DISTRICT COURT OF QUEENSLAND

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1 DISTRICT COURT OF QUEENSLAND CITATION: Ask Funding Limited v Kenny [2018] QDC 78 PARTIES: FILE NO/S: 1570/17 DIVISION: PROCEEDING: ORIGINATING COURT: ASK FUNDING LIMITED ACN (Plaintiff) v LEONE JOAN KENNY (Defendant) Civil Application DELIVERED ON: 4 May 2018 DELIVERED AT: District Court at Brisbane Brisbane HEARING DATE: 9 February 2018 JUDGE: ORDER: 13 April 2018 Porter QC DCJ The plaintiff recover from the defendant possession of: Lot 58 on CP AG901, County of Aubigny, Parish of Motley, Title Reference ; and Lot 211 on CP A342593, County of Aubigny, Parish of Motley, Title References , and CATCHWORDS: PROCEDURE CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS ENDING PROCEEDINGS EARLY SUMMARY DISPOSAL SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT FOR DEBT OR DEMAND OR FOR POSSESSION OF LAND where there is an application for summary judgment pursuant to rule 292(2) for possession by the plaintiff as mortgagee of two properties owned by the defendant whether the defendant has reasonable prospects of defending the claim for possession advanced by the plaintiff whether there is a need for trial of the claim. Cases Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469 Commonwealth Bank of Australia v Jackson (1992) V Conv R Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232

2 2 Dubois v Ong & Anor [2004] QCA 185 Garra Water Investments Pty Ltd (in Liq) v Ourback Yard Nursery Pty Ltd & Anor [2012] SASC 44 Gullco International Pty Ltd v Brisbane Parcel Deliveries Pty Ltd [2003] QDC 341 Haller v Ayre [2005] 2 Qd R 410 Queensland Pork Pty Ltd v Lott [2003] QCA 271 Robertson v Hollings & Ors [2009] QCA 303 Ross v Hallam [2011] QCA 92 Vacuum Oil Company Pty Limited v Wiltshire (1945) 72 CLR 319 Xebec Pty Ltd (in liq) v Enthe Pty Ltd (1987) 18 ATR 893 Legislation Land Title Act 1994 (Qld) s 78 National Consumer Credit Protection Act 2009 (Cth), Schedule 1 National Credit Code ss 76, 88 Property Law Act 1974 (Qld) s 84 Trusts Act 1973 (Qld) s 72 Uniform Civil Procedure Rules 1999 (Qld) r 292(2) Other J W Carter, Contract Law in Australia (6 th Edn, 2013) at [22.18] J D Heydon and M L Leeming, Jacobs Law of Trusts in Australia (7 th Edn, 2016) at [2102] E L G Tyler, P W Young & C E Croft, Fisher and Lightwood s Law of Mortgage (3 rd Aust. Edn, 2013) at [19.24] COUNSEL SOLICITORS: C Templeton for the plaintiff L Kenny for the defendant (appearing in person on 9 February 2018, no appearance on 13 April 2018) Boyd Legal for the plaintiff [1] This is an application for summary judgment pursuant to rule 292(2) for possession by the plaintiff as mortgagee of two properties owned by the defendant. For the reasons that follow, I order summary judgment in favour of the plaintiff. Background [2] The plaintiff, until 2012, carried on business as a lender of funds, amongst other things, to meet living and legal expenses of beneficiaries awaiting the distribution of the proceeds from deceased estates and of parties to estate litigation. The first loan agreement: June 2008

3 3 [3] On 16 May 2008, the defendant, Ms Kenny, by her solicitors Anderssen Lawyers, applied for a loan from Ask for $150,000. Ms Kenny s loan application, amongst other things: (c) (d) Identified Ms Kenny as the executor and sole residuary beneficiary of her mother s will; Sought funding for solemn form proceedings in respect of the will which was being contested by her siblings; Sought funding to defend a claim against the estate by the Public Trustee for breach of fiduciary duty by Ms Kenny s mother, claiming $354,000 by way of damages and orders setting aside certain transactions; and Sought funding also for living expenses. [4] On 22 May 2008, Ms Kenny sent a further letter in support of her application for finance which set out the particulars of the assets and liabilities of the estate. She estimated assets at about $3m with liabilities at about $100,000. She informed Ask that she had been advised she had good prospects in the solemn form proceeding. [5] On 19 June 2008, Ask and Ms Kenny entered into a loan agreement whereby Ask agreed to lend $157,250 to Ms Kenny at an interest rate of 18.5% per annum on security of a registered mortgage over certain property owned by her being sufficiently described as Lot 2 on Plan (Lot 2). The second loan agreement: December 2008 [6] On 23 December 2008, Ms Kenny executed a second loan agreement with Ask. It is evident from that agreement that as at December 2008, Ms Kenny had drawn down some $76, on the first loan agreement. [7] By the second loan agreement, Ask agreed to lend a total of $181, to Ms Kenny, comprising, amongst other amounts, $80,000 to be paid to her solicitor, Mr Myrteza of Forbes Dowling, on account of legal costs in the solemn form proceedings and $20,000 for living expenses. The interest rate specified was 19.5%. The security comprised a mortgage over Lot 2. Mr Myrteza executed a solicitor s certificate in respect of that agreement. The mortgage was registered on 12 March The third loan agreement: September 2009 [8] On 4 August 2009, Ms Kenny s solicitor, Mr Brown of Aden Lawyers, sent an to officers of Ask seeking a further increase in the loan amount to pay out Forbes Dowling plus further sums urgently needed to cover urgent costs. [9] This was followed up by the first of many handwritten letters sent over the next seven years from Ms Kenny to representatives of Ask or its solicitors. Those letters generally are courteous and demonstrate a clear understanding of the issues relating to the loan. They also demonstrate a capacity of Ms Kenny to handle her own affairs independently and effectively and to negotiate firmly and assertively with Ask. This letter is a good example. It provides:

4 Dear Mr Scally, I would like to offer you and ASK Funding a sincere apology for my sudden departure from my lawyer Mr Duke Myrteza s firm. As you know the 1 st lawyers Andersons paid themselves out of my loan. I then engaged Forbes Dowling Lawyers to probate my mother s will. As it turns out Mr Myrteza had a friend that was going to come and move into the Queenslander house on one of my mother s farms. This was a very urgent situation where I had to cut all ties with Mr Myrteza his friend was suggesting I let these people into the house and they would do a valuation on the property (120 acres with a house 2 larger beds) for the valuation cost $220, 000. I know I could sell the property when will probates for $400,000 at least. So Mr Scally as you would understand I had no option but to get another lawyer. Adam Brown from Aden Lawyers 24A Hill St, Toowoomba. There is only 2 steps left to finalise the will. 1. get the files from Forbes Dowling Lawyers 2. get the deed of settlement signed by my 3 brothers and sister. The only thing I need and I ideally hope you can help me is I need a further loan of $70,000 to pay Forbes Dowling they will not release the files to Adam Brown without payment. The other option is Mr Myrteza wants me to offer my deeds on 100 acres I own as security until he is paid. There is no way I will let him put a mortgage on anything. I do not trust him. Mr Scally if you could help me on this last request I would be eternally grateful. I would give you these deeds to 100 acres to ask funding to mortgage as security but not to Forbes Dowling. I have no other means of seeking finance. Thanking you, Leone Kenny [10] As will be seen, this was not the last request for funding. (It should not be assumed that the complaints directed at third parties in this letter are justified. There will undoubtedly be another side to the events described by Ms Kenny. This comment applies to all the criticisms of third parties in Ms Kenny s correspondence, such as Mr Klatt.) [11] Consistent with those requests, a third loan agreement was entered into on 4 September By that agreement, Ask agreed to lend a total of $274, to Ms Kenny, comprising, amongst other amounts, $67,370 to Mr Myrteza of Forbes Dowling, $3630 for living expenses and $198,768 for accrued liabilities under the second loan agreement. The interest rate specified was 19.5%. [12] The security included mortgages over Lot 2, as well as her 1/3 share as tenant in common in: Lot 20 on CP A (Lot 20);

5 5 Lot 110 on CP AG3 (Lot 110); and (c) Lot 211 on Plan A (Lot 211). [13] Those mortgages were executed by Ms Kenny on 28 September 2009 and registered on 25 November 2010, (the First Lot 211 Mortgage). That mortgage secured payment of the Loan and all moneys payable and all other obligations of the Borrower under this Credit Contract (being the third loan agreement). [14] I note that Lot 211 is one of the lots for which possession is sought in these proceedings. At this stage, however, it appears that Ms Kenny had only mortgaged her 1/3 interest as tenant in common in Lot 211. [15] The third loan agreement specified Ms Kenny as borrower both personally and in her capacity as executor of the Estate of the Late Mary Malone. The fourth loan agreement: January 2010 [16] On 27 November 2009, Ms Kenny again wrote by hand to Mr Scally of Ask seeking further funds and making further proposals regarding security. She wrote Dear Mr Scally, I am writing concerning the possibility of getting a small loan to help me out until the will probates in March, Adam Brown has made a date to go for probate of my mother s will. I urgently need money to live on until this occurs I would like to use the deeds from 300 acres (sending to-morrow) as security. I would like $20,000 as soon as possible. There will be real estate of my mother s sold as soon as the will probates, there are 4 properties ready to go on the market. Thanking you, Leone Kenny [17] Following this (and presumably as a result of that letter), a fourth loan agreement was entered into on 5 January By that agreement, Ask agreed to lend a total of $306, to Ms Kenny, comprising, $15,000 for living expenses and $290, to repay the loan under the third loan agreement. The interest rate specified was 19.5%. [18] The security specified was the same as that specified under the third loan agreement. The fourth loan agreement specified Ms Kenny as borrower both personally and in her capacity as executor of the Estate of the Late Mary Malone. A solicitor s certificate was given by a Mr Riwoe of Aden Lawyers. [19] There is no evidence that these further mortgages were signed or registered. I note that the First Lot 211 Mortgage is not on its terms apt to secure liability under the fourth loan, limited as it was to securing the liability under the third loan (which was repaid by the advanced under the fourth loan). As will be seen, this matter was addressed in a 2012 deed discussed below. [20] This loan agreement was accompanied (as were the others) by a so-called irrevocable instruction. In summary, it comprised a direction by Ms Kenny to her solicitors (then

