AAGT Private Loans Pty Ltd v Ferguson - [2009] QSC 113

SUPREME COURT OF QUEENSLAND

CITATION: AAGT Private Loans Pty Ltd v Ferguson & Anor [2009] QSC 113
PARTIES: AAGT PRIVATE LOANS PTY LTD A.C.N. 129 631 410
(plaintiff)
v
ROBERT JOHN FERGUSON
(first defendant)
DERRELLE LISA FERGUSON
(second defendant)
ROBDELL TASMANIA PTY LTD A.C.N. 126 656 988
(first plaintiff by counterclaim)
ROBERT JOHN FERGUSON AND DERELLE LISA
FERGUSON
(second plaintiffs by counterclaim)
AAGT PRIVATE LOANS PTY LTD A.C.N. 129 631 410
(first defendant by counterclaim)
GRANT PATRICK THOMPSON
(second defendant by counterclaim)
FILE NO/S: 12058/08
DIVISION: Trial Division
PROCEEDING: Claim
ORIGINATING Brisbane
COURT:
DELIVERED ON: 12 May 2009
DELIVERED AT: Brisbane
HEARING DATE: 30 April 2009, 1 May 2009, 6 May 2009
JUDGE: A Lyons J
ORDER:
CATCHWORDS: REAL PROPERTY – TORRENS TITLE – INSTRUMENTS GENERALLY – ATTESTATION AND EXECUTION – EXECUTION UNDER POWER OF ATTORNEY – where letter of offer expressly excluded the taking of security over property
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES – where plaintiff sought to execute Power of Attorney clause over defendants’ home
EQUITY – UNCONSCIONABILITY – whether first and second defendant were at a special disadvantage as against the plaintiff – whether the plaintiff had an unfair advantage as against first and second defendant
Australian Securities and Investment Commission Act 2001 (Cth),
s 12CB
Evidence Act 1977 (Qld), s 92
Land Title Act 1994 (Qld)
Powers of Attorney Act 1998 (Qld), ss 10, 66
Trade Practices Act 1974 (Cth), ss 51AA, 52, 82
Commercial bank of Australia v Amadio (1983) 151 CLR 447,
considered
Equuscorp v Glengallan Investments Pty Ltd 218 CLR 471,
considered
Williams v Turner [2008] QSC 327, followed
COUNSEL: Mr P Travis for the plaintiff
Mr S Shearer for the defendants
SOLICITORS: Elliott May Lawyers for the plaintiff
Piper Alderman for the defendants
A LYONS J:
Background

The first defendant, Robert John Ferguson (Mr Ferguson) and the second defendant, his wife, Derrelle Lisa Ferguson (Mrs Ferguson) were involved in a development of a property at Macrae Street, Ipswich (the Development). The development property had been purchased for $735,000 in July 2007, by their company Robdell Pty Ltd and their business partner Bob Pierce’s company SWSWSW Pty Ltd, as trustees of the Ipswich Innovations Trust. The purchase price of the property had been provided by Robdell, in an amount of $340,000, with an amount of $25,500 provided by SWSWSW and a loan of $421,353, which they had obtained from their mortgage broker Solutions Finance.
The development was stalled, pending development approval from the Ipswich City Council. Additional funds were also required, to relocate a house and to complete the property subdivision project. The proposed project involved the subdivision of the residential property block from four lots into six, the relocation of the house and then the sale of the subdivided blocks.
On 21 April 2008, the plaintiff, AAGT Private Loans Pty Ltd (AAGT) sent a letter of offer of short-term bridging finance, to various joint borrowers, including the Fergusons. The loan…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] QSC 113
Decision Date: 12/05/2009

CaseChat Overview and Summary

AAGT Private Loans Pty Ltd sought to enforce a mortgage over property owned by Mr and Mrs Ferguson. The court was required to determine whether the mortgage was properly executed and enforceable. The defendants argued that the mortgage was not properly executed because Mrs Ferguson did not read the documents she signed and did not understand the consequences of her actions. The court had to decide whether the defendants were under a special disadvantage that would render the mortgage unconscionable.

The court found that the defendants had not established that they were under a special disadvantage. Mr and Mrs Ferguson were not financial novices and had experience with finance transactions. They had received legal advice prior to the transaction and had turned their minds to the nature of the documents they were signing. The court held that the defendants had not shown that they were at a special disadvantage or that the plaintiff had taken unfair advantage of their position. The court found that the mortgage was properly executed and enforceable.

