Perpetual Trustees Victoria Ltd v Ford

The case of Perpetual Trustees Victoria Ltd v Ford was heard in the Supreme Court of Victoria. The plaintiff, Perpetual Trustees Victoria Ltd, sought possession of land held as security for a loan provided to the defendant, Ford, who was both illiterate and intellectually disabled. The central issue before the court was whether Ford, due to his impairments, was capable of understanding the mortgage transaction and whether the contract could be deemed unjust or unconscionable under the Contracts Review Act 1980. Additionally, the court had to determine if the mortgage broker acted as an agent for the plaintiff, and if so, whether Perpetual Trustees Victoria Ltd was entitled to restitution for the moneys advanced under a mistaken belief.

The court examined whether Ford, because of his illiteracy and intellectual disability, was able to comprehend the nature and effect of the mortgage agreement. It considered whether the contract could be declared void under the doctrine of non est factum. The court also assessed if the contract constituted an unconscionable bargain, which could render it voidable under the Contracts Review Act 1980. Furthermore, the court needed to establish whether the mortgage broker acted as the plaintiff’s agent and, if so, whether the plaintiff could recover the funds advanced under a restitutionary claim despite the defendant’s non est factum defence.

In its decision, the court held that Ford, given his significant intellectual and literacy impairments, was not capable of understanding the transaction, rendering him unable to assent to the mortgage contract. Consequently, the court found that the contract was voidable due to the unconscionability stemming from Ford's disability. However, the court also determined that the mortgage broker was not acting as the plaintiff's agent. Despite the non est factum defence, the court ordered restitution for the moneys advanced, considering the circumstances to be unjust.

The court's final orders included the declaration that the mortgage contract was void due to Ford's intellectual disability, and Perpetual Trustees Victoria Ltd was ordered to refund the loan amount together with interest, reflecting the court's finding of unjust enrichment.