Unconscionability (Statute)

Nichols Constructions v Elphick [2015] NSWSC 1732

The lender obtained default judgment which was set aside on the basis that the court found the borrower had an arguable case that her obligation to repay the loan only arise if and when the subdivided lots were sold and construction contracts entered into for the amounts in a spreadsheet attached to the loan agreement …

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CBA v Clapham; Byron Bay Holdings v CBA [2015] NSWSC 1714

The bank financed the purchase of Macadamia farms secured over the farms, a beach property and personal guarantees by the husband and wife. The borrower was the trustee of a family trust. The borrower defaulted and receivers were appointed to the trust properties and sold. The beneficiaries of the trust were the husband and wife. …

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Mavaddat v HSBC [2015] WASCA 205

A husband and wife entered into three loans – one to enable the purchase of the family home and the second and third to finance the husband’s business. All the loans were secured over the family home. The court rejected that the wife had an arguable defence based on the wife’s equity principle in relation …

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Paratei v ING Bank [2015] NSWSC 1368

This case concerned a group of family companies. The parents were shareholders and the parents and sons were directors of the family companies. The parents gave guarantees and mortgages over various properties owned by them to secure their companies’ debts. The bank sued for possession and a money judgment and the parents claimed unconscionability and …

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Mueller v Que Capital [2015] WASCA 155

A lender took an unregistered second mortgage over 3 properties of the borrower and the borrower defaulted on his loan. The lender then purported to assign the debt to a second lender but overlooked this when he refinanced that loan to the borrower to aid a refinance. The borrower defaulted on the second loan and …

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Stacks Managed Investments Limited v Tolteca [2015] QSC 80

The borrower sued its former solicitor for his conduct relating to its entry into the loan.  In separate proceedings the lender sought possession and the borrower counterclaims for relief founded on “unconscionable conduct” by the lender in the giving of the loan in breach of section 12CB of the Australian Securities and Investments Commission Act 2001. The …

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Secure Funding v Stark [2015] NSWSC 223

The lender called up a mortgage that secured both business and personal debt. The default was said to be a default by the business. The directors of the business (who had mortgaged their homes to guarantee the business debt) sought to defend possession proceedings on the grounds of unconscionability under the ASIC Act.  The court …

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Perpetual Trustees v Xiao [2015] VSC 21

A husband wanted to purchase a restaurant but had a bad credit rating so he transferred his home to his wife and then forged her signature on the mortgage to finance his purchase. The loan went into default and the lender claimed possession. The court found that the wife was a pawn in her husband’s …

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NAB v Smith [2014] NSWSC 1605

A naive, simplistic salesman was talked into buying a two year old business where he worked as a salesman for $2 million. He had no inkling of the businesses financials but the bank did and encouraged him. The bank also fell victim to questionable documents emanating from a broker’s office.  The parents of the borrower …

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Hannaford v CBA [2014] NSWCA 297

The borrower defaulted and the bank sued the guarantor. At a very late stage (two years later) the guarantor sought to amend her defence and cross-claim to plead that she had no knowledge of executing the guarantee, and a Contracts Review Act defence. The court’s power to permit a defence to be amended is qualified …

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