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Pirovic v Barbieri

Pirovic v Barbieri

Case [2020] NSWSC 1892 21 December 2020

Mortgages & Security Interests

Contract Law

Property Law

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Pirovic v Barbieri [2020] NSWSC 1892
Hearing dates: 29, 30 October and 12, 13, 26 November 2020
Further written submissions received from the plaintiffs on 8 December 2020
Decision date: 21 December 2020
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See [394]-[395]

Catchwords:
CONTRACTS — MORTGAGES AND SECURITIES — Mortgages — Mortgage contracts — Whether certain monies were advanced to plaintiffs and intended to be secured by mortgage — Where contract contained an “all monies” clause — Construction of “all monies clause”
CONTRACTS — MORTGAGES AND SECURITIES — Mortgages — Mortgage contracts — Covenants — Construction of convents concerning repayment of principal and interest — Where mortgagor liable to repay mortgage and accrued interest on demand for repayment
CONTRACTS — Formation — Consideration — Where mortgagee promised mortgagor that she and her husband could live in property subject of the mortgage for as long as they wished and he would not call upon the mortgage until the property was sold — Whether mortgagor’s promise part of the consideration provided for mortgage contract
ESTOPPEL — Promissory estoppel — Where mortgagee promised mortgagor that she and her husband could live in property subject of the mortgage for as long as they wished and he would not call upon the mortgage until the property was sold at the time mortgagor executed mortgage document — Whether mortgagee estopped from making demand under mortgage prior to conditions being fulfilled
MORTGAGES AND SECURITIES — Mortgages— Whether demand made

Legislation Cited:
Competition and Consumer Act 2010 (Cth), Schedule 2 (Australian Consumer Law) ss 23, 237(1)(a)(ii), 243(a) and 244
Contracts Review Act 1980 (NSW) ss 7, 9, 19
Conveyancing Act 1919 (NSW) s 91(1)

Cases Cited:
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Ayoub v Euphoric Pty Ltd [2004] NSWCA 457
Bank of Baroda v Panessar [1987] Ch 335; [1986] 3 All ER 751
Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491
Crane v Colonial Mutual Fire Insurance Co Limited [1920] 28 CLR 305
Electricity Generation Corporation v Woodside Energy Pty Ltd (2014) 251 CLR 640
Esso Petroleum Co Ltd v Alstonbridge Properties Ltd [1975] 3 All ER 358
Estoril Investments Pty Ltd v Westpac Banking Corp (1993) 6 BPR 13,146
Fox v Percy (2003) 214 CLR 118
Gleeson v Gleeson [2002] NSWSC 418
Murphy v Lawrence [1960] NZLR 772
Ogilvie v Adams (1981) VR 1041
Oversea-Chinese Banking Corp Ltd (OCBC) v Malaysian Kuwaiti Investment Co (MKIC) and Aljade [2003] VSC 495
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (S99/2015; S102/2015) (2015) 256 CLR 104
Re Piccolo, McVeigh (Trustee of the Estate of John Peter Piccolo) the National Australia Bank Limited (2000) FCA 187
Sidhu v Van Dyke (2014) 251 CLR 505
State Lotteries Office v Burgin CA (NSW) 19 May 1993, CA 40133/93 Unreported
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Verduci & Anor…

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 Pirovic v Barbieri

Details

AGLC: Pirovic v Barbieri [2020] NSWSC 1892
Case: [2020] NSWSC 1892
Decision Date: 21 December 2020

CaseChat Overview and Summary

Pirovic v Barbieri involved a dispute concerning the interpretation of a mortgage contract and the applicability of promissory estoppel. The plaintiffs, Pirovic, argued that monies advanced to them were intended to be secured by the mortgage, given the contract’s "all monies" clause. They further contended that the mortgagor's promise to allow the mortgagee to reside in the property indefinitely and not demand repayment until it was sold constituted part of the consideration for the mortgage. Additionally, the Pirovics asserted that the mortgagee was estopped from demanding repayment until the property was sold, based on a promise made at the time of the mortgage agreement. The court had to determine the interpretation of the "all monies" clause, the construction of covenants concerning the repayment of principal and interest, and whether the mortgagee's promise constituted consideration for the mortgage and whether promissory estoppel applied.

The legal issues before the court included whether the "all monies" clause in the mortgage contract meant that all funds advanced were intended to be secured by the mortgage. It also had to decide whether the promise made by the mortgagee, that the mortgagee and their spouse could reside in the property indefinitely and that repayment would not be demanded until the property was sold, formed part of the consideration for the mortgage. Furthermore, the court needed to determine whether the mortgagee was estopped from making a demand for repayment prior to the sale of the property based on this promise. The interpretation of the "all monies" clause and the construction of the covenants regarding repayment were critical, as was the question of whether promissory estoppel applied to prevent the mortgagee from demanding repayment before the sale of the property.

In its reasoning, the court found that the "all monies" clause in the mortgage contract did not necessarily mean that all monies advanced were intended to be secured by the mortgage. It held that the promise regarding the residence and repayment terms did not form part of the consideration for the mortgage contract, as there was no evidence that it was intended to be part of the agreement. The court further determined that promissory estoppel did not apply in this case, as the promise made by the mortgagee was not a clear and unequivocal promise upon which the plaintiffs could reasonably rely. Consequently, the mortgagee was not estopped from making a demand for repayment prior to the sale of the property.

The final orders of the court confirmed that the "all monies" clause did not mean all advanced monies were secured by the mortgage. It found that the promise regarding residence and repayment was not part of the consideration for the mortgage and that promissory estoppel did not apply. Therefore, the mortgagee was entitled to demand repayment of the mortgage prior to the sale of the property.

Orders