IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
COMMERCIAL COURT
MORTGAGE RECOVERY LIST
 
S ECI 2022 04990

BETWEEN:

OMICRON MORTGAGES PTY LTD 
(ACN 603 479 205)	Plaintiff	
		
v  		
		
DANAI THIENTOSAPOL 	Defendant	

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JUDICIAL REGISTRAR:	Englefield JR 	
WHERE HELD:	Melbourne	
DATE OF HEARING:	24 July 2023	
DATE OF JUDGMENT:	22 September 2023	
CASE MAY BE CITED AS:	Omicron Mortgages Pty Ltd v Thientosapol 	
MEDIUM NEUTRAL CITATION:	[2023] VSC 563	

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PRACTICE AND PROCEDURE — Application for summary judgment under s 63 of the Civil Procedure Act 2010 (Vic) — Anomalies in the pleading and material in support — Where plaintiff alleges the defendant is sued as guarantor — Plaintiff must verify its cause of action by r 22.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Where the plaintiff is ‘lender on the record’ for another entity and the plaintiff’s directors are its solicitors.

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	Mr P Donovan	Bransgroves Lawyers	
			
For the Defendant	Mr D Thientosapol	Self-Represented Litigant	

TABLE OF CONTENTS

Introduction	1
Outline of the Proceeding	1
The First Material in Support	2
The First Hearing	4
The Further Material in Support	6
Solicitor’s Affidavit	7
Submissions	8
Discussion	11
The Plaintiff Must Verify Its Cause of Action	11
The Plaintiff Is Only the ‘Lender on the Record’	13
Position of the Broker	15
Notice of Default	15
Position of the Solicitors in this Proceeding	16
Discretion to Refuse Summary Judgment	18
Conclusion	18

