JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: PERMANENT MORTGAGES PTY LTD -v- VANDENBERGH [2010] WASC 10
CORAM: MURPHY J
HEARD: 18-20 AUGUST 2009 & ON THE PAPERS
DELIVERED : 29 JANUARY 2010
FILE NO/S: CIV 1074 of 2007
BETWEEN: PERMANENT MORTGAGES PTY LTD
Plaintiff
AND
JULES JOSEPH VANDENBERGH
MARIA HUBERTINA VANDENBERGH
Defendants
Catchwords:
Equity - Unconscionable conduct - Whether unconscionable for bank to enforce mortgage - Relationship of trust and confidence - Whether 'wife's special equity' applies to elderly mother
Agency - Mortgage aggregator - Whether agent's knowledge imputed to the principal - Agent to know
Indefeasibility - Fraud exception to indefeasibility - Personal equity - Registered mortgage - Joint borrowing by joint tenants
Legislation:
Bankruptcy Act 1966 (Cth), s 153
Trade Practices Act 1974 (Cth), s 51AC, s 87
Transfer of Land Act 1893 (WA), s 68, s 134
Result:
Declaration of unconscionable conduct in favour of the secondnamed defendant
Consequential relief to be subject of further submissions
Category: A
Representation:
Counsel:
Plaintiff: Mr D H Solomon
Defendants: Mr D R Williams QC & Mr A J Camp
Solicitors:
Plaintiff: Solomon Brothers
Defendants: Butcher Paull & Calder
Case(s) referred to in judgment(s):
Alderton v Prudential Assurance Co Ltd (1993) 41 FCR 435
Ardrey v Bartlett [2004] WASCA 256
ASB Bank Ltd v Harlick [1996] 1 NZLR 655
Australia & New Zealand Banking Group Ltd v Dzienciol [2001] WASC 305
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Australian Competition & Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491
Australian Competition & Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174
Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51
Australian Mutual Providence Society v Chaplin (1978) 18 ALR 385
Australian Regional Credit v Mula [2009] NSWSC 325; (2009) 14 BPR 26,779
Australian Securities & Investments Commission v National Exchange Pty Ltd (2005) 56 ACSR 131
Avon Finance Co Ltd v Bridger [1985] 2 All ER 281
Baden v Societe Generale Pour Favoriser Le Developpement du Commerce et de L'Industrie en France SA [1993] 1 WLR 509
Bahr v Nicolay (No 2) (1988) 164 CLR 604
Bainbrigge v Browne (1881) 18 Ch D 188
Baker v Monk (1864) 4 De GJ&S 388
Bank of Baroda v Shah [1988] 3 All ER 24
Bank of Credit & Commerce International SA v Aboody [1990] 1 QB 923
Bank of New South Wales v Rogers (1941) 65 CLR 42
Bank of South Australia Ltd v Ferguson [1998] HCA 12; (1998) 192 CLR 248
Barclays Bank plc v O'Brien [1994] 1 AC 180
Bar‑Mordecai v Hillston [2004] NSWCA 65
Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1
Beach Petroleum NL v Johnson (1993) 115 ALR 411
Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256
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- Case
- [2010] WASC 10
- Decision Date
CaseChat Overview and Summary
The court found that the relationship between Maria and Jules was one of trust and confidence, akin to the 'wife's special equity', which could potentially impose an equitable duty on the son to act in his mother's best interests. The court further held that the son's knowledge of the transaction could be imputed to the bank through his role as the mother's agent. The court also determined that the bank's failure to ensure proper witnessing of the statutory declaration was a significant oversight that amounted to fraud under the exception to indefeasibility. Given these findings, the court concluded that it was unconscionable for the bank to enforce the mortgage against Maria.
As a result of the court's decision, the mortgage was declared to be void against Maria Vandenbergh. The court made orders that the bank's mortgage was to be registered as a security only over the property interests of Jules Joseph Vandenbergh and not over any interest held by Maria Hubertina Vandenbergh. The bank was further ordered to pay costs associated with the proceedings.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Around this time the son was given a statutory declaration for signature by himself and the mother. The statutory declaration included statements to the effect that the son and the mother were the registered proprietors of the property. The statutory declaration included the following provisions:STATUTORY DECLARATIONWe, Jules Joseph Vandenbergh of 7/70 Chestnut Court COLLIE WA 6225 and Maria Hubertina Vandenbergh of 7/70 Chestnut Court COLLIE WA 6225 do hereby solemnly & sincerely declare as follows:1.We are, or about to be, entitled to be the registered proprietor(s) of the land known as 9/80 Mooro Drive, MOUNT CLAREMONT WA 6010 being the whole of the land comprised in Certificate of Title Volume 1885 Folio 009 which will constitute a first security for the loan from Permanent Mortgages Pty Ltd A C N 097176362. ('Bank')2.On draw‑down of the loan, the property will be free from all other encumbrances and the Bank's mortgage will constitute a first security over the property. …17.We acknowledge receipt of a copy of the Memorandum of Common Provisions. …AND WE HEREBY authorise and direct the Bank's Solicitors to deduct from the loan their disbursements and to date and complete the documents executed by me/us in relation to the loan as may be required to give effect to the agreed terms and conditions of the loan. AND WE HEREBY authorise and direct the Bank's Solicitors to date and complete the documents executed by me/us in relation to the loan as may be required to give effect to the agreed terms and conditions of the loan. The son and the mother initially signed the declaration before the sister. The son's evidence, which I accept in this regard, was as follows:In the case of the first statutory declaration, I initially took my mother to witness it before my sister. Only after we had signed we read and realised it had to be witnessed by a solicitor or someone qualified. I telephoned Butlers office and went to their offices. Consequently, on 30 December 2003, the son and the mother signed the statutory declaration before Mr Butler, the principal of Butlers, solicitors. Mr Butler also signed a certificate that day to the effect that he had witnessed the son's and the mother's execution of the security documents, and that he had identified them. In that regard he ticked the box stating that he had 'sighted driver's licence(s)', and ticked another box in which he wrote 'know as client'. He did not specify in the form who he knew as a client and who he had identified from a driver's licence. The mortgage signed by the son and the mother, and witnessed by Mr Butler that day, gave the address of each of the son and the mother as the son's address in Collie. In his evidence Mr Butler said, in effect, that from his review of the file and from his own limited involvement in his firm acting for the son in this matter, his firm was not acting for the mother in this transaction, and that neither he nor his firm ever advised the mother. In cross‑examination, Mr Butler, when asked whether there was any discussion about the mortgage assisting the son from going bankrupt, said that he had no memory of that, but that he could not say 'definitively what happened'. He also said that whilst he only had a vague recollection of this occasion, it was his standard practice to enquire of declarants whether they had read the declaration and declared it to be true to the best of their knowledge, information and belief. He said that he would not have witnessed the statutory declaration had both the mother, and the son, not responded affirmatively. I accept that evidence. I also accept that he subjectively did not see it as his firm's role to advise the mother, and that the mother did not receive any advice from him, and that there was nothing on the file to indicate she had received any advice from his firm.