The court ordered that the mortgage be registered over the defendants' property and that the defendants pay the plaintiff's costs of the proceedings. The court found that the defendants had not established any grounds for setting aside the mortgage and that the plaintiff was entitled to enforce the mortgage as agreed.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Mrs Ferguson’s testimony was that she did not read any of the documents that she signed and only signed what her husband told her to sign. In fact, she states she does not even remember signing the actual mortgage document at all. She vaguely remembered going to see the solicitor, but could not remember anything that was said at the meeting. However, she recalls being told that Mr Thompson was definitely going to get them another loan with normal bank interest rates.[17] [17] Transcript Day 2 p 69 ll 38-40. The evidence of Mr Ferguson Mr Ferguson described himself as a truck mechanic/driver. He said he left school in Victoria at the end of Year 9 when he was 16 years old and has been working since then.[18] He said that he had never worked in finance but has owned several houses, including his current home on which mortgages have been placed by other lenders. [18] Transcript Day 2 p 73. Special disadvantage? The defendants place particular reliance on the unconscionability doctrine, as outlined in Commercial Bank of Australia v Armadio.[19] However, that judgment makes it clear that the disabling circumstances or condition must be ‘special’ in the sense that it “seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstances and of its effect on the innocent party.”[20] [19] (1983) 151 CLR 447. [20] Commercial Bank of Australia v Armadio (1983) 151 CLR 447, 462 per Mason J. Having considered the evidence, I do not consider that the defendants have established that they are under a special disadvantage. Mr and Mrs Ferguson each run their own business and they have both been involved in finance transactions previously. Indeed, Mr Pierce in his evidence indicated that he left all the finances to Mr Ferguson. The evidence also indicates that Mr Ferguson had obtained legal advice prior to the Jheeta loan and that the Jheeta mortgage covenants also contained power of attorney provisions which enabled Mr Thompson to register additional mortgages over any property owned by Mr Ferguson. This was not the first time therefore, that Mr Ferguson had been required to turn his mind to issues of this nature and it was not the first time he had received legal advice in relation to transactions of this nature. Furthermore, legal advice was obtained immediately prior to the execution of the documents and that advice was obtained at the office of a solicitor completely un-associated with the transaction. Furthermore, I do not consider that, the fact that the defendants urgently required finance put them under a special disability, as submitted by their counsel. Clearly, Mr and Mrs Ferguson were not financial novices and I do not consider they indeed suffered any special disability or disadvantage as required by the Amadio principles. As Gibbs CJ stated: “A transaction will be unconscientious within the meaning of the relevant equitable principles only if the party seeking to enforce the transaction has taken unfair advantage of his superior bargaining power, or of the position of disadvantage in which the other party was placed. The principle of equity applies “whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affecting his ability to conserve his own interests and the other party unconscientiously takes advantage of the opportunity thus placed in his hands”: Blomley v Ryan per Kitto J.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	AAGT Private Loans Pty Ltd v Ferguson & Anor [2009] QSC 113
PARTIES:	AAGT PRIVATE LOANS PTY LTD A.C.N. 129 631 410 (plaintiff) v ROBERT JOHN FERGUSON (first defendant) DERRELLE LISA FERGUSON (second defendant) ROBDELL TASMANIA PTY LTD A.C.N. 126 656 988 (first plaintiff by counterclaim) ROBERT JOHN FERGUSON AND DERELLE LISA FERGUSON (second plaintiffs by counterclaim) AAGT PRIVATE LOANS PTY LTD A.C.N. 129 631 410 (first defendant by counterclaim) GRANT PATRICK THOMPSON (second defendant by counterclaim)
FILE NO/S:	12058/08
DIVISION:	Trial Division
PROCEEDING:	Claim
ORIGINATING	Brisbane
COURT:
DELIVERED ON:	12 May 2009
DELIVERED AT:	Brisbane
HEARING DATE:	30 April 2009, 1 May 2009, 6 May 2009
JUDGE:	A Lyons J
ORDER:
CATCHWORDS:	REAL PROPERTY – TORRENS TITLE – INSTRUMENTS GENERALLY – ATTESTATION AND EXECUTION – EXECUTION UNDER POWER OF ATTORNEY – where letter of offer expressly excluded the taking of security over property
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – HARSH AND UNCONSCIONABLE CONTRACTS AND STATUTORY REMEDIES – where plaintiff sought to execute Power of Attorney clause over defendants’ home
EQUITY – UNCONSCIONABILITY – whether first and second defendant were at a special disadvantage as against the plaintiff – whether the plaintiff had an unfair advantage as against first and second defendant
Australian Securities and Investment Commission Act 2001 (Cth), s 12CB Evidence Act 1977 (Qld), s 92 Land Title Act 1994 (Qld) Powers of Attorney Act 1998 (Qld), ss 10, 66 Trade Practices Act 1974 (Cth), ss 51AA, 52, 82
Commercial bank of Australia v Amadio (1983) 151 CLR 447, considered Equuscorp v Glengallan Investments Pty Ltd 218 CLR 471, considered Williams v Turner [2008] QSC 327, followed
COUNSEL:	Mr P Travis for the plaintiff Mr S Shearer for the defendants
SOLICITORS:	Elliott May Lawyers for the plaintiff Piper Alderman for the defendants
A LYONS J:
Background