02 October 2013


The borrowers claimed that the bank represented to them that their facilities would be renewed for a further three years based on express and implied representations. The borrowers pleaded waiver, estoppel, the formation of a new agreement, as well as misleading conduct and unconscionability. The court at first instance found that the borrowers had no arguable defence to the claim for possession. The borrowers appealed.

The court noted that the mortgage required any waiver or variation to be in writing signed by the bank and that the bank’s statements amounted to no more than a statement of the bank's preparedness to consider a roll over for a further 3 years, but did not amount to a commitment to do so. Any extension of the facilities was contingent upon the completion of the necessary documentation. The conduct of the bank, taken at its highest, could not imply the formation of a new agreement or constitute a representation by the bank that the facilities would be extended. Nor could the borrowers rely upon the bank's receipt of their continued interest payments because during that period the matter was the subject of negotiations which would have been cut very short had the borrowers not continued to meet the interest accruing.

The court found no arguable defence against the bank's claim for possession. The appeal was dismissed.

Click here to read the full judgment

Matthew Bransgrove, Partner

Matthew Bransgrove has practised exclusively in the field of mortgage law and mortgage related litigation since 1998. He is author of Avoiding Mortgage Fraud in Australia (2015) Lexis Nexis. He is co-author of The Essential Guide to Mortgage Law in NSW (2008) Lexis Nexis and its successor The Essential Guide to Mortgage Law in Australia (2013) Lexis Nexis.

Read more about Matthew Bransgrove