Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Bonanno v Finamore [2022] NSWCA 276 Hearing dates: 25 October 2022 Date of orders: 20 December 2022 Decision date: 20 December 2022 Before: Ward P at [1];
Macfarlan JA at [2];
Basten AJA at [55]Decision: (1) Grant leave to appeal;
(2) Dismiss the appeal with costs.
Catchwords: MORTGAGES AND SECURITIES — whether Deed recorded a transaction that was in substance a mortgage — whether obligation to transfer interest in property was a collateral advantage — unconscionability of obligation — Kreglinger (G&C) v New Patagonia Meat and Cold Storage Company Ltd [1914] AC 25 considered — Lord Parker’s three propositions
Legislation Cited: Real Property Act 1900 (NSW), s 57
Cases Cited: Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18
Epic Feast Ltd v Mawson KLM Holdings Pty Ltd (in liq) (1998) 71 SASR 161; [1998] SASC 6616
Gurfinkelv Bentley Pty Ltd (1966) 116 CLR 98; [1966] HCA 75
Handevel Pty Ltd v Comptroller of Stamps (Vic) (1985) 157 CLR 177; [1985] HCA 73
House v The King (1936) 55 CLR 499; [1936] HCA 40
Kreglinger (G & C) v New Patagonia Meat and Cold Storage Company Ltd [1914] AC 25
Lift Capital Partners Pty Ltd (in liq) v Merrill Lynch International (2009) 73 NSWLR 404; [2009] NSWSC 7
Waller v Hargraves Secured Investments Ltd (2012) 245 CLR 311; [2012] HCA 4
Westfield Holdings Ltd v Australian CapitalTelevision Pty Ltd (1992) 32 NSWLR 194
Texts Cited: B Edgeworth, Butt’sLand Law (Law Book Co, 7th ed, 2017)
JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis)
K and SF Gray, Elements of Land Law (OUP, 5th ed, 2009)
Category: Principal judgment Parties: Salvatore Antonio Bonanno (Appellant)
Nicola Finamore (First Respondent)
Weisen Zhou (Second Respondent)Representation: Counsel:
Solicitors:
G Foster (Appellant)
S Aspinall / D Woods (Respondent)
Phillip A Wilkins & Associates (Appellant)
LegalVision (Respondent)
File Number(s): 2022/186533; 2022/254111 Decision under appeal
- Court or tribunal:
- Supreme Court
- Jurisdiction:
- Equity
- Citation:
- Date of Decision:
- 1 December 2021
23 May 2022- Before:
- Robb J
- File Number(s):
- 2015/228434
HEADNOTE
[This headnote is not to be read as part of the judgment]
On 25 February 2011 Mr Nicola Finamore and Ms Weisen Zhou (the present respondents) entered into a Deed with Mr Salvatore Bonanno (the present appellant). Mr Finamore and Ms Zhou were the registered proprietors of a property that was being used as a boarding house.
The operative provisions of the Deed provided, inter alia, that in consideration of Mr Bonanno paying $130,000 to Mr Finamore and Ms Zhou, they would transfer one-third of their interest and title in the property to Mr Bonanno. The Deed also provided that, in the event the property was sold, the parties agreed that Mr Bonanno would receive $130,000 plus one-third of the remaining net proceeds of…
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- AGLC
- Bonanno v Finamore [2022] NSWCA 276
- Case
- [2022] NSWCA 276
- Decision Date
CaseChat Overview and Summary
The Court was required to determine the substantive nature of the transaction recorded in the Deed. Specifically, it had to consider whether the obligation to transfer an interest in property was an integral part of a mortgage transaction, or if it represented an unconscionable collateral advantage that could be severed from the primary obligation. The Court's analysis was guided by the principles established in *Kreglinger (G&C) v New Patagonia Meat and Cold Storage Company Ltd* [1914] AC 25, particularly Lord Parker’s three propositions concerning the nature of mortgages and collateral advantages.
The Court reasoned that the Deed did not, in substance, create a mortgage. It found that the obligation to transfer the interest in property was not a clog on the equity of redemption, nor was it an unconscionable collateral advantage. The Court applied the principles from *Kreglinger* to conclude that the transaction was not a mortgage and that the collateral obligation was valid. Consequently, the Court granted leave to appeal but dismissed the appeal with costs.
Orders
Orders of the court
(1) Grant leave to appeal;
(2) Dismiss the appeal with costs.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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