Unconscionability (Equity)

Westpac v Kekatos [2014] NSWSC 1802

The bank lent money to a husband and wife on the security of their Vaucluse family home to finance the husband’s development project. The bank applied for summary judgment against the husband and the wife. Against the husband, the bank got judgement for $19.3 million. However, the bank failed to get summary judgment against the …

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Schultz v Bank of Queensland Ltd [2014] QSC 305

A wife gave a mortgage and guarantees to secure three different loans by her husband and their family trust, controlled by her husband. The bank sued and the wife argued the wife’s equity principle and alternatively claimed unconscionability (in equity and under section 12CA of the ASIC Act 2001). The court noted that in order …

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Nibar Investments v Manikad [2014] NSWSC 920

The lender sought possession but did not sue the guarantor. The arrangement was struck that finance would be provided to the guarantor’s company, and a new purchase contract was entered into to reflect this. The guarantor sought to be joined on the basis that the loan, mortgage and guarantee be set aside because the arrangement …

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Hilton v Gidley [2014] NSWSC 874

A sister suffering from schizophrenia provided a guarantee and mortgage for her sister’s loan and received none of the proceeds. The borrower defaulted and the lender sought possession. The sister’s lawyer filed a submitting appearance by mistake and the lender obtained default judgment in her absence. The sister had been notified of the proceedings before …

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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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Taouk v Louis [2014] NSWSC 799

An elderly Lebanese couple with limited English claimed they were tricked into signing a loan and mortgage by their nephew and their signatures and loan withdrawals were all forgeries. The couple claimed that they had mistakenly understood they were guarantors for their nephew’s loan. The couple sought orders that the mortgage be set aside as …

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Permanent Custodians v Grida [2014] SASC 75

The lender was granted possession and the borrowers appealed. The borrowers argued that the lender, through their mortgage administrator and broker acted unconscionably in approving loans based on clearly incorrect income. The borrowers had self-certified their income. The court found that the broker was the agent of the borrower not the lender. The court also …

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Donnelly v ANZ [2014] NSWCA 145

This case concerned a dual currency HKD/AUD loan. The loan was converted to AUD by the bank when the value of the AUD fell. The wife’s claims of unconscionability, breach of agreement and estoppel were all rejected by the court and the bank obtained possession and judgment against the wife. The wife appealed. The Court …

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Rich v Westpac [2014] NSWCA 136

The husband granted two “all money” mortgages over the family home, which was in his name only, to secure his debts of over $4m to the bank. The husband and wife separated just before the final loan. The wife claimed that her husband was stripping the family assets. The husband became bankrupt and the family …

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Bertola v ANZ [2014] WASCA 66

The borrowers argued that the lender engaged in unconscionable conduct because the lender pressured them to accept an early repayment date which it knew would force the borrowers into early default. This was rejected by the lower court. The Appeal Court held that there was no reasonable prospect of the appeal succeeding because the argument …

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