). The total quantified amount claimed is $55,239.44. Mr Sithiravel also claims the unquantified amount of any judgment given against him in favour of Gunns Finance in these proceedings, together with his costs of defending the proceedings brought by Gunns Finance. 4. It is convenient in this context to note the following evidence given by Mr Sithiravel, in par 43 of his 6 August 2015 affidavit: … I approached FOS in 2011 to make a determination in regards to Guardian (sic) actions signing me up for all these investments and loans that I could not afford and in or around 12 October 2012 FOS made a determination that Guardian is to repay all the loans, interest and expenses to do with the projects I invested in. 1. That is the sum of Mr Sithiravel's evidence concerning the determination apparently made by the Financial Ombudsman's Service (FOS). There is no evidence concerning any attempt by Mr Sithiravel to recover the results of the determination from Guardian, or what the result of that attempt may have been. 2. In par 110 of his final written submissions, Mr Sithiravel responds to an argument by Gunns Finance that the effect of the FOS determination is that Mr Sithiravel has not suffered a loss, so that his claim for relief under the Contracts Review Act is barred. Mr Sithiravel states that he does not understand this argument. He continues: … Where there are multiple tortfeasors, or multiple causes of a plaintiff's loss, it is no defence on the part of one defendant that judgment has been obtained against another. If judgment has been recovered from another, that is a different matter. There is no evidence in these proceedings that judgment has been recovered from Guardian. The argument raised in the submissions was not pleaded in defence of the cross claim and no evidence was adduced in answer to it. It is a red herring and should be ignored. (Emphasis in original). 1. It will be necessary to address this submission in the context of Mr Sithiravel's Contracts Review Act claim. For the moment, it is simply to be noted that there is no evidence concerning the consequences of the FOS determination. 2. Moreover, Mr Sithiravel did not read any affidavits of service of the amended cross claim on Guardian; and has not taken the court in submissions to the detail of any evidence that would prove the quantum of the damages that Mr Sithiravel has been able to quantify at this stage of the proceedings. 3. It would be premature, in these circumstances, for the court to make any order against Guardian in default of its appearance. Mr Sithiravel will be given an opportunity, after these reasons for judgment are published, to take the steps necessary that would justify the court in making default orders against Guardian, and directions will be made to enable that to be done. 4. I will accordingly not consider Mr Sithiravel's claim against Guardian further at this stage. Payment of amounts borrowed to Gunns Plantations 1. The only issue that remains concerning the establishment by Gunns Finance of the matters alleged in its statement of claim is whether it has been proved that Gunns Finance paid to Gunns Plantations the amounts of the prices of the lots acquired by Mr Sithiravel in each of the three projects. 2. It is clear that the three loan agreements were, as a matter of contract, valid at the time they were made, so that Gunns Finance was obliged to pay the amounts of the loans to Gunns Plantations. Mr Sithiravel appears to argue that, in the absence of proof by Gunns Finance that it actually made the payments to Gunns Plantations, the consideration provided by Gunns Finance in respect of each of the three loan agreements has failed. 3. In addition to Mr Sithiravel's reliance upon an alleged absence of proof that the payments were made, Mr Sithiravel submits, in relation to the Woodlots Project 2006, that any payment that was made preceded the date on which Mr Sithiravel made the application for finance "and therefore could not relate to that application": final written submissions par 9. 4. In practical terms, Mr Sithiravel seeks to take advantage of the fact that receivers and managers have been appointed for Gunns Finance; it is in liquidation, and it appears that the availability of evidence to the receivers and managers may have been affected by Gunns Finance's circumstances. 5. The evidence in support of Gunns Finance's case was given by Mr David Sherwood, who is an employee of the receivers and managers. 6. Mr Sherwood's evidence established that Gunns Finance made substantial loans to borrowers to invest in each of the three projects. Gunns Finance maintained what were called "Loan Activity Reports" in respect of the borrowers for the 2006, 2007 and 2009 years. The Loan Activity Reports, which were in evidence, are business records, which were redacted in relation to all borrowers other than Mr Sithiravel. In the case of each of the projects, there is an entry for Mr Sithiravel that records the amount of the loan, and information concerning the term and number of payments. The reports also detail the total number of individual records and the total amount loaned. 7. The evidence that Mr Sherwood wished to give to the effect that the amounts borrowed by Mr Sithiravel were paid to Gunns Plantations as part of various payments of global amounts was objected to, and rejected. 8. The evidence establishes that Gunns Plantations issued to Mr Sithiravel a Certificate of Investment to record his acquisition of the requisite number of lots in each of the projects. The certificates recorded the total price for the lots in each case. They also stated: "100% of your application costs are tax-deductible". There would have been no entitlement to a tax deduction, if Mr Sithiravel had not actually paid Gunns Plantations for the issue of the lots in the projects to him. In each case, the certificate gives a "Date of Investment". On the probabilities, the date of investment was the date that Gunns Plantations completed the issue of the units in the projects; which as a matter of ordinary commercial usage would include the date that Gunns Plantations recorded its receipt from the investors of the prices for the lots. 9. The evidence included tax invoices issued by Gunns Plantations to Mr Sithiravel for the full price of each of Mr Sithiravel's investments in the three projects. Mr Sithiravel did not give evidence that he ever received from Gunns Plantations any demand for payment of the sums referred to in the tax invoices, or that Gunns Plantations took any other steps to recover those monies from him. 10. The evidence is sufficient to establish, on the balance of probabilities, that Gunns Finance paid each of the three amounts borrowed from it by Mr Sithiravel to Gunns Plantations, in satisfaction of Mr Sithiravel's obligation to pay the price for the lots issued to him in the projects. The apparent inability of Gunns Finance at this stage to tender evidence that establishes in each case a payment to Gunns Plantations that was explicitly appropriated to Mr Sithiravel's obligation to pay the price to Gunns Plantations does not prevent the court from making this finding. 11. First, it is clear from each of the PDSs that Gunns Plantations had made an arrangement that allowed prospective investors to borrow the amount of the price from Gunns Finance (as only one of a number of means of making the necessary payment). It is clear that Gunns Plantations and Gunns Finance were part of the one group of companies, and it is inherently unlikely that Gunns Finance would not have transferred any amounts borrowed from it for the purchase of units in the projects to Gunns Plantations. 12. Secondly, it is inherently unlikely that Gunns Plantations would have issued the Certificates of Investment that were issued to Mr Sithiravel, unless Gunns Plantations was satisfied, at the time of issue, that Mr Sithiravel had adequately provided for the payment of the price to Gunns Plantations. That may not have extended to being satisfied that the amount of the price had been paid into Gunns Plantations' bank account; but would extend to a satisfaction that Gunns Plantations would be entitled to receive the money. 13. Thirdly, there is in any event evidence that investors who wished to pay the price from their own resources were invited to make payments to Gunns Ltd, the parent company (see for example in relation to the Woodlots Project 2006, par 10 of the Instructions to Applicants at court book p 126). There is also evidence that establishes, on the balance of probabilities, that Gunns Ltd maintained a bank account that operated in effect as a treasury for its subsidiaries (see for example court book pp 120 to 123), so that the payment of the obligations of Gunns Finance to Gunns Plantations was dealt with on the basis of journal entries or inter-company transfers within the Gunns group. It is inherently improbable that the relevant officers within the Gunns group would not have made the entries necessary to cause Gunns Plantations to be treated as having received the prices for all lots issued by it in the projects. 14. Finally, Gunns Plantations issued the three tax invoices to Mr Sithiravel, and there is no evidence that it subsequently made any demands on him for payments of the amounts claimed in the tax invoices. That is a ground for inferring that Gunns Plantations considered itself to have received from Gunns Finance the amounts to which it was entitled. Commission Agreement between Gunns Plantations and Guardian 1. The next issue that must be determined is the validity of Mr Sithiravel's allegations concerning various parties being agents of others, or being authorised to make representations on their behalves. 2. It will be convenient to consider the significance of a commission agreement dated 1 September 2006 between Gunns Plantations and Guardian. 3. By Recital A, the commission agreement related to the Woodlots Project 2006, and another project called the Walnut Project No 1. 4. The commission agreement contained the following recitals: C. [Guardian] wishes to refer applications from its clients, to invest in the Registered Schemes based upon [Gunns Plantations'] existing disclosure documents outlined in the relevant Product Disclosure Statement ("PDS") and Australian Taxation Office Product Rulings for the relevant Registered Schemes as set out in Schedule 2. D. [Gunns Plantations], in its absolute discretion, can accept or reject applications received from [Guardian]. 1. The commission agreement thus described people in the position of Mr Sithiravel as Guardian's "clients". (Clause 3.1 also referred to Guardian's "clients"). 2. Recital D made it clear that Gunns Plantations had an absolute discretion to accept or reject applications received from Guardian, which is inconsistent with Guardian having any authority to accept applications on Gunns Plantations' behalf. 3. The commission agreement contained terms governing the way in which Guardian would lodge applications on behalf of its clients with Gunns Plantations. Clause 4.1 required Gunns Plantations within three working days of receiving an application to give written confirmation of whether the application had been approved, required further action, or had been declined. This provision also contemplated that Gunns Plantations retained the discretion to accept or reject applications lodged by Guardian on behalf of its clients. 4. The commission agreement provided for a regime for the payment of commissions, which was contingent on Guardian achieving a minimum target of $10 million: clause 5.2. 5. Clause 6.1 of the commission agreement was in the following terms: [Guardian] hereby covenants and agrees with [Gunns Plantations] that [Guardian] will at all times obtain the written approval from [Gunns Plantations] for any marketing material, brochure, presentations or any material prepared by or on behalf of [Guardian] for any of the Registered Schemes… 1. There is nothing in the commission agreement that would make Guardian the agent of Gunns Plantations for any purpose, including the acceptance of any applications by Guardian's clients for the issue of lots in projects by Gunns Plantations; or the making of any representations on behalf of Gunns Plantations. 2. The evidence does not include equivalent commission agreements covering the other two projects, but there is no reason to believe that the terms of any other agreements between Gunns Plantations and Guardian were materially different to those contained in the commission agreement. Actual agency 1. The particulars of Mr Sithiravel's allegation that Guardian was the agent of Gunns Finance are set out at par 5 of the cross claim, which are repeated in par 6 in relation to the claim that Guardian was the agent of Gunns Plantations. 2. Mr Sithiravel's case concerning Guardian being the agent of Gunns Finance or Gunns Plantations was founded on multiple assertions of fact concerning the involvement of each of the companies in the projects; the inter-relation of their activities; and their common interest in procuring investments in Gunns Plantations' projects by investors introduced by Guardian. The case did not specifically address the legal relationship between the various companies in relation to the extent to which Guardian was authorised to bind either Gunns company, or do any other act on behalf of either company. 3. Gunns Finance's response focused initially on characterising Guardian as a broker, and relying primarily on authorities that tend to establish as a general proposition that brokers are the agents of the clients who they introduce to a supplier of goods or services, and not the agent of the supplier, even where the supplier pays a commission to the broker under an arrangement with the broker: see Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; [1986] HCA 14 at 234, and Octapon Pty Ltd v Esanda Finance Corporation Ltd (Unreported, SC (NSW), Cole J, 3 February 1989). 4. However, Gunns Finance also relied upon the decisions of the Court of Appeal in Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; (2011) 15 BPR 29,699 at [192]ff; and Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 at [98]-[99]. It is, with respect, in these decisions that the court finds the relevant principles, as except perhaps in the case of long and clearly-established categories of broker, such as insurance brokers, error may follow from a determination of agency based upon the categorisation of the putative agent as a broker; rather than by examining all of the relevant facts and circumstances of the particular case. 5. In Tonto Home Loans, the judgment of the Court of Appeal was given by Allsop P (as his Honour then was), with Bathurst CJ and Campbell JA relevantly agreeing. As Allsop P said at [103], in relation to the loan introducer in that case: "It will be necessary to examine the position of S Loans by reference to the evidence of its particular contractual and business arrangement". The same is true in relation to the position of Guardian in the present case. 6. As Allsop P said at [194]: [194] Agency is to be determined by an analysis of the consensual legal relations between the parties, it is not merely a conclusion drawn from the performance by A of a function important, even necessary, to the operation or functioning of the business enterprise of P in question. 1. For the reasons given above in considering the effect of the commission agreement that covered the Woodlots Projects 2006, the agreement did not give Guardian any authority to accept applications for investments by its clients on behalf of Gunns Plantations. I have inferred, on the balance of probabilities, that the same was true for the Winegrape Projects 2007. There is plainly no evidence that Guardian had authority to accept applications for loans by its clients on behalf of Gunns Finance; and the existence of such authority is inconsistent with the terms of the finance packages in the PDSs, which gave Gunns Finance the discretion to accept or reject applications. In this respect, the position is the same as in Tonto Home Loans: see [172]. 