McIvor v Westpac Banking Corporation

McIvor brought an action against Westpac Banking Corporation, alleging that certain guarantees and mortgages granted to the bank were procured by undue influence exercised by her son, who was both her child and a lawyer. McIvor, an elderly individual with limited formal education, claimed that her son, who was also a moneylender, exerted undue influence over her to secure the guarantees and mortgages. The primary issues before the court were whether the relationship between McIvor and her son created a presumption of undue influence, whether the bank had notice of or was on notice of potential undue influence, and whether the bank reasonably believed that the documents had been properly explained to McIvor. The court also had to determine if enforcing the guarantees and mortgages would be unconscionable.

The court examined the relationship between McIvor and her son to determine if it warranted a presumption of undue influence. Given the son's professional status as a lawyer and moneylender, and his position of trust and dependency relative to his elderly mother, the court found a relationship of influence. However, the court concluded that the bank was not on notice of undue influence due to the presence of independent solicitors' certificates and signed acknowledgements by McIvor. The court further found that the bank reasonably believed that the documents had been explained to McIvor by a competent, independent party. Consequently, the court ruled that it would not be unconscionable for the bank to enforce the guarantees and mortgages.

The court's decision resulted in a judgment for the defendant bank, with the bank also prevailing on its counterclaim against McIvor. The court ordered that the bank recover possession of the mortgaged property and that McIvor pay the bank's costs of the proceeding and counterclaim. The bank was awarded the sum of $9,542,484.09, inclusive of interest up to 14 December 2012.