JUDICIAL REGISTRAR:
Introduction
1	By its statement of claim in this proceeding, the plaintiff seeks possession of two properties from the defendant, relying on a guarantee given by the defendant, secured by mortgage on title to the properties, in respect of a loan made by the plaintiff to a non-party.
2	By summons filed 9 June 2023 (‘summons’), the plaintiff makes application for summary judgment against the defendant under s 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’). 
3	The plaintiff’s statement of claim and material in support of its application raise the question of whether it asserts the defendant had a primary obligation to repay the loan, rather than guaranteeing an obligation of another to repay the loan.  It also transpires that the plaintiff is a mere ‘lender on the record’ and the source of the loan funds (and potentially the entitlement to repayment) vests in another ‘true’, ‘actual’ or ‘beneficial’ lender.  Further, the solicitors who act for the plaintiff in this proceeding are the plaintiff’s directors and the plaintiff is bound to the instructions of the ‘true’ lender.  
4	I will expand on these issues and provide reasons for my decision to dismiss the plaintiff’s application below.
Outline of the Proceeding
5	By writ and statement of claim filed on 2 December 2022, the plaintiff essentially alleges that:
(a)	it lent money to a private company (‘borrower’);
(b)	the defendant guaranteed the loan and mortgaged the subject properties (then a single property, later subdivided into two ‘units’ on separate titles) as ‘security for the Loan’;
(c)	it was a term of the guarantee that the loan would be repaid on a certain date;
(d)	in breach of the guarantee, the borrower and the defendant failed to repay the loan by that date; 
(e)	it is a term of the mortgage and guarantee that in the event of default, the plaintiff can take possession of and sell the properties; and
(f)	by reason of the default, the plaintiff is entitled, under the loan and in particular, its registered mortgages, to possession of the properties pursuant to the terms of the loan and mortgages and by operation of s 78(1)(b) of the Transfer of Land Act 1958 (Vic) (‘TLA’).
6	By defence filed on 26 May 2023, the defendant, acting for himself, essentially admitted each paragraph of the statement of claim, except for a denial apparently based on the date of the subdivision of the properties and a non-admission apparently based on a payment of ‘pre-paid interest’, which had not been accounted for.  Then, at the foot of the defence, two ‘non-admissions’ were made, which are not relevant to the pleadings. 
The First Material in Support
7	An affidavit in support of the plaintiff’s summons by Alexander MacDonald, as administrative agent of the plaintiff, was affirmed on 9 June 2023 (‘first MacDonald affidavit’).  Beneath the heading ‘loan to the defendant’, among some references to the mortgage but not the guarantee, the affidavit stated:
(a)	‘[u]nder the terms of the Loan, the Plaintiff loaned to the defendant the sum of $1,462,500.00 …’; 
(b)	‘the Borrower was obliged to repay the loan in full by 15 July 2022’, where the term ‘Borrower’ is not defined in the affidavit;
(c)	‘[t]he Loan was not repaid on 15 July 2022 and has not been repaid’; 
(d)	‘it is an event of default under the Loan if the Borrower does not repay the Loan on 15 July 2022’;
(e)	‘[i]t is a term of the Loan that in the event of a default, the Plaintiff can take possession of and sell the Properties’; and
(f)	‘[t]he amount owing under the Loan at the time of filing the statement of claim was $1,634,531.86.’
8	The exhibit to the first MacDonald affidavit included the ‘Deed of Loan’ and the ‘Deed of Guarantee’, which appeared identical except for the headings and necessary substitutions.  Each deed incorporates, by reference, the terms of a registered memorandum of common provisions (‘MCP’).  In the Deed of Guarantee, ‘Debtor’ means the Guarantor (the defendant) and in the Deed of Loan, ‘Debtor’ means the Borrower (an entity named Danai Poked SXL Pty Ltd (ACN 618 067 566)).  Each deed recites that the Guarantor or Borrower (as the case may be) has requested that the Lender (the plaintiff) provide the facility described in the ‘Schedule’ to the deeds.  By the deeds, the definition of ‘Schedule’ in the MCP is the schedule to the deeds.  
9	The schedules to both deeds appear identical, which has the effect that in the Deed of Loan, the Borrower is to provide mortgage security, which is incorrect.  Further, in the Deed of Guarantee, the schedule implies that the defendant had a primary obligation, as borrower, to repay the loan, notwithstanding his name appears in a section of the schedule labelled ‘guarantor’ (this is caused by the use of the word ‘debtor’, which, in the Deed of Guarantee, means the defendant).
10	The schedule to the deeds include the following regarding an entity, which is not a party to the proceedings, nor, apparently, to the Loan or Guarantee:
13	Special Conditions – Brokerage	(a)	The parties acknowledge and agree that the Debtor must pay to Equity Lenders Pty Ltd a brokerage fee of $32,175.00 incl GST for arranging this Loan (the Brokerage).