6 6 Aden Lawyers) to notify Ask of any settlement of the Matter (defined in the loan schedule as the estate of the Late Mary Malone ) and to pay any settlement proceeds to Ask as a first call on the settlement sum. Dealings between January 2010 and December 2012 [21] From at least 29 November 2010, Ms Kenny further corresponded with Ask about the loan. Again the correspondence under her own hand demonstrates a clear understanding of the issues and an ability to negotiate effectively. In brief: (c) (d) (e) (f) On 12 October 2010, Ms Kenny wrote proposing a repayment plan taking into account obligations to pay her siblings; On 29 November 2010, Ms Kenny requested further funds ($30,000-$50,000) for living and legal expenses while Lots 1 and 2 were sold to permit Ask to be paid and payments to be made to her siblings (presumably under the will). She estimates her assets in that letter at $1.5-$2m; On 24 February 2011, Ms Kenny made a further proposal for sale of certain properties to repay Ask. It is evident from a later statutory declaration in evidence relating to this proposal that one of the lots Ms Kenny proposed selling was Lot 58 on Moran Road Linthorpe (this is Lot 58 on CP AG901, Lot 58). The other appears to have been Lot 200 on AG 1539 (Lot 200); On 7 September 2011, Ms Kenny again appears to have offered to repay the loan of $400,000 on sale of Lots 58 and 200, after completion of certain works on a building on Lot 58 which she estimates would take 4 months; An undated letter (seemingly sent around September 2011 given the course of the narrative) in which Ms Kenny again put a repayment proposal to Ask and also sought further funding. This letter adds for the first time a request that Ask release its irrevocable instruction. It also raises for the first time Ms Kenny s throat tumour and Mrs Kenny s suggestion that when she signed the irrevocable instruction in 2010, she could no longer afford legal advice. That is directly inconsistent with the documents which contain a solicitor s certificate as noted in paragraph [18] above; A letter dated 24 October 2011 again proposing that Ask be repaid from the proceeds of Lots 58 and 200 along with a third property. It is evident from this letter that Ask had said that it might take steps to enforce its rights under the mortgage and loan agreement. In response Ms Kenny wrote: I ask you Mr Templeton to give me a change (sic: chance) to sell the (3) properties, asap. do not send in the troops for a fire sale, it is entirely unnecessary [22] The replies from Ask, if any, are not in evidence. However, there is no suggestion that Ask took steps to enforce the loan or mortgages at that time. [23] On 31 August 2012, Mr Gebauers of Ask sent a letter of demand for the sum of $560, to be paid immediately. The letter referred to the binding effect of the

7 7 irrevocable instruction then said that if payment was not forthcoming we may commence legal action to enforce our rights against you without further notice to you. [24] Ms Kenny responded on 4 September 2012 under her hand stating that she knew that she owed the sum stated and had every intention of honouring the loan. She then referred to her illness and her need for $20,000 to save my life. She referred to her previous offers to repay Ask from the proceeds of the various properties identified in paragraph [21] and asked Mr Gebauers please can you trust me and wait a little longer. It seems Ask did stay its hand. [25] There were further negotiations and on 1 November 2012, CLO Lawyers (for Ms Kenny) wrote to Mr Boyd, solicitor for Ask, providing information about Ms Kenny s further proposals for repayment. [26] On 20 November 2012, Ms Kenny wrote by hand to Mr Boyd. It was a long letter telling him her life story as it related to her mother s will. It included complaints about Mr Michael Klatt (the administrator of her mother s estate: see paragraphs [62] to [68] below). Ultimately, however, it requested that Ask give her time to try to repay the loan by selling her property of 300 acres. The 300 acre property comprised three lots: Lot 20, Lot 110 and Lot 211. [27] On 23 November 2012, Mr Boyd wrote to Ms Kenny enclosing a draft Deed of Acknowledgement and related mortgages which, in general terms, gave effect to the requests by Ms Kenny. The effect of the 2012 Deed was: To give Ms Kenny until 28 February 2013 to sell the 300 acre property; and Required mortgages over the 300 acre property and Lot 58. [28] Thereafter further negotiations resulted in the variation to the Deed to cap the amount of the debt and reduce the amount owed if payment was made by 28 February The 2012 Deed and Mortgages [29] Ms Kenny executed a Deed of Acknowledgement (the 2012 Deed) and the related mortgages on 10 December [30] The 2012 Deed: Contained an acknowledgement of the debt under the fourth loans at 21 November 2012 at $585,462.45; Provided for time to sell the 300 acre block until 28 February 2013; (c) (d) (e) Provided for a fixed repayment obligation of $600,000 if payment was made by that date; Required mortgages of Lot 58 and the lots comprising the 300 acre block; and Required repayment of the debt by 28 February 2013 in any event. [31] Ms Kenny executed the mortgage of the fee simple of Lots 20, 110 and 211 (the 300 acre block ) to secure the sum due under the fourth loan (the Second Lot 211 Mortgage) and that mortgage was registered. This appears to have been possible

