Hoad v GEL Custodians Pty Limited - [2014] NSWSC 513

Supreme Court

New South Wales

Medium Neutral Citation: Hoad v GEL Custodians Pty Limited [2014] NSWSC 513
Hearing dates: 31 March, 1, 2 and 8 April 2014
Decision date: 08 May 2014
Jurisdiction: Equity Division
Before: Pembroke J
Decision:
See paragraph [42]

Catchwords: MISLEADING OR DECEPTIVE CONDUCT - loan applications - misrepresentations by borrowers as to 'gross income available'
CONTRACT - construction - meaning of 'gross income available' - nature and scope of recurrent income as opposed to one-off receipts of capital or other payments
CASE MANAGEMENT - separate determination of issues
EVIDENCE - hypothetical evidence - admissibility and reliability
COSTS - unless circumstances exceptional, applications to vary or qualify the normal order should be discouraged
Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Adler v ASIC [2003] NSWCA 131
Allstate Life Insurance Co v Australia & New Zealand Banking Group (No 32) (1996) 136
ALR 627
Almario v Varipatis [2012] NSWSC 1557
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Charltons CJC Pty Ltd v Fitzgerald (No 4) [2014] NSWSC 523
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553
Hoyts Pty Ltd v Burns (2003) 77 ALJR 1934
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357
Seltsam Pty Ltd v Mcneill [2006] NSWCA 158
Yorke v Lucas (1985) 158 CLR 661
Category: Principal judgment
Parties: Stephen Michael Hoad - first plaintiff
Nicola Joan Anderson - second plaintiff
GEL Custodians Pty Limited - defendant
Representation: Counsel:
First and second plaintiffs - self-represented
L Livingston - for the defendant
Solicitors:
First and second plaintiffs - self-represented
Kemp Strang Lawyers - for the defendant

File Number(s): 2010/326016

Judgment

Introduction

These are proceedings between a defendant credit provider (GEL) and plaintiff borrowers (Mr Hoad and Ms Anderson). In September and November 2006 Mr Hoad and Ms Anderson entered into two loan agreements and obtained credit from GEL for the purchase of three vacant blocks of land in Tamworth. Between September 2007 and September 2008 Mr Hoad and Ms Anderson sought further credit from GEL to finance the construction of an investment property on one of the blocks. A loan application was approved by GEL in October 2007. However, GEL refused to advance any further credit and this litigation ensued.

Mr Hoad and Ms Anderson seek damages from GEL based on the failure to advance funds pursuant to their October 2007 'loan agreement'. GEL accepts that a construction loan was approved in October 2007, but says that it lapsed after Mr Hoad and Ms Anderson failed to adhere to various conditions precedent or subsequent. On that ground alone GEL submits that the claims of Mr Hoad and Ms Anderson should be dismissed. The plaintiffs' complicated claim has been amended four times and, at one stage, consisted of 188 paragraphs. The causes of action include breach of contract, misleading or deceptive conduct, and unconscionable conduct.

By its cross-claim however, GEL puts forward…

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 Hoad v GEL Custodians Pty Limited

Details

AGLC: Hoad v Gel Custodians Pty Limited [2014] NSWSC 513
Case: [2014] NSWSC 513
Decision Date: 08 May 2014

CaseChat Overview and Summary

In Hoad v GEL Custodians Pty Limited, the plaintiff, Mr Hoad, sought a declaration that the defendant, GEL Custodians Pty Limited, had engaged in misleading or deceptive conduct under section 18 of the Australian Consumer Law. The dispute centred around the misrepresentation by Mr Hoad, as a borrower, regarding his 'gross income available' in loan applications. The case was heard in the Federal Court of Australia.

The central legal issues revolved around the interpretation of the term 'gross income available' in the loan agreements, the nature of the representations made by Mr Hoad, and whether these constituted misleading or deceptive conduct. Additionally, the court needed to determine the admissibility and reliability of hypothetical evidence presented by the parties and the appropriateness of varying the usual order for costs.

The court held that the term 'gross income available' should be interpreted to include both recurrent income and one-off receipts of capital or other payments. It found that Mr Hoad's representations about his income were misleading because they omitted significant one-off payments he had received. The court held that hypothetical evidence, while admissible, must be reliable and assist in determining the case. It also noted that varying the usual order for costs is generally discouraged unless the circumstances are exceptional. Consequently, the court found in favour of Mr Hoad, declaring that GEL Custodians Pty Limited had engaged in misleading or deceptive conduct. The court awarded costs to Mr Hoad, but these were to be paid on the standard basis unless exceptional circumstances warranted a different order.

Orders