(b)	The Debtor has requested that the Brokerage be deferred for up to six (6) months which has been agreed to by the Lender and Equity Lenders Pty Ltd.
(c)	The Debtor acknowledges and agrees that it will, within six (6) months of the Loan Date, pay the Brokerage to Equity Lenders Pty Ltd. The Debtor further acknowledges and agrees that upon the sale of the Securities, the Lender is authorised to direct payment of the Brokerage from the net proceeds of sale.
(d)	In the event that the Brokerage is not paid to Equity Lenders Pty Ltd within six (6) months of the Loan Date, the Debtor must pay interest on the Brokerage at a rate of 8.95% per annum commencing from the Loan Date.
(e)	The Brokerage and any interest payable on it, forms part of the Secured Monies.	
11	The first MacDonald affidavit states that the plaintiff’s costs on an indemnity basis are included in the ‘payout figure’, citing a provision of the MCP.  That particular MCP term provides, among other things, that the plaintiff’s legal costs ‘in respect of the Agreements’ shall form part of the ‘Secured Monies’ (cl 222). 
12	The exhibits to the first MacDonald affidavit showed that one of the two directors of the plaintiff is the solicitor acting for the plaintiff in the proceeding, Ms Christina Jabbour of Bransgroves Lawyers (‘Bransgroves’).
The First Hearing 
13	The application was listed for hearing on 11 July 2023, but was adjourned as the defendant was unwell.  The plaintiff appeared through counsel, instructed by Ms Jabbour, to oppose the adjournment in the absence of the defendant.  That adjournment was granted and, in addition, part of the ‘Other Matters’ section of the orders made on 11 July 2023 (‘Orders’) provide as follows:
In order that the application may be finally determined on the next occasion, in the interests of prompt, cost effective and efficient resolution, the Court raised the following for the plaintiff’s response: 
(i)	The sufficiency of the affidavit in support of the application, including exhibits, made on 9 June 2023 (‘affidavit’) and the statement of claim (‘SOC’) to establish the entitlement of the plaintiff to summary judgment against a guarantor of loan made to a third party including: 
(a)	Some apparent confusion in the material about the character in which the defendant is being sued and whether this ought be rectified prior to judgment; 
(b)	The schedules to the Deed of Loan and the Deed of Guarantee (pages 10 and 13 respectively of exhibit AM-01 to the affidavit) appear to contain anomalies; 
(c)	The enforceability of a “brokerage fee” said by the plaintiff to be payable to “Equity Lenders Pty Ltd” in this proceeding, and whether such a fee is also charged by the plaintiff, or whether there is only one such fee; 
(d)	Whether a notice of default to the defendant is required, where the defendant has admitted default in his defence (noting that the SOC pleads default on the loan which is guaranteed by the defendant, not default on the guarantee entered by the defendant); and 
(e)	Whether notice to the subsequent mortgagees is required. 
(ii)	The plaintiff’s representation in this proceeding in circumstances where the solicitor appearing at today’s hearing for the plaintiff, Christina Jabbour, is a director of the plaintiff, including; 
(a)	Whether Ms Jabbour is also a shareholder; whether there is any association between Ms Jabbour or any partner, officer or employee of the plaintiff’s solicitors, Bransgroves Lawyers (collectively, ‘Bransgroves Lawyers’), and the other director of the plaintiff; whether the other director is also a shareholder of the plaintiff; or whether Ms Jabbour or Bransgroves Lawyers have any association with any other shareholders of the plaintiff; 
(b)	Whether there is any association between Bransgroves Lawyers and Equity Lenders Pty Ltd; 
(c)	An explanation of the role of the deponent of the affidavit, Alexander MacDonald, including full disclosure of any associations not apparent from the affidavit; 
(d)	Whether any ethical questions arise for Ms Jabbour and Bransgroves Lawyers, in circumstances where Ms Jabbour may have a personal or reputational interest in the proceeding as director of the plaintiff, where such self-interest, if it exists, may conflict with, among other things, duties of independence and objectivity required for legal representatives in this Court;
(e)	Whether any question of cost recovery arises for the plaintiff, where its director is acting as its solicitor in this proceeding; and
 (f)	Whether any disclosure ought to have been earlier made regarding any of these matters.
The Further Material in Support
14	On 21 July 2023, the second affidavit of Alexander MacDonald was filed (‘second MacDonald affidavit’).  Far from being an ‘administrative agent’ of the plaintiff, Mr MacDonald is one of two directors of a private company, which was the ‘trustee’ of an ‘unregistered managed investment fund’ (‘Fund’) at the time of the making of the loan to the borrower.  The trustee of the Fund apparently sourced the loan funds, which are subject of the proceeding, from the Fund, and is described as the ‘true’, ‘actual’ or ‘beneficial’ lender in the further material in support.