8 8 because Mr Klatt had transferred the interest of the estate in those properties to Ms Kenny absolutely as beneficiary under the will, thus constituting her sole registered proprietor of those lots. [32] A separate mortgage of the fee simple of Lot 58 was also executed (the Lot 58 Mortgage). The estate s interest in that property must have been transferred by Mr Klatt sometime later because the mortgage of Lot 58 was registered on 7 May That mortgage also secured the sums due under the fourth loan. Events leading up to the Second Deed of Acknowledgement [33] Sadly, no sale occurred as contemplated by the 2012 Deed. Instead Ms Kenny sought an extension of time to sell pending repair of parts of the properties caused by a flood. It is unclear how she was to pay for that work, given her previous statements to Ask that she had no funds to live on. However, she did not seek further finance from Ask. She sought an extension to 30 June Not only did Ask agree to this request, it extended the reduced repayment provision in the Deed to that date as well. Thus the debt was repayable under the varied terms of the 2012 Deed on 30 June [34] On 25 June 2013 Ms Kenny wrote to Mr Boyd asking that Ask provide some $34,947 in funding for repairs to the building on Lot 58. I note that Ms Kenny had been corresponding about the repairs to this building since February I infer Ask refused that request because on 2 July 2013, Ms Kenny asked Mr Boyd for $5000 to do up the façade of the building. She also mentioned her life threatening tumour in her neck and mentioned her prolapsed uterus and stomach tumour. She then sought an extension of 3 months to market and sell Lot 58. [35] It can be inferred that these requests were refused because on 4 September 2013, Mr Boyd sent a letter of demand on behalf of Ask seeking full repayment of the amount due, being some $718, [36] On 6 September 2013, Ms Kenny again sent a handwritten letter to Mr Boyd. This gave assurances about four different persons interested in Lot 58 at near $450,000. It also recounted further health emergencies and tumours which had been found and seemed to warn Mr Boyd that Ms Kenny faced a dangerous operation. [37] On 10 February 2014, Ms Kenny sent a further letter to Mr Boyd and Mr Templeton. This contained another life story which highlighted her traumatic childhood, the alleged betrayal by her half siblings and the sale of estate assets at an undervalue. It also recounted the health problems of her son and her wish to make some provision for him. This is followed by a hard headed proposal to Ask to accept payment of $500,000 in full settlement of the loan, to be funded from the sale of Lot 58 and another 30 acre property within 90 days, with the mortgage over the 300 acres to be released. [38] That proposal did not seem to meet with success. On 5 March 2014, Mr Boyd wrote to Ms Kenny asserting (correctly in my view) that she was in default under the Lot 58 Mortgage and demanding possession of Lot 58 under the Lot 58 Mortgage. It does not appear a demand was made for possession of the other lots at that time. [39] On 7 May 2014, Mr Gebauers of Ask sent a default notice under s. 88 of the National Credit Code to Ms Kenny.

9 9 [40] Thereafter there was further correspondence from Ms Kenny of the same kind as previously sent, explaining the difficulties (health and otherwise) Ms Kenny faced and putting yet another proposal to Ask. The effect of that proposal was to offer the mortgaged properties other than Lot 211, along with Lot 2, to Ask so that Ask could sell those properties to meet the debt. That was sent to Mr Gebauers because, according to Ms Kenny, Mr Boyd was no longer taking her calls. [41] On 8 May 2014, Ms Kenny again sent a proposal in similar terms to that in her letter to Mr Gebauers. This letter also speaks of persecution and stand over tactics, though no particulars of that conduct is given. I note that at this point, Ms Kenny had been in default under the 2012 Deed for nearly a year and Ask had taken no concrete step to obtain possession nor to recover its debt. Further, Ms Kenny had not repaid any money at all since the original loan in June [42] On 28 May 2014, Ms Kenny lodged a complaint about Ask with the Financial Ombudsman because I am of the opinion that Ask Funding has failed or refused to give genuine consideration to any proposal put forward by me 1 [and] any further enforcement action would cause be further financial detriment. [43] Nothing more appears in the evidence about this complaint. [44] On 2 June 2014, despite her complaint, Ms Kenny put yet another proposal for repayment of Ask: again preserving Lot 211 and asking for 90 days to sell the other four lots. The Second Deed of Acknowledgment: June 2014 [45] On 11 June 2014, Mr Boyd send a proposed Deed of Acknowledgement giving effect to some aspects of the proposals put by Ms Kenny. That letter also required an independent solicitor s certificate. This led to a round of correspondence in which Ms Kenny, again retaining Aden s lawyers, negotiated to improve the terms of the proposed deed. These negotiations were successful in some respects. The second Deed of Acknowledgment was executed on 15 July 2014 (the 2014 Deed). [46] It relevantly provided that: It took effect as a variation to the fourth loan agreement; Ask would cap liability at $600,000 (the same figure as in the 2012 Deed) if Ms Kenny: (i) Entered into contracts over the Lot 2, Lot 58 or the 300 acre lots by 8 October 2014; and (ii) Paid a total of $600,000 by 8 December 2014; (c) If that did not occur, the full amount of the debt would be immediately payable and Ask would be at liberty to act on its notice of default and notices of power of sale; 1 Apart from entry into the Deed and its variation to extend time to repay perhaps (my interpolation).

10 10 (d) Ms Kenny accepted that entry into the Deed resolved her dispute referred to the Financial Ombudsman and acknowledged she had no other complaints in relation to the loan or her dealings with Ask. [47] An independent solicitor s certificate was given by Mr Bigby of Aden Lawyers. The variations to the 2014 Deed [48] The conditions in the 2014 Deed were not met. Instead, on 27 October 2014, at Ms Kenny s request communicated through her solicitors, the 2014 Deed was varied to extend time for securing contracts to 15 November and the time for payment to 15 December 2014 (the First Variation). Ask did not receive any payment for this variation. [49] Ms Kenny was not able to meet the conditions of the 2014 Deed as varied. On 5 November 2014 her solicitors wrote as follows: Dear Mr Boyd I am instructed all follows: 1. My client has approached other real estate agents to enquire as to whether they had any suitable buyers on their books without success; 2. My client has also arranged for a friend to place an advertisement on a Chinese website in the hope of attracting an investor; 3. The properties remain for sale with Ray White Real Estate but no further offers have been forthcoming; 4. My client s possessions are located on Lot 211 which is the Lot which my client wishes to remain on (I am further instructed that Lot 211 has the lowest value of parcels due to tis topography and lack of water); 5. My client agrees to providing vacant possession of Lot 58 (Factory Block) and Lot 2 (the 30 Acre Block) to ASK Funding if the sale condition cannot be satisfied. Unfortunately there has been almost no rain in this region for quite a while and most grazing country is presently very poorly at the moment which would do little to assist with sale efforts. Yours Faithfully, Cliff Krosen Solicitor Aden Lawyers Pty Ltd 2 [50] On 10 November 2014, and again on February 2015, Ms Kenny sent further long hand written letters to Mr Templeton and Mr Boyd. Those letters again allege misconduct by Mr Boyd and Ask. Apart from allegations of harassment, there was also a complaint that an agent appointed by Ask, told people in Ms Kenny s neighbourhood that she was broke. 2 Affidavit of R Templeton affirmed on 21 December 2017, filed 8 January 2018 (Court Document 10), Ex 55, p. 384.

