In order to preserve our clients' confidentiality the case results on this website are limited to those in which there has been a reported decision. However, only a small portion of the cases we act on end up going to trial. In particular, cases involving professional negligence against valuers and solicitors are almost always settled with the insurers.
Winters v HGR Nominees Pty Ltd [2009] NSWSC 467
Because the borrower was a corporation the relevant duty of a lender exercising a power of sale, is that laid down in the Corporations Act. In applying that test, Associate Justice Bryson noted:
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It is essential to the borrowers’ case to establish that there was a serious discrepancy between the market value of the property at the time it was sold and the sale price. Unless there was a serious discrepancy, criticisms of the lender’s conduct cannot affect the outcome. |
Thus the Court’s first enquiry is to consider whether there is evidence before the Court that the property was sold undervalue, and only if it was does the Court next consider whether the lender’s conduct was culpable. The Court then examined the evidence of valuation before it, and concluded that there was no evidence, the property was undersold. Notwithstanding the earlier quoted comment, His Honour took time to exonerate the lender noting:
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This document shows careful consideration and review of factors relevant to a decision to sell and to the price, going through the information and advice available and supporting the decision to recommend it with careful reasoning. This rebuts any view that the defendant acted with any extraneous or improper motive, or with indifference or lack of appropriate attention to the business in hand and its importance. |
Click here for a copy of the judgement
Matthew Bransgrove is a partner and occasional lecturer for the College of Law. He has practised exclusively in the field of mortgage law and mortgage related litigation since 1998.
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