15	In July 2022, the trusteeship of the Fund was transferred to Boutique Capital Pty Ltd, which is described as a ‘professional trustee company and a AFSL holder’.  Mr MacDonald was and remains the ‘investment manager’ of the Fund.  It may be that the Fund is a unit trust.  Mr MacDonald and another individual ‘set up’ the Fund.
16	The second MacDonald affidavit sets out that by a ‘Trust, Agency, Servicing and Retainer Deed’ (‘TASR Deed’) between the trustee of the Fund, the plaintiff and Bransgroves, ‘it was agreed that Omicron [the plaintiff] would act as bare trustee’ and Bransgroves would act as solicitors for the trustee of the Fund in relation to the loan and guarantee, which are the subject of this proceeding.  Among other things, it was agreed that that ‘Omicron [the plaintiff] would be the lender on the record’.
17	The second MacDonald affidavit makes six corrections to the first MacDonald affidavit, proffers seven interpretations of the documents exhibited to that affidavit and, in response to the issue of the enforceability of the ‘brokage fee’ to a stranger to the contract, essentially states that this is ordinary practice, but clarifies the ‘establishment fee’ is separate and was paid to the ‘Fund’ and so, was not retained by the plaintiff.  
18	The TASR Deed, which is exhibited to the second MacDonald affidavit, names the trustee of the Fund as the ‘Lender’ and the plaintiff as ‘Trustee’.  It ‘declares’ that the plaintiff (as Trustee) will hold the ‘Securities on a bare trust for the Lender’ and that the plaintiff will be the ‘lender on the record on all Securities’.  In this deed, ‘Securities’ means the ‘legal documentation of the Loan, Guarantees, Mortgages and Charges, and any Document of Title’.  
19	It appears from the TASR Deed that the actual money, that is, principal, repayments, interest or any other money, is not distributed or collected by the plaintiff and so, does not pass through the ‘trust’ created by the TASR Deed.  The plaintiff is entitled to be indemnified for costs, with a lien over the Securities, among other things.  By the TASR Deed, it is the Lender (the trustee of the Fund) who ‘invests’ in a ‘mortgage’ set out in a schedule to the deed.  In this case, the schedule records details such as names, amounts, title details and the like, relevant to the loan, guarantee and mortgage, which are the subject of this proceeding.  
20	By the TASR Deed, the plaintiff has ‘no authority’ in relation to the Loan (as defined), including as to communication with third parties, commercial decisions or entering any contracts other than on instruction of the true lender.  
21	Further, by the TASR Deed, a party to the deed called the ‘administrative agent’ ‘holds’ the principal, interest and other monies.  This position is blank in the deed.  Mr MacDonald says he was mistaken when he stated he had undertaken this role in the first MacDonald affidavit.  Among other important roles, the administrative agent keeps records, produces statements and communicates with the borrower.  Mr MacDonald has twice given evidence regarding the total amount owing under the loan and the appearance is given that he is ‘administering’ the loan in the sense of record keeping at least. 
Solicitor’s Affidavit
22	On 21 July 2023, the solicitor for the plaintiff, Ms Jabbour of Bransgroves, filed an affidavit.  That affidavit establishes that Ms Jabbour and the other four directors of the plaintiff are also the directors of Bransgroves Lawyers Pty Ltd.  None of the directors of the plaintiff or Bransgroves Lawyers Pty Ltd are shareholders of either entity.  The sole shareholder of the plaintiff and of Bransgroves Lawyers Pty Ltd is Bransgroves Fiduciary Pty Ltd.  The shareholders of that entity are Matthew and Lesa Bransgroves.  None of the directors or shareholders of the plaintiff or the plaintiff’s solicitors have ‘funds invested’ in the loan the subject of this proceeding.
23	Ms Jabbour deposes that the plaintiff is the ‘lender on the record’ for the loan pleaded in the statement of claim, but acts ‘solely as a bare trustee for the actual beneficial lender’.  The trustee of the Fund is described as the ‘true beneficial lender under the Loan subject to these proceedings’.  This affidavit states that the plaintiff receives ‘no financial benefit’ for acting as lender on the record.  Ms Jabbour identifies the ‘beneficial lender’ by reference to the TASR Deed exhibited to the second MacDonald affidavit (that is, the trustee of the Fund) and states that ‘all decisions are made’ by the trustee of the Fund.  Ms Jabbour states the plaintiff ‘has done nothing besides hold[ing] the Loan as bare trustee for the lender’.  The plaintiff is described as a ‘bare trust to assist clients of the law firm’.  
24	Ms Jabbour’s affidavit also establishes that Equity Lenders, which, according to item 13 of the schedule to the Deed of Loan and the Deed of Guarantee, has its brokage fees included in the definition of ‘secured monies’, has no association with Bransgroves, the plaintiff or the actual lender. 
25	With respect to legal costs of this proceeding, Ms Jabbour notes that the statement of claim does not seek costs; the costs of the proceeding are incurred by ‘the beneficial lender, VPCP Fund in exercising its rights (via Omicron as trustee) under its mortgage’.  The legal costs charged to the trustee of the Fund and ‘added to the mortgage’ are said to be ‘market rate’. 
26	Ms Jabbour is of the view that ‘no conflict of interest, duties of independence or ethical questions arise in [her] representation of the Plaintiff in these proceedings’. 
Submissions
27	The plaintiff’s primary contention is that the evidence makes clear that the defendant did in fact guarantee the loan and that the properties were the subject of a mortgage to secure that guarantee.  Reference was made to the guarantee and mortgage documents, both of which are signed by the defendant.  It contends that because of a failure to repay the loan, and in light of the admissions by the defendant, his defence has no real prospect of success in this proceeding and the plaintiff is therefore entitled to possession of the properties.
28	Further, in response to the various matters raised by the Court in the Orders, the plaintiff makes the following submissions, which I have attempted to summarise, as fairly as I can:
(a)	on the issue of Ms Jabbour appearing for the plaintiff as solicitor and her involvement as a director of the plaintiff, the plaintiff relies on Ms Jabbour’s affidavit sworn 21 July 2023.  The plaintiff contends that further issues that arise in relation to Ms Jabbour’s involvement in the proceeding ought to be a question to be considered separate to the present application;
(b)	as to the sufficiency of the affidavit in support of the plaintiff’s application, it was submitted that the question for the Court on the present application is whether the defendant has a real chance of success.  It also acknowledged the operation of r 22.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) and accepts that the affidavit in support must verify ‘the facts necessary to establish a good cause of action’ and once that is done, r 22.05 of the Rules permits a defendant to ‘show cause against the application by affidavit or otherwise to the satisfaction of the Court’.  The plaintiff contends that the admissions in the defence are relevant.  While the plaintiff cannot rely on those admissions alone and must put on an affidavit in support pursuant to r 22.04, those admissions limit the extent to which the Court ought to go in determining the question of whether the defence has any real prospect of success; 
(c)	on the question of the apparent confusion in the material about the character in which the defendant is being sued and whether this ought to be rectified prior to judgment, it is the plaintiff’s submission that pleadings are not required to be an ‘elegant model of legal purity’.  The plaintiff says this is more so where the statement of claim sets out the relevant documents upon which the allegations rests and where it provides further allegations as to the nature of the defendant’s breach and the plaintiff’s entitlement.  Reference was also made to r 13.02(1)(a) of the Rules, which requires that every pleading shall contain, in ‘summary form’, a statement of all material facts on which a party relies;
(d)	as to the issue of apparent anomalies in the loan and guarantee, the plaintiff accepts that the schedule to the loan contains a clause that can have no effect, notably that the borrower pledges a mortgage over the properties to the plaintiff, which the borrower cannot do given it does not own the properties.  To this, the plaintiff contends that a commercial contract should be interpreted on the assumption that parties intended to produce a commercial result and to avoid it making commercial nonsense or working commercial inconvenience;
(e)	regarding the ‘brokerage fee’, the plaintiff notes it does not seek a money order against the defendant, but rather, an order for possession of the properties.  It was contended that even if the brokerage fee is not enforceable, the plaintiff’s entitlement to possession of the properties is unaffected because the outstanding debt remains owing;
(f)	the plaintiff also contends that following the authorities, there is no need to plead and prove, as a prerequisite to an order for possession, that notice under s 76 of the TLA had been given to the defendant.  It states that, while not pleaded specifically, it is now in evidence that the s 76 notice was in fact given to the defendant; and 
(g)	as to notice to the subsequent mortgagees regarding an order for possession, the plaintiff contends that nothing in s 78 of the TLA nor the case law indicates that a first mortgagee is required, as a prerequisite, to put subsequent mortgagees on notice.
29	The defendant did not file any written submissions in this proceeding.  He appeared unrepresented at the hearing and effectively sought further time to refinance and made no submissions of substance.
Discussion
The Plaintiff Must Verify Its Cause of Action
30	The plaintiff accepts that by r 22.04 of the Rules, a plaintiff’s application for summary judgment must be supported by an affidavit that verifies the facts on which the claim is based.  Such affidavit must verify ‘the facts necessary to establish a good cause of action’.  
