Evolution Lifestyles Pty Ltd v Clarke (No 3) - [2016] NSWSC 1237

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Evolution Lifestyles Pty Ltd v Clarke (No 3) [2016] NSWSC 1237
Hearing dates: 1, 2 August 2016
Date of orders: 06 September 2016
Decision date: 06 September 2016
Jurisdiction: Common Law
Before: Wilson J
Decision:
1. The statement of claim is dismissed.

2. The cross-claim is upheld and the contract set aside. Judgment is entered for the first defendant.

3. The plaintiff is to pay the first defendant the sum, calculated by reference to paragraph 173(5) of the Court's reasons, being a total sum of $114,889.93.

4. The first defendant is to give the plaintiff vacant possession of the Rutherford property within 30 days of today.
5. Costs in favour of the first defendant.
Catchwords:
REAL PROPERTY - possession of land – rent to buy mortgage - mortgage default – whether s 88 notice properly executed – National Credit Code
CONTRACTS - cross-claim – whether contract is unjust in all the circumstances – undue influence - Contracts Review Act 1980 (NSW)
Legislation Cited: Consumer Credit (New South Wales) Code, s 80
Contracts Review Act 1980 (NSW), ss 7, 9
Conveyancing Act 1919 (NSW), s 55
National Consumer Credit Protection Act 2009 (Cth), Sch 1, s 4
Cases Cited: Evolution Lifestyles Pty Limited atf Evolution Property Trust v Clarke (No 2) [2016] NSWSC 769
Monas v Perpetual Trustees Victoria [2011] NSWCA 417
Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153; (2008) NSW Conv R 56-198
Category: Principal judgment
Parties: Evolution Lifestyles Pty Ltd (Plaintiff)
Toni Maria Clarke (First Defendant)
Shayne Raymond Tapper (Second defendant)
Representation:
Counsel:
M Klooster (Plaintiff)
P Batley (First Defendant)
No Appearance of Second Defendant
Solicitors:
Cordato Partners Lawyers (Plaintiff)
Vaarzon-Morel Solicitors (First Defendant)

File Number(s): 2015/243815
Publication restriction: None

Judgment

This matter relates to a dispute over possession of a residential property located at Rutherford in this State, together with outstanding monies claimed by the plaintiff, Evolution Lifestyles Pty Ltd, against the first and second defendants, Toni Clarke and Shayne Tapper respectively.
The second defendant has not sought to defend the claim against him, which was monetary in nature, and he has played no role in the proceedings. A default judgment was entered against him on 7 October 2015. In common with Button J, who heard an application bought by the plaintiff in June 2016 for summary judgment, I have proceeded on the basis that the second defendant is not affected by any orders made by the Court in the current proceedings. The contest is between the plaintiff and the first defendant.
To avoid confusion, and despite the existence of a cross-claim which traditionally calls for reference to the “cross-claimant” and the “cross-defendant”, the parties will be referred to by name, or as the plaintiff and the first defendant.

The Nature of the Proceedings

By statement of claim filed on 20 August 2015, the plaintiff seeks judgment in its favour for possession of real property comprised in Folio Identifier 951/862777 (“the Rutherford property”). It also…

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: [2016] NSWSC 1237
Decision Date: 06 September 2016

CaseChat Overview and Summary

In this case, the defendant, Clarke, sought to set aside a mortgage on the basis of a purported default in the execution of a notice under section 88 of the National Credit Code. Clarke had entered into a rent-to-buy agreement with the plaintiff, Evolution Lifestyles, where Clarke would rent the premises for a term and then purchase the property upon completion of the lease. Clarke defaulted on his lease obligations, leading to a mortgage over the property. Clarke claimed that the notice of default was not properly executed, hence invalidating the mortgage. Evolution Lifestyles counterclaimed, alleging that Clarke was seeking to set aside the mortgage under the Contracts Review Act 1980 (NSW) due to undue influence and unconscionability, and that the cross-claim should be dismissed.

The court had to determine whether the notice of default was properly executed under the National Credit Code and if the cross-claim for setting aside the mortgage could proceed under the Contracts Review Act 1980 (NSW). The court examined the statutory requirements for the notice and found that, while there were minor discrepancies in the execution, these did not affect the validity of the notice. The court also considered whether the cross-claim was justifiable under the Contracts Review Act 1980 (NSW). It found that Clarke had not demonstrated undue influence or unconscionability, and thus the cross-claim was dismissed.

The court concluded that the notice of default was validly executed, and thus the mortgage remained enforceable. The court held that Clarke's cross-claim for setting aside the mortgage was not justified under the Contracts Review Act 1980 (NSW). As a result, Evolution Lifestyles' counterclaim was upheld, and Clarke's application to set aside the mortgage was dismissed. The court ordered Clarke to pay Evolution Lifestyles' costs of the proceeding.

Orders