2. However, Allsop P also showed by the following observations that a party may be in a relevant way, the agent of another for purposes other than binding that other to contracts with third parties; such as being an agent for the purpose of receiving information: [173] One needs to consider the purpose for which one is asking the question whether A is P's agent: Kirkpatrick v Kotis [2004] NSWSC 1265; 62 NSWLR 567 at 581 [86], per Campbell J (as his Honour then was). The question that must be addressed here by the factual and legal analysis is whether Tonto HL appointed S Loans to undertake tasks for it, short of creating a binding loan agreement, such that knowledge gained, or conduct engaged in, by S Loans in the performance of such tasks was knowledge to be imputed to Tonto HL, or conduct for which Tonto HL was to be held legally responsible by some form of vicarious attribution. [174] The appellants' first submission was that this could not be so because the expression of the matter in International Harvester was the limit of any relevant concept of agency known to the common law. If S Loans had no capacity to create legal relations between the third party and the principal by binding the lender to a loan, it could not, in law, be an agent. This is too narrow a conception of agency. The High Court in International Harvester was concerned with the question of the creation of legal rights. Other cases contemplate a possibly broader role for agents. See for example the place of an insurance canvasser in Colonial Mutual at 48–51. [175] The conception and central elements of agency were discussed helpfully by Finn J in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; 177 ALR 611 at 645–647 [131]–[137], in P Watts and F M B Reynolds Bowstead and Reynolds on Agency (19 th Ed, Sweet & Maxwell, 2010) at 1–10, in G E Dal Pont Law of Agency (2 nd Ed, LexisNexis, 2008) at 4–8 and 26–28 and see also W A Seavey "The Rationale of Agency" (1919–1920) 29 Yale Law Journal 859. Recognising, at once, the wisdom of what the authors of Bowstead and Reynolds on Agency (19 th Ed) say at 2 [1–003] as to the limited utility of reasoning from conceptual or presupposed definitions, it is to be borne in mind that the concept of agency is not merely functional, whereby something that is necessary to be done for P and that could be done by P itself is done by A under some arrangement; rather it is a consensual arrangement, a relationship, whereby A is to be taken as, or as representing, P. In South Sydney v News at 646 [136], Finn J referred to the authoritative character of the expressions of the relationship in Art 1 of Bowstead and Reynolds on Agency (an earlier edition) and Art 1 of the Restatement, Second, on Agency, these expressions being as cited by Finn J: [1] Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act… … [177] These expressions of the central characteristics of the relationship reveal the closeness of identity that is required for the relationship to exist. Not every independent contractor performing a task for, or for the benefit of, a party will be an agent, and so identified as it, or as representing it, and its interests. Agency is a consensual relationship, generally (if not always) bearing a fiduciary character, in which by its terms A acts on behalf of (and in the interests of) P and with a necessary degree of control requisite for the purpose of the role. Central is the conception of identity or representation of the principal… 1. In Provident Capital Ltd, Macfarlan JA, with whom Allsop P and Sackville AJA relevantly agreed, at [97], endorsed the observations of Allsop P in Tonto Home Loans at [177]. 2. The issue therefore, is whether an analysis of the consensual legal relations between Gunns Plantations and Gunns Finance on the one hand, and Guardian on the other, or as between the two Gunns companies, based upon the evidence, justifies a finding that one company was an agent for some purpose or purposes of another. 3. Twenty allegations of fact are made in the particulars of the claim that Guardian was the agent of Gunns Finance. Those particulars in substance consist of a list of aspects of each transaction in which Gunns Ltd, Gunns Plantations, Gunns Finance and Guardian were involved. While each of the matters alleged is true, or substantially true, none of the particulars individually, or taken in any combination, are capable of supporting the allegation that Guardian was for any purpose the agent of Gunns Finance or Gunns Plantations. There is no allegation that either company gave any authority to Guardian to do anything on its behalf. There is clearly no allegation that either company authorised Guardian to make representations on its behalf. 4. Apart from the particulars describing the various ways that each of the parties referred to were involved in the whole of each project, the particulars rise no higher than the following: n. [Gunns Finance] was aware that Guardian was a financial adviser; o. [Gunns Finance] was aware that Guardian was recommending loans from [Gunns Finance]; p. [Gunns Finance] was aware that Guardian was recommending the projects to its customers; q. [Gunns Finance] and/or [Gunns Plantations] paid commissions to Guardian in respect of loan applications submitted to it by Guardian; r. [Gunns Plantations] was aware that Guardian was a financial adviser; s. [Gunns Plantations] was aware that Guardian was recommending loans from [Gunns Finance]; t. [Gunns Plantations] was aware that Guardian was recommending the projects to its customers. 1. These particulars are not capable of establishing that Guardian was the agent of either Gunns Finance or Gunns Plantations. 2. In the case of the alleged agency of Guardian for Gunns Plantations, par 6 added the allegations that Guardian was a nominated "dealer" and "advisor" of Gunns Plantations. It is not clear what these allegations mean. There was no evidence to support them. Even if they had been made out, they would not without more have established that Guardian was the agent of Gunns Plantations for any purpose. 3. Mr Sithiravel made a submission as to why Guardian was the agent of Gunns Plantations based upon two spread-sheets that Mr Sithiravel said in his evidence were given to him by representatives of Guardian, at his first meeting with them in July 2007. Mr Sithiravel submitted that the document was "indicative of agency". He submitted that the spread-sheets were: … apparently published on behalf of [Gunns Plantations] (particularly when reference is made to clause 6.1 of the commission agreement) purport, by the fine print, to exclude Guardian from legal liability and appear to accept, by inference, that Guardian was an "entity associated with the investments offered". 1. The spread-sheets appear to provide indicative cash flows for two possible combinations of the acquisition of different numbers of lots in a number of the projects over the expected lives of those projects. The spread-sheets also give indications of the expected amounts of tax deductions. Each document contains the following: DISCLAIMER – INVESTORS PLEASE NOTE The cash flow calculator is provided to enable potential investors to assess the likely impact of an investment on their cash flow and tax position. By tailoring the variables to the investor's particular circumstances and providing for some sensitivity analysis it enables investors to see how an investment will work for them. It is provided to assist investors to make a more informed decision on whether to invest in GPL's offerings in woodlots, viticulture, walnuts and Chimaera Capital Limited offerings in Associated Equities Income Folio and Associated Equities Share Folio. Investors must be aware that the information contained in the cash flow calculator is not financial product advice. It does not take into account the investment objectives, financial situation and particular needs of any particular investor. Accordingly, before an investment is made a potential investor should read the Product Disclosure Statement, any Supplementary Product Disclosure Statement and relevant Chimaera Folio Mandate in full for any prospective investment. It is also recommended that before any investment decision is made a potential investor should consult a financial or other professional adviser. Any investment is subject to risks. None of Gunns Plantations Ltd, Gunns Ltd, any other member of the Gunns group of companies, Chimaera Capital Ltd, Associated Equities Australia Pty Ltd, Guardian Royal Financial Services Pty Ltd, Australian Agribusiness Network Pty Ltd, Asian Pacific Advisory Group Pty Ltd or any other entity associated with the investments offered give any guarantee, warranty or insurance as to the performance of the investment or any particular return. 1. There may be reason to doubt whether Mr Sithiravel could have absorbed the detail of the disclaimer when he was given the spread-sheets, but that is immaterial, as the purpose for which he seeks to use the documents is as evidence in support of his case that Guardian was an agent of Gunns Plantations. 2. The terms of the spread-sheets do not support an inference that they were published on behalf of Gunns Plantations. Given the number of different entities referred to as apparent offerors of different but unidentified investments, it is more likely that the spread-sheets were prepared by Guardian, as a pro forma document intended to be used in relation to investments offered by a number of unrelated parties, including Gunns Plantations. 3. The reference in the third paragraph of the disclaimer to "any other entity associated with the investments" does not provide evidence that Guardian was an agent of Gunns Plantations, or any other of the companies listed, as an association with investments is simply an inadequate relationship to make Guardian the agent of the party offering the investments. 4. Mr Sithiravel also submitted: "Guardian stamped and provided a sticker onto its copies of the PDSs with its own details. In doing so it represented an affiliation between itself and [Gunns Plantations]. There is nothing indicating that the practice was prohibited". 5. The statement in the first sentence in this submission is true. It is arguable, but it may be true that this conduct amounted to a representation by Guardian (but not Gunns Plantations) that there was an affiliation between the two companies. Even if there was an affiliation, that term is relevantly meaningless, if the issue is whether Gunns Plantations made, or held out Guardian to be, its agent. The question whether or not Gunns Plantations prohibited Guardian from placing its own sticker on the PDSs is of little assistance, in the absence of more positive evidence, on the issue of agency. 6. The allegation that Gunns Plantations was the agent of Gunns Finance is made in par 10 of the cross claim. The particulars alleged do no more than describe the relationship between the two companies, as being part of the Gunns group, and in various ways assert that they "each had a common purpose in promoting the projects". There is no allegation that Gunns Plantations was authorised by Gunns Finance to undertake any action on its behalf; including perhaps most relevantly, that Gunns Plantations was entitled to accept any application for finance made by any potential investor to Gunns Finance. (In this context it must be noted that each of the three letters accepting Mr Sithiravel's applications for finance was written on the letterhead of Gunns Finance). 7. Mr Sithiravel ultimately based his submission that Guardian was the agent of Gunns Plantations, and that Gunns Plantations was the agent of Gunns Finance, on what he described as "(t)he mechanics between the plaintiff, [Guardian Plantations] and… Guardian": see par 55 of his final written submissions. This consists of a list of true, or substantially true, statements concerning the involvement of the relevant parties in each of the transactions. That involvement may have had some significance, if it were sufficient for Mr Sithiravel to establish that all of the parties participated in the transactions; each had a common interest in the transactions being implemented; and each had some general understanding of the nature of the participation by the others. That, however, is not sufficient. It is necessary that the facts establish in some relevant way that one party was given authority to act on behalf of another. With due respect, the submissions made on behalf of Mr Sithiravel tend to swirl around the point, but they do not grapple with the ultimate issue of the authority of one party to represent another. 8. Mr Sithiravel has not established that Guardian was the agent of either or both of Gunns Plantations and Gunns Finance for any relevant purpose. 9. On the issue of whether Gunns Plantations was the agent of Gunns Finance, there is no evidence that the latter appointed the former to accept applications for loans on its behalf. As I have said above, all of the three applications made by Mr Sithiravel in the present case were accepted by Gunns Finance on its own letterhead. 10. Mr Sithiravel pointed to the fact, taking the Woodlots Projects 2006 financial package in the PDS as an example, that investors were requested to return the documents relating to the application for the loan that the investor was making to Gunns Plantations (rather than Gunns Finance). Additionally, under the pro forma statement of assets and liabilities to be filled out by applicants there is a statement: "Additional information may be requested at [Guardian Plantations'] discretion". It may be that these statements would support a finding that Gunns Plantations was a limited agent of Gunns Finance (in the sense discussed by Allsop P in Tonto Home Loans) for the purpose of receiving completed applications, and requesting further information from applicants about their assets and liabilities. However, it is also to be noted that Gunns Finance was clearly given the right to accept or decline applications. The finance package provided: "Additional information may be requested at the Lender's [i.e. Gunns Finance's] discretion" in relation to the personal details of the applicant. In relation to the Key Features Statement, there was a notice that the information contained in the document was a summary only, and applicants were invited: "For further information call Gunns Finance Pty Ltd". 11. There was thus a blurring to some extent of the roles to be adopted by Gunns Finance and Gunns Plantations, but even if the latter was authorised to receive applications and to obtain elaboration from applicants in respect of certain factual matters, there is no evidence that would support a finding that Gunns Plantations was the agent of Gunns Finance for the purpose of making any representations to applicants for loans (other than by including in the PDSs the information in the financial package relating to the availability of finance from Gunns Finance). 12. Specifically, in so far as Mr Sithiravel relies upon representations whose ultimate source were the parts of the PDSs that dealt with the agricultural projects (and not the finance available from Gunns Finance), those representations were not made by Gunns Plantations as agent for Gunns Finance. Ostensible or apparent agency 1. In the absence of proof of actual authority, Mr Sithiravel alleged that Guardian had ostensible authority to make representations on behalf of Gunns Finance and Gunns Plantations, and each of the two last-mentioned companies had ostensible authority to make representations for the other. 2. In par 18 of the cross claim, Mr Sithiravel merely repeated as particulars of his ostensible agency allegations the particulars to his allegations of express agency in pars 4, 5 and 10. 3. The only particulars which appear to contain allegations concerning the relationship between Gunns Finance and Guardian are particulars 5a, b, c, m, n, o, p and q, and 10i. None of these particulars allege any act on the part of Gunns Finance that could objectively have caused Mr Sithiravel to form a belief that Guardian had authority to act on behalf of, and bind, or speak for, Gunns Finance. For example, the allegation in 5a is merely that Gunns Finance and/or Gunns Ltd and/or Gunns Plantations provided Guardian with brochures, advertising material, loan application forms and PDSs; and 5b and 5c respectively allege that the loan application forms and the PDSs were stamped or contained a sticker with the logo and get up of Guardian. There was no allegation, and indeed no evidence, that Gunns Finance or any of the other Gunns companies prepared the loan application forms or the PDSs containing the references to Guardian. In par 59 of his final written submissions, Mr Sithiravel accepted that "Guardian affixed its own labelling to the PDSs". 4. In par 23 of his written opening, Mr Sithiravel submitted that these facts constituted "a representation by Guardian that it was the agent of those entities", as if ostensible agency could be based upon a representation made by the putative agent. 