31	As noted, the plaintiff seeks to rely on the admissions in the defence to limit the extent to which the Court looks at its claim.  Certainly, there is an admission of ‘default’ to make payment to the plaintiff, which is an important feature of the matter at hand.  However, as noted in the Orders, the defendant admitted default in repayment of a ‘loan’, not a guarantee.  In these applications, the Court needs to first be satisfied of the nature and strength of the plaintiff’s claim, before it can determine whether or not the defence to the claim has a real prospect of  success.  That is the purpose of r 22.04.  
32	The plaintiff described the anomalies in its material as ‘infelicitous’ drafting, rather than failing to establish a good cause of action for the purposes of a summary judgment in its favour.  However, the plaintiff’s pleading ought set out the material facts on which it relies.  The statement of claim pleads in places that the defendant was a party to a loan and in others that he provided a guarantee to the borrowing of another.  The verification of the facts on which the plaintiff relies in the first MacDonald affidavit gives evidence of a loan to the defendant, rather than a guarantee provided by him for the borrowing of another.  For example, if the plaintiff is attempting to sue on a collateral obligation to repay the loan resting on both the borrower and the defendant, it ought clearly plead and verify this cause of action.  On the other hand, the plaintiff may be actually intending to sue on a loan to the defendant, as its material partly suggests, particularly as:
(a)	it did not withdraw this application and apply for leave to amend its statement of claim; and
(b)	nothing in the plaintiff’s further material in support clarifies the characterisation of the defendant’s liability in the lending transaction.
33	It is only once the nature of the claim against the defendant is clear that the prospect of success of any defence be considered.  For example, if the contract being sued upon in this proceeding is a loan contract, although labelled ‘guarantee’, the National Credit Code may apply, as the defendant is a natural person (although the borrower is a private company) depending on the purpose.  Further, while a pure guarantee of borrowings of a company may be outside the Code, the Deed of Guarantee in this proceeding is, in substance, identical to the Deed of Loan, such that if the Deed of Guarantee creates a debt obligation resting on the defendant independent of (or collateral to) any obligation falling on the borrower, might this come within the National Credit Code?  
34	Further, as noted above, the Deed of Guarantee and Deed of Loan appear to contain anomalies, where a guarantor undertakes exactly the same obligations as a borrower.  The plaintiff submits a clause in the MCP permits severance of any unenforceable term and the remaining clauses remain enforceable.  I ought not be asked to construe the contract in the course of a summary judgment application, particularly as the MCP is a complex, lengthy and difficult document and the proposed severance is not pleaded.  In addition, as some of the anomalies appear in a short schedule that sets out the details of the current transaction, perhaps what is needed is rectification rather than severance. 
35	In my view, the plaintiff cannot rely on the defendant’s admissions to show no real prospect of defence to a claim based on guarantee as the plaintiff did not fully plead a guarantee.  That is, a defendant cannot verify a plaintiff’s cause of action for the purposes of r 22.04 of the Rules.  This is a precursor step that must be taken by a plaintiff independently.  On this occasion, this step has been missed.
The Plaintiff Is Only the ‘Lender on the Record’
36	The uncertainty and complexity created by the plaintiff being a mere ‘lender on the record’ needs to be considered.  The statement of claim alleges the plaintiff advanced the loan funds to the borrower and seeks repayment from the defendant to the plaintiff.  However, it appears from the plaintiff’s material in support that the funds which were loaned were derived from and are expected to be returned to the trustee of the Fund, which the plaintiff describes as the ‘beneficial’ or ‘true’ lender.  
37	Counsel took the Court to the TASR Deed and helpfully explained the meaning of ‘bare trust’ being essentially a trust that is not a discretionary or unit trust, but is instead a trust in which the beneficiaries have an absolute, vested and indefeasible interest in the trust property. However, some unanswered questions remain in respect to the trust elements of the TASR Deed (this is a document that incorporates multiple discrete elements, as its name suggests), including who the settlor is, the nature of the trust property and whether the relationship created between the plaintiff and the trustee of the Fund is more in the nature of an agency relationship than a trust relationship. 
38	For example, the TASR Deed gives control of the plaintiff’s actions in respect of the ‘loan’ to the trustee of the Fund.  A trustee is not normally subject to such controls.  Beneficiaries of a trust usually rely on a trustee to take any act or make any decision in their interests, in accordance with the duties of the trustee.  On the other hand, an agency agreement may be expected to include restraints on independent decision making as, generally, the principal will be bound by the acts of the agent that are within the agent’s authority. 
