Third Party Loans

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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Mango Media v Comitogianni [2011] NSWSC 152

The broker was a school friend of the borrower. They had not seen each other for 20 years but rekindled their friendship a year before the loan. The borrower was a truck driver prior to which he had worked in his father’s sand and cement business. The broker told the borrower he needed money for …

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Perpetual Trustee Company v Kotevski [2009] NSWSC 1228

This involved a loan of $224,000 by way of first mortgage over the home unit of a borrower who was 74 years old, could not speak English, and who’s only apparent source of income was an aged persons pension of about $500 per fortnight. The case was interesting because it appears to have involved fraud. …

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Prime Finance v Randall [2009] NSWSC 361

In this case an elderly couple mortgaged their house for the benefit of their daughter. They raised the standard Contracts Review Act defence. In the course of the proceedings they filed affidavits in which they admitted that they gave a false residential address, lied that the loan was for investment purposes, and provided false information …

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Perpetual Trustees Victoria v Malouf [2008] NSWSC 834

In this case the son borrowed on his non-English speaking parent’s house to invest in the short term loan market. The money was lost and the lender sought possession of the house. The parents sought to effectively cross claim against the solicitor who represented them on the mortgage. Lawcover refused indemnity and so they sought …

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Clarke v Lopwell [2008] NSWSC 615

In this case there was guarantee and mortgage given by dairy farmers to support a loan that went to a third party. The third party was introduced to the borrowers by their accountant. They received no independent legal advice. The loan was $1,473,000 and the interest rate was 216%per annum. The guarantees were set aside …

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Spina v Conran Associates [2008] NSWSC 326

In this case the owner of the mortgaged property was a 91 year old Sicilian woman who lived in a nursing home and although a resident of Australia for 55 years could not speak, read or write English. The mortgage was executed under a power of attorney by her son and the money used for …

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J P Morgan Trust Australia v Siahos [2008] NSWSC 207

In this matter a 81 year old Greek man and his 71 year old Greek wife (both with limited English) granted a power of attorney to their son who used it to transfer a third of the family home to himself and then borrow from Interstar. When that loan defaulted the son then refinanced with …

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Higgs v Thompson [2006] NSWSC 920

The borrower/mortgagor was an elderly man suffering from dementia born in 1914. His daughter guaranteed the loan but the court found she was in substance the borrower. The court also found she had provided false information to obtain the loan. The borrower/mortgagor sought relief against under the Contracts Review Act. The judgement makes no mention …

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