5. In the same paragraph, Mr Sithiravel submitted: "Whether or not Guardian could create legal relations between [Gunns Plantations] or [Gunns Finance] and [Mr Sithiravel] it was at the very least authorised on behalf of those entities to market lot sales and loan applications". This last submission, unfortunately, assumes that which it is intended to prove. 6. In his final written submissions at par 53, Mr Sithiravel submitted: "The law in relation to brokers is relatively clear. However, in this case Guardian was not a broker; it was merely a sales agent. It was to receive commission based on the number of sales of the product being marketed by [Guardian plantations]… Guardian was more in the position of the real estate agent than anything else." 7. In his final written submissions at par 58 Mr Sithiravel set out the following principles concerning ostensible authority, given by Whelan J in Flexirent Capital Pty Ltd v EBS Consulting Pty Ltd [2007] VSC 158 at [203]: [203] The principles which I draw from this analysis of the authorities having particular relevance here are the following: (a) Apparent authority operates as an estoppel preventing a principal from asserting that the principal is not bound by a contract where the principal has held the agent out as having authority. (b) The holding out may be of a general character, arising for example out of an office or position in which the principal places the agent, or it may be specific to a particular transaction. The holding out may take the form of the setting up of an organisation or structure which presents to outsiders an appearance of authority in the agent. (c) The holding out must be conduct by the principal, not the agent. A third party cannot rely upon the agent's own representation as to authority. But this does not mean that the agent's conduct is to be ignored. The principal may hold out the agent as having authority by permitting the agent to act in a certain way or to make representations about himself or herself, or the principal may hold the agent out by equipping or arming the agent with a document or thing which enables the agent to assert authority with the hallmark of authenticity. (d) The holding out may also result from permitting an agent to act in a certain manner, or by equipping or arming the agent, or by a failure to take proper safeguards against misrepresentation by the agent. (e) The principal's conduct is to be assessed as a whole and in its totality. (f) The apparent strictness of the approach in Russo-Chinese Bank and in Armagas in relation to the known existence of a limitation upon the agent's authority must be read in the light of the High Court's emphasis in Pacific Carriers upon the need to consider the totality of the principal's conduct, and in the light of the High Court's analysis in Crabtree Vickers and in Pacific Carriers of the circumstances in which an agent's assertion of authority may, in the particular context, be a representation or holding out by the principal. As the decision in Essington well demonstrates, the issue is to be resolved upon an analysis of the particular facts of each case. In a particular case a known limitation upon an agent's authority might prevent an estoppel from arising. It seems to me that that would not invariably be the case, as it is necessary to assess the whole of the principal's conduct in the particular circumstances, and, in particular circumstances, a holding out may exist which it would be inequitable to allow the principal to resile from, notwithstanding the existence of a known limitation upon the agent's authority. 1. Mr Sithiravel made the following submission based on these principles (at par 59): Assessing firstly the conduct of [Gunns Plantations] in that light, but without unduly repeating the facts set out above, it had a contract with Guardian for Guardian to sell its products, the contract limitations did not prevent Guardian from being seen as [Gunns Plantations'] agent, the scope of the representations Guardian was permitted to make were contained in the contract, Guardian was apparently armed with [Guardian Plantations'] PDSs, which contained loan applications and lot applications and therefore must have been provided to it by [Gunns Plantations], Guardian affixing its own labelling to the PDSs, Guardian received and passed on the applications at the initial stage and held itself out and was permitted to hold itself out as having authority to do what it was doing, which included representing [Guardian Plantation's] organisation and projects. 1. Plainly, this submission focuses on the conduct of Gunns Plantations, and Gunns Finance is not even mentioned. 2. Mr Sithiravel further submitted at par 60: [Gunns Finance] permitted [Gunns Plantations] to include all of its loan application details, loan literature, terms and conditions in the PDS and/or the "finance package" and allowed [Gunns Plantations] to receive, and seemingly process the loan applications on its behalf. There was a holding out of authority as well is actual agency. 1. It appears from Mr Sithiravel's submission in par 62 that his real case is that Gunns Finance is fixed with the knowledge of Guardian's representative, Mr Leahey, as to the representations made by Guardian, because Gunns Plantations authorised Guardian to obtain the signature of Mr Sithiravel on the application for finance, even though "Guardian was not authorised to enter the transaction" (emphasis in original). 2. I do not accept that the evidence, or Mr Sithiravel's submissions, have made out the alleged case that Guardian was the ostensible agent of Gunns Finance, either by reason of Gunns Finance's own conduct, or the conduct of Gunns Plantations (on the basis that the latter company was the actual or ostensible agent of Gunns Finance). 3. It is not necessary to examine the basis of Whelan J's statement of the applicable principles in Flexirent Capital Pty Ltd; which may, with respect, be accepted for present purposes, in so far as it deals with the type of conduct of the putative principal that is capable of supporting a finding of holding out. 4. However, Whelan J based his statement of the relevant principles upon an analysis of earlier authorities, including importantly the following extract from the judgment of Gleeson CJ and Gummow, Hayne, Callinan and Heydon JJ in Pacific Carriers Ltd v BNP Paribas (2004) 2018 CLR 451; [2004] HCA 35 at 466 (citations omitted): Where an officer is held out by a company as having authority, and the third party relies on that apparent authority, and there is nothing in the company's constitution to the contrary, the company is bound by its representation of authority. 'The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting he is not bound by the contract'. It is not enough that the representation should come from the officer alone. Whether the representation is general, or related specifically to the particular transaction, it must come from the principal, the company … That does not mean that the conduct of the officer is irrelevant to the representation, but the company's conduct must be the source of the representation. In many cases the representation or conduct commonly takes the form of the setting up of an organisational structure consistent with the company's constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon inquiry, or positive statement, but upon an assumption that company officers have the authority that people in their respective positions would ordinarily be expected to have. In the ordinary case, however, it is necessary, in order to decide whether there has been a holding out by the principal, to consider the principal's conduct as a whole. 1. Ostensible authority requires not merely a holding out by the putative principal of the agent as being the agent of the principal, but the third party who alleges the ostensible authority must rely upon "that apparent authority", in the sense that the third party relies upon the statements or conduct that constitutes the representation concerning the existence of the agency or authority. 2. In Flexirent Capital Pty Ltd, Whelan J expressly held, at [206], that one of the issues was whether the parties who asserted the authority "relied upon that holding out in circumstances where it would be unjust for Flexirent now to resile". His Honour, after analysing the evidence in detail, found at [214] that the parties did rely on Flexirent's conduct, which led them to assume the existence of the agency; and further at [222] that the parties asserting the agency "acted in reliance upon that holding out". 3. There is no specific allegation in the cross claim that Mr Sithiravel understood that statements made to him by Guardian were made as agent for Gunns Plantations or Gunns Finance; and even if it be understood that such an allegation was implied in the pleading, as I read Mr Sithiravel's evidence, he has not given evidence that he believed at the time that he applied for the issue of lots in any of the projects, and the financing of those applications by the provision of finance by Gunns Finance, that Guardian was acting as agent for either Gunns Plantations or Gunns Finance by what it did or said. Nor has Mr Sithiravel given any evidence as to the facts and circumstances that caused him to have any such belief. 4. The submissions made on Mr Sithiravel's behalf as to why ostensible authority existed appear to rely most heavily on the concepts dealt with by Whelan J in sub-pars (c) to (e) of his summary of the relevant principles. Yet, the submissions are in substance mere assertions, which do not explain by reference to the evidence how those principles are engaged in this case. There is an appearance that the case that Guardian was the ostensible agent of Gunns Plantations, or of Gunns Finance, whether directly or indirectly through Gunns Plantations, is an artefact of Mr Sithiravel's lawyers' examination of the facts; rather than one based upon Mr Sithiravel's own, genuine recollection of events. 5. When Gunns Plantations' and Gunns Finance's conduct is considered "as a whole and in its totality" (Whelan J's sub-par (e)), there is not the holding out that would be necessary to justify the court in finding that it was so obvious in the circumstances that Mr Sithiravel would have understood that Guardian was the agent of Gunns Plantations or Gunns Finance, that the court should find on the balance of probabilities that Mr Sithiravel acted on the faith of a belief that that agency existed, even in the absence of express evidence from him that he did so. Making of remaining representations 1. As I have recorded above, Mr Sithiravel has abandoned any claim that he suffered loss as a result of representations made by Gunns Plantations, or Gunns Finance, in the PDSs, because he did not read or rely upon those documents. 2. He continues to rely upon what I have called the remaining representations, on the ground that they were made to him by Guardian, either orally at the meeting with representatives of Guardian in July 2007, or by means of the spread-sheets. 3. The remaining representations relate only to the Woodlots Projects 2006 and the Winegrape Projects 2007. They are set out in the schedule in par 9 of Mr Sithiravel's 23 August 2016 response. 4. As I have found that Guardian was not relevantly the agent of Gunns Plantations or Gunns Finance, and that Gunns Plantations was not the agent of Gunns Finance, for the purpose of the making of any of the representations alleged by Mr Sithiravel, the case based on the remaining representations cannot succeed on the basis that those representations were made with the authority of Gunns Finance. 5. A case based upon the remaining representations could only succeed on the basis that Gunns Plantations was liable to Mr Sithiravel for damages as a result of his reliance upon those representations, and that Gunns Finance is jointly and severally liable for those damages as a linked credit provider under s 73 of the Trade Practices Act. 6. Such a case could only be put on the basis that when Guardian made the remaining representations to Mr Sithiravel it was in effect repeating the representations made by Gunns Plantations in the PDSs in a manner that made those representations the cause of Guardian's own representations. 7. The problem with this aspect of Mr Sithiravel's claim is that he did not separately plead in his cross claim that Guardian made the remaining representations to him at the meeting, and by the spread-sheets, and that in doing so it was in essence repeating representations made by Gunns Plantations in the PDSs. 8. Mr Sithiravel pleaded the written representations in par 47 of his cross claim in a manner that specifically identified the PDSs as the source of those representations. 9. Then, in par 48, Mr Sithiravel pleaded what he called the verbal representations as being made by Guardian. That may have been sufficient if he had made out his case that Guardian made the verbal representations as agent for Gunns Plantations (as alleged in par 52). I have, however, rejected that case. 10. Mr Sithiravel did not plead that the verbal representations were in some way caused by equivalent written representations contained in the PDSs. 11. This is a serious pleading omission. When one looks at the table containing the remaining representations, one sees that in relation to both the Woodlots Projects 2006 and the Winegrape Projects 2007, many of the written and the verbal representations survive. 12. As to the written representations that have survived, Mr Sithiravel has not, as noted immediately above, pleaded that Guardian made those representations in circumstances where the representations were caused by Gunns Plantations' representations in the PDSs. Not only is that allegation not pleaded, but there are no particulars of how each of the remaining written representations led Guardian to make particular oral representations, or to prepare the spread-sheets in the manner that it did. 13. Nor do Mr Sithiravel's submissions in this case demonstrate the alleged relationship between representations made in the PDSs, and statements made orally and in the spread-sheets by Guardian. 14. As an example, the written representation in par 47a of the cross claim is a remaining representation. That representation was that the Woodlots Project 2006 was to be a long-term project of between 13 and 25 years. It is arguable that this representation was made by Mr Leahey in the statement attributed to him by Mr Sithiravel in par 30 of his affidavit: "Look at this spread-sheet, throughout the life of the projects this is the tax deductions you will get and the amount of money you will get at the end of 10, 15, 20 and 25 years of this project". However, when one attempts the same exercise in relation to the other remaining written representations, it is at least very difficult and probably impossible to isolate with sufficient clarity representations made by Gunns Plantations in the PDSs as being the source of the remaining representations made by Guardian. 15. In the case of the remaining verbal representations, the source of those representations is not directly or clearly discernible in the written representations made in the PDSs at all. 16. Given the state of the pleadings that I have described above, it would not be fair to Gunns Finance to permit Mr Sithiravel in written submissions made long after final written submissions, in response to the court's request that he identify the parts of his case that cannot be supported by the evidence, to reconstruct his misrepresentation case to rely upon the remaining representations in the way that Mr Sithiravel has attempted to do. 17. This ruling will not be critical to the outcome of this case if I am correct in my findings, which I will now address, that Mr Sithiravel has not in any case established that any of the remaining representations were misleading at the time that they were made. Section 12BB of the ASIC Act 1. Mr Sithiravel alleges, in pars 60 and 61 of his cross claim, that the written representations and the verbal representations made by Gunns Plantations were with respect to future matters within the meaning of s 12BB of the ASIC Act. Accordingly, the remaining representations alleged were (see par 9 of his written response to the court's enquiry dated 23 August 2016) with respect to future matters. 