Child v Commonwealth Development Bank

NEW SOUTH WALES COURT OF APPEAL

CITATION:         Child v Commonwealth Development Bank [2000]  NSWCA 256

FILE NUMBER(S):
40371/99

HEARING DATE(S):          5 September 2000

JUDGMENT DATE:           29/09/2000

PARTIES:
JAMES DAVID CHILD v
COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LIMITED

JUDGMENT OF: Handley JA Stein JA Heydon JA   

LOWER COURT JURISDICTION:    Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S):               CLD 1347/96

LOWER COURT JUDICIAL OFFICER:          Adams J

COUNSEL:
C J Leggat/J Gillespie (Appellant)
M Walton SC (Respondent)

SOLICITORS:
Webster O'Halloran & Associates (Appellant)
Abbott Tout (Respondent)

CATCHWORDS:
CONTRACTS - loan agreement - borrower mistaken as to property mortgaged - actual agreement not "radically different" to that presumed by borrower - non est factum not established - whether loan agreement harsh or unjust - whether unconscionable bargain - no error in Judge’s exercise of discretion in granting relief - Contracts Review Act 1980 (NSW) s7(1)

LEGISLATION CITED:
Contracts Review Act 1980 (NSW)
Real Property Act 1900 (NSW)
Supreme Court Act 1970 (NSW)

DECISION:
Appeal dismissed with costs

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40371/99
CLD 1347/96

HANDLEY JA

STEIN JA

HEYDON JA

29 September 2000

James David CHILD  v  COMMONWEALTH DEVELOPMENT BANK OF AUSTRALIA LIMITED

CONTRACTS - loan agreement - borrower mistaken as to property mortgaged - actual agreement not “radically different” to that presumed by borrower - non est factum not established - whether loan agreement harsh or unjust - whether unconscionable bargain - no error in Judge’s exercise of discretion in granting relief - Contracts Review Act 1980 (NSW), s 7(1)

The appellant, who owned properties “S” and “B”, applied to the respondent Bank for finance to purchase another property, “E”, offering as security his intended acquisition, “E”, in addition to his existing property “B”.  The Bank rejected the appellant’s offer of security over “E” and “B” proposing security instead over “S” and “B”.  The Bank communicated this counter-offer to the appellant by letter which enclosed an amended application for the loan and sent copies to his solicitor as well.  The appellant had only limited schooling and was not fully literate.  The loan agreement and securities were executed at the branch of the ANZ Bank, the appellant’s general bank.  Upon the appellant’s default the Bank sued to recover its debt and possession.  The trial Judge rejected the appellant’s defence of non est factum but held the contract to be unjust because the appellant was not aware that security required by the Bank had been varied to substitute “S” for “E” and the circumstances of the case required the Bank to bring that change specifically to the attention of the appellant or his solicitor.  The Judge ordered that “E” be substituted for “S” as security for the loan on the condition that the appellant grant a registered first mortgage over “E”.  The appellant challenged the Judge’s decision rejecting the defence of non est factum, argued that the remedial orders under s 7 of the Contracts Review Act failed to remedy the relevant injustice, and that the…