11 11 [51] Notwithstanding that, it appears that Ms Kenny was able to sell Lots 20 and 110 from the 300 acre block for $215,000. She says that price was an undervalue, though there is no persuasive evidence that is so. Ms Kenny provided a valuation in correspondence to Ask dated 12 May 2014 which seemed to put the price of those lots at around $300,000, but that valuation was rather guarded and it is unclear what information was provided, beyond a basic description of the lots. [52] It also appears that Lot 2 was also sold at about this time or soon after. [53] The result was that on 2 March 2015, Ask, by Mr Boyd, offered to vary the 2014 Deed in writing such that it would accept $200,000 in cleared funds by 22 April 2015 in full discharge of Ms Kenny s obligations. Ms Kenny solicitors accepted the offer but Ms Kenny did not sign any deed of variation. [54] Rather, Ms Kenny sent another letter highlighting her health problems and asking for a longer period to sell Lot 58 and pay the sum offered by Ask. Ask rejected that request. Thereafter on 1 May 2015, Mr Boyd wrote to Ms Kenny s solicitors noting that the proposed variation had not been executed but the time provided in that proposal had passed and sought voluntary delivery of possession by Ms Kenny. [55] This led to further letters from Ms Kenny and yet another proposal from Ask. On 11 January 2016, Mr Boyd forwarded proposed terms for yet another resolution of the matter. It offered to accept $250,000 paid by 31 March 2016 in settlement of Ask s claims on condition of full releases of previous complaints, and agreement to give possession of Lots 58 and 211 if payment was not made. [56] These terms led to the second deed of variation to the 2014 Deed (the Second Variation) dated 27 February It ultimately provided that: (c) Ask would accept $250,000 by 30 April 2016 in full discharge of the loan; If payment was not made, the full amount became due and Ms Kenny would provide possession of Lots 58 and 211; Ms Kenny released claims she made against Ask since the 2014 Deed. [57] Again an independent solicitor s certificate was provided by Mr Bigby of Aden Lawyers, who appeared to have been acting for Ms Kenny (perhaps intermittently) since June [58] By 30 May 2016, it was evident that Ms Kenny had not meet the requirements of the Second Variation. Mr Boyd called for possession in accordance with the terms of the Second Variation. [59] On 15 September 2016, notice requiring vacant possession dated 6 June 2016 was served requiring vacant possession by 15 October 2016 [60] Ms Kenny did not give possession. [61] These proceedings were commenced on 5 May The administration of Mrs Malone s estate

12 12 [62] The administration of Mrs Malone s estate provides the backdrop to the above events. The precise circumstances were never explained satisfactorily, nor was there any reason for Ask to do so. However, based on various statements by Ms Kenny and some of the documents before the Court, it appears that the administration unfolded generally as follows. [63] On Mrs Malone s death, there was some kind of challenge to the will by Ms Kenny s half siblings and also a claim by the Public Trustee in respect of certain properties transferred to Mrs Malone during her life. [64] The outcome of those proceedings is unclear. However, what is clear is that at some point, Mr Michael Klatt was appointed as administrator of the estate and Ms Kenny was removed. Mr Klatt is a solicitor (amongst others) occasionally appointed by the Supreme Court as administrator in estates requiring independent administration. I infer that is what occurred in this case. [65] It can be seen from Ms Kenny s letter to Mr Scally sent on 22 May 2008 that many of the estate properties she refers to were either owned by Mrs Malone or held as tenant in common by Ms Kenny with Mrs Malone. In particular: (c) Lot 211 was owed by Ms Kenny, Mrs Malone and Mrs Malone and P. Keane (as joint tenants), as tenants in common in equal shares; The same seems to have been true for Lots 20 and 110; and Lot 58 was owned by Mrs Malone. [66] Mr Klatt s appointment had the consequence that the interest of Mrs Malone s estate in those properties passed from Ms Kenny s control as executor to Mr Klatt s control as administrator. Accordingly, Ms Kenny could only obtain the fee simple to these properties through administration of the estate (ignoring any issues arising from the joint tenancies, which do not appear to have been an issue). As is seen in paragraphs [31] and [32], that appears to be what occurred in about 2012 (for Lot 211) and by May 2013 (for Lot 58). [67] Ms Kenny expressly borrowed under each of the third and fourth loan agreement both personally and in her capacity as executor of her mother s estate. Aden Lawyers provided certificates for both agreements and appear to have been acting for Ms Kenny in some respects about this time. It might therefore be inferred that Ms Kenny was still executor in January It seems she was replaced by Mr Klatt somewhere between January 2010 and the end of [68] Ms Kenny makes some allegations about Mr Klatt and his dealings with the plaintiff. They do not appear to have any relevance to these proceedings. Certainly nothing has been sworn to which seems to sustain any defence to the claim for possession. One of her complaints is that the plaintiff had the benefit of an irrevocable direction given by her to Mr Klatt in respect of benefits payable to her under the estate in favour of the plaintiff. No such document was in evidence and its terms cannot be inferred from other material before the Court. It appears to be irrelevant. The proceedings

