RHG Mortgage Corporation Ltd v Baira; RHG Mortgage Corporation Ltd v Ianni

In the case of RHG Mortgage Corporation Ltd v Baira and RHG Mortgage Corporation Ltd v Ianni, the parties involved were the lender, RHG Mortgage Corporation Ltd, and two sets of parents who had provided guarantees and mortgages for their children's loans. The dispute centred around the possession of certain properties due to the borrowers' defaults on their loans. The matter was heard in the Supreme Court of New South Wales.

The legal issues that the court needed to address included whether the parents were kept unaware by their children of the true nature of the loans, and whether the parents' change in status from guarantors to borrowers and mortgagors was adequately explained to them. Additionally, the court had to consider the lender's failure to follow its own guidelines and the effect of this failure on the lending process. Another issue was whether the mortgage broker acted as an agent of the lender for the purposes of the Financial Transaction Act, and whether the lender had sufficient notice of the true position.

The court found that the parents were indeed kept in the dark by their children and that the change in their status was not properly explained. The court also found that the lender's failure to follow its guidelines did not affect the validity of the mortgage. Regarding the mortgage broker, the court held that the broker was not an agent of the lender for the purposes of the Financial Transaction Act. The court found that the lender did have notice of the true position. Finally, the court determined that the Jones v Dunkel inference could not be applied due to the failure of both sides to call some witnesses.

The final orders of the court were that the lender's claims against the parents for possession of the properties were dismissed. The court also held that the lender was liable to the parents for the costs of the proceedings. The court did not order any specific relief for the lender or the parents beyond these findings.