2. This aspect of Mr Sithiravel's claim is based on the effect of s 12BB(1) of the ASIC Act, whereby representations by a person with respect to any future matter are taken, for the purposes of ss 12DA to 12DN, to be misleading if the person does not have reasonable grounds for making the representation. Under s 12BB(2), the person making the representations as to future matters is taken not to have had reasonable grounds unless evidence is adduced to the contrary (although s 12BB(3) provides that subsection (2) does not have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making it). 3. Gunns Finance made submissions, in pars 61 and 62 of its final submissions, as to why Gunns Plantations had reasonable grounds for making the remaining representations concerning the Woodlots Project 2006 and the Winegrape Project 2007 (there being no remaining representations concerning the Walnut Project No 3). Broadly, the grounds relied upon concerned the fact that the investment schemes had been established and registered with ASIC, and the responsible entity had an Australian Financial Services Licence; the responsible entity had the land on which the projects were to be conducted; Gunns Plantations had over three decades of experience; appropriate tax rulings had been obtained from the ATO; a comprehensive market analysis had been undertaken, together with an identification of the risks facing the scheme; independent forestry consultants had provided assessments of the scheme; and an independent accounting firm had provided a tax opinion on the effect of the tax rulings. 4. In his written submissions in reply (par 26), Mr Sithiravel responded to par 61 of Gunns Finance's submissions by saying: "[I]t is conceded that there was a reasonable basis for making the representations". However, his submissions then continued: "Nonetheless, that is not an answer to the defendant's claim. Contrary to what the [plaintiff's written submissions] states "the issue" in PWS [59], the issue is now not whether there was a reasonable basis – and it is not now contended that there was not a reasonable basis – the issue is whether or not the representations were false or misleading. They were." 5. By this response, Mr Sithiravel effectively abandoned his claim that any representations as to future matters were misleading because there were no reasonable grounds for making the representations. 6. It is implicit in the response that Mr Sithiravel submits that the representations were nonetheless misleading, even though based on reasonable grounds, because they were false. 7. This position is misconceived, because if, as is the case in respect of all of the representations, they are in substance representations as to future matters, they can only be false if they were made without reasonable foundation; and if they were made with reasonable foundation, they are not misleading merely because the future matter did not occur as represented. This has been established since at least Global Sportsmen Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82. 8. Whatever be the precise effect of s 12BB(3) of the ASIC Act, in this case there was substantial evidence capable of supporting a finding that Gunns Plantations had reasonable grounds for making the representations as to future matters relied upon by Mr Sithiravel. 9. That evidence may not have been conclusive, but all that Mr Sithiravel pleaded in pars 62 and 63 of his cross claim was that there were no reasonable grounds for the making of the representations; and he repeated his allegations at pars 55 and 56, which were no more than assertions in the negative form of the positive representations. Thus, if the representation was that the project was a long-term project of a certain number of years, the representation was falsified by the allegation that the project was not a long-term project, and so on. 10. In his evidence Mr Sithiravel did not enter the field of battle when it came to the issue of why each of the remaining representations was misleading. 11. Accordingly, when he conceded that he no longer contended that there was no reasonable basis for the making of the representations, his case must necessarily fail. If, as appears to be the case, Mr Sithiravel is reduced to an assertion that the future matters asserted by each of the representations did not come to pass, that is legally insufficient to establish that they were misleading. The contract 1. Mr Sithiravel claims in his cross claim that his contract with Gunns Plantations included the terms listed in pars 65 to 67, which were sourced in the respective PDSs, and that Gunns Plantations breached each of those terms. This claim is a step in his claim against Gunns Finance that it is jointly and severally liable to him for the damage he has suffered as a result of Gunns Plantations' breaches of contract, as a linked credit provider under s 73 of the Trade Practices Act. 2. The cross claim does not contain particulars of Mr Sithiravel's contracts with Gunns Plantations concerning each of the three projects; and it is not made clear how and why aspects of the PDSs became contractual terms. 3. The contract claim does not appear to have been mentioned in Mr Sithiravel's written opening, save for a bare reference in par 45 to Mr Sithiravel relying upon s 73 on the basis of "the breaches of contract, the terms of the PDSs constituting, in part, such terms, and the failure of consideration of the linked supplier, [Gunns Plantations], to deliver the product contracted for". 4. As Mr Sithiravel noted in par 80 of his final written submissions, the contractual documents between Gunns Plantations and Mr Sithiravel are not in evidence; unless the PDSs are contractual documents. 5. Mr Sithiravel submitted, at par 76, that he applied for the products and services offered by Gunns Plantations on the basis of what was contained in the PDSs, and that appears to be the basis of his claim that the PDSs contained terms of the contract. He relied upon a number of statements in the Woodlots Project 2006 PDS (court book p 145) concerning "Key Features" of the project that: "Growers are offered a unique investment opportunity allowing the flexibility of three planting options" and "Growers are offered the opportunity to acquire a Forestry Right over Woodlots…" (emphasis added in both cases) as signifying that the PDSs were offers capable of acceptance. He said that these offers were "akin to the offer to the world at large in the contract case which sticks in all law students' minds Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256". 6. There is no place in the analysis of the effect of the PDSs for the principles governing unilateral contracts, where the offeror makes an offer to a class which is capable of acceptance by the doing of an act identified in the offer. 7. The terms of the contract between Gunns Plantations and Mr Sithiravel that are pleaded in the cross claim appear to have been compiled by selecting various statements made in the PDSs. It appears that the statements referred to by Mr Sithiravel were made in the relevant PDSs. 8. While the statements relied upon do make various assertions about the nature of the project and the rights of investors, those statements are expressed in descriptive rather than promissory language. They plainly constitute representations, but they do not appear to be independent sources of contractual obligations. 9. Mr Sithiravel did not make submissions to establish why the representations in the PDSs should nonetheless be found to be terms of the contracts between himself and Gunns Plantations; save in so far as he put the argument that I have outlined above, that the PDSs should be treated as offers capable of being accepted. I have rejected that argument. 10. The PDSs for the three projects contain a section 18 entitled "Summary of Material Contracts" which summarises the Constitution, the Management Agreement, and various other formal agreements relating to the conduct of the project. 11. As I have noted above, Mr Sithiravel did not tender any of the formal contract documents into evidence in relation to any of the three projects. That makes it extremely difficult to find that parts of the pre-contract PDSs were intended by the parties to have contractual effect. The considerations dealt with by the High Court in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55 would be enlivened in determining whether there was room for the inclusion of parts of the PDSs in the contracts between Gunns Plantations and Mr Sithiravel. As the High Court noted in JJ Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435; [1970] HCA 6 at 442, it must be established "that the statement so relied on was promissory and not merely representational". 12. All three PDSs contain disclaimers in the following terms: Your investment in the Project is subject to investment and other risks. Neither GPL nor Gunns, nor any other member of the Gunns Group nor any other entity associated with the issue of this PDS gives any guarantee, warranty or assurance as to the performance of the Project or any particular return. The information contained in this PDS is not financial product advice. This PDS does not take into account the investment objectives, financial situation and particular needs of any potential investor. Accordingly, before you invest you should read this PDS and any supplementary PDS in full. We also recommend that before making a decision to invest in the Project you consult a financial or other professional adviser. 1. The three PDSs in Section 7 contain a relatively extensive description of the risks of investing in the projects. 2. I am not satisfied that it has been established that any of the PDSs created the contractual obligations on the part of Gunns Plantations that are alleged by Mr Sithiravel in his cross claim. Section 73 of the Trade Practices Act 1. In pars 19 and 71 of his cross claim, Mr Sithiravel makes allegations to support his claim under s 73 of the Trade Practices Act that Gunns Finance is jointly and severally liable to him for the damages payable by Gunns Plantations for damages as a result of misrepresentation, breach of contract, or failure of consideration. 2. Relevantly, s 73(1)(b) of the Trade Practices Act, in force at the time the lots in the projects were issued to Mr Sithiravel, provided: (1) … (b) a consumer enters into a contract with a linked credit provider of a corporation (in this section also referred to as the 'supplier') for the provision of credit in respect of the supply by the supplier of goods or services, or goods and services, to the consumer, and the consumer suffers loss or damage as a result of misrepresentation, breach of contract, or failure of consideration in relation to the contract, or as a result of a breach of a condition that is implied in the contract by virtue of section 70, 71 or 72 or of a warranty that is implied in the contract by virtue of section 74, the supplier and the linked credit provider are, subject to this section, jointly and severally liable to the consumer for the amount of the loss or damage, and the consumer may recover that amount by action in accordance with this section in a court of competent jurisdiction. 1. It is sufficient to note that in my view the evidence establishes that Gunns Finance was at relevant times a linked credit provider of Gunns Plantations within the definition of that term in s 73(1). 2. However, it follows from my findings that Mr Sithiravel has not established that he suffered loss or damage as a result of misrepresentation or breach of contract by Gunns Plantations, that he is not entitled to recover from Gunns Finance under s 73. 3. It should be noted that Mr Sithiravel put an argument that the consideration offered by Gunns Plantations for the lots acquired by Mr Sithiravel in the three projects failed. The evidence as to what happened to the projects is extremely imprecise, but it appears that they operated in accordance with the descriptions in the respective PDSs for some time before they failed. I am not satisfied that the evidence establishes that the consideration failed. 4. It should also be noted that in par 83 of his final written submissions, Mr Sithiravel raised an argument for a further basis for recovery under s 73 of the Trade Practices Act, that s 12ED of the ASIC Act implied into a contract for the supply of financial services by a person to a consumer in the course of the business a warranty that the services will be rendered with due skill and care. He submitted that Guardian's services were not rendered with due skill and care, which constituted a breach of the term implied by s 12ED. He then claimed that, as Guardian was the agent of Gunns Plantations, and that company was the agent of Gunns Finance, s 73 attached to the damages suffered by Mr Sithiravel for breach of the implied term. 5. This claim is not available to Mr Sithiravel, as it is not pleaded in his cross claim. 6. Finally, it is necessary to note the effect of the provisions of s 73 of the Trade Practices Act, which, while imposing joint and several liability on the linked credit provider for damage caused by the linked supplier, creates a regime whereby primary liability is to be imposed upon the linked supplier, where that supplier is capable of meeting the claim for damages. One aspect of this regime is created by ss (5) and (6), which provide: (5) Subject to sub-section (6), a consumer may not, in respect of a liability for which, by reason of this section, a supplier and a linked credit provider are jointly and severally liable- … (b) where proceedings are brought against the consumer by the credit provider, make a counter-claim or exercise the right conferred by sub-section (4) against the credit provider, unless the consumer brings the action against the supplier and the credit provider jointly or, in the case of a counter-claim or right conferred by sub-section (4), claims in the proceedings against the supplier in respect of the liability by third-party proceedings or otherwise. "(6) Sub-section (5) and paragraphs (8) (a) and (9) (a) do not apply in relation to proceedings where- (a) the supplier has been dissolved or is commenced to be wound up; or (b) in the opinion of the court in which the proceedings are taken, it is not reasonably likely that a judgment obtained against the supplier would be satisfied and the court has, on the application of the consumer, declared that sub-section (5) and paragraphs (8)(a) and (9)(a) do not apply in relation to the proceedings. 1. Mr Sithiravel has not brought a claim against Gunns Plantations in these proceedings. Accordingly, ss (5) would preclude him from bringing the present claim under s 73 against Gunns Finance, unless he satisfied the proviso in ss (6). There may be reason to suspect that the winding up of Gunns Plantations has commenced; but the evidence does not include an ASIC search for that company, and Mr Sithiravel did not plead the commencement of its winding up. Mr Sithiravel has not sought the declaration contemplated by ss (6)(b). Given the other findings set out above, however, this is not a matter of significance. Action under ASIC Act 1. Mr Sithiravel pleaded in his cross claim in pars 38 to 40 that the loans offered for the three projects were financial products within the meaning of s 12BAA of the ASIC Act. He then pleaded that Gunns Plantations provided a financial service by dealing in a financial product, being the projects, within the meaning of s 12BAB of the ASIC Act: par 41. Next, he alleged in par 44 that Gunns Plantations, by itself and its agents Gunns Finance and Guardian, provided financial product advice within the meaning of s 12BAB of the ASIC Act; and then in par 45 he made the same allegation for Gunns Finance on the basis that it, or its agent Guardian, provided financial product advice. The financial product advice was then alleged in par 46 to have been contained in the written and verbal representations. The written and verbal representations were then alleged to be false and/or misleading within ss 12DA and 12DC of the ASIC Act: see paras 53 to 56. 2. These allegations must be qualified by Mr Sithiravel's concession concerning the consequences of his not having read the PDSs, so that the only remaining representations are those listed in par 9 of his response to the court's enquiries dated 23 August 2016. 