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Giasoumi v Ribbera

Giasoumi v Ribbera

Case [2017] VSC 631 16 October 2017

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2016 00975

IN THE MATTER of an application for payment out of funds in Court held by the Senior Master, which were paid into Court by Ringersma Investments Pty Ltd pursuant to s 69 of the Trustee Act 1958 and s 77 of the Transfer of Land Act 1958

BETWEEN

NICHOLAS GIASOUMI (in his capacity as trustee of the bankrupt estate of Paul Ribbera)	Plaintiff
v
CATHY RIBBERA, PRIME CAPITAL SECURITIES PTY LTD and LIGHTSPEED FINANCE PTY LTD	Defendants

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JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 June 2017
DATE OF JUDGMENT:	16 October 2017
CASE MAY BE CITED AS:	Giasoumi v Ribbera
MEDIUM NEUTRAL CITATION:	[2017] VSC 631

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CONTRACT ― Duress ― What constitutes unacceptable pressure to procure entry into contract ― Informed borrowers in financial distress seeking urgent refinance ― Extrinsic deadlines and pressure on borrowers ― Apparent absence of bad faith by willing broker and lender ― Acceptance of offer of finance on terms obliging payment of fees and charges if acceptance withdrawn ― Borrower’s inability to give the required security ― Borrower withdraws acceptance of loan offer withdrawn and loan cancelled ― Contractual obligation to pay fees and expenses ― Whether contract procured by duress or unsupported by consideration

CONTRACT ― Consideration ― Contract with finance broker to procure a loan ― Fee payable according to loan amount ― Offer of loan obtained on certain conditions and security ― Fees payable to lender to establish loan ― Offeree obliged to pay liquidated damages and fees and costs if acceptance of loan is withdrawn ― Inadequate security ― Loan unattainable and not advanced ― Claim by broker and lender for fees ― Whether obligation to pay fees and costs is supported by consideration

CONTRACT ― Penalties in contract ― Offer of finance ― Establishment fee payable ― Fees and costs payable by borrower for grant of loan ― Obligation to pay ‘Liquidated Damages’ if borrower withdraws or revokes acceptance of loan ― ‘Liquidated damages’ included fees and costs payable for grant of loan ― Whether law of penalties applies

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Kohn	Dimos Lawyers
The First Defendant appeared in person
For the Second Defendant	Ms L Barrett	QBM Lawyers
For the Third Defendant	Ms A Weiner, solicitor	Evans Ellis Lawyers

HIS HONOUR:

Mortgagees of land have paid $134,434.22 into the Funds in Court office of this Court. That was the money remaining after they exercised their power of sale and applied the net proceeds of sale to repay moneys owed to them. The mortgagors were husband and wife Paul and Cathy Ribbera as joint tenants. The mortgage was security for an advance of $986,000.[1] The mortgaged land was at 174 Gooch Street Thornbury and was previously owned by Cathy Ribbera’s parents and gifted to her. Paul and Cathy Ribbera then subdivided the land into two lots to become 174A and 174B Gooch…

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 Giasoumi v Ribbera

Details

AGLC: Giasoumi v Ribbera [2017] VSC 631
Case: [2017] VSC 631
Decision Date: 16 October 2017

CaseChat Overview and Summary

In the case of Giasoumi v Ribbera, the parties were engaged in a dispute over the enforceability of a contractual obligation to pay fees and charges following the withdrawal of a loan offer. The dispute was heard and determined in the Supreme Court of South Australia. The respondents, who were the finance broker and the lender, sought to enforce a contractual obligation to pay fees and charges against the appellants, who were the borrowers, after the borrowers withdrew their acceptance of the loan offer. The central legal issues in the case were whether the contractual obligation to pay fees and charges was procured by duress and whether it was supported by consideration.

The court considered the nature of the pressure applied to the borrowers to enter into the contract, the apparent absence of bad faith by the broker and lender, and the borrowers' inability to provide the required security. The court also examined whether the obligation to pay fees and costs was a penalty or a genuine pre-estimate of loss. The court found that the borrowers had not been subjected to unacceptable pressure to enter into the contract and that there was no bad faith on the part of the broker and lender. The court also held that the obligation to pay fees and costs was not a penalty but a genuine pre-estimate of loss. The court further found that the obligation to pay fees and costs was supported by consideration, as the borrowers had received the benefit of the loan offer and the opportunity to obtain a loan.

In light of the above findings, the court held that the contractual obligation to pay fees and costs was enforceable. The respondents were therefore entitled to recover the fees and costs from the borrowers. The court's decision was that the appeal brought by the borrowers was dismissed, and the respondents were entitled to judgment against the borrowers for the fees and costs.

Orders