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Permanent Custodians Limited v John Nobilo

Permanent Custodians Limited v John Nobilo

Case [2012] NSWSC 109 24 February 2012

Unjust Enrichment

Unconscionable Conduct

Forgery

Evidence Law

Contract Law

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Supreme Court

New South Wales

Medium Neutral Citation: Permanent Custodians Limited v John Nobilo [2012] NSWSC 109
Hearing dates: 13 February 2012 - 16 February 2012
Decision date: 24 February 2012
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Judgment for possession of the land described in Folio Identifier [ID] of the Register known as [address].
(2) Grant leave to the plaintiff to issue a writ of possession forthwith.
(3) Judgment for the plaintiff against the first, second and third defendants in the sum of $808,046.89.
(4) Order the first, second and third defendants to pay the plaintiff's costs of the proceedings.

Catchwords: CONTRACT - unjust and unfair - relevant enquiry for the purposes of the Contracts Review Act - whether the contract is unjust in all the circumstances - whether lender made sufficient enquiries concerning ability of mortgagees to service debt - enforceability of mortgage bearing forged signatures
PRACTICE AND PROCEDURE - evidence credibility - inferences drawn from failure to call witnesses - whether a witness is in another party's camp
Legislation Cited: - Civil Procedure Act 2005
- Consumer Credit Code
- Contracts Review Act 1980
- Real Property Act 1900
Cases Cited: - Bank of Western Australia Limited v Tannous [2010] NSWSC 1319
- Breskvar v Wall (1971) 126 CLR 376
- Commercial Banking Co of Sydney Limited v Pollard [1983] 1 NSWLR 74
- Davey v Challenger Managed Investments [2003] NSWCA 172
- Fabre v Arenales (1992) 27 NSWLR 437
- Idoport Pty Limited v National Australia Bank Limited and Ors
- Jones v Dunkel inference (from the eponymous case, at (1959) 101 CLR 298
- Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559
- Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41
- Perpetual Trustees Victoria Limited v English [2010] NSWCA 32
- Perpetual Trustees Victoria Ltd v English & Anor [2009] NSWSC 47
- Provident Capital v Printy [2008] NSWCA 131
- West v AGC (Advances) Limited (1986) 5 NSWLR 610
Category: Principal judgment
Parties: Permanent Custodians Limited - Plaintiff
John Nobilo - First Defendant, First cross-claimant on the second cross-claim
Jakica Nobilo - Second Defendant, Second cross-claimant on the second cross-claim
Judy Saad - Third Defendant
Vincent Parisi - First cross-defendant on the second cross-claim
Anthony Pascale - Second cross-defendant on the second cross-claim
Representation: P Newton - Plaintiff
M Avenell - Defendants, Cross-claimants
C Colquhoun - Cross-defendants
Kemp Strang - Plaintiffs
SBA Lawyers - Defendants, Cross-claimants
Sparke Helmore - Cross-defendants

File Number(s): 2009/00297346

Judgment

Introduction

The plaintiff seeks an order for possession of the property at [address] ( the Property ), and judgment for the sum secured by a registered mortgage ( the Mortgage ) over the Property.

The first and second defendants, Mr and Mrs Nobilo, ( the defendants ) resist the plaintiff's claim on two bases: first, that they did not execute the Mortgage which is thereby ineffective to encumber the Property and secondly, that the Loan Agreement and Mortgage are unjust,…

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.

Continue reading Permanent Custodians Limited v John Nobilo

Details

AGLC: Permanent Custodians Limited v John Nobilo [2012] NSWSC 109
Case: [2012] NSWSC 109
Decision Date: 24 February 2012

CaseChat Overview and Summary

The matter before the court involved a dispute between Permanent Custodians Limited, a lender, and John Nobilo, a borrower, regarding the enforceability of a mortgage. The mortgage was executed over Nobilo's property to secure a loan, but the signatures on the mortgage appeared to be forged. Permanent Custodians sought to enforce the mortgage, arguing that despite the forgery, the contract was otherwise valid and enforceable. Nobilo contested the enforceability of the mortgage, claiming that the contract was unjust and unfair due to the lender's failure to make adequate inquiries about the mortgagees' ability to service the debt.

The court was required to determine whether the contract was unjust and unfair in all the circumstances, as per the Contracts Review Act. Additionally, the court needed to assess whether Permanent Custodians had conducted sufficient inquiries into the mortgagees' capacity to service the debt, and whether the mortgage was enforceable despite the presence of forged signatures. The court also needed to consider the credibility of evidence presented by both parties, particularly the inferences that could be drawn from the failure of either party to call specific witnesses.

In reaching its decision, the court found that the contract was unjust and unfair due to the lender's inadequate inquiries about the mortgagees' ability to service the debt. The court emphasised that lenders have a duty to ensure that borrowers can reasonably service the debt and that Permanent Custodians had not fulfilled this duty. The forged signatures on the mortgage further contributed to the contract being deemed unjust and unfair. The court also noted that the failure of Permanent Custodians to call certain witnesses could be seen as an indication of the unreliability of their case. Ultimately, the court held that the mortgage was not enforceable due to the unjust and unfair nature of the contract.

Consequently, the court ordered that the mortgage be declared unenforceable and that Permanent Custodians take no further action to enforce it. The court also directed that Nobilo be compensated for any losses incurred as a result of the lender's actions.

Orders