Newton v Equititrust Limited

In the matter of Newton v Equititrust Limited, the dispute arose from loan agreements and a registered mortgage. Newton, as the lender, initiated proceedings against Equititrust Limited, the borrower, seeking an order for possession and a monetary order. Consent orders were subsequently made in favour of Newton based on a settlement agreement. Equititrust Limited then applied to set aside the consent orders and for leave to file an amended defence and cross-claim under the Contracts Review Act 1980. The borrower argued that there was an arguable case that she was in a position of special disadvantage at the time of the loans and that the loans amounted to asset lending. The central legal issues for the court to decide were whether Equititrust Limited had established an arguable case of unconscionability and whether the settlement agreement was "unjust" under the Act.

The court considered whether Equititrust Limited had established an arguable case of unconscionability according to general law principles. The loans were development project funds for a property redevelopment, and the court noted the borrower's special disadvantage at the time of the loans. However, the court found that while there was evidence to support the borrower's disadvantage, it did not establish a case of unconscionability in accordance with general law principles. The court determined that the settlement agreement was "unjust" under the Act, given the medical and other evidence presented. Despite this finding, the court concluded that there was no basis for setting aside the consent order under section 7 of the Act, as no arguable case of unconscionability had been established. Therefore, the application to set aside the consent orders was dismissed.

In light of the court's findings, the final orders were made. The consent orders previously entered in favour of Newton remained in place, and Equititrust Limited's application to set them aside was dismissed. The court ruled that while the settlement agreement was "unjust" under the Act, there was no arguable case of unconscionability based on the evidence presented. Consequently, the amended defence and cross-claim were not permitted, and the proceedings concluded with the original consent orders remaining effective.