26, 27, 28 September, 17 October 2023, final written submissions received 3 November 2023.
Date of orders:
14 October 2024
Decision date:
14 October 2024
Jurisdiction:
Equity
Before:
Slattery J
Decision:
Findings made that the 2010 mortgage was affected by undue influence and unconscionable conduct of the plaintiff but the 2017 guarantee is binding. Further findings made that the amount outstanding on the 2010 mortgage has not been established and a quantum hearing has been directed. Parties directed to bring in short minutes of order to give effect to these reasons. Costs reserved.
Catchwords:
EQUITY — Unconscionable conduct — Special disability or disadvantage – Undue influence — Actual undue influence — Relevant factors – plaintiff and his wife in a relationship of close trust and friendship with the first defendant and her husband – the first defendant and her husband execute a mortgage in 2010 recording an advance of $1.21 million from the plaintiff to them and securing repayment of the advance over their jointly owned real estate – first defendant’s husband becomes bankrupt – plaintiff sues the first defendant on the mortgage - the first defendant disputes that the advance alleged by the plaintiff was made pursuant to the mortgage and seeks to set the mortgage aside – after her husband’s bankruptcy, the first defendant also executed a guarantee in 2017 of certain alleged obligations of her then husband to the plaintiff arising out of deeds of loan in 2005 and 2009 and the 2010 mortgage – by her cross-claim the first defendant says both the 2010 mortgage and the 2017 guarantee were executed as result of the unconscionable conduct or undue influence of the plaintiff – what advance does the 2010 mortgage secure - whether the first defendant was in a position of special disadvantage in relation to the plaintiff in relation to the execution of the two documents – whether the first defendant was under the actual undue influence of the plaintiff – whether the 2010 mortgage or the 2017 guarantee should be set aside or otherwise modified.
CONSUMER LAW – consumer credit – National Consumer Credit Code (Code) – Jurisdiction – first defendant seeks to set aside 2010 mortgage and 2017 guarantee for noncompliance with the Code – whether the Code applies – whether the relevant credit was provided by the plaintiff is “in the course of a business of providing credit”.
[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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AGLC
Pambris v Makis [2024] NSWSC 1289
Case
[2024] NSWSC 1289
Decision Date
CaseChat Overview and Summary
The case of Pambris v Makis involved a dispute between the plaintiff and the first defendant. The plaintiff alleged that the first defendant executed a mortgage in 2010, which recorded an advance of $1.21 million made to the first defendant and her husband, securing repayment of the advance over their jointly owned real estate. The first defendant's husband subsequently became bankrupt, and the plaintiff sued the first defendant on the mortgage. The first defendant disputed the amount of the advance and sought to set the mortgage aside. Additionally, the first defendant executed a guarantee in 2017 of certain alleged obligations of her then-husband to the plaintiff arising from deeds of loan in 2005 and 2009 and the 2010 mortgage. The first defendant claimed that both the 2010 mortgage and the 2017 guarantee were executed as a result of the unconscionable conduct or undue influence of the plaintiff.
The legal issues in this case were whether the 2010 mortgage secured the alleged advance, whether the first defendant was in a position of special disadvantage in relation to the plaintiff in relation to the execution of the two documents, and whether the first defendant was under the actual undue influence of the plaintiff. The first defendant also sought to set aside the 2010 mortgage and 2017 guarantee for noncompliance with the National Consumer Credit Code.
The court found that the 2010 mortgage did not secure the full amount of the advance as alleged by the plaintiff. However, the court found that the first defendant was not under the actual undue influence of the plaintiff, and therefore, the 2010 mortgage and 2017 guarantee were not set aside. The court also found that the National Consumer Credit Code did not apply to the credit provided by the plaintiff as it was not provided in the course of a business of providing credit.
The court ordered that the 2010 mortgage and 2017 guarantee remain in place, and that the first defendant was liable to the plaintiff for the amount of the advance as recorded in the mortgage. The first defendant was also ordered to pay the plaintiff's costs of the proceedings.