Kerry Jane Fraser v Kirsty Power - [2000] NSWSC 257

Reported Decision: [2001] Aust Contract R 90-127

New South Wales

Supreme Court

CITATION: KERRY JANE FRASER v KIRSTY POWER and ORS. [2000] NSWSC 257

CURRENT JURISDICTION: EQUITY

FILE NUMBER(S): SC 1334/1997

HEARING DATE(S): 22, 23 and 24 February 2000

JUDGMENT DATE: 6 April 2000

PARTIES :

KERRY JANE FRASER v KIRSTY POWER and ORS.

JUDGMENT OF: Simos J

COUNSEL : I.M. Wales, SC (Plaintiff - Cross-Defendant)
G.K. Burton (First and Second Defendant - Cross-Claimants)

SOLICITORS: Fox & Staniland (Plaintiff - Cross-Defendant)
Gillis Delaney Brown (First and Second Defendants - Cross-Claimants)

CATCHWORDS: Mortgage - Construction - Held, mortgage had effect only to secure repayment of debts owed jointly by husband and wife of which there were none - Rectification - Held, the first and second defendants had not established that the mortgage ought to be rectified - Guarantee - Release of Guarantor - Held, release of guarantor operated to discharge mortgagors from liability under the mortgage - Mortgage - Held, deed of variation of principal debt operated to discharge mortgagors from liability under mortgage - Unconscionable Conduct - Held, the third defendant had been guilty of unconscionable conduct with the result that the mortgage was liable to be set aside as against the third defendant - Held, further, that the mortgage was also liable to be set aside as against the first and second defendants - Contracts Review Act 1980 - Held, that the mortgage was unjust in the circumstances in which it was made within the meaning of the Contracts Review Act 1980 - Held, further, that the mortgage should be set aside as against the first and second defendants - Conveyancing Act 1919 - Section 23C(1)(b) - Held, the husband's oral declaration of trust of his one-half interest as joint tenant in the subject land in favour of the wife was valid and enforceable - Limitation Act 1969 - Held, the wife's claim to enforce the oral declaration of trust by the husband in her favour was not barred by the Act

LEGISLATION CITED: Bankruptcy Act 1966 (Cwlth)
Contracts Review Act 1980 (NSW)
Fair Trading Act 1987 (NSW)
Law Reform (Miscellaneous Provisions) Act 1965
Limitation Act 1969 (NSW)
Real Property Act 1960 (NSW)
Supreme Court Act 1970

CASES CITED: Codelfa Construction Pty. Limited v State Rail Authority of New South Wales (1981-1982) 149 CLR 337
Commercial Bank of Australia Limited v Amadio (198201983) 151 CLR 447
Con-Stan Industries of Australia Pty. Limited v Norwich Winterthur Insurance (Australia) Limited (1985-1986) 160 CLR 226
Garcia v National Australia Bank Ltd. (1998) 194 CLR 395
Last v Rosenfeld (1972) 2 NSWLR 923
Louth v Diprose (1992) 175 CLR 621
Richards v Commercial Bank of Australia (1971) 18 FLR 95
The Commonwealth v Verwayen (1989-1990) 170 CLR 394
Waltons Stores (Interstate) Limited v Maher (1987-1988) 164 CLR 387
Wratten v Hunter (1978) 2 NSWLR 367
Yerkey v Jones (1939) 63 CLR 649

DECISION: Mortgage held to secure repayment only of debts owned by husband and wife jointly of which there were none;…

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: [2000] NSWSC 257
Decision Date: 6 April 2000

CaseChat Overview and Summary

The case of Kerry Jane Fraser v Kirsty Power was heard in a court, where the primary issue was the validity and enforceability of a mortgage over certain property. The plaintiff, Kerry Jane Fraser, sought to set aside a mortgage executed by her and her husband, with the defendants being Kirsty Power and others. The dispute centred on whether the mortgage was valid, if the defendants were entitled to enforce it, and whether the plaintiff could claim an oral declaration of trust from her husband.

The court had to determine several legal issues, including whether the mortgage was validly executed and enforceable, if there was any joint debt that the mortgage secured, whether the release of a guarantor discharged the mortgagors, if the deed of variation affected the mortgage, and if the mortgage was unconscionable or unjust under the Contracts Review Act 1980. Additionally, the court examined if the husband's oral declaration of trust was valid and enforceable under the Conveyancing Act 1919 and if the wife's claim was barred by limitation.

The court found that the mortgage did not secure any joint debt, and therefore, it had no effect. It ruled that the first and second defendants had not established grounds for rectification of the mortgage. The release of the guarantor discharged the mortgagors from their liability under the mortgage, and the deed of variation operated to discharge them further. The third defendant was found to have engaged in unconscionable conduct, leading to the mortgage being set aside against them. The mortgage was also set aside against the first and second defendants due to its unjust nature under the Contracts Review Act 1980. The court held that the husband's oral declaration of trust was valid and enforceable. Lastly, the wife's claim to enforce the oral declaration of trust was not barred by the Limitation Act 1969.

The court ordered that the mortgage be set aside against all defendants, and the husband's oral declaration of trust in favour of the wife was upheld. The outcome was that the mortgage was nullified, and the wife's interest in the property was recognised.

Orders