Equititrust Ltd v Franks

Case [2009] NSWCA 128

New South Wales


Court of Appeal


CITATION: Equititrust Ltd & Anor v Franks [2009] NSWCA 128
HEARING DATE(S): 23 March 2009
 
JUDGMENT DATE: 
24 July 2009
JUDGMENT OF: Ipp JA at 1; Macfarlan JA at 2; Handley AJA at 68
DECISION: See paragraphs [66] to [67] of the judgment
CATCHWORDS: ESTOPPEL - promissory estoppel - representations by financier that would not charge interest at default rate - extent of detrimental reliance on representations by borrower - SET-OFF - set-off at law under s 21 Civil Procedure Act 2005 - no set-off where debt sought to be set-off was owed to joint but not joint and several creditor
LEGISLATION CITED: Civil Procedure Act 2005
Conveyancing Act 1919
Corporations Act 2001 (Cth)
Managed Investments Act 1998 (Cth)
Property Law Act 1974 (Qld)
Real Property Act 1900
CATEGORY: Principal judgment
CASES CITED: Bowyer v Pawson (1880-1) 6 QBD 540
Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394
Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1
CGU Insurance Limited v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1
Foran v Wright [1989] HCA 51; (1989) 168 CLR 385
Goodwin v Duggan (1996) 41 NSWLR 158
Hircock v Windsor Homes (Development No 3) Pty Ltd [1979] 1 NSWLR 501
In Re Usines De Melle's Patent [1954] HCA 32; (1954) 91 CLR
Legione v Hateley [1983] HCA 11; (1983) 152 CLR 406
Lord v Direct Acceptance Corporation (1993) 32 NSWLR 362
Roberts v Wayne Roberts Concrete Constructions Pty Ltd [2004] NSWSC 734; (2004) 208 ALR 532
Steeds v Steeds (1889) 22 QBD 537
Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418
Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387
TEXTS CITED: R P Meagher, J D Heydon, M S Leeming Meagher Gummow & Lehane's Equity: Doctrines & Remedies, 4th ed (2002) Butterworths
Ritchie's Uniform Civil Procedure NSW (LexisNexis, Butterworths)
PARTIES: Equititrust Ltd (formerly Equitiloan Ltd) (First Appellant)
Equitiloan Pty Ltd (formerly Equitiloan Securities Pty Ltd) (Second Appellant)
Phillip Maurice Franks (Respondent)
FILE NUMBER(S): CA 40193/08
COUNSEL: D J Jackson QC/M G McHugh (Appellants)
M S Willmott SC/M W Sneddon (Respondent)
SOLICITORS: Marsdens Law Group (Appellants)
Tucker & Cowen (Appellants)
DTA Lawyers Lawyers (Respondent)
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): SC 4333/00
LOWER COURT JUDICIAL OFFICER: Brereton J
LOWER COURT DATE OF DECISION: 1 February 2008 and 4 April 2008
LOWER COURT MEDIUM NEUTRAL CITATION: Franks v Equitiloan Securities Pty Ltd [2008] NSWSC 33; Franks v Equitiloan Securities Pty Ltd (No 2) [2008] NSWSC 456


IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

                          CA 40193/08
                          SC 4333/00

                          IPP JA
                          MACFARLAN JA
                          HANDLEY AJA

                          24 JULY 2009

EQUITITRUST LTD & ANOR v FRANKS
Judgment

1 IPP JA: I agree with Macfarlan JA and, save for stating that I express no view as to what Handley AJA says in [71] to [73],…

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Equititrust Ltd v Franks [2009] NSWCA 128
Case
[2009] NSWCA 128
Decision Date

CaseChat Overview and Summary

Equititrust Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a loan agreement. The dispute arose from representations made by Equititrust to the respondents, Mr and Mrs Franks, regarding the application of a default interest rate. The Franks sought to rely on these representations to resist the claim for default interest.

The Court of Appeal was required to determine whether Equititrust was estopped from claiming default interest on the loan. Specifically, the court considered the nature and extent of the detrimental reliance by the Franks on Equititrust's representations. A further issue was whether the Franks could claim a set-off at law under section 21 of the *Civil Procedure Act 2005* (NSW) against Equititrust's claim for default interest.

The Court of Appeal held that Equititrust was estopped from claiming default interest. The court found that the representations made by Equititrust, that it would not charge the default interest rate, were clear and unambiguous. The Franks had relied on these representations to their detriment by not seeking alternative finance or taking other steps to avoid the default interest. Regarding the set-off, the court determined that the debt sought to be set-off was owed to the Franks jointly, but not jointly and severally, and therefore could not be set-off against a debt owed by the Franks to Equititrust.

The appeal was dismissed, and the orders of the primary judge were affirmed.

Orders

Orders of the court

See paragraphs [66] to [67] of the judgment

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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