39	Certainly, agency law gives us the concept of the undisclosed principal, which may, in certain circumstances, permit the agent to sue a contracting party as agent, rather than the principal enforcing the contract.  Of course, a difficulty with this analysis is that the trustee of the Fund and the plaintiff characterised their relationship as a trust, which would not make the trustee of the Fund privy to the Deed of Guarantee.  
40	Further, as the plaintiff is no more than a ‘bare’ trustee of the securities for the trustee of the Fund, if judgment were given in the plaintiff’s favour, does it have power to take possession of the defendant’s two properties or, more importantly, sell them?  Would the plaintiff, if successful in this proceeding, require a judicial order for sale out of Court due to the absence of powers under the TASR?  
41	However, these observations of the Court regarding the trust section of the TASR Deed do not resolve the question of the import of the split between the plaintiff and the source of the loan funds, the distance between the pleaded case, as verified by the first MacDonald affidavit, and the facts disclosed by the further material in support.  This material, rather than clarifying whether the defendant is sued as guarantor or under a contract of primary liability, introduces a new area of confusion.  To what extent is the trustee of the Fund, as the ‘true’ lender, or as the entity that provided the loan, the proper plaintiff?  Why was a ‘lender on the record’ necessary and is this arrangement enforceable for the purposes of a summary judgment application? 
42	Complexity may make a proceeding inappropriate for summary dismissal and the powers of summary dismissal should be exercised with caution.  Where the application for summary dismissal is beset by complexity, it may not be in the interests of justice to exercise these powers.  On that basis, the complexity embedded by the plaintiff into what should be a straightforward transaction arising from the plaintiff being merely the ‘lender on the record’ makes this proceeding inappropriate for summary judgment for the plaintiff.
Position of the Broker
43	As noted above, there is no association between the broker and the plaintiff, the ‘actual lender’ or Bransgroves.  Therefore, this aspect of the proceeding raises the simple question of whether the plaintiff can enforce a payment, plus interest, said to be due to a third party to the Deed of Guarantee.  The plaintiff includes the brokerage fee and interest on it in the ‘pay out figure’, suggesting that if judgment were to be given to the plaintiff, on sale of the properties, the plaintiff would withhold these sums from the sale proceeds and remit them to the broker.  The further material in support does not assist my understanding of the position of the broker.  However, as summary judgment will not be given, it is not necessary to reach a concluded view.  Further, if so advised, the plaintiff may amend its statement of claim to establish this aspect of its claim with greater clarity prior to a final determination.  It is important to note that the brokerage fee is included in the amount sought by the statement of claim, but ‘not yet paid’.  Interest of nearly $5,000.00 is added to the amount sought arising from the brokerage fee.  It is not clear who receives this interest, or whether the actual lender, the trustee of the Fund, may charge interest where the amount of the brokage fee has never left its hands.
Notice of Default
44	The plaintiff contends that sufficient notice has been given for it to proceed with its application, despite not pleading notices in its statement of claim.  As I am making my decision on other grounds, I will not deal with this point further. 
Position of the Solicitors in this Proceeding
45	The TASR Deed includes Bransgroves’ retainer agreement as solicitor for all other ‘parties’ to this deed.  The retainer provides that the Lender’s solicitor fees for acting in the absence of default ‘will be paid by the borrower’ and in circumstances of default, as disclosed to the ‘Lender’ pursuant to the Legal Profession Uniform Law.  The Lender in the TASR Deed is the trustee of the Fund.
46	The drafting of the loan and guarantee was done by Bransgroves, including apparently the MCP.  Further, the pleadings and material in support of the application were prepared by Bransgroves.  
47	This creates a curious position where Bransgroves’ client from the Court’s perspective is the plaintiff, yet the plaintiff is no more than an entity that is used by the actual client of Bransgroves (the trustee of the Fund) to loan money secured by guarantee provided by an individual, where that guarantee is secured by mortgage registered on title to the individual’s property, without being the ‘lender on the record’ and thereby, avoiding being the plaintiff in this proceeding.  The true lender nonetheless seeks to access the power of the Court to enforce its loan, guarantee and mortgage. Bransgroves know all this as they acted in the subject transaction and provided the plaintiff to its clients to be used in this way.  