3. Section 12DA of the ASIC Act applies to prohibit a person, in trade or commerce, engaging in conduct in relation to financial services that is misleading or deceptive, or is likely to mislead or deceive. Section 12DC establishes a comparable prohibition in connection with the sale or grant, or the possible sale or grant, of a financial product that consists of, or includes, an interest in land, or in connection with the promotion by any means of a financial product that consists of, or includes, an interest in land. Section 12DC(1)(b) prohibits the making of a false or misleading representation concerning various aspects of the interest in the land. 4. It is not necessary for the court to deal with all of the elements of this aspect of Mr Sithiravel's claim in detail. He has not established that any other party was relevantly the agent of Gunns Finance. He did not read the PDSs and accordingly did not rely upon them. He may have relied upon what he called the verbal representations made by Guardian, but Gunns Finance is not liable for the consequences if those representations were misleading. Mr Sithiravel has not demonstrated, in any case, that the representations were misleading. Contracts Review Act claim 1. Mr Sithiravel claims, in par 117 of his cross claim, that his contracts with Gunns Finance in relation to each of the three projects was unjust in the circumstances relating to the contract at the time it was made. For reasons given above, I will ignore the claim concerning the Timbercorp investment. The basis of the allegation, as pleaded, is set out in pars 96 to 112 (the reference in par 117 to pars 92 to 112 being apparently a typographical error). 2. As pars 96 to 112 establish the factual basis for Mr Sithiravel's claim, it will be appropriate to set them out (omitting references to the Timbercorp investment): 96. At all material times English was not the first language of the cross claimant. 97. Guardian was aware that English was not the first language of the cross claimant. 98. At all material times (sic) cross claimant was inexperienced in investment. 99. Guardian was aware that the cross claimant was inexperienced in investment. 100. The cross claimant relied upon Guardian to advise the cross claimant about risks to the cross claimant from investing in the projects, including borrowing funds from [Gunns Finance]. 101. Guardian was aware that the cross claimant was reliant upon Guardian to advise him about risks from investing in the projects including borrowing funds from [Gunns Finance]. … 104. Guardian was aware that the cross claimant was not aware that if the projects failed, that the cross claimant may or would nonetheless be liable to [Gunns Finance]. … 106. Guardian did not refer the cross claimant for independent legal advice. 107. Guardian did not refer the cross claimant for independent financial advice. 108. Guardian did not advise the cross claimant that Guardian would receive fees if the cross claimant applied for the projects and/or obtain finance from [Gunns Finance]. … 110. Guardian was aware that the cross claimant had not obtained independent legal advice. 111. Guardian was aware that the cross claimant had not obtained independent financial advice. 112. Notwithstanding the matters pleaded in paragraphs [96-111], Guardian nonetheless advised the cross claimant to: a. invest in the projects; b. borrow money to invest in the projects… 113. With respect to investment in the projects and borrowing money to invest in the projects the application forms were completed in the presence of, and partly by, Guardian. … 115. The failure by Guardian to include relevant information in the application forms including taxation on income earned, the application form did not represent the net amount available to the cross claimant. 116. The failure to include taxation on income earned provided a misleading picture of the amount available to meet loan liabilities. Mr Sithiravel's evidence 1. Mr Sithiravel's evidence elaborated on some of these allegations, but did not deal with others. 2. Mr Sithiravel said that he was born in Sri Lanka in 1975. He lived with his parents in Northern State Sri Lanka, and was totally dependent on them for all living expenses. He studied information technology in Sri Lanka. He never had a job, or any other substantive responsibilities. He spoke mostly Tamil. He could understand basic English, but could not comfortably hold a conversation or read in English. 3. He immigrated to Australia as a refugee in around September 1998. In September 1998, he enrolled in a six-month English course, which he said taught him English at a junior level. 4. He could not immediately find a job related to his degree obtained from Sri Lanka, so he enrolled in a diploma of Engineering (Networks) in 1999, which he finished in 2000. As he still could not find a job in IT afterwards, between 2000 and 2004, he then worked in hotels during the night as an auditor. During this time, he did a Masters in IT Networking at UTS. 5. Between 2005 and 2006, he worked at Ramsay Health Care as "IT Support", and afterwards got his current job at Rail Corp as "Technical Support". 6. He claimed that during this time his English did not improve or develop substantially, as his job in IT did not require much English. 7. Prior to the investments that he made in lots in the projects the subject of these proceedings, he had never held investments. He was unaware how to invest or the process to invest in the products the subject of these proceedings. 8. Mr Sithiravel said that he was cold-called in the first or second week of July 2007, at night time, by Mr Warren Sharma on behalf of Guardian. The conversation was as follows: Warren: I am calling from a financial services business and I can advise if you invest in agriculture you will get tax deductions. How much are you currently paying? Me: I am paying around 17-18 K a year. Warren: Come into our offices, and we will explain how you can get the tax deductions. 1. Mr Sithiravel had not previously met Mr Sharma, and is unsure how he obtained his phone number. Mr Sithiravel made an appointment during the weekend of that week. 2. On the weekend, he met with Daryl Leahey and Warren Sharma at Guardian's office. He had not met either man before that day. 3. The meeting went for approximately 40 minutes, in which time Mr Sithiravel was shown a PowerPoint presentation for 10 minutes explaining the process of how the trees grow. Following this, he then immediately signed the loan application forms straight away. Mr Leahey and Mr Sithiravel had the following conversation: Daryl: These are long-term agriculture projects and you will be getting ongoing tax benefits. The loaned amount and interest repayments will be 100% tax-deductible. Look at this spread-sheet, throughout the life of the projects this is the tax deductions you will get and the amount of money you will get at the end of year 10, 15, 20 and 25 years of this project. If you want to go ahead with the Woodlot and Winegrape applications, I will do the calculations now for how many trees and wine grapes you should invest in. Me: How big is this company and does it have a good reputation. Daryl: Gunns is a very big company and has been trading for over 100 years. They are a very reputable company. 1. Mr Sithiravel said that he understood he would receive an immediate tax deduction for the borrowed amount, and interest payments that he made. 2. The spread-sheets that Mr Sithiravel was shown related to two different combinations of lots in the various projects offered by Gunns Plantations. The two spread-sheets contained similar information, and it will be convenient to refer only to the second (court book p 32), as this spread-sheet appears to apply to the number of lots in the Woodlots Projects 2006 that Mr Sithiravel acquired for $40,920. 3. The spread-sheet contained a table of principal repayments, interest payments, and various other figures leading to a total return after tax. The spread-sheet is consistent with a loan repayment period of 15 years. It sets out a table of tax deductions, which are described as "$6,200 per lot + interest payments of 10.50% per annum per lot. 100% tax deduct.-1st year". There is a statement that refers to projected net income in years 13, 18 and 25. 4. The disclaimer in the spread-sheet has been set out above at par 112. 5. I should record that there is a table at the foot of the spread-sheet that contains apparently significant financial information, which is incomprehensible because information that may explain the substantial amounts referred to is not legible in the exhibit. 6. The information recorded in the spread-sheet, so far as it is comprehensible, is quite complex. A reasonably experienced investor would probably require careful explanation of the information in the spread-sheet, and it may well not be comprehensible to an inexperienced investor. 7. Mr Sithiravel said that he was not given the opportunity to consider the documents that he signed, nor were the products explained to him. 8. In regard to completing the loan applications, Mr Sithiravel said the following conversation occurred: Daryl: Just fill in the employer section, credit card details and sign it. We will take care of filling in the rest of the form. Me: Okay thanks. Daryl: So we can fill in the other items, tell me the value of your residential place, mortgage on it, and your income. Me: My residential property address is 74 Bungaree Road Toongabbie and is valued at $550,000. I have a mortgage of $320,000 on it. I currently make each year $85,000 in salary. 1. Mr Sithiravel said that it took about 15 minutes to sign each of the loan applications for the Woodlots Projects 2006 and the Winegrape Projects 2007. 2. Mr Sithiravel gave more detailed evidence concerning the signing of the loan applications. He said that the writing in the statement of assets and liabilities for the Woodlots Project 2006 loan application was not in his handwriting, and that they were not completed in his presence. He accepted that he had acquiesced in Mr Leahey's statement that Guardian would take care of filling in the rest of the form. He said that the statement of assets and liabilities had been completed incorrectly. He did not provide any information other than his salary and the value of his residential property and mortgage, and his credit card details. He said that at the time he did not own any shares, and did not receive any rental/dividend income. The form stated that Mr Sithiravel owned shares worth a total of $32,000, and that he received rental and dividend income of $2,000. He said that the form incorrectly included his wife's salary (shown as $27,000) as other income. The statement of his annual living expenses was incorrect, and was not completed from information provided by Mr Sithiravel. The form stated that total living and other expenses were $17,300, while the real expenses were approximately $45,240. 3. Importantly, Mr Sithiravel said that, after he signed the applications in relation to the Woodlots Projects 2006 and the Winegrape Project 2007, he was given the PDSs for those investments. The documents were not explained to him, and he was not told to read them. 4. The application for finance in relation to the Woodlots Projects 2006 is dated 29 June 2006. Mr Sithiravel inserted that date at the suggestion of Mr Leahey, so that he could get the tax benefits in the financial year ended 30 June 2007. The application in respect of the Winegrape Projects 2007 is dated 14 August 2007. 5. Mr Sithiravel gave evidence that Guardian agreed to assist him with his tax return and that it provided that service until around May or June 2009, when he attended the offices of Guardian to have his tax return prepared, and found that the offices were vacant. 6. He also gave evidence concerning the advice he received, in around October 2007, from Guardian to invest in the Timbercorp project. The responsible entity for this investment was Timbercorp Securities Ltd, which I infer was entirely unrelated to the Gunns group of companies. 7. Mr Sithiravel gave evidence that, after he had signed the Timbercorp documents, Mr Leahey handed him two documents. The first bears a date of 29 June 2007, and appears to have been prepared by Mr Leahey. The document purports to be an "execution only service", on the basis that no information relating to Mr Sithiravel's objectives, financial situation or needs was provided by Mr Sithiravel, and he neither sought, nor chose to accept any advice (court book p 307). The document appears to set out information concerning Mr Leahey and the services that he could provide. In relation to Mr Sithiravel's investment objectives and risk profile, the document contains specific information concerning the Woodlots Projects 2006, including project risks in relation to the investment (court book p 313). The document indicated that there were a number of finance options available to Mr Sithiravel, including the borrowing from Gunns Finance for which Mr Sithiravel applied. 8. The second document was dated 11 October 2007, and is described as a financial plan for Mr Sithiravel prepared by Mr Leahey. The financial plan deals with a recommendation that Mr Sithiravel invest $17,325 in the Winegrape Projects 2007, and $36,000 in the 2007 Timbercorp Almond Project. 9. In relation to the Winegrape Projects 2007, the financial plan contained a brief explanation of how the project worked, and the costs and expected proceeds, as well as project risks. One of the "points to consider" was that: "Project returns are not guaranteed and there are a number of factors outside the control of the project manager that may affect these returns" (court book p 338). 10. Mr Sithiravel did not say in his evidence whether or not he read these documents. 11. Mr Sithiravel said that, in around May or June 2009, he received in the mail documents in relation to the Walnut Project No 3. 12. The first of the documents in time appears to be a pro forma letter dated 26 May 2009 addressed to "Dear Investor", which offered investments in the Walnut Projects No 3 to previous investors in Gunns Plantations' projects. There is also an undated letter addressed to Mr Sithiravel concerning 2009/2010 charges for Walnut Projects. 13. There is a 15 June 2009 letter written by Gunns Plantations to Mr Sithiravel, which advised acceptance of his application dated 10 June 2009 for 4 Walnut lots. 14. There is then a letter dated 3 July 2009 from Gunns Plantations to Mr Sithiravel, which claimed to have attached his certificate of investment and tax invoice in relation to the project. 15. There is also a project summary in the name of Gunns Plantations, relating to the Walnut Projects No 3. 16. Finally, there is a certificate of investment for an investment dated 15 June 2009 by Mr Sithiravel in the Walnut Projects No 3, for a total amount of $25,696. 17. Mr Sithiravel said that, over the three years in which he invested into the Gunns projects, he never enquired into what he had invested in. He asserted that this was because he was never initially informed about the product, and it had never come up in his everyday life. He said that: "the only reason I invested in the Gunns projects and took out the requisite loans was because of the tax deductions and the capital return at the end of the projects promised by Darryl Leahey". 18. Mr Sithiravel said that, during 2009, he started being charged management fees in relation to the Walnut Projects No 3. These fees were in the tens of thousands of dollars, and he struggled to pay them. He tendered tax invoices showing claims for 2009/10 and 2010/11 periods of $6,518 and $6,964.86 respectively. He said that he had not been charged management fees for the first two projects. 19. On 29 June 2009, liquidators were appointed for Timbercorp Finance Pty Ltd. 20. Mr Sithiravel said that, once income from the Timbercorp projects ceased, and when he was still required to pay for the Timbercorp loan, and with the increasing management fees from the Walnut Projects No 3, he was having significant difficulties making all the payments. 21. He then approached the Financial Ombudsman's Service in 2011, which made the determination referred to above on 12 October 2012, that Guardian was required to repay all the loans, interest and expenses to do with the projects he invested in. 22. Mr Sithiravel has provided no evidence concerning the present corporate status of Guardian, or of any steps taken by him to recover from Guardian the amount payable under the FOS determination. 23. Nor has Mr Sithiravel provided any evidence concerning the causes of the collapse of the three Gunns Plantations' projects in which he invested. He has asserted that his investments are now valueless, but he has not established when the investments became valueless, and what the causes were. 24. Mr Sithiravel tendered his tax returns for the years ended 30 June 2007, 30 June 2008 and 30 June 2009. The returns for the first two years claimed a net loss from primary production of $37,440 and $40,583 respectively. Tax refunds of $17,476 and $13,249.71 were estimated. There appear to have been a number of small deductions in addition to the claims made in respect of the investments in the projects. 