Burch v Cone [2009] NSWSC 1430

This case involved an obscure equitable remedy known as ‘an equity of exoneration’. Burch borrowed money on a mortgage and 38% of the proceeds she kept for herself while 62% she gave to Cone. The equity of exoneration was applied and Cone was ordered to pay 62% of the costs of the mortgage. The court noted that the test for the application of this rule is: First, a person must charge his property. Secondly, the charge must be for the purpose of raising money to pay the debts of another person or to otherwise benefit that other person. Thirdly, the money so borrowed must be applied for that purpose.

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