Broker Liability

NWC Finance v Borsellino [2015] NSWSC 1702

A lender sued a borrower, who cross-claimed against his solicitor and broker. The lender asked that the cross-claim against the broker be severed because it was peripheral. The borrower did not resist this and so the court ordered the claim against the broker to be heard separately and after the main claim by the lender …

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RHG Mortgage Corporation v Baira [2014] NSWSC 849

Two sets of parents gave guarantees and mortgages for a loan to their children who were married to each other. The loans were then transferred to a different bank and the parents became borrowers and mortgagors, with one of the children’s properties released from the security. The parents argued that their change of status was …

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Androvitsaneas v Members First Broker Network [2013] VSCA 212

A loan consultant contracted to work for a mortgage banking business had been terminated after he misrepresented the income of a borrower (his cousin) in a ‘low doc’ loan application. He sought a declaration that the termination of his Credit Representative Deed was invalid. The trial judge had found against him, finding that the misrepresentation …

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Baira v RHG Mortgage Corporation [2012] NSWCA 387

The parents claimed the broker falsely represented them as the borrowers when it was in fact their children. In particular the application included a false contract naming the parents as purchasers. The parents sought relief under the Contracts Review Act and cross-claimed against the broker. The trial judge disbelieved the parents and believed the broker …

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Baira v RHG Mortgage Corporation Limited [2012] NSWCA 387

We have previously prepared a case note on the decision before the trial judge which favoured the lender. That decision was overturned on appeal. The trial judge disbelieved the evidence of the guarantor parents, preferring the evidence of the broker. Orders were made for possession of the guarantor parents’ properties located at Marrickville and Drummoyne …

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Secure Funding v Moon [2012] QSC 244

A husband and wife defaulted on their mortgage and the lender sought possession and the balance of the loan. The husband and wife counter-claimed against the broker and the lender for negligence and sought for the loan and mortgage to be set aside. The basis of the negligence claim was that the broker allegedly falsified …

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Perpetual Trustee Company Ltd v CTC Group [2012] NSWCA 252

CTC (as originator), submitted to Resimac (as manager), a forged application for a loan by Perpetual (as trustee) of $480,000. As required under the mortgage origination deed CTC verified the identity of the applicant, Mr David El-Bayeh. The loan was made and upon default proceedings were commenced for possession of the property. The trial judge …

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BNY Trust Company v Moore [2012] WASC 255

An elderly husband and wife refinanced a loan on their house, after having gone into default. The mortgage broker acting on the refinance submitted a loan application on their behalf which had been signed by them in blank form while the husband was in hospital and later completed by the mortgage broker, showing a monthly …

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CT Money v Thompson (No 3) [2012] NSWSC 528

This case involved a mortgage originator/manager who used a network of franchisees to originate mortgages. The franchisees contracted with a subsidiary company of the originator. There was a bad loan for which AFIG obtained indemnity from the originator/manager. The originator/manager then sought indemnity from the franchisee who had failed to interview the borrower. The franchisee …

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Perpetual Trustee Company Ltd v Milanex (No 2) [2012] NSWCA 93

These proceedings arose out of an earlier case where a broker received an application for finance from a 74 year-old pensioner, which was in fact completed by a friend of the broker and the broker provided it to a lender (through an intermediary). A solicitor provided independent legal advice to the pensioner. The pensioner defaulted …

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