Ciavarella v Hargraves Secured Investments Ltd

The appeal concerned an application for leave to appeal from a summary judgment for possession of farm properties and a money judgment. The respondent creditor had advanced monies to the first applicant farmer, with the second and third applicants acting as guarantors. The debt was secured by a mortgage over the properties and a charge over a water entitlement. Following the service of a s 8 notice under the *Farm Debt Mediation Act 1994* (NSW) and subsequent mediation, the parties executed a Heads of Agreement. By this agreement, the applicants acknowledged their indebtedness and released existing claims against the respondent. The respondent subsequently commenced possession proceedings, and the applicants sought to raise equitable set-offs as a defence, arguing that any such set-off would only arise if it was arguable that the Heads of Agreement and release were not binding.

The primary judge had found that there was no arguable case that the Heads of Agreement was not valid or enforceable. The central legal issues before the Court of Appeal were whether the primary judge erred in holding that it was not arguable that the Heads of Agreement should be set aside for unconscionable conduct contrary to ss 12CA or 12CB of the *Australian Securities and Investment Commission Act 2001* (Cth), or as "unjust" within the meaning of s 7 of the *Contracts Review Act 1980* (NSW).

The Court of Appeal, comprising Meagher, Leeming and Payne JJA, dismissed the applicants' summonses for leave to appeal and their notice of appeal as incompetent. The court found no error in the primary judge's determination that the applicants had not established an arguable case that the Heads of Agreement was invalid or unenforceable on the grounds of unconscionable conduct or injustice. The court also ordered the discharge of a previously granted stay order and ordered the applicants to pay the respondent's costs.