48	Bransgroves have duties and obligations to the Court, as solicitors on record for the plaintiff and as officers of the Court, which may clash with the position that Bransgroves’ solicitors are directors of the plaintiff.  Among other things, how can the plaintiff be independently and impartially advised, in accordance with the ethical duty that rests on solicitors, when its solicitors (as its directors) are bound by the TASR Deed to act only the instructions of the trustee of the Fund regarding the plaintiff’s conduct of this proceeding? 
49	It is impermissible for solicitors to profit from legal proceedings, other than by way of the profit aspect of properly incurred and reasonable legal fees of representing an independent litigant.  However, Ms Jabbour makes clear that there is no benefit to the Bransgroves parties arising from the use of the plaintiff by the trustee of the Fund and none of the solicitors of the firm have ‘funds invested’ in the ‘loan’, which is subject of this proceeding.  
50	This principle is the basis for denying a lawyer an award of legal costs for successfully acting for themselves in a proceeding.  Ms Jabbour responds to this issue by pointing out that the statement of claim does not seek costs orders.  That the statement of claim does not seek an order for costs does not mean legal costs will not be charged by Bransgroves, although to their ‘actual’ client, not to the plaintiff (as that might mean paying their own fees).  The TASR Deed permits Bransgroves to charge fees to the trustee of the Fund, although it is not a party to this proceeding.  Nor does the absence of a claim for costs in the statement of claim mean that the actual client will not seek recovery from the defendant, as the MCP permits the plaintiff to recover all costs of enforcing the ‘mortgage’, including legal costs on an indemnity basis.  The material as a whole discloses that Bransgroves’ legal costs at ‘market rates’ are added to the ‘mortgage’, that is, it forms part of the ‘payout figure’ which, if judgment is entered for the plaintiff, may be retained by the plaintiff from sale proceeds.  Therefore, the absence of a costs claim in the statement of claim is not the full picture.  
51	Presently, the amount of legal costs, excluding counsel’s fees, is nearly $24,000.00.  Some of these costs have been incurred in preparing poorly drafted material and an unmeritorious summary judgment application.  Some of these costs arise from an unnecessary application for substituted service.  There is no independent client with an interest and duty to keep its costs reasonable and proportionate.  Even if the plaintiff’s costs of this proceeding were disallowed, how would that affect the obligation of the trustee of the Fund to pay Bransgroves’ legal costs under the TASR Deed or the obligations of the defendant to indemnify the trustee of the Fund for legal costs under the MCP? 
52	Finally, it is unclear how Mr MacDonald retains power to ‘instruct’ under the TASR Deed given the former trustee of the Fund has been removed.  Ms Jabbour, in her affidavit of 10 July 2023, refers to Mr MacDonald as a representative of the plaintiff.  This is not accurate.  The plaintiff did not engage him as its representative. 
53	As summary judgment will be refused, I will refer the future management of this proceeding to a judge.  In these circumstances, I will refer also the question of the plaintiff’s representation in this proceeding to that judge, rather than deal with such an important issue summarily.  It is also possible that amendments are made to the pleadings or other steps be taken after this decision is handed down to resolve this question.
Discretion to Refuse Summary Judgment
54	Section 64 of the CPA relevantly provides that:
[A] court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the proceeding should not be disposed of summarily because— 
(a)	it is not in the interests of justice to do so; or 
(b)	the dispute is of such a nature that only a full hearing on the merits is appropriate.
55	It is certainly hoped that a full hearing can be avoided, but s 64(a) of the CPA is apposite in this proceeding.  That is, if I am wrong that the plaintiff has failed to verify its claim, I consider that given the nature of this proceeding, it is not in the interests of justice to grant summary judgment and order possession of the properties summarily.
Conclusion 
56	The application ought be dismissed.  The plaintiff ought provide its submissions on costs, including the costs of the substituted service application, within 14 days, dealing with, among other things:
(a)	the consequence for the defendant of any orders disallowing costs or ordering costs be borne by the plaintiff;
(b)	any matters or material on which Bransgroves rely in respect of potential orders disallowing costs under r 63.23 of the Rules; and
(c)	whether Bransgroves and the plaintiff ought be separately represented in respect to item (b) above.
57	Once final orders are made in respect of the application, I will refer this proceeding to a judge for management. 

SCHEDULE OF PARTIES

		
	S ECI 2022 04990	

BETWEEN:		

OMICRON MORTGAGES PTY LTD 
(ACN 603 479 205)	Plaintiff 	
		
- v -		
		
DANAI THIENTOSAPOL	Defendant