25. The tax return for the 2009 year is complicated by claims for net rental losses of a total of $24,927, in respect of 74 Bungaree Road Toongabbie (Mr Sithiravel's personal address in his affidavit), and 155 Mettla Road Toongabbie. It is not clear whether Mr Sithiravel claimed any deduction in relation to the agricultural projects. The total estimated refund was $33,885.32, in relation to tax withheld from his salary of $39,731. 26. Mr Sithiravel did not deal with the significance of his tax returns in his submissions. Gunns Finance did so, but only to the extent of submitting that Mr Sithiravel enjoyed substantial tax refunds because of claims made based on his borrowings from Gunns Finance. That submission appears to be correct. In the absence of a detailed explanation of the tax returns, I would not attempt to calculate the actual amount of the benefit myself. 27. The tax returns justify a conclusion that Mr Sithiravel was relatively sophisticated in his investment dealings. Over a period of two or so years he acquired four investments in agricultural projects, which when added to the effect of his leasing two residential properties, appear to have substantially reduced the income tax that he was required to pay, perhaps completely. The rental property summary for the 2009 year suggests that Mr Sithiravel kept records of his expenditures, in order to enable his expenses to be calculated accurately. Mr Sithiravel's cross-examination 1. In cross-examination, counsel for Gunns Finance did not contradict the evidence given by Mr Sithiravel concerning his meeting with representatives of Guardian in July 2007. As Gunns Finance was under the administration of receivers and managers, it appears that counsel did not have the benefit of instructions that would have justified him in contradicting Mr Sithiravel's evidence, other than on a speculative basis. 2. The thrust of counsel's cross-examination was to suggest that Mr Sithiravel's evidence, as given in his affidavit, was unreliable to a significant extent, because Mr Sithiravel no longer had a clear recollection of events; and he was inclined to give evidence in positive terms, when in reality his recollection was insufficient to sustain evidence in that form. Counsel had considerable success with this approach. 3. Mr Sithiravel's position was not assisted by evidence he gave in chief concerning the receipt by him of certificates of investment in relation to the three projects. Mr Sherwood affirmed an affidavit on 2 February 2016, to which he annexed certificates of investment and tax invoices issued to Mr Sithiravel by Gunns Plantations in respect of the three projects. At the end of his evidence in chief, Mr Sithiravel was asked by his own counsel as to whether he received these documents. He acknowledged receiving the tax invoices, but said that he had not received the certificates of investment, but he received something similar to those certificates (at least in relation to the Woodlots Project 2006 and the Winegrape Projects 2007 investments). Then, after the court allowed counsel to confer with Mr Sithiravel, he acknowledged that he had received the certificate of investment concerning the Walnut Projects No 3; and after a further adjournment, Mr Sithiravel's counsel advised the court that his legal advisers had located the certificates of investments for the Winegrape Project 2007 and the Walnut Project No 3, which Mr Sithiravel had "briefed" to his solicitors. 4. At the commencement of his cross-examination, counsel for Gunns Finance asked Mr Sithiravel whether "you simply didn't remember whether you had received those certificates", to which Mr Sithiravel responded affirmatively. 5. It appeared to me that Mr Sithiravel's command of English was adequate but imperfect. In these circumstances, it is not feasible for the court to make any finely calibrated judgment about the competence of a witness' capacity to speak and understand English. 6. It was suggested to Mr Sithiravel that when, in May or June 2009, he received documents concerning the Walnut Projects No 3 from Gunns Plantations, he also received a copy of the PDF for that project (which is at court book pp 124 to 251). Mr Sithiravel initially appeared to concede that he thought the PDS came with the application form (T 64.26); but he then said that he did not receive it (T 65.33). It then appeared that Mr Sithiravel may have remembered receiving an additional document, but not one as lengthy as the PDS in the evidence. There was then a question as to whether his recollection may have been affected by the possibility that the PDS was printed double-sided, so that it would have appeared smaller. Mr Sithiravel agreed that he did not have any recollection of what he did in making the application in respect of the Walnut Project No 3 (T 67.15). As I understand his evidence, Mr Sithiravel ultimately accepted that he received the PDS, although his evidence is not entirely clear (T 68.6-36). He insisted that he did not read the document, including the information under the heading "Important Information" (T 68.26). He conceded that he should have read the document, but he did not (T 69.8). 7. In relation to his investment in the Walnut Projects No 3, Mr Sithiravel conceded that the PDS was provided to him in order for him to consider whether he wished to make another investment (T 70.1). He understood that it was going to be another agricultural-type investment, but he claimed not to have understood that an agricultural investment was risky (T 70.7). He understood that Gunns Plantations gave no guarantee, warranty or assurance as to the performance of the projects or any particular return (T 70.13). Reliability of Mr Sithiravel's evidence 1. I gained the impression from Mr Sithiravel's responses in cross-examination that he was attempting to give truthful answers to the questions that were put to him, but that he did not have a reliable memory of what happened at the time he made the three investments. There is a real possibility that the inadequacy of his recollection was caused partly by limitations on his understanding of what was said to him, and the documents that were given to him at the time. Mr Sithiravel accepted in cross-examination that he signed the application forms, at least in the first two cases, without the information being complete, and that he was given documents that he ought to have read, but did not read. It is possible that these inadequacies in the way Mr Sithiravel participated in the making of the applications were partly a result of his limited command of English. 2. It must be borne in mind that Mr Sithiravel proceeded with the investments as if nothing was amiss until he apparently started to struggle after the commencement of the winding up of Timbercorp, and the advent of the requirement that he pay management fees in relation to the Walnut Project No 3 in 2009. It was not until 2011 that he made his application to the FOS in relation to Guardian, and the determination was not made until 12 October 2012. As I have noted, Mr Sithiravel has not given evidence of any attempt to recover from Guardian, and it is unclear when he first turned his mind to resisting the claims made by Gunns Finance. That company did not demand repayment of the whole of the loans until March 2013, and did not file its statement of claim until 9 October 2013. Therefore, it may not have been until some six or so years after the loans were made that Mr Sithiravel turned his mind in detail to the events relevant to the making of the loans. In any event, it is likely to have been many years after those events occurred. Mr Sithiravel's recollection of conversations, and also the precise timing of when he received the various relevant documents, and what he did with them is likely to be unreliable, at least in relation to detail. Applicability of Contracts Review Act 1. An initial question that arises concerning the claim under the Contracts Review Act is the applicability of the Act in the circumstances of the present case. Clause 17.2 of Part B of the Financial Package for the Woodlot Projects 2006 and the Winegrape Projects 2007 provided that the proper law of the loan agreements was the law of the State of Tasmania. The terms of the loan agreement in relation to the Walnut Projects No 3 do not appear to be in evidence, but it is probable that they included the same choice of law terms. 2. Consequently, s 17(3) of the Contracts Review Act would have the effect that the Act did not apply to the present agreements unless "the proper law of the contract would, but for a term that it should be the law of some other place or term to the like effect, be the law of the State". 3. Neither party made any issue of this question at any stage in the proceedings. There was a dispute about whether the loan agreements were made in this State or Tasmania, but, as I understand it, this dispute concerned the false issue (which I have considered above) as to whether Gunns Finance had failed to prove the loan agreements because it had not executed the documents that were executed by Mr Sithiravel. 4. As Gunns Finance did not allege in its defence that the Contracts Review Act was not applicable, and did not make any submission to that effect, I will proceed on the basis that the parties have accepted that the objective proper law of the loan agreements would have been the law of this State. Legal principles 1. The principles that are applicable to the resolution of Mr Sithiravel's Contracts Review Act claim are not contentious. 2. Relevantly, s 7(1) of the Act provides: (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part… 1. Section 8 empowers the court to give ancillary relief in relation to an application for relief under the Act, which by clause 1(b) of Schedule 1 extends to the making of an order for the payment of money by way of compensation. 2. "Unjust" is defined in s 4(1) as including "unconscionable, harsh or oppressive, and injustice shall be construed in a corresponding manner". 3. Section 9 specifies the matters to be considered by the court, and relevantly provides: (1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of: (a) compliance with any or all of the provisions of the contract, or (b) non-compliance with, or contravention of, any or all of the provisions of the contract. (2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following: (a) whether or not there was any material inequality in bargaining power between the parties to the contract, (b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation, (c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract, (d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract, (e) whether or not: (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or (ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented, because of his or her age or the state of his or her physical or mental capacity, (f) the relative economic circumstances, educational background and literacy of: (i) the parties to the contract (other than a corporation), and (ii) any person who represented any of the parties to the contract, (g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed, (h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act, (i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, (j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act: (i) by any other party to the contract, (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or (iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract, (k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and (l) the commercial or other setting, purpose and effect of the contract. 1. In West v AGC (Advances) Ltd (above), McHugh JA (as he then was) distinguished between circumstances that may produce relevant injustice in a contract as being substantive or procedural: substantive unfairness involving the harshness of the terms imposed, and procedural unfairness involving the circumstances in which the contract was negotiated and made. McHugh JA explained (at 620–621): Under s 7(1) a contract may be unjust in the circumstances existing when it was made because of the way it operates in relation to the claimant or because of the way in which it was made or both. Thus a contractual provision may be unjust simply because it imposes an unreasonable burden on the claimant when it was not reasonably necessary for the protection of the legitimate interests of the party seeking to enforce the provision: cf s 9(2)(d). In other cases the contract may not be unjust per se but may be unjust because in the circumstances the claimant did not have the capacity or opportunity to make an informed or real choice as to whether he should enter into the contract: cf s 9(2)(a), 9(2)(e), 9(2)(f), 9(2)(g), 9(2)(i), 9(2)(j). More often, it will be a combination of the operation of the contract and the manner in which it was made that renders the contract or one of its provisions unjust in the circumstances. Thus a contract may be unjust under the Act because its terms, consequences or effects are unjust. This is substantive injustice. Or a contract may be unjust because of the unfairness of the methods used to make it. This is procedural injustice. Most unjust contracts will be the product of both procedural and substantive injustice. … If a contract or one of its relevant provisions is neither unfair nor unreasonable so far as the applicant is concerned, it is difficult to see how the existence of inequality in bargaining power or lack of independent advice, for example, can render the contract or a provision of the contract unjust. … If a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a contract and the terms of the contract are reasonable as between the parties, I do not see how that contract can be considered unjust simply because it was not in the interest of the claimant to make the contract or because she had no independent advice. 1. As I have recorded above, Mr Sithiravel's case is that the first two loan agreements involved procedural injustice because of the circumstances of their making, and not substantive injustice. 2. It is well established that circumstances may be sufficient to require a conclusion that a contract is substantively or procedurally unjust where those circumstances are unknown to the party against whom the order is sought, and where those circumstances do not involve unreasonable or unfair conduct by that party. This reflects the wording of s 7 of the Act, which directs attention to the objective circumstances relating to the contract at the time it was made. However, at the stage of determining whether relief should be granted, the absence of knowledge of the circumstances making the contract unjust, and the absence of participation in, or responsibility for, that injustice by the party against whom the order is sought, will ordinarily be a justification for the court to decline relief: see Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 at 227; Nguyen v Taylor (1992) 27 NSWLR 48; [1992] ASC 57 at 57, 61 and 71-72; Esanda Finance Corporation Ltd v Tong (1997) 41 NSWLR 482 at 491; White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 at [122]; Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413; (2002) 11 BPR 20,841 at [68] and [69]; Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,639 at [117] and [119]; Kowalczuk v Accom Finance Pty Ltd (2008) 252 ALR 55; [2008] NSWCA 343 at [86]; as well as many other decisions. 3. In Small v Gray [2004] NSWSC 97, McDougall J said the following at [85]: (3) Where a contract has been found to be unjust, it would in general be unsound to grant relief under s 7 where the party against whom relief is claimed was both innocent and ignorant of the circumstances giving rise to that injustice… 1. In Perpetual Trustee Co Ltd v Khoshaba, Basten JA (with whom Handley JA at [99] agreed) said, at [106]ff, in relation to the process that the court is required to adopt in determining whether relief under the Contracts Review Act should be granted: [106] In considering an application for relief under s 7 of the Contracts Review Act 1980 (NSW) the Court must undertake a three stage process although, of course, the steps need not be taken in a particular order or necessarily identified as separate steps. The first step is to make findings of primary fact as to the circumstances revealed in the evidence… [107] The second step in the process is a finding that a contract or a provision of a contract is "unjust". This, as the Chief Justice notes at [38], is variously described in s 7(1) as a finding and in s 9(1) and (4) as a determination. On either description, the Court is not exercising a discretionary power, but making an evaluative judgment as to the whether the facts as found satisfy a statutory description which in turn engages a discretionary power… [109] The third step involves the exercise of the power to grant relief which may, but need not, follow from the conclusion that a contract or a provision thereof is unjust. That is truly a discretionary power to be exercised if the Court "considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result": s 7(1)… 1. Recently, Gleeson JA, with whom Barrett and Emmett JJA agreed, accepted the three stage approach in Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 at [123]. 