Dowdle v Pay Now for Business Pty Ltd - [2012] QSC 272

SUPREME COURT OF QUEENSLAND

CITATION:

Dowdle v Pay Now For Business Pty Ltd & Anor [2012] QSC 272

PARTIES:

DERRYN MAREE DOWDLE
(plaintiff)
v
PAY NOW FOR BUSINESS PTY LTD
(ACN 088 979 533)
(first defendant)
DONALD CUNNINGTON
(second defendant)

FILE NO:

BS4514 of 2005

DIVISION:

Trial Division

PROCEEDING:

Trial

DELIVERED ON:

13 September 2012

DELIVERED AT:

Brisbane

HEARING DATE:

14-18 May 2012

JUDGE:

Mullins J

ORDER:

Adjourn the proceeding to a date to be fixed.

CATCHWORDS:

EQUITY – GENERAL PRINCIPLES – UNDUE INFLUENCE AND DURESS – PRESUMPTION OF UNDUE INFLUENCE FROM RELATIONSHIP OF PARTIES – SPOUSES – where the plaintiff’s husband requested that she grant a mortgage over her property for a loan from the first defendant – where the first defendant sent a letter of offer to the plaintiff for the loan to her of $50,000 secured on her property – where the funds from the loan were to be used by the plaintiff’s husband – where the plaintiff accepted the letter of offer – where the first defendant decided to lend the funds direct to the husband and take a guarantee and mortgage from the plaintiff – where the husband owed an existing large debt to the first defendant – where the first defendant sent a subsequent letter of offer to the plaintiff’s husband without advising the plaintiff of the withdrawal of the offer to her – where the plaintiff signed the guarantee and mortgage that made her liable for the loan to her husband of $50,000 and his existing debt to the first defendant – where the plaintiff did not understand the purport and effect of the transaction at the time she signed the guarantee and mortgage because she believed the documents gave effect to the transaction the subject of the letter of offer sent to her – whether the principle in Yerkey v Jones (1939) 63 CLR 649 applies

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the plaintiff signed an all moneys guarantee and mortgaged her property for the loan of $50,000 to her husband – where the plaintiff signed the guarantee and mortgage believing that they were for the transaction the subject of the letter of offer of a loan to her which she had accepted and would have limited her liability to $50,000 – where the first defendant failed to advise the plaintiff of the change in the structure of the transaction – whether the failure by the first defendant to advise the plaintiff of the change in the structure of the transaction constitutes misleading and deceptive conduct

Australian Securities and Investments Commission Act 2001 (Cth), s 12CB, s 12CC, s 12DA, s 12GF
Corporations Act 2001 (Cth), s 79
Trade Practices Act 1974 (Cth), s 52

Agripay Pty Ltd v Byrne [2011] 2 Qd R 501, considered
ANZ Banking Group Ltd v Alirezai [2004] QCA 6, considered Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR…

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.

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Details

Case: [2012] QSC 272
Decision Date: 13 September 2012

CaseChat Overview and Summary

In the case of Dowdle v Pay Now for Business Pty Ltd, the plaintiff, Mrs Dowdle, sought to challenge the enforceability of a mortgage over her property and a personal guarantee she signed for a loan made to her husband by the first defendant, Pay Now for Business Pty Ltd. The dispute came before the court as Mrs Dowdle contended that the loan transaction was the result of undue influence and misleading or deceptive conduct by the lender. The initial offer for a $50,000 loan to Mrs Dowdle, secured by a mortgage on her property, was later altered to a direct loan to her husband with her serving as guarantor for both the new loan and her husband’s pre-existing debt to the lender. Mrs Dowdle claimed she was not informed of the change and signed documents under the mistaken belief that she was only guaranteeing the original transaction.

The legal issues before the court encompassed whether the relationship between Mrs Dowdle and the lender triggered a presumption of undue influence, akin to the principle established in Yerkey v Jones. Additionally, the court had to determine if the lender’s failure to inform Mrs Dowdle of the altered transaction structure constituted misleading or deceptive conduct under the Australian Consumer Law. The court's analysis involved examining the nature of the relationship between the parties, the circumstances surrounding the transaction, and the lender’s obligation to ensure transparency in the changes to the loan agreement.

The court found that the relationship between the parties, specifically the spousal relationship, did warrant a presumption of undue influence. It was held that the lender had a duty to ensure that Mrs Dowdle fully understood the transaction into which she was entering. The court concluded that the lender’s failure to inform Mrs Dowdle of the significant change in the transaction's structure amounted to misleading or deceptive conduct. As such, the court determined that the mortgage and guarantee executed by Mrs Dowdle could potentially be set aside due to the undue influence exerted and the misleading conduct of the lender.

The court adjourned the proceeding to a later date to allow for further submissions and evidence, leaving the final outcome pending further arguments and findings.

Orders

Orders of the court

Adjourn the proceeding to a date to be fixed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Dowdle v Pay Now For Business Pty Ltd & Anor [2012] QSC 272
PARTIES:	DERRYN MAREE DOWDLE (plaintiff) v PAY NOW FOR BUSINESS PTY LTD (ACN 088 979 533) (first defendant) DONALD CUNNINGTON (second defendant)
FILE NO:	BS4514 of 2005
DIVISION:	Trial Division
PROCEEDING:	Trial
DELIVERED ON:	13 September 2012
DELIVERED AT:	Brisbane
HEARING DATE:	14-18 May 2012
JUDGE:	Mullins J
ORDER:	Adjourn the proceeding to a date to be fixed.
CATCHWORDS:	EQUITY – GENERAL PRINCIPLES – UNDUE INFLUENCE AND DURESS – PRESUMPTION OF UNDUE INFLUENCE FROM RELATIONSHIP OF PARTIES – SPOUSES – where the plaintiff’s husband requested that she grant a mortgage over her property for a loan from the first defendant – where the first defendant sent a letter of offer to the plaintiff for the loan to her of $50,000 secured on her property – where the funds from the loan were to be used by the plaintiff’s husband – where the plaintiff accepted the letter of offer – where the first defendant decided to lend the funds direct to the husband and take a guarantee and mortgage from the plaintiff – where the husband owed an existing large debt to the first defendant – where the first defendant sent a subsequent letter of offer to the plaintiff’s husband without advising the plaintiff of the withdrawal of the offer to her – where the plaintiff signed the guarantee and mortgage that made her liable for the loan to her husband of $50,000 and his existing debt to the first defendant – where the plaintiff did not understand the purport and effect of the transaction at the time she signed the guarantee and mortgage because she believed the documents gave effect to the transaction the subject of the letter of offer sent to her – whether the principle in Yerkey v Jones (1939) 63 CLR 649 applies CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the plaintiff signed an all moneys guarantee and mortgaged her property for the loan of $50,000 to her husband – where the plaintiff signed the guarantee and mortgage believing that they were for the transaction the subject of the letter of offer of a loan to her which she had accepted and would have limited her liability to $50,000 – where the first defendant failed to advise the plaintiff of the change in the structure of the transaction – whether the failure by the first defendant to advise the plaintiff of the change in the structure of the transaction constitutes misleading and deceptive conduct Australian Securities and Investments Commission Act 2001 (Cth), s 12CB, s 12CC, s 12DA, s 12GF Corporations Act 2001 (Cth), s 79 Trade Practices Act 1974 (Cth), s 52 Agripay Pty Ltd v Byrne [2011] 2 Qd R 501, considered ANZ Banking Group Ltd v Alirezai [2004] QCA 6, considered Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR…