Commonwealth Bank of Australia v Mastros

The case of Commonwealth Bank of Australia v Mastros involved a dispute over the possession of land and an outstanding mortgage debt. The Commonwealth Bank sought to enforce a default judgment for possession against the defendant, who argued for setting aside the default judgment under the Contracts Review Act 1980. The court was tasked with determining whether the defendant had an arguable defence under the Act and whether the mortgage and loan contract was arguably based on asset lending. The case was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the defendant had an arguable defence under the Contracts Review Act 1980 that would warrant the setting aside of the default judgment. The defendant claimed that the mortgage and loan contract was arguably based on asset lending, as the purpose of the contract was to refinance an existing loan on the property. The defendant also argued that there were disputes over the accuracy of the evidence of his annual income provided by a broker to the bank, specifically, copies of income tax returns. The defendant denied the accuracy of these returns and disputed that they were his returns. The bank, on the other hand, argued that the defendant refinanced with them due to his financial capacity and ability to service the previous loan secured on the property.

The court considered the evidence presented and found that the defendant had an arguable defence under the Contracts Review Act 1980. The court held that the mortgage and loan contract was arguably based on asset lending, as the purpose of the contract was to refinance an existing loan on the property. The court also found that the defendant had a reasonable basis for disputing the accuracy of the evidence of his annual income provided by the broker to the bank. The court held that the interests of justice required the setting aside of the default judgment due to the potential for an unwarranted benefit to the bank and the level of outstanding debt and value of the property. The court concluded that the defendant had an arguable defence under the Act, and the default judgment was set aside.

In light of the court's decision, the Commonwealth Bank of Australia was ordered to pay the costs of the defendant up to the date of the hearing. The court also directed that the matter be listed for further directions to be determined by the court. The defendant was granted leave to file an amended defence within 14 days of the date of the judgment.