A recent decision of the Supreme Court of Queensland has brought into sharp focus the conduct of certain private lenders and the law firms engaged to act on their behalf, and the findings carry significant implications for borrowers navigating the private lending market.

Background

In Evolve Wealth Corp Pty Ltd v QB Finance Pty Ltd [2026] QSC 46, delivered by McCafferty J on 17 March 2026, the Supreme Court of Queensland was called upon to resolve a dispute that, on its face, should never to have reached a courtroom.

Evolve Wealth had borrowed $450,000 from a private lender, secured by a registered mortgage over a property at Burleigh Heads. The facility was structured as a commercial loan rather than a regulated consumer credit arrangement. The loan fell into default. Following a period of correspondence and forbearance, the parties agreed upon a settlement date of 23 May 2025. Evolve Wealth arranged refinancing, loaded the full payout sum of $517,448.74, the precise figure the lender had itself advised, into the PEXA, and stood ready to complete.

The lender declined to proceed with settlement. On the morning of settlement, the lender’s solicitors provided, for the first time, a Deed of Settlement and Release and made clear that settlement would not occur unless it was executed.

Notably, this was the first occasion on which a copy of the deed had been provided to the borrower, on the day its execution was demanded.

The Terms of the Proposed Deed

The proposed deed was not a standard settlement instrument. It purported to require Evolve Wealth to, inter alia:

1. Release all claims not only against the lender, QB Finance, but also against SF Mortgage, a former mortgagee that had assigned its entire interest in the loan some months earlier and no longer held any interest in the mortgage, and Blue Streak Capital, the mortgage manager, which had never been a lender under the facility;
2. Extend the ambit of that release to the agents, employees, legal representatives and related entities of all three organisations.
3. Provide a broad contractual indemnity in favour of all such parties, the terms of which went substantially beyond the indemnity already contained within the mortgage memorandum; and
4. Submit to sweeping confidentiality obligations, the practical effect of which would have prevented Evolve Wealth from making any complaint to a regulatory authority in respect of the conduct of any of the released parties.

Upon Evolve Wealth’s rejection of the proposed deed, the lender escalated its position. It demanded that Evolve Wealth either execute the deed as presented or pay an additional sum of $110,000 as a form of post-settlement security against the prospect of future claims, bringing the total amount demanded to approximately $627,448.75.

The Court’s Findings

The Court found comprehensively in favour of the borrower.

Evolve Wealth had made a valid tender. Funds were available, the payout figure was set by the lender and remained current, and the PEXA workspace was properly prepared. Settlement failed solely because the lender refused to complete.

The lender was not entitled to require execution of the deed. While the mortgage permitted releases where a claim was apprehended, that power was limited to claims connected with the transaction and to the credit provider itself. It did not extend to third parties or justify a broader indemnity.

There was also no proper basis to apprehend a claim. The borrower’s prior correspondence did not amount to a genuine threat against the lender.

The lender’s subsequent demand for additional security was impermissible, having not been raised prior to refusing settlement.

As a result, the lender lost its entitlement to interest from the settlement date, and its application for default and possession was dismissed.

The Broader Concerns This Decision Raises

The significance of this decision extends beyond the parties. It highlights practices emerging in parts of the private lending market that warrant close attention from borrowers, advisers and regulators.

Settlement deeds as a commercial lever

The use of last-minute settlement deeds places borrowers in a difficult position, forcing a choice between accepting prejudicial terms or prolonging default. This decision confirms that such demands must be grounded in the mortgage and cannot be used to obtain broader releases or indemnities.

Confidentiality and regulatory access

Confidentiality clauses that restrict complaints to ASIC, AFCA or other regulators raise serious concerns. If routinely imposed, they risk suppressing legitimate grievances and limiting oversight.

Commercial structures and reduced protections

Private lending is often structured as commercial borrowing through corporate entities, removing access to protections under the National Consumer Credit Protection Act 2009 (Cth). Combined with high default interest and capitalisation, these arrangements can become difficult to exit even where refinancing is available.

Key Considerations for Borrowers in the Private Lending Market

Whether entering, managing or exiting a private lending arrangement, several issues warrant careful attention. Borrowers should understand the implications of borrowing through a corporate structure, including the loss of consumer protections, and carefully consider interest provisions, particularly default rates and compounding.

Mortgage memoranda should be reviewed closely, as they often contain expansive enforcement and discharge provisions. Any indication that a deed may be required at settlement should be addressed early by requesting a draft, and any proposed deed should be scrutinised for the scope of releases, indemnities and confidentiality obligations.

Where security is sought for anticipated claims, it must be raised before settlement is refused and be proportionate. Above all, early independent legal advice is critical, particularly as default progresses and options narrow.

How We Can Help

We regularly act for borrowers, guarantors and property owners in disputes arising from mortgage enforcement, default and redemption, including matters involving privately arranged commercial lending facilities. We advise on whether enforcement action has been validly taken, the scope of redemption rights and valid tender, whether discharge conditions are supported by the loan documents, and the enforceability of settlement deeds, including confidentiality and indemnity provisions. We also advise on urgent injunctive relief to restrain wrongful possession or sale. These matters are often time-critical, and delay can have serious consequences. If you are facing pressure from a lender or concerns about settlement terms, we encourage you to seek advice promptly.

Conclusion

Evolve Wealth Corp Pty Ltd v QB Finance Pty Ltd confirms that a mortgagor’s right to redeem upon payment of the amount owing cannot be used as leverage to extract broader releases, indemnities or confidentiality obligations than those provided for in the mortgage. It also underscores that courts will not hesitate to scrutinise and reject overreach by private lenders and their advisers, with potentially significant consequences, including loss of interest and failed enforcement action.

Russell Hall
Associate