Mango Media Pty Ltd v Comitogianni - [2011] NSWSC 152

Supreme Court

New South Wales

Medium Neutral Citation: Mango Media Pty Ltd v Comitogianni [2011] NSWSC 152
Hearing dates: 18-22 October 2010
Decision date: 22 March 2011
Jurisdiction: Common Law
Before: Davies J
Decision:
(1) The Plaintiff is entitled to possession of the Burwood Heights property and to a judgment for the appropriate sum outstanding. (2) The Parties should bring in Short Minutes of Order to reflect these reasons.

Catchwords: CONTRACTS - unjust contracts - loan obtained by borrower to on-lend to a friend who acted as his finance broker - borrower promised $20,000 for on-lending money -borrower independently but inadequately advised - borrower signs Business Purposes Declaration - whether funds borrowed predominantly for personal, domestic or household purposes - whether on-lending was for a business or investment purpose - loan subject to Credit Code - interest rate reduced - whether finance broker exerted undue influence over borrower - whether unconscionable dealing - effect of undue influence and unconscionable dealing on lender - failure to serve s 80 notice - whether mortgage identified property charged - whether mortgage void for contravening s 40 Credit Code.
Legislation Cited: Consumer Credit (New South Wales) Special Provisions Regulation 2007
Contracts Review Act 1980
Public Trustee Act 1941 (WA)
Real Property Act 1900
Trade Practices Act 1974 (Cth)
Uniform Consumer Credit Code
Cases Cited: Bank of Baroda v Shah [1988] 3 All ER 24
Bank of Queensland Ltd v Dutta [2010] NSWSC 574
Beckley v Consumer, Trader and Tenancy Tribunal [2009] NSWSC 703
Benjamin v Ashakian [2007] NSWSC 735
Bromley v Ryan (1956) 99 CLR 362
Brott v Shtranbrandt [2009] VSC 467
Coldunell Ltd v Gallon [1986] QB 1184
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Commissioner of Taxes v The Australian Mutual Provident Society (1902) 22 NZLR 445
Cromer Excavations Pty Ltd v Cruz Concreting Services Pty Ltd [2011] NSWSC 51
In the will of Sherriff [1971] 2 NSWLR 438
Johnson v Buttress (1936) 56 CLR 113
Jonsson v Arkway Pty Ltd [2003] NSWSC 815
Linkenbolt Pty Ltd v Quirk [2000] VSC 166
Louth v Diprose (1992) 175 CLR 621
Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41
Perpetual Trustees Victoria Limited v Bianka Monas [2011] NSWSC 57
Re Fraser; Ex parte The Public Trustee as Manager of the Estate of Anne Veronica Fraser [2000] WASC 36
Shakespeare Haney Securities Ltd v Crawford [2009] QCA 85
Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040
West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Texts Cited: Meagher, Gummow and Lehane, Equity: Doctrines and Remedies, 4th ed (2002) Butterworths, Sydney
Category: Principal judgment
Parties: Mango Media Pty Ltd (Plaintiff)
Giuseppe Comitogianni (Defendant)
Representation: M W Young (Plaintiff)
D A Smallbone (Defendant)
Heidtman & Co Lawyers (Plaintiff)
Allied Lawyers (Defendant)

File Number(s): SC 2008/289595 & 2008/283681

Judgment

On 21 December 2007 Mango Media lent $250,000 to the Defendant. The money had been borrowed by the Defendant to on-lend to a friend of his, Sam Hraiki. The loan…

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] NSWSC 152
Decision Date: 22 March 2011

CaseChat Overview and Summary

Mango Media Pty Ltd, the lender, brought an action against Comitogianni, the borrower, seeking to recover moneys advanced under a loan agreement. Comitogianni borrowed the funds from Mango Media with the intention of on-lending them to a friend who acted as his finance broker. The dispute centred on whether the funds were used predominantly for personal, domestic or household purposes, or if the on-lending was for a business or investment purpose. The loan was subject to the Credit Code, and the interest rate was later reduced. The borrower signed a Business Purposes Declaration and Comitogianni independently but inadequately advised him. The lender claimed that the finance broker exerted undue influence over the borrower, resulting in unconscionable dealing. The lender also argued that the mortgage was void for contravening section 40 of the Credit Code. The court was required to determine whether the loan was for predominantly personal, domestic or household purposes, whether the finance broker exerted undue influence over the borrower, and whether unconscionable dealing occurred. The court also had to consider whether the lender's failure to serve a s 80 notice rendered the mortgage void, and whether the mortgage correctly identified the property charged.

The court found that the loan was not for predominantly personal, domestic or household purposes, and that the on-lending was for a business or investment purpose. The court held that the finance broker did not exert undue influence over the borrower, and that there was no unconscionable dealing. The court found that the lender's failure to serve a s 80 notice did not render the mortgage void, and that the mortgage correctly identified the property charged. The court held that the interest rate reduction did not affect the validity of the mortgage, and that the borrower had not been adequately advised.

The court ordered that Mango Media's claim be dismissed in its entirety, and that Comitogianni be entitled to his costs of the proceedings on an indemnity basis. The court found that the loan was not for predominantly personal, domestic or household purposes, and that the on-lending was for a business or investment purpose. The court held that the finance broker did not exert undue influence over the borrower, and that there was no unconscionable dealing. The court found that the lender's failure to serve a s 80 notice did not render the mortgage void, and that the mortgage correctly identified the property charged. The court held that the interest rate reduction did not affect the validity of the mortgage, and that the borrower had not been adequately advised. The court dismissed Mango Media's claim and ordered Comitogianni to be entitled to his costs of the proceedings on an indemnity basis.

Orders