13 13 Events leading up to the summary judgment application [69] The claim seeks orders for possession of Lots 58 and 211 pursuant to s. 78(2) Land Title Act 1994 (Qld) (the LTA). [70] The statement of claim pleads the loan agreements (other than the first one), the mortgages and the various deeds. It relies on failure to repay the loan amount under, inter alia, the Second Variation. It alleges a consequent default: In respect of Lot 211, under the First and Second Lot 211 Mortgages; and In respect of Lot 58, under the Lot 58 Mortgage. [71] It pleads s. 84 Property Law Act 1974 (Qld) notices in respect of both mortgages and a Credit Code notice of default. [72] The defence was prepared by Aden Lawyers. It admitted the various documents and the defaults in repayment. It was otherwise an inadequate pleading. So far as could be determined, it appeared to defend on the following grounds. (c) (d) (e) (f) (g) (h) First, it alleged that the defendant was under a special disability in dealing with the plaintiff (seemingly her serious health issues) and that disability was or should have been sufficiently evident to make it unconscientious for the plaintiff to rely on the defendant s assent to the agreements and mortgages as pleaded in the statement of claim. Second, it is alleged that the plaintiff s failure to extend time under the Second Variation somehow frustrated a verbal agreement between the defendant and a third party to sell part of her land in April 2016; Third, it is alleged that the defendant knew that its advances were for the purpose of estate litigation and that the assets in that estate were required to repay the loan, together and that the defendant needed funds to pay solicitors in litigation over the estate. Fourth, it is alleged that the defendant was subject to duress, or was unduly influenced, and or was unable to understand the nature and effect of the documents she signed and the plaintiff knew or reasonably should have known and that the defendants made threats against the defendant and actually harmed (assaulted?) the defendant Fifth, the plaintiff knew that after Ms Kenny was removed as executor, she was unable to repay the loan without selling her assets. Sixth, it is alleged that the plaintiff has not given necessary statutory notices. Seventh, the plaintiff s conduct amounts to unconscionable conduct as defined the Australian Consumer Law or the Trade Practices Act; Eighth, the loan agreement should be re-opened under s. 76 of the National Credit Code.

14 14 [73] On 16 August 2017, the plaintiff sought particulars of most of the substantive allegations in the defence. Particulars were sought of: The special disability alleged, the basis for the plaintiff s knowledge of it; and The duress, influence and lack of understanding alleged and the basis for attributing a role in those matters to the plaintiff; [74] The reply was filed on 24 August It pointed to the various acknowledgments of independent advice in the various documents, the releases in the 2012 and 2014 Deeds and the variations, and otherwise joins issue with the facts alleged. [75] On 1 September 2017, Mr Boyd wrote to Aden Lawyers explaining why the plaintiff considered that the defendant had no prospect of defending the claim. On 30 August 2017, Ms Kenny filed a notice of acting in person. [76] Mr Boyd then forwarded the Request for Particulars and 1 September letter to Ms Kenny. He received no response. On 3 December he sent a Rule 444 letter in respect of the request. [77] On 7 December 2017, Ms Kenny provided a document headed This is my amended defence. That document made the following allegations: (c) (d) (e) That Mr Boyd and Ask took steps to sell Lot 211 in May 2014 through Ray White Pittsworth and as a result many people came onto her land and stole her cattle and farm equipment; Second, she was bullied into signing all the deeds including the original deed which she was advised by her solicitor had to be signed or else Ask would make her life a living hell; Third, that she has been very unwell with health problems; Fourth, that the loan is a litigation loan not mine as executor ; Fifth, Ask breached the deed of agreement in 2015 when it refused to accept a buyer for Lot 58. [78] On 22 December 2017, the plaintiff filed an application for summary judgment or, in the alternative, an order that the defence be struck out except for relevant admissions. The Summary Application [79] The summary judgment application was returnable on 9 February Ms Kenny appeared without representation. She applied for an adjournment. She relied on three affidavits. The first sought to tell the story of loan. It included allegations relating to her ill health, pressure applied by Ask for repayment, Ask s alleged conduct frustrating a sale of Lots 211 and 58 and other issues. The second contained some documents relating to the issues raised in relation to Lots 211 and 58. The third dealt with her ill health. [80] She also relied on a letter from Ms Giblin of Law Right dated 29 January Ms Giblin had written to Ms Kenny to report that Colin Biggers & Paisley had agreed to

