Private Mortgages Australia Pty Limited ACN 600 628 813 as trustee for the PMA Trust v Stever

In the Supreme Court of New South Wales, Private Mortgages Australia Pty Limited, as trustee for the PMA Trust, brought an action against Stever for recovery of fees. The dispute centres on whether fees stipulated in a mortgage agreement are payable when the loan to which the fees related did not proceed. The court was also required to determine whether the fees constituted a penalty under the Contracts Review Act 1980 (NSW). The crux of the matter was the interpretation of the contractual terms and the applicability of the penalty provisions, particularly in light of the precedent set by Andrews v Australia and New Zealand Banking Group Limited. Additionally, the court considered whether the defendant, who did not read the agreement and was not a sophisticated businessperson, could be held to an unjust contract.

The court engaged in a detailed analysis of the agreement, focusing on the precise language and the obligations of the parties. It was determined that the fees were indeed payable as the loan did not proceed due to the actions of the defendant. The court found that the fees did not constitute a penalty, as they were not disproportionate to the legitimate interest of the plaintiff in the performance of the contract. The court also held that the defendant, by choosing not to read the document and not being a sophisticated businessperson, could still be held to the terms of the contract. Furthermore, the court clarified that the caveatable interest arose before the fees became due and payable, and thus the extension of the operation of the caveat was appropriate.

In light of the findings, the court ordered that the defendant pay the stipulated fees to the plaintiff. The court also extended the operation of the caveat to ensure that the plaintiff's interest was protected. This decision underscores the importance of contractual obligations and the consequences of not fulfilling them, particularly when dealing with financial agreements.