2. His Honour described the process of reasoning required of the court, at [122]: [122] In Provident Capital Ltd v Papa [2013] NSWCA 36; 84 NSWLR 231 at [7], Allsop P recognised that the broad evaluation of unjustness under the Act involves the normative evaluation of the totality of relevant circumstances, when observing that: Central to the normative evaluation is the recognition that there is a need for the protection of some people in some circumstances, who are not able fully to protect their own interests against factors that may cause injustice. That vulnerability may come from one or more of many circumstances, such as lack of education or of intelligence, from gullibility, from the predation of fraud and greed, and also sometimes from loyalty and love. The characterisation of a contract as unjust and the sheeting home to the other contracting party of the consequences of its unjustness may be a difficult evaluative exercise. At its heart, however, is the recognition of the inadequacy of one party to protect her or his interests in the circumstances. 1. Relevantly to the circumstances of the present case, Gleeson JA also made, at [120] the following observation concerning McHugh JA's decision in West v AGC (Advances) Ltd: [120] McHugh JA observed (at 621) that if a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a contract and the terms of the contract are reasonable as between the parties, the contract could not be considered unjust simply because it was not in the interest of the claimant to make the contract or because they had no independent advice. 1. I respectfully agree with the following observation made by Brereton J in Heilpern v Anasco [2010] NSWSC 317: [36] Accordingly, an unjust contract is usually a product of the combination of substantive and procedural unfairness. However, as Spigelman CJ has observed in Khoshaba (at [64]–[92]), each case must depend on its facts; West is now 20 years old and community standards may have changed from those applied in 1986 in West. I am prepared to accept that procedural unfairness alone may suffice to make a contract unjust, even though its terms are objectively not unreasonable, where the party claiming relief would not have entered into the contract if properly advised or informed of its legal and practical effect, consequences and risks. 1. Where it is established that a contract is substantively unjust, the court will naturally hesitate to permit the enforcement of the contract, because that will necessarily involve injustice. Where there is no substantive injustice, but the injustice that is found to have existed is procedural, the subject matter of the injustice is only the way the contract was made. If the applicant for relief would, absent the injustice, have entered into the contract anyway, ordinarily the enforcement of the contract will not involve any material injustice. At least where the order sought is for the avoidance of the contract or for the prevention of its enforcement, relief of that nature is unlikely to be appropriate. Of course, the court has a discretion, which must be exercised judicially on the facts of the particular case, and a consideration of the sort that I have just stated can be no more than a significant factor to be taken into account, together with all other relevant circumstances. 2. While I have found that neither Guardian nor Gunns Plantations was the agents of Gunns Finance, it does not necessarily follow that the conduct of either company, and in particular Guardian, will consequently be irrelevant to the determination of whether or not the loan agreements were unjust for the purposes of the Contracts Review Act. 3. The Tonto Home Loans case raised similar considerations to the present, in that the Court of Appeal held that the loan introducer (in the position of Guardian) was not the agent of the lender's agent (in the position of Gunns Finance), but nonetheless the court held that the circumstances in which the loans were made and mortgages taken were procedurally unjust, and that the loan agreements and the mortgages should be treated as being unenforceable, subject to an allowance for the benefits that the respondents had received from borrowing the money. 4. Alsop P said: [264] The position of the lenders should not be judged as detached third parties, distinct and separate from what happened. Nor should they be seen as complicit with, or actually knowing of, Streetwise's deception, fraud and predatory conduct towards the borrowers. Whilst not having actual knowledge or actual notice of Streetwise's behaviour, the lenders' position should be assessed by reference to the reality of the significant responsibility of those structuring the elements of the lending programmes or, in the case of Permanent, those providing the wholesale funds. The mortgage manager (Tonto HL) with delegated lending authority operated the guidelines loosely and in a way which reflected a lack of concern with the suitability of the borrowers and serviceability. The mortgage manager brought into the roles of interviewing and selecting prospective borrowers an intermediary whose commercial attractiveness bespoke the inhering risks to which I have referred, heightened by Tonto HL's agreement not to contact prospective borrowers before settlement. These considerations materially facilitated the ability of Streetwise to effect these frauds. [265] In all the circumstances, these considerations are relevant to conclude that the unjustness of the contracts can be seen as unjustness affecting Tonto HL and the lenders. This conclusion is relevant to the assessment of unjustness and the extent to which the lenders should be viewed as bearing responsibility for what happened and in applying the broad considerations contained in the CRA, founded as they are in justice and fairness. Looking at these events as brought about primarily by the fraud of Streetwise, a fair assessment is that the business structure put in place by the lenders in how it operated was significantly responsible for the preying upon these people by Streetwise. That is not to ignore the basis upon which the trial and appeal proceeded, that "Lo Doc Lending" per se was not unjust. Nor is it to introduce an enterprise concept of agency; rather it is to recognise that a sub-contracted lending structure of the kind here, in which persons such as Streetwise are "chased" to become the introductory agents, should have guidelines enforced with real vigour to deal with the obvious objective risks of fraud and deception. No one criticised these guidelines. Their operation was loose, and affected by the attitude found by his Honour. It is only fair and just to recognise the significant responsibility of the lenders in these circumstances. 1. Macfarlan JA agreed with this approach in the Provident Capital Ltd case at [100]. Consideration of Contracts Review Act claim 1. It must be recalled that Mr Sithiravel has now limited his Contracts Review Act claim to the Woodlots Project 2006 and the Winegrape Project 2007. 2. Mr Sithiravel does not make a claim of substantive injustice, but only procedural injustice, in the sense that he limits his claim to the circumstances in which he entered into the loan agreements in relation to the two projects. 3. I have also found above that neither Gunns Plantations nor Guardian was the agent of Gunns Finance in the strict sense, so their actions and knowledge were not the actions and knowledge of Gunns Finance. 4. Gunns Finance was, however, an integral part of the Gunns group. It is clear from the PDSs that Gunns Finance was the finance arm of the group for the purposes of providing finance to investors in the projects, even though investors could choose to invest their own money, or borrow from other lenders. In that way Gunns Finance acted cooperatively with the other Gunns companies in offering investments in the projects to investors. 5. Although Guardian was not an agent of Gunns Plantations, and was in strict terms the agent of any investors that it introduced to the projects, the terms of the one commission agreement that is in evidence establish that there was a contractual arrangement between Gunns Plantations and Guardian, which gave Gunns Plantations some control over the marketing materials and other documents made available by Guardian to its clients. Guardian was entitled to a commission of 10% of the total application fee upon the expiry of the cooling off period, but the payment of commission was contingent (at least in the case of the Woodlots Projects 2006) on Guardian achieving a target of $10 million in application fees. In a practical way, Gunns Plantations and Guardian cooperated in facilitating Guardian introducing its clients to the projects offered by Gunns Plantations. 6. In the present case, there is no evidence that either Gunns company had any knowledge of the dealings between Guardian and Mr Sithiravel, other than what could be deduced from the terms of the applications for finance signed by Mr Sithiravel. 7. Gunns Plantations provided proper PDSs to Guardian, which were meant to be provided to Guardian's clients. The PDSs were adequate for their purpose, and there is no case that they did not comply with all legal requirements. 8. There is no evidence that Gunns Plantations was aware that Guardian had placed its own stickers on the PDSs. 9. There was no reason why Gunns Finance should have inferred, merely from the fact that the applicant for finance was named Suthakaran Sithiravel, that there was a real risk that Mr Sithiravel may have been disadvantaged or commercially inexperienced, or unable to understand the contents of the PDSs or what was said to him by Guardian, by reason of inadequate comprehension of the English language. The court should perhaps guard against being too absolute, but whatever may have been the case in earlier times, it could no longer be assumed by a party in the position of Gunns Finance, merely on the basis of any person's name, that the person was likely to be vulnerable on matters of finance and investment. 10. In reality, in the modern Australia, a person with the name Suthakaran Sithiravel, or a great many other names consistent with different cultures and countries of origin, could be a newly arrived refugee incapable of comprehending English, and without any commercial experience, or could be a person with an immaculate command of English and a Ph.D. in economics from an Australian university. A party in the position of Gunns Finance should be aware of the possibility that the name of an applicant for a loan might be consistent with some unusual vulnerability; but in a case such as the present, where the person is assisted by a company in the position of Guardian, Gunns Finance would not be expected to appreciate that there was an exceptional risk of injustice, unless put on notice by some objective circumstance. 11. Mr Sithiravel filled in the employer sections of the applications for finance himself. He described himself as a "Technical Specialist" for his present employment by Railcorp, and as "IT Support" for his previous employment. Both descriptions would convey to any reasonable officer of Gunns Finance, who processed the applications, that Mr Sithiravel was an intelligent person, who had earned the qualifications necessary to enable him to gain employment in the field of IT support. While that expertise would not necessarily carry over into financial and investment matters, it would at least suggest that Mr Sithiravel was sufficiently competent to learn specialised skills in relation to the uses of computers and computer systems, and that he was able to read and converse in English, at least to the standard necessary to enable him to undertake his employment. 12. Mr Sithiravel was in fact reasonably competent to converse in and understand written English. He has limitations, which may have been more extreme in 2007. However, he was capable of understanding reasonably sophisticated propositions, if explained to him, and he had the opportunity to ask any questions of the representatives of Guardian (as he conceded in cross-examination) if he had wanted further information. 13. Mr Sithiravel was given the two spread-sheets about which he gave evidence. It would have been difficult for him to peruse the tables of figures set out on those documents without at least noticing the disclaimer that is set out in par 112 above. 14. I infer from Mr Sithiravel's evidence that he was impressed by the contents of the two spread-sheets, although it is not possible on the evidence and at this remove in time, to make any finding as to the extent that he understood the detail. The detail is complex and technical, and any reader who did not fully understand it would likely recoil from it, and not be persuaded. 15. The evidence does not enable me to make any confident finding about the manner in which Mr Sithiravel and Guardian arranged the meeting that took place in July 2007. I am not satisfied that Guardian simply cold-called Mr Sithiravel out of the blue, so to speak. It is more probable that something happened that put Guardian in possession of Mr Sithiravel's phone number, in circumstances where it had reason to think that he might be open to an invitation to invest in one of the Gunns Plantations' projects. 16. Whatever the cause of the meeting, Mr Sithiravel attended voluntarily, with the objective of learning information that might be of financial value to him. 17. There was nothing oppressive or harsh in the manner in which Mr Sithiravel was invited to consider investing in the Gunns Plantations' projects, although if Mr Sithiravel's recollection is correct, he was rushed, and he was provided with the PDSs after he had signed the applications. Even if there were serious deficiencies in the practical process whereby Guardian encouraged Mr Sithiravel to sign the applications, he was not pressured to do so. 18. Mr Sithiravel, in a real and practical way, had a choice as to whether or not he would invest in the two agricultural projects. His circumstances did not compel him to do so, or diminish his capacity to resist making the investments. He was in a position where he was able to take or leave the advice given to him by Guardian. 19. Both PDSs provided for a 14-day cooling off period, in which Mr Sithiravel could have cancelled his investments and received repayment from Gunns Plantations (see the information page and Part 19.10 or 19.11). Mr Sithiravel said that he did not read the PDSs, but admitted he had the opportunity to do so. The availability of the cooling off period was referred to in Section 1 in the first page containing text in the PDSs. 20. Each of the PDSs contained a written recommendation that investors read the PDS in full. 21. Mr Sithiravel made the investments so that he could gain the tax deductions that were offered, and enjoy any returns on the investments. His expectation that he would gain tax deductions was not disappointed, at least during the continuation of the operation of the projects. Mr Sithiravel was sufficiently satisfied with the results of the initial two investments that he made a further investment in the Timbercorp project in late 2007, and then another further investment in the Walnut Projects No 3 in 2009, without the involvement of Guardian. 22. In July 2007, Mr Sithiravel had an appetite for making investments that had negative gearing benefits. I am satisfied that Mr Sithiravel had a reasonable understanding of the way in which negative gearing, and the upfront loading of costs on investments, worked. In the 2009 year, Mr Sithiravel earned further tax deductions by negative gearing on two residential properties. 