Credit Union Australia Ltd v Lyons - [2009] NSWSC 1188

CITATION: Credit Union Australia Ltd v Lyons [2009] NSWSC 1188

HEARING DATE(S): 29 October 2009

JUDGMENT DATE :
29 October 2009

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 29 October 2009

DECISION: Refer to paras 32 and 33 of judgment.

CATCHWORDS: BANKING AND FINANCE - Credit union seeks judgment for moneys advanced to customer by mistake – credit union inadvertently left line of credit account open after discharging the mortgages securing that account – first defendant liable as borrower under loan agreement – second defendant liable in restitution for moneys received from first defendant’s account - EQUITY – equitable remedies - tracing – some moneys traced to reduction of mortgage debts secured over properties – those properties charged to plaintiff to secure moneys so advanced

LEGISLATION CITED: Civil Procedure Act 2005 (NSW)

CATEGORY: Principal judgment

CASES CITED: Ilich v R (1987) 162 CLR 110
Shields v Westpac Banking Corporation [2008] NSWCA 268
Wambo Coal Pty Ltd v Stuart Karim Ariff [2007] NSWSC 589; (2007) 25 ACLC 809
Kang v Kwan [2002] NSWSC 1187
Boscawen v Bajwa [1996] 1 WLR 328

PARTIES: Plaintiff: Credit Union Australia Ltd
1st Defendant: Tanya Lynette Lyons
2nd Defendant: Wayne John Lyons

FILE NUMBER(S): SC 2746/09

COUNSEL: Plaintiff: R Harper SC
Defendants: n/a

SOLICITORS: Plaintiff: MacGillivrays Solicitors
Defendants: n/a

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Thursday, 29 October 2009

2746/09 Credit Union Australia Ltd v Tanya Lynette Lyons & Anor

JUDGMENT

1 HIS HONOUR: This is an application by a credit union for judgment for an amount of advances it has made to its customer, the first defendant, under a line of credit account, together with interest. The line of credit account was initially secured by registered mortgages, but those mortgages were discharged in 2006 when the loan was re-financed.

2 By administrative oversight the line of credit account was not closed when the mortgages were discharged. The first defendant, or the second defendant acting as her attorney, was able to draw on the account back to its original overdraft limit. It was only when that limit was again exceeded in 2008, and the plaintiff made attempts to obtain repayment, that the relevant officers then dealing with the defendants appreciated that the account had been unsecured.

3 In addition to claiming judgment against the first defendant for the amount drawn on the account and interest, the plaintiff seeks judgment against the second defendant for an amount of $81,700 withdrawn from the first defendant’s line of credit account and credited to his account with Westpac.

4 The plaintiff has also traced sums totalling $81,438 which have been applied by the defendants in reduction of a loan secured over a property at Springwood. The plaintiff has also traced sums totalling $71,880 applied by the defendants to reduce loans secured by registered mortgages over another property at Springwood and a property at Hazelbrook.

5 One of the Springwood properties has been sold. The plaintiff claims that the moneys…

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 Credit Union Australia Ltd v Lyons

Details

AGLC: Credit Union Australia Ltd v Lyons [2009] NSWSC 1188
Case: [2009] NSWSC 1188
Decision Date: 29 October 2009

CaseChat Overview and Summary

In the matter of Credit Union Australia Limited versus Lyons, the credit union sought to recover funds advanced to a customer by mistake. The credit union had inadvertently left an account with a line of credit open after discharging the mortgages that secured the account. The court was required to determine the liability of the two defendants in relation to the mistaken advances. The first defendant was liable as the borrower under the loan agreement, while the second defendant was liable in restitution for the moneys received from the first defendant’s account. The court examined the principles of equity and the doctrine of tracing to determine if any of the funds could be traced to the reduction of mortgage debts secured over properties that were charged to the credit union to secure the advances.

The court assessed whether the credit union could recover the mistaken advances under the doctrine of restitution. It considered whether the first defendant could be held liable under the loan agreement and whether the second defendant could be held liable in restitution for the moneys received from the first defendant’s account. The court also examined whether any of the funds could be traced to the reduction of mortgage debts secured over properties charged to the credit union. The court found that the credit union could recover the mistaken advances under the doctrine of restitution, and that the first defendant was liable under the loan agreement. The court also found that the second defendant was liable in restitution for the moneys received from the first defendant’s account. The court further found that some of the funds could be traced to the reduction of mortgage debts secured over properties charged to the credit union.

The court ordered that the credit union recover the mistaken advances from the first and second defendants. The court also ordered that the properties charged to the credit union be charged to secure the recovery of the mistaken advances. The court found that the credit union could trace some of the funds to the reduction of mortgage debts secured over the properties charged to the credit union. The court held that the credit union could recover the mistaken advances under the doctrine of restitution and that the first and second defendants were liable for the moneys advanced. The court ordered that the properties charged to the credit union be charged to secure the recovery of the mistaken advances.

Orders