Fast Fix Loans Pty Ltd v Samardzic - [2011] NSWCA 260

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Fast Fix Loans Pty Ltd v Samardzic [2011] NSWCA 260
Hearing dates: 29 July 2011
Decision date: 02 September 2011
Before: Bathurst CJ at 1
Allsop P at 2
Campbell JA at 55
Decision:
Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
CONTRACT - Contracts Review Act 1980 (NSW) - "asset lending" - deed of guarantee and mortgage by parents of borrower - parents obtained no benefit from transaction - failure of lender to make enquiries concerning ability of parents to repay in event of default - fact that parents guarantors and not borrowers no bar to relief - asset lending not a term of art but an expression applied in cases where contract may be found to be unjust.
CONTRACT - unjust - Contracts Review Act 1980 (NSW) - relevant enquiry for the purposes of the Contracts Review Act, ss 7 and 9 is whether contract is unjust in all the circumstances of the case and whether it is just to grant relief - no requirement of moral obloquy on the part of the party against whom relief is sought.
Legislation Cited: Contracts Review Act 1980 (NSW) ss 7, 9, (2)(a), (b), (c), (d), (e), (f), (h), (i), (j)
Cases Cited: Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256
Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343; 77 NSWLR 205
Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; 14 BPR 26,639
Spina v Permanent Custodians Ltd [2009] NSWCA 206; 14 BPR 26,923
St George Bank Ltd v Trimarchi [2004] NSWCA 120
Category: Principal judgment
Parties: Fast Fix Loans Pty Ltd (Appellant)
Mladenko Samardzic (First Respondent)
Dragica Samardzic (Second Respondent)
Representation: M W Young (Appellant)
M B J Lee, C Cassimatis (Respondents)
Greenstein & Associates Solicitors (Appellant)
Mitry Lawyers (Respondents)

File Number(s): 2010/34211
Decision under appeal

Jurisdiction:

9111

Citation:

Fast Fix Loans Pty Limited v Mladenko Samardzic and Anor [2011] NSWSC 19

Date of Decision:

2011-02-04 00:00:00

Before:

Hoeben J

File Number(s):

2010/34211

Judgment

BATHURST CJ: For the reasons given by Allsop P, in my opinion the appeal should be dismissed with costs.

ALLSOP P: The appellant seeks to have orders made by a judge in the Possession List of the Common Law Division (Hoeben J) set aside and in their place to have an order for possession of land at Bowral owned by the respondents. The primary judge made the orders in question under the Contracts Review Act 1980 (NSW) (the "Act") in respect of a deed of loan, a deed of variation of…

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: [2011] NSWCA 260
Decision Date: 02 September 2011

CaseChat Overview and Summary

Fast Fix Loans Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge who had found a deed of guarantee and mortgage executed by the respondents, Mr and Mrs Samardzic, to be unjust and void under the Contracts Review Act 1980 (NSW). The dispute concerned a loan facility provided by Fast Fix Loans to the respondents' son, where the respondents acted as guarantors and mortgaged their home as security. The respondents received no direct benefit from the loan facility.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding the deed of guarantee and mortgage to be unjust within the meaning of the Contracts Review Act 1980 (NSW), and consequently, whether it was just to grant relief. Specifically, the court considered whether the lender's failure to make inquiries regarding the guarantors' ability to repay in the event of default, and the fact that the respondents were guarantors rather than the primary borrowers, were relevant factors in determining the contract's unjustness.

The Court of Appeal affirmed the primary judge's decision, holding that the term "asset lending" was not a term of art but an expression used in circumstances where a contract might be found to be unjust. The court reasoned that the relevant inquiry under sections 7 and 9 of the Contracts Review Act 1980 (NSW) is whether the contract is unjust in all the circumstances, and whether it is just to grant relief, without requiring proof of moral obloquy on the part of the party against whom relief is sought. The court found no error in the primary judge's assessment of the circumstances, including the lender's lack of inquiry into the guarantors' capacity to meet their obligations.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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.

Medium Neutral Citation:	Fast Fix Loans Pty Ltd v Samardzic [2011] NSWCA 260
Hearing dates:	29 July 2011
Decision date:	02 September 2011
Before:	Bathurst CJ at 1 Allsop P at 2 Campbell JA at 55
Decision:	Appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	CONTRACT - Contracts Review Act 1980 (NSW) - "asset lending" - deed of guarantee and mortgage by parents of borrower - parents obtained no benefit from transaction - failure of lender to make enquiries concerning ability of parents to repay in event of default - fact that parents guarantors and not borrowers no bar to relief - asset lending not a term of art but an expression applied in cases where contract may be found to be unjust. CONTRACT - unjust - Contracts Review Act 1980 (NSW) - relevant enquiry for the purposes of the Contracts Review Act, ss 7 and 9 is whether contract is unjust in all the circumstances of the case and whether it is just to grant relief - no requirement of moral obloquy on the part of the party against whom relief is sought.
Legislation Cited:	Contracts Review Act 1980 (NSW) ss 7, 9, (2)(a), (b), (c), (d), (e), (f), (h), (i), (j)
Cases Cited:	Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 Kowalczuk v Accom Finance Pty Ltd [2008] NSWCA 343; 77 NSWLR 205 Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; 14 BPR 26,639 Spina v Permanent Custodians Ltd [2009] NSWCA 206; 14 BPR 26,923 St George Bank Ltd v Trimarchi [2004] NSWCA 120
Category:	Principal judgment
Parties:	Fast Fix Loans Pty Ltd (Appellant) Mladenko Samardzic (First Respondent) Dragica Samardzic (Second Respondent)
Representation:	M W Young (Appellant) M B J Lee, C Cassimatis (Respondents) Greenstein & Associates Solicitors (Appellant) Mitry Lawyers (Respondents)
File Number(s):	2010/34211
Decision under appeal	Jurisdiction: 9111 Citation: Fast Fix Loans Pty Limited v Mladenko Samardzic and Anor [2011] NSWSC 19 Date of Decision: 2011-02-04 00:00:00 Before: Hoeben J File Number(s): 2010/34211