15 15 provide legal assistance to her on a pro bono or similar basis. Ms Alice Blackburn was identified as the solicitor with carriage of the matter. It was accepted at the hearing of the adjournment application that Ms Kenny had entered into a costs agreement with that firm and that Ms Blackburn had estimated 6 to 8 weeks was required to prepare a response to the summary judgment application. It also appeared that Ms Blackburn had suggested that an amended defence might be required. Ms Kenny did not suggest that her health would likely be any better at a later time. [81] Despite the facts that the plaintiff had foreshadowed the application in detail in September 2017, that the plaintiff had already delayed bringing the application on Ms Kenny s request so she could seek legal advice and that the plaintiff had served the application weeks in advance of the hearing date, I granted Ms Kenny an adjournment of the summary judgment application until 13 April [82] I did not adjourn the strike out application. I struck out the whole of the defence with the exception of certain paragraphs making admissions. I gave reasons at the time. In short, however, the defence was struck out for two main reasons: First, many of the allegations failed properly to plead material facts to make good the claims alleged; and Second, many of the allegations were vague or unnecessary or failed to give rise to any defence to the claim for possession (at least in the form in which they were pleaded in the defence). [83] I made clear to Ms Kenny that she would have leave to file an amended defence and as I have said, she thought such a step might be the result of her legal advice from Collins Biggers & Paisley. [84] Ms Kenny referred to the informal document referred to in paragraph [77] above at the hearing. She did not seek to file this document or rely on it in respect of the strike out application. It was not in a proper form and did not meet even the minimum requirements of a proper pleading. [85] Accordingly, on the first hearing I adjourned the summary judgment application and ordered, relevantly, that Ms Kenny file and serve any amended defence, any affidavits in response to the summary judgment application and any submissions by 30 March [86] At the first hearing, I explained at length the character of the application and the procedure which applied to its determination to Ms Kenny. She recognised the importance of providing affidavit evidence in support of her allegations in the summary judgment application. This is demonstrated by the following exchange in relation to her allegation that Ask improperly frustrated sales of Lots 211 and 58. When asked by me to identify why an adjournment would assist her in defending the claim she answered that she can get those affidavits that I don t have. That comment referred to an earlier discussion where she said she could get an affidavit from her previous solicitor Mr Bigby to prove the relevant allegations. 3 Obtaining relevant evidence and obtaining 3 See TS and TS

16 16 advice from her solicitors was accepted by Ms Kenny as the purpose of the adjournment. 4 Hearing on 13 April 2018 [87] None of the steps required of Ms Kenny by the directions on 9 February 2018 were complied with. However, the following did occur. [88] On 5 April 2018, Mr Boyd wrote to Ms Kenny acknowledging receipt of a document in the form of a defence. (That document was included in the material sent direct to me discussed next, but not filed by Ms Kenny). Mr Boyd pointed out the document did not respond to the allegations in the statement of claim. He also noted that it was not sworn and that no affidavits had been provided in accordance with the order of 9 February but that no objection based on late provision would be taken if affidavits were provided by 6 April. It appears no further material was provided to the plaintiff. [89] However, on 11 April 2018 I received an envelope addressed to me sent by Ms Kenny. I notified the parties by that I would not be opening that letter until the hearing. (Ms Kenny s notice of acting in person contained an address.) I received no further contact from Ms Kenny prior to 13 April [90] On 13 April 2018, the matter came on for hearing. Ms Kenny did not appear. At the hearing, the envelope was opened. It contained the following: (c) (d) First, it contained a Notice of Intention to Defend of 21 handwritten pages plus three attachments. This was confirmed by Mr Templeton for Ask as being the same of the document sent to Ask referred to in Mr Boyd s 5 April 2018 letter. I inferred that Ms Kenny sought to file this as her amended defence (the amended defence). I gave leave for that to be done, subject to incorporation of the admissions in the original defence which were not struck out; Second, it contained three medical certificates. Two were historical, dated 6 June 2015 and 16 January They had already been tendered on 9 February 2018 by Ms Kenny. They certified Ms Kenny had a thyroid goitre and uterine polyp which were serious conditions which could not safely be treated. The third certificate was dated 10 April It confirmed the on-going serious nature of the two conditions previously mentioned and that Ms Kenny feels dizzy after a haemorrhage. That report did not state that she was unwell to attend Court on 13 April, nor did any document provided by Ms Kenny. Third, it contained a photograph which seems to be intended to document one of Ms Kenny s health problems. Fourth, it contained a handwritten letter to me. It was unsworn and made assertions about the alleged frustration of a sale of Lot 58 by Ask which had been raised before. No evidence from Mr Bigby about this was provided and no explanation given as to why it was not provided. The amended defence 4 See TS

17 17 [91] The amended defence did not comply even in the most basic manner with the requirements for a defence under the UCPR. While some indulgences might properly be extended to a litigant in person, such a litigant must nonetheless comply with the rules, including the rules of pleading. 5 A fortiori where Ms Kenny had retained a pro bono solicitor with the assistance of Law Right to reconsider her position in the proceedings, and had obtained an adjournment for 8 weeks to do so. Nothing in Ms Kenny s material explains (whether on a sworn basis or otherwise) how it has come about that the pro bono solicitors are no longer involved. [92] Doing the best I can, however, the issues raised in the amended defence are as follows: (c) (d) (e) (f) First, Ms Kenny was pressured to sign the 1 st and other deeds of agreement, despite her illness. Second, in about May 2015, a Mr Brian Costigan offered $155,000 for Lot 58 and a couple of days after, Ask required possession within 24 hours or they would not release the mortgage. This was inconsistent with clause 4 of the terms of the loan which provide that a borrower can repay their loan early. Third, in April 2016, Ms Kenny got a sale contract to sell Lot 211 for $345,000. They offered to buy with clear funds by 10 May 2016, 10 days after the 30 April 2016 date in the Second Variation. Ask did not grant an extension and would not let the sale go through. Fourth, when Mr Klatt was appointed he took control of her mother s assets. Fifth, Ask breached clause 24 of the loan terms by unduly harassing or threatening Ms Kenny by Mr Boyd ringing Ms Kenny and abusively telling her she had 24 hours to get off the land. Sixth, Ask has not complied with clause 23 of the loan terms which provide that the loan contract may be able to be changed if a borrowed is unemployed or sick. It never negotiated or compromised. [93] Ms Kenny then finished the document stating she was very ill and had received last rites. Evidence relied on in support of the matters raised in the amended defence [94] In her correspondence with the Court, Ms Kenny did not seek to rely on her affidavits filed on 9 February Those affidavits were formally admitted on that date only in relation to her application for adjournment. However, I have taken the material in those affidavits into account in deciding whether to grant summary judgment in this case. Relevant principles [95] Rule 292(2) of the UCPR provides: If the court is satisfied that 5 Ross v Hallam [2011] QCA 92 per Chesterman JA at [19]-[22] and see also McMurdo P (with whom Atkinson J agreed) at [12] to [13]; Robertson v Hollings & Ors [2009] QCA 303 at [11] per Keane JA (with whom Fraser JA and Cullinane J agreed).

