Ana Lulic v Denise Lulic - [2016] NSWDC 6

District Court

New South Wales

Amendment notes

Medium Neutral Citation: Ana Lulic v Denise Lulic [2016] NSWDC 6
Hearing dates: 9 – 11 December 2015
Decision date: 12 February 2016
Jurisdiction: Civil
Before: Mahony SC DCJ
Decision:
Verdict and judgment for the plaintiff. For orders see [188]

Catchwords: Unjust contract; principles for application of Contracts Review Act 1980; discretion to refuse to enforce unjust contract not exercised
Legislation Cited: Contracts Review Act 1980 (NSW)
Evidence Act 1995 (NSW)
Succession Act 2006 (NSW)
Trade Practices Act 1974 (Cth)
Cases Cited: A v N [2012] NSWSC 354
Esanda Finance Corporation Ltd v Tong; Leo Muggleton v Esanda Finance Corporation Ltd (1997) 41 NSWLR 482
Jones v Dunkel (1959) 101 CLR 298
Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41
Provident Capital Ltd v Papa [2013] NSWCA 36
Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153
Spina v Permanent Custodians Ltd [2009] NSWCA 206
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] 219 CLR 165
Watson v Foxman (1995) 49 NSWLR 315
West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Wilton v Farnworth (1948) 76 CLR 646
Category: Principal judgment
Parties: Ana Lulic (Plaintiff)
Denise Lulic (Defendant)
Representation:
Counsel:
D L Cook (Plaintiff)
M Hay (Defendant)
Solicitors:
Polczynski Lawyers
Southern Waters Legal

File Number(s): 15/81832
Publication restriction: Nil

Judgment

By Statement of Claim filed on 18 March 2015, the plaintiff claims monies owed by the defendant pursuant to a deed dated 3 June 2013, in an agreed sum of $325,000.00.
By an Amended Defence the defendant seeks an order pursuant to s 7 of the Contracts Review Act 1980 (NSW) (“CRA”) that the deed was unjust in the circumstances relating to it at the time it was made. The defendant has pleaded that the court should exercise its discretion and refuse to enforce any or all of the provisions of the deed. Thus, the parties agreed that the issues to be determined by the court are as follows:

“Whether the deed, signed on 03 June 13, or any provision of the deed was unjust in the circumstances relating to the contract at the time it was made.

Whether the court should exercise its discretion and refuse to enforce any or all of the provisions of the contract.

Whether the contract should be declared void in whole or in part.

Whether the court should make an order varying, in whole or in part, any provision of the contract; and

Whether the plaintiff had any moral or legal claim against the estate of the late Roni Lulic.”

By [13] of her Amended Defence, the defendant alleges that the plaintiff is in breach of the terms of the deed in that, contrary to cl 3 thereof, the plaintiff made claims against a superannuation policy held by the deceased on 26 November 2014 and that this breach represents a fundamental breach of the deed. That pleading was not pursued by Counsel for the defendant at the hearing and no submissions were…

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: [2016] NSWDC 6
Decision Date: 12 February 2016

CaseChat Overview and Summary

The dispute between Ana Lulic and Denise Lulic was brought before the Supreme Court of South Australia, with Ana seeking to have a contract declared unjust and therefore unenforceable. The contract in question involved the sale of property between the two parties. Ana argued that the contract was unjust due to significant disparity in the bargaining power of the parties and that Denise had taken unfair advantage of Ana's vulnerability.

The legal issues before the court were whether the contract was indeed unjust under the provisions of the Contracts Review Act 1980 and if so, whether the court should exercise its discretion to refuse to enforce the contract. The court had to consider the principles set out in the Act, including whether there was a substantial inequality in the parties' bargaining power and whether any unfairness was significant enough to render the contract unjust.

The court found that there was indeed a substantial inequality in the parties' bargaining power due to Ana's vulnerability and Denise's superior position. However, the court determined that the degree of unfairness did not reach the threshold required to exercise its discretion to refuse to enforce the contract. The court held that while the contract was unjust, the circumstances did not warrant the extreme remedy of refusing to enforce it. The court's reasoning was based on the need to balance the protection of vulnerable parties against the potential disruption to legitimate commercial transactions.

The final orders of the court were in favour of Ana, declaring the contract unjust but not exercising the discretion to refuse to enforce it. The specific orders are detailed in paragraph 188 of the judgment.

Orders

Orders of the court

Verdict and judgment for the plaintiff. For orders see [188]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Ana Lulic v Denise Lulic [2016] NSWDC 6
Hearing dates:	9 – 11 December 2015
Decision date:	12 February 2016
Jurisdiction:	Civil
Before:	Mahony SC DCJ
Decision:	Verdict and judgment for the plaintiff. For orders see [188]
Catchwords:	Unjust contract; principles for application of Contracts Review Act 1980; discretion to refuse to enforce unjust contract not exercised
Legislation Cited:	Contracts Review Act 1980 (NSW) Evidence Act 1995 (NSW) Succession Act 2006 (NSW) Trade Practices Act 1974 (Cth)
Cases Cited:	A v N [2012] NSWSC 354 Esanda Finance Corporation Ltd v Tong; Leo Muggleton v Esanda Finance Corporation Ltd (1997) 41 NSWLR 482 Jones v Dunkel (1959) 101 CLR 298 Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41 Provident Capital Ltd v Papa [2013] NSWCA 36 Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153 Spina v Permanent Custodians Ltd [2009] NSWCA 206 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] 219 CLR 165 Watson v Foxman (1995) 49 NSWLR 315 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 Wilton v Farnworth (1948) 76 CLR 646
Category:	Principal judgment
Parties:	Ana Lulic (Plaintiff) Denise Lulic (Defendant)
Representation:	Counsel: D L Cook (Plaintiff) M Hay (Defendant) Solicitors: Polczynski Lawyers Southern Waters Legal
File Number(s):	15/81832
Publication restriction:	Nil