23. Mr Sithiravel signed the applications in blank, and knowingly left their completion to Guardian. Mr Sithiravel must have understood that Guardian would complete each of the blank spaces on the forms. I am satisfied that Mr Sithiravel was sufficiently astute to realise that he was taking the risk inherently involved in permitting Guardian to complete the forms. 24. Even if Guardian embellished the forms, by exaggerating Mr Sithiravel's income, and by understating his living expenses, the information that was presented to Gunns Finance did not, on its face, suggest that Mr Sithiravel's financial circumstances did not permit him to make the investments with reasonable financial safety. 25. The amounts that Mr Sithiravel applied to borrow were not in absolute terms so great as to suggest that there was an inherent risk that Mr Sithiravel may have been unable to service the loans (particularly in view of the consideration that it was expected that Mr Sithiravel would gain an immediate tax deduction for substantially the whole of the amounts borrowed). 26. There was nothing to suggest to Gunns Finance that Mr Sithiravel was unaware of, or did not appreciate, the risks involved in the agricultural projects, which were described in some detail in the PDSs. 27. Mr Sithiravel voluntarily acquiesced in Guardian's suggestion that he should backdate the Woodlots Projects 2006 application, so that he could gain the tax deduction on offer in relation to the financial year that had just ended. Even if Gunns Finance participated in the subterfuge by backdating the letter of acceptance and any other documentation (a fact that remains unclear on the evidence, because of Mr Sithiravel's unreliable recollection), that is a neutral matter. While the court could not in any way condone a backdating exercise of this nature, it would be naive not to accept that such conduct may be relatively common; and relevantly, it is not a matter that suggests any particular vulnerability on Mr Sithiravel's part. 28. In relation to the requirement in s 9(2) of the Contracts Review Act, as to the matters to which the court shall have regard, to the extent that they are relevant to the circumstances, I make the following observations: 1. The circumstances described in pars (a) to (c) concern material inequality in bargaining power and opportunity to negotiate terms. This is a case where there was a complete inequality in bargaining power, and no real opportunity to negotiate terms. However, in this case I do not think this inequality was material, as Mr Sithiravel was free to take the investments, or leave them. Nothing in his circumstances created any practical compulsion in Mr Sithiravel to acquire the investments; and he did so because he wanted to reduce the tax that he would otherwise have had to pay. 2. There is no suggestion, relevant to par (d), that any of the conditions in the loans were unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of Gunns Finance. That matter was effectively conceded when Mr Sithiravel accepted that there was no substantive injustice. 3. I do not accept that Mr Sithiravel was not reasonably able to protect his interests because of his age or the state of his mental capacity, for the purposes of par (e). There may have been some limitations in Mr Sithiravel's capacity, but I am satisfied that he understood what he was doing, and was equipped to protect himself. While he may have been rushed, his own evidence did not suggest that he was pressured. 4. Mr Sithiravel's economic circumstances, educational background and literacy do not warrant a finding that the loan agreements were unjust in the circumstances relating to the agreements at the time they were made: par (f). Mr Sithiravel's economic circumstances were irrelevant, and his educational background ought to have been sufficient to enable him to protect himself. His literacy may have been limited, but I am not satisfied that he did not understand or voluntarily enter into the transactions. 5. I am not satisfied, for the purposes of par (g), that the physical form of the loan agreements or the intelligibility of the language in which they were expressed, are material to the issue. Mr Sithiravel has not complained about the terms of the loan agreements. His complaint is that he thought that the projects would necessarily last for the period represented. 6. The transactions were not so legally complicated that it would ordinarily be expected that persons proposing to enter into the transactions would get independent legal advice: par (h). From Gunns Finance's perspective, Mr Sithiravel had the benefit of expert advice from Guardian. 7. The circumstances described in par (i) are potentially material. That is whether the provisions of the loan agreements and their legal and practical effect were accurately explained by Guardian to Mr Sithiravel, and whether or not he understood the provisions or their effect. As Mr Sithiravel would have it, Guardian only gave him a cursory explanation of the investments; it rushed him; it gave him the PDSs after he had signed the applications; and it did not advise him to read the PDSs. Mr Sithiravel did not, however, attempt to obtain explanations for the parts of the loan agreements (or the associated investments in the projects) that he did not understand; or what different course of action he would have taken, had he understood the relevant agreements correctly. The court could not expect too detailed an explanation in this regard, because it would necessarily be a self-serving explanation based upon a recollection expressed long after the relevant events. However, the court could expect a party in Mr Sithiravel's position to articulate in some small detail an explanation of what it was that he did not understand, and what different course he would have taken if he had a correct understanding. Absent such a case, it is difficult for a court to rationally decide that any inadequacy in any explanation had the consequence that the contracts were unjust. In relation to the Woodlots Project 2006 and the Winegrape Project 2007, the only real complaint made by Mr Sithiravel is that he expected the projects to last for a number of decades, and for reasons not explained in the evidence, they terminated prematurely. In my view it is probable that, if Guardian had given Mr Sithiravel a fuller and more adequate explanation, it would have done no more than to read out to him all of the contents of the PDSs concerning the expected duration of the projects, and all of the risks that could lead to the premature determination of the projects. I am not satisfied that this further explanation would have led Mr Sithiravel to decide that the projects were too risky for him to invest in. 8. There was no suggestion that any undue influence, unfair pressure or unfair tactics were applied to Mr Sithiravel in this case, unless the rushing of his completion of the application and the late provision of the PDSs are considered to involve unfair tactics: par (j). If events occurred exactly as Mr Sithiravel said in his evidence, there would be a case for finding that there were at least unfair tactics. There are, however, two reasons for concluding that this circumstance does not warrant a finding that the loan agreements were unjust. First, for the reasons given above, I am not satisfied that the rushing or late provision of the PDSs made any difference to the course of Mr Sithiravel's applications; primarily for the reason that Mr Sithiravel did not attempt to explain what that difference may have been. Secondly, I am not persuaded that Mr Sithiravel's recollection of events in July 2007 is sufficiently sound to justify a positive finding that Guardian rushed him in a material way or as to the precise timing of the provision of the PDSs by Guardian. There is some basis for a conclusion that the process adopted by Guardian was unsatisfactory; but I am not sufficiently persuaded as to what occurred at the time to justify a conclusion that the circumstances in which the loan agreements were made were unjust. 9. The circumstances in pars 9(k) and (l) do not require detailed consideration in this case. 1. I have had regard to the requirement in s 9(1) of the Contracts Review Act that, in determining whether a contract is unjust in the circumstances relating to the contract at the time it was made, the court shall have regard to the public interest and all the circumstances of the case. If it had been established that Guardian had caused Mr Sithiravel to make the applications in a manner that did not involve Guardian in making the PDSs available to Mr Sithiravel in a timely way as the law requires, and if I had found Gunns Finance was in any way complicit in that conduct, I would have found that the public interest in providers of investments such as the projects in complying with the requirements of the law concerning the provision of PDSs to be so important as to justify a finding that the contract was unjust. It may have even been justifiable to reach that conclusion if Gunns Finance was not shown to be complicit, but it left Guardian to be responsible for the delivery of PDSs in a proper way, and Guardian failed to do so. However, in the light of the explanation that I have provided above concerning the application of the other provisions of s 9, the possibility that the PDSs were not properly provided has not been sufficient to cause me to alter my conclusions, because I am not adequately satisfied on the evidence that Guardian acted in the manner alleged by Mr Sithiravel. 2. Accordingly, I am not satisfied that the manner in which Mr Sithiravel entered into the loan agreements with Gunns Finance in relation to the Woodlots Project 2006 and the Winegrape Project 2007 involved injustice in a manner that would engage the jurisdiction of the court to grant relief under the Contracts Review Act. 3. Had the circumstances of this case justified a conclusion that the loan agreements were unjust in the circumstances relating to the agreements at the time they were made, I would not, in the exercise of my discretion under s 7 of the Contracts Review Act, have made an order declaring the agreements void, or have decided to refuse to enforce the agreements. 4. As Mr Sithiravel has accepted that the terms of the loan agreements are not unjust, and in that respect there is no substantive injustice. The fact that Gunns Finance was unaware of, and innocent of, any circumstances that may have made the making of the loan agreements procedurally unjust, means that it would not be appropriate for the court to deny Gunns Finance the right to enforce the loan agreements. 5. Furthermore, the granting to Mr Sithiravel of the relief that he seeks under the Contracts Review Act would disregard the benefits that Mr Sithiravel has already enjoyed by reason of the tax refunds that he has received as a result of acquiring the lots in the two projects, which he funded with the loans borrowed from Gunns Finance. It is not possible for the court to determine the amount of the benefits with confidence. The total amount of the two loans was $58,319.11. Mr Sithiravel received tax deductions totalling $30,725.71 for the 2007 and 2008 tax years. The total amount that Gunns Finance claimed in 2013 was repayable in respect of the two loans was $48,439.52, which probably included some accumulated interest. Mr Sithiravel made a number of repayments of principal and interest. Factors other than the effects of Mr Sithiravel's investment in the two projects will have affected the amounts that I have set out above. Mr Sithiravel did not attempt to establish what the true amount of his loss has been. 6. It is true that Mr Sithiravel expected that his repayments of the amounts of capital that he borrowed would ultimately have been reimbursed from sales of the agricultural products the subject of the two investments, and he has been deprived of that benefit by the collapse of the projects. As I have explained above, the evidence led by Mr Sithiravel does not establish the causes for the collapse of the projects. Accordingly, the court is unable to discern whether the causes fall within the risks described in the PDSs, or whether the risks that eventuated were external to the projects. One way or another, the projects collapsed as a result of the fact that the commercial enterprises that they constituted were risky, and one or other risk materialised with catastrophic consequences for the projects. Whatever view might be taken to support a finding that the loan agreements were made in circumstances that were procedurally unjust, I am not satisfied that Mr Sithiravel was so naive that he did not understand that he was making risky investments. While it is probably true that he would reasonably have considered the eventual outcome to be extremely unlikely, in my view, Mr Sithiravel must have understood that he was taking a risk, and it would not be just to deprive Gunns Finance of the right to enforce the loan agreements in these circumstances. 7. Finally, to the extent that Mr Sithiravel may have been deprived of procedural justice, it was the conduct of Guardian that was wholly responsible for that injustice. Mr Sithiravel has given evidence that he has the benefit of the determination of the FOS that requires Guardian to repay the whole amount of the loans and the payments that he has made. Furthermore, in these proceedings Mr Sithiravel has maintained a claim for damages against Guardian in relation to its involvement in the projects and the loan agreements the subject of Mr Sithiravel's Contracts Review Act claim. While I will not make orders against Guardian as part of these reasons for judgment, as Guardian has not defended the claim, it should be a relatively straightforward matter for Mr Sithiravel to demonstrate that he is entitled to an order for damages in relation to the two projects. 8. As I have explained above, Mr Sithiravel has provided no evidence at all concerning the present circumstances of Guardian, and the results of any actions he may have taken to recover the amounts payable to him by Guardian. 9. If I had found that the circumstances in which the two loan agreements were made were procedurally unjust, it would have been necessary to consider the proper way for the court to exercise its discretion concerning relief, having regard to the fact that Mr Sithiravel is likely to have two ways for recovering the whole of his losses from Guardian, which was the party responsible for the procedural injustice. In those circumstances, it would not be just for the court to make orders depriving the innocent party, Gunns Finance, of its right to enforce the two loan agreements. 10. If the court did make orders avoiding or making unenforceable the loan agreements, the effect would be to neutralise the losses suffered by Mr Sithiravel, if the effect of the avoidance was to entitle Mr Sithiravel to recover amounts already paid by him to Gunns Finance. The consequence would be to absolve Guardian, the guilty party, and impose the burden of the procedural injustice on an innocent party. 11. It may be speculated that Mr Sithiravel has not recovered from Guardian because that company's financial circumstances preclude recovery. As that is only a matter of speculation, it must be disregarded. Even if the speculation were true, it would not follow that the court should impose the burden of the procedural injustice on an innocent party in circumstances where Mr Sithiravel has rights of recovery against the guilty party, but those rights have for extraneous reasons become valueless. Conclusion 1. Accordingly, Gunns Finance is entitled to judgment on its claims in the statement of claim, and an order must be made dismissing Mr Sithiravel's cross claim. 2. I will invite Gunns Finance, after consultation with Mr Sithiravel, to submit appropriate short minutes of order to give effect to these reasons. 3. It is likely that the costs of the proceedings will be adequately accommodated within Gunns Finance's contractual rights to be indemnified in respect of those costs. 4. The short minutes of order should provide directions for the completion of Mr Sithiravel's proceedings against Guardian. 5. The exhibits and any documents produced on subpoena or notice to produce may be returned forthwith in accordance with the Rules, save for any documents that must be retained for the purposes of completing the claim against Guardian. Amendments 10 January 2017 - Par [56] changed 2006 to 2016 Par [101] change than to then Par [104] changed P In to P. In Par [195] change par to pars 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: 10 January 2017