18 18 the defendant has no real prospect of successfully defending all or a part of the plaintiff s claim; and there is no need for a trial of the claim of the part of the claim; the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff s claim and may make any other order the court considers appropriate. [96] The task for the court on an application under r 292 is to determine whether there is a realistic, as opposed to fanciful, prospect of the defendant successfully defending all or part of the plaintiff s claim. 6 [97] The applicant bears the onus of proving the claim and persuading the court that there is no real prospect of the defendant succeeding. However, once a prima facie case has been made out, the evidentiary onus shifts to the defendant. 7 In discharging that onus, a defendant must condescend upon particulars in order to demonstrate the arguability of the defence advanced. 8 In that regard, it is necessary for the defendant s material to show prospects of success by sworn evidence, as distinct from allegations in pleadings. 9 [98] As was said in Salcedo, nothing in the UCPR detracts from the well-established principle that issues raised in proceedings will be determined summarily only in the clearest of cases. However, in the appropriate case, the court should make use of the power in order to give effect to the overriding object of achieving the just resolution of civil disputes without undue expense and delay. 10 Summary judgment should not be withheld on the basis of a mere spectre of a possible, but speculative, defence. 11 [99] As to the second limb of the test, summary judgment might be refused notwithstanding that it appears on the material before that Court that there is no real prospect of defending the claim, if the circumstances are such that there is a need for a trial of the claim. It is not possible or appropriate to identify all the circumstances which might meet this statutory test. However, the circumstances which might do so include situations such as where the Court is satisfied in the circumstances that the claim ought to be investigated by the defendant notwithstanding that no particular issue can be identified which ought to be tried he following and where the defendant at the time of the application is ignorant of the circumstances giving rise to the claim and is therefore unable to know if a defence might formulated. The Plaintiff makes out its positive case [100] The plaintiff seeks possession under s. 78(2) Land Title Act. That section provides: (2) Without limiting subsection (1), but subject to the terms of the mortgage, if the mortgagor defaults under a registered mortgage, the mortgagee may take possession of the mortgaged lot in a way that does not contravene the Criminal Code, section 70 ; or 6 Deputy Commission of Taxation v Salcedo [2005] 2 Qd R 232, Queensland Pork Pty Ltd v Lott [2003] QCA 271 at [41]. 8 Dubois v Ong & Anor [2004] QCA 185 at [45] per Williams JA. 9 Gullco International Pty Ltd v Brisbane Parcel Deliveries Pty Ltd [2003] QDC 341 at [18] per O Sullivan DCJ. 10 Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469, Haller v Ayre [2005] 2 Qd R 410, 432 [65].

19 19 enter into possession of the mortgaged lot by receiving rents and profits; or (c) by a proceeding in a court of competent jurisdiction (i) obtain possession of the mortgaged lot; or [101] As has been observed, the mortgagee s claim for possession under s. 78(2)(c) is a simple one. 12 All it requires is proof of a registered mortgage over a lot, that the terms of the mortgage do not modify the right and that there has been default under the mortgage by the mortgagor. [102] The material filed by the plaintiff makes out that claim. To be clear, that conclusion arises in the following way. [103] Ms Kenny does not dispute the authenticity of any of the formal documents relied upon by the plaintiff nor does she dispute signing them. [104] The liability secured under the First Lot 211 Mortgage as varied by the 2012 Deed secured Ms Kenny s obligations under the fourth loan agreement (cl. 3.1). Ms Kenny defaulted under the fourth loan agreement on a number of occasions, but most relevantly by failing to repay the loan by 30 April 2016, as required by the Second Variation to the 2014 Deed. [105] The liability secured by the Second Lot 211 Mortgage is the Secured Moneys as defined in the schedule. Secured Moneys means, by cl. 18, all money payable under a Transaction Document. A Transaction Document means each of the Facility Agreement, this Mortgage and each other mortgage granted by the Mortgagor to the Mortgagee from time to time. Facility Agreement means the Credit Contract dated 5 January 2010 between the Mortgagee and the Mortgagor, as varied by the Settlement Deed dated on or about the date of this Mortgage. An event of default under a Transaction Document (i.e. fourth loan agreement) is an evident of default under the Mortgage (cl. 4.1). [106] The Lot 58 Mortgage was in the same terms. [107] That the defendant had defaulted on the mortgages is admitted on the pleadings. Paragraph 8 of the Statement of Claim alleges a default under the fourth loan agreement and each of the mortgages. The amended defence does not engage specifically with the allegations in the Statement of Claim but at para 6 of the original defence admits that Ms Kenny had not paid the amounts claimed the by defendant (sic plaintiff). That admission remains incorporated into the amended defence as orders on 9 February [108] Further, the evidence demonstrates default in repayment of the loan. The 2012 Deed, the 2014 Deed and the two variations to the 2014 Deed specified that repayment had to occur by the date specified therein. That never occurred, and Ms Kenny never suggested to the contrary. Rather, the material contains numerous acknowledgements of the debt and undertakings to repay. 12 See Commonwealth Bank of Australia v Jackson (1992) V Conv R at 65,225, dealing with the equivalent Victorian provision.