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Chaudhary v Chaudhary

Chaudhary v Chaudhary

Case [2016] NSWSC 1423 6 October 2016

Unjust Enrichment

Unconscionable Conduct

Mortgages & Security Interests

Contract Formation

Property Law

Contract Law

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Supreme Court

New South Wales

Medium Neutral Citation: Chaudhary v Chaudhary [2016] NSWSC 1423
Hearing dates: 2 May – 4 May 2016
Date of orders: 06 October 2016
Decision date: 06 October 2016
Jurisdiction: Common Law
Before: Campbell J
Decision:
(1) Declare the advance of $1,200,000 from the plaintiff was a gift to the first defendant only; not a gift to the second defendant; and not a loan;
(2) Refuse the plaintiff’s claim for an order for possession;
(3) Refuse the plaintiff’s claim for an order under s 66G Conveyancing Act 1919;
(4) Under s 7(1)(d) Contracts Review Act 1980 order that the plaintiff, first defendant and, if necessary for its legal effect, the second defendant execute a discharge of mortgage registered dealing no. XXXXX XXX dated 13 December 2004;
(5) Under s 8 schedule 1 Contracts Review Act 1980 the plaintiff, first defendant and second defendant are to take all steps necessary on the part of each of them to procure the registration of the discharge of mortgage referred to in order 5 on the Register maintained under s 31B Real Property Act 1900, for the purposes of that Act;
(6) Liberty to apply for further orders or directions necessary to give effect to these orders;
(7) The plaintiff to pay the second defendant’s costs of the proceedings.

Catchwords:
REAL PROPERTY – claim for possession following default on mortgage – whether advanced sum a loan or a gift– advance from father to son to allow purchase of property – property acquired by son and then wife as co-owners – mortgage payable on demand with only son liable for the sum but both to possession – where mortgage not registered at time of purchase but many years later – demand for sum made when marriage between son and then spouse broke down – no interest or regular repayments made – whether mortgage secured anything – whether spouse’s claim to possession affected by mortgage
CONTRACTS – unjust or unfair contract – contracts review act or at equity – whether contract was unjust in the circumstances– whether co-owner suffered from a special disability when signing mortgage
Legislation Cited: Contracts Review Act 1980 (NSW), ss 7,8,9
Conveyancing Act 1919 (NSW), s 66F, 66G
De Facto Relationships Act 1984 (NSW), s 47
Family Law Act 1975 (Cth), s 90B
Property (Relationships) Act (1984) (NSW)
Real Property Act 1900 (NSW), ss 3(1), 41, 42, 57, 60
Cases Cited: Allianz Australia Insurance Limited v GSF Australia Pty Ltd (2005) 221 CLR 568
Australia and New Zealand Banking Group v Scott [1993] 6 BPR 13, 217.
Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 102 ALR 681; 30 FCR 491
Commercial Bank of Australia v Amadio (1983) 151 CLR 447
Nolan v Nolan (2003) 10 VR 627; [2003] VSC 121
Raulfs v Fishy Bite Pty Ltd [2012] NSWCA 135
Perpetual Trustee Co Limited v Khoshaba [2006] NSWCA 41
Perpetual Trustees Victoria Ltd v English [2010] NSWCA; 14 BPR 27,339
Perpetual Trustees…

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 Chaudhary v Chaudhary

Details

AGLC: Chaudhary v Chaudhary [2016] NSWSC 1423
Case: [2016] NSWSC 1423
Decision Date: 06 October 2016

CaseChat Overview and Summary

The case of Chaudhary v Chaudhary involved a dispute between a father, Chaudhary, and his son, also Chaudhary, who had purchased a property using an advance from his father. The son and his then-wife held the property as co-owners, with the mortgage payable on demand, but only the son was liable for the sum. The mortgage was not registered at the time of purchase but was registered many years later. When the marriage between the son and his wife broke down, the father demanded repayment of the sum, which had not been interest-bearing or subject to regular repayments. The son and his wife claimed the mortgage was not secured by anything and that the wife's claim to possession was unaffected by the mortgage.

The legal issues before the court included whether the sum advanced by the father was a loan or a gift, whether the mortgage was valid and enforceable, and whether the contract was unjust or unfair. The court also had to consider whether the wife's co-ownership rights were affected by the mortgage and whether the contract was subject to review under the Contracts Review Act or at equity.

The court found that the sum advanced by the father was a loan, not a gift, and that the mortgage was valid and enforceable. The court held that the mortgage was not unfair or unjust, as the son and his wife had entered into the agreement voluntarily and had not suffered from any special disability. The court also found that the wife's co-ownership rights were not affected by the mortgage, as the mortgage only imposed a liability on the son. The court dismissed the wife's claim to possession, as the mortgage was valid and enforceable, and ordered the son and his wife to repay the sum advanced by the father.

The court's final orders were that the son and his wife repay the sum advanced by the father, and that the mortgage remain registered as security for the repayment of the sum. The court also ordered the son and his wife to pay the father's legal costs.

Orders