Newton v Equititrust Limited [2010] NSWSC 1075

Equititrust  Ltd v  Newton  [2010] NSWSC 455 (13 May 2010)
13 May 2010

The borrower claimed she did not have to repay the loan because she had used the funds (some $3million) to travel overseas with her family and the remainder to pay off a home loan. She argued that it was therefore a Consumer Credit Code loan as it was not for business or investment purposes. She lived in the property with her elderly aunt and autistic epileptic daughter.

Justice Davies recognised the need to have the matter heard quickly given the interest rate and limited defence and set the matter down for hearing very quickly.  The borrower sought to have the hearing vacated on several occasions.

On the day of the hearing the borrower presented a letter from a psychiatrist which indicated she was not fit to give instructions or appear in Court. The borrower also indicated she had, the day before, found legal representation. The lender opposed an adjournment providing evidence it would suffer a shortfall.

The Judge indicated that if the borrower had been represented he would not have allowed the adjournment. He limited this to two weeks however because of the strength of the lender’s evidence.

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Newton  v  Equititrust  Limited [2010] NSWSC 1075
1 October 2010

Ultimately, Bransgroves negotiated with the borrower’s solicitors and arranged for judgment to be entered by consent with a short period allowed for selling the property. However, the borrower was not prepared to accept that she must vacate the property.

A summons to set aside the consent orders was filed and an interim stay granted. Senior Counsel indicated that the consent orders were unjust. The Judge found for the lender noting there was no unfairness because there was a very strong likelihood the lender would have won and the borrower would have lost her home if the hearing had taken place. 

Senior Counsel then informed the Court the borrower wished to now file a defence and cross-claim.  The crux of her defence was that she had no income and used the money (apart from holidays) to develop the property to make a profit so that her family had funds on which to live. The lender knew of the difficulties in developing the property and therefore acted unconscionably in advancing the funds. The Judge held that the borrower did not have an arguable defence. This is because she actively participated in the development process.

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Rachael is a Partner in our litigation department where she specialises in Supreme Court litigation in the fields of mortgage enforcement, professional negligence, and originator/funder disputes, and family provisions cases.

Read more about Rachael Gabrael