The broker had one email that killed the case. The court called the rest "vexatious"
A couple's lawsuit against a mortgage broker and three private lenders collapsed under its own weight - and the Federal Court made them pay for it.
In a decision handed down on October 13, 2026, the Federal Court of Australia ordered two applicants to pay $145,000 in indemnity costs - the highest scale available, covering nearly all of the winning side's legal bills - after their claims against mortgage broker eBroker.com.au and a group of private lenders were abandoned just days before a scheduled hearing.
The case grew out of a business loan. A company called CJDJ Pty Ltd, which operated a hospitality business called Soakhouse Adelaide, borrowed money from private lender First Cash Flow Solutions. The loan was secured by a registered mortgage over a residential property in Mt Jagged, South Australia, owned by the husband. The wife was CJDJ's sole director. The husband was its sole shareholder.
eBroker.com.au had introduced the couple to the lender. But the broker had also sent the wife a clear email in February 2024 saying it would not proceed with the application because it did not meet its "Responsible Lending standards." The wife replied four minutes later confirming the couple would proceed with First Cash Flow Solutions "without ebrokers Involvement."
The loan was later refinanced through Dynamic Business Enterprises, which took over as both lender and mortgagee. A director of Dynamic was also named as a respondent.
In January 2026, the couple launched a case alleging unconscionable conduct, misleading and deceptive conduct, and breaches of the National Consumer Credit Protection Act 2009. Their central argument was that the loan fell under the National Credit Code - the federal law that regulates consumer lending and sets minimum standards for how lenders must treat borrowers.
The court found that argument had no reasonable basis. The National Credit Code only applies where the borrower is a person (or strata corporation) and the money is lent for personal, household, or residential investment purposes. Here, the borrower was CJDJ - a company - and the loan was for its business. The wife, the court said, "was not able to explain any plausible basis on which the provisions of the National Credit Code could apply."
A broker with nothing to answer for
The claims against eBroker.com.au fared worse still. The court accepted the broker's submission that "no plausible cause of action against it has ever been identified in the proceeding." The statement of claim alleged only that eBroker.com.au had introduced the couple to the lenders and "held itself out as a broker capable of arranging finance." That alone, the court said, "clearly does not itself identify or support any cause of action."
When the broker's counsel raised the February 2024 email during the costs hearing, the wife interrupted to claim she had never received it - "a different email address," she said. The court described this assertion as "brazenly dishonest," noting the wife had replied in the same email chain, from the same address, four minutes later.
A proceeding no one was steering
The husband never appeared at a hearing, never filed a document, and never engaged a lawyer. The wife ran the entire case alone - filing the statement of claim, sending dozens of lengthy emails to the court's chambers (many described as "inappropriate"), and lodging 37 pages of written submissions and a separate 27-page document styled as a "list of authorities" that turned out to be more substantive argument.
The court described the wife's email correspondence with chambers as "frequent, and often inappropriate." Despite repeated reminders about the boundaries of proper communication, she "repeatedly professed that she is conscious of the limits of appropriate communication with chambers while, often in the same email, flagrantly transgressing the limits previously communicated to her."
The court also identified a pattern of unsupported claims. The wife asserted that the Australian Financial Complaints Authority had requested the proceedings be stayed. No evidence was filed to support this. She maintained she was unaware of her own bankruptcy until early 2025 - a claim the court had already rejected in a prior decision, finding she had received notice of the bankruptcy order in July 2022.
The wife was an undischarged bankrupt throughout the entire proceeding, which raised a fundamental problem: under bankruptcy law, any right to sue that she might have had was held by her bankruptcy trustee, not by her. When pressed on whether any of her claims could survive this, she could not identify one.
The husband's only direct communication with the court was a May 14, 2026 email in which he wrote: "So I don't want to be involved at all, not then not now, not ever." The court dismissed his part of the case that same day. The wife then indicated she would discontinue the rest of the proceeding but never filed the required paperwork. The case was dismissed by operation of a court order on May 29, 2026.
$145,000 - and no way around it
The court ordered costs on an indemnity basis, finding the claims against at least some respondents were "untenable" and the conduct of the litigation was, "considered cumulatively, and objectively," properly characterised as "unreasonable and vexatious."
The breakdown: eBroker.com.au was awarded $53,000 ($46,000 jointly against both applicants; $7,000 against the wife alone). The lenders were awarded $92,000 ($82,000 jointly; $10,000 against the wife alone). The court applied a 20% discount to the respondents' actual legal bills to make sure the totals were not "disproportionate to the proceeding and the stage at which it was terminated."
The husband argued he should bear no costs - he had not been involved. The court rejected this. He had sworn an affidavit at the start of the case, he was copied on all correspondence, and his own email stated he "had only wanted to be involved if [the wife] could present for [him]." The court found he had "adopted a position of wilful blindness" about how the case was being run.
What this means for brokers and lenders
For mortgage brokers, the decision is a clean vindication: a broker that clearly communicated its withdrawal from a transaction and kept the paper trail had no cause of action to answer. For private lenders, the case reinforces that the National Credit Code does not cover business lending through a corporate borrower - a basic point, but one that keeps surfacing in litigation. And for any professional on the receiving end of a poorly founded claim, the ruling confirms that Australian courts will award significant costs where litigation was pursued without a reasonable basis.
None of the substantive allegations were tested in court. The proceeding was dismissed after the applicants abandoned it. The costs decision reflects the court's assessment of the conduct of the litigation and the reasonableness of the claims, not a finding on the merits of the underlying dispute.
