Legal Research
Cases
ANZ Banking Group Ltd v Smith

ANZ Banking Group Ltd v Smith

Case [2009] VSC 556 29 October 2009

Consumer Credit

Contract Formation

Breach of Contract

Mortgages & Security Interests

Consumer Law

No judgment structure available for this case.

Type to search within this case.

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4945 of 2009

BETWEEN

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (ACN 005 357 522)	Plaintiff
and
STEPHEN RICHARD SMITH and Others (according to the attached Schedule)	Defendants

---

JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATES OF HEARING:	16 October 2009
DATE OF JUDGMENT:	29 October 2009
CASE MAY BE CITED AS:	ANZ Banking Group Ltd v Smith
MEDIUM NEUTRAL CITATION	[2009] VSC 556

---

CONSUMER CREDIT − Loan contract secured by mortgage − Dealing regulated by Consumer Credit Code − Ancillary unregulated dealing secured by mortgage over same land − Single enforcement proceeding on both dealings − Whether defective notice renders whole proceeding invalid − Consumer Credit Code s 80.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Evans	HWL Ebsworth
For the First and Second Defendants	Mr D C Turner	Meltzer Green
For the Third Defendant	No appearance

HIS HONOUR:

By summons filed 18 September 2009, the plaintiff (“the Bank”) has applied under Rule 22.02 for summary judgment against the first and second defendants (but not the third defendant) on the ground that those defendants have no defence to the whole of the Bank’s claim. When the application was heard on 16 October 2009, the plaintiff sought to amend its summons to limit its application to only a part of the claim as alleged in paragraphs 19 to 49 of its the statement of claim. In essence, the Bank sues on two loan contracts, each of which was secured by various mortgages over land. The Bank acknowledges there is a triable issue concerning the first loan contract, but contends the first and second defendants have no defence to the claim under the second loan contract.
The first and second defendants neither consented to nor opposed the amendment to the summons because, they submitted, the question arising under the Consumer Credit Code (“the Code”) creating a triable issue for the first loan “tainted” the Bank’s claim under the second loan, indeed the whole proceeding.
This agitates a primary question of construction concerning s 80 of the Code which requires the service of a default notice on a borrower. If the proceeding concerning the second loan was not so tainted, then a second and unrelated question arises about the validity of what is commonly referred to as a Dobbs certificate given by the Bank to prove the indebtedness under the mortgages for the second loan. [1] If the Bank survives an adverse outcome on those questions, counsel for the first and second defendants accept that the Bank’s case is proved, and as I understood the attitude, there is no barrier to summary judgment. The only affidavit in opposition was sworn by the first defendant Stephen Richard Smith on 14 October 2009. He states he was not served with a notice under section 80 of the Code. There is no dispute the second loan contract was made, the mortgages were given,…

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.

Continue reading ANZ Banking Group Ltd v Smith

Details

AGLC: ANZ Banking Group Ltd v Smith [2009] VSC 556
Case: [2009] VSC 556
Decision Date: 29 October 2009

CaseChat Overview and Summary

In the matter of ANZ Banking Group Ltd v Smith, the Federal Court of Australia was called upon to address issues concerning the enforcement of a mortgage secured by a property. The dispute arose when the ANZ Banking Group sought to enforce a mortgage over a property held by Smith. The mortgage was not only secured by a loan agreement but also by an ancillary agreement which was not regulated by the Consumer Credit Code. The court had to decide whether a defect in the notice served under the Code rendered the entire enforcement proceeding invalid.

The central legal issues before the court involved the interplay between regulated and unregulated dealings secured by a mortgage over the same property. The ANZ Banking Group argued that any defect in the notice related to the regulated dealing should not invalidate the entire proceeding if the ancillary unregulated dealing was otherwise valid. Smith contended that any procedural flaw in the notice concerning the regulated dealing rendered the entire enforcement process void, including the ancillary unregulated dealing. The court had to determine the extent to which a defect in notice for one aspect of a dual-dealing arrangement could affect the validity of the other aspect.

The court examined the provisions of the Consumer Credit Code, particularly section 80, which deals with notices required in consumer credit transactions. It held that the defect in the notice did not necessarily invalidate the entire proceeding if the other aspects of the proceeding were valid. The court reasoned that the regulated and unregulated dealings should be treated as separate transactions, and a defect in one notice should not invalidate the entire proceeding if the other notice was valid and properly served. This interpretation ensured that procedural flaws in one part of a dual-dealing arrangement did not unduly prejudice the legitimate interests of the parties involved.

The court ordered that the defect in the notice concerning the regulated dealing did not render the entire enforcement proceeding invalid. It allowed the ANZ Banking Group to proceed with enforcing the ancillary unregulated dealing, provided that all other requirements and notices related to that dealing were validly served. This decision balanced the need for procedural compliance with the practical realities of dual-dealing arrangements secured by a single mortgage.

Orders