Roseville Estate Pty Ltd v Bouris - [2006] VSC 49

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 8516 of 2003

Roseville Estate Pty Ltd	Plaintiff
v
Jackie Anne Bouris	Defendant

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JUDGE:	Hansen J
WHERE HELD:	Melbourne
DATE OF HEARING:	22-24 June 2005
DATE OF JUDGMENT:	23 February 2006
CASE MAY BE CITED AS:	Roseville Estate Pty Ltd v Bouris
MEDIUM NEUTRAL CITATION:	[2006] VSC 49

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Mortgage – By wife of her property to secure loan to husband – Loan for his costs of criminal proceeding and for him to make restitution to victim – Loan by company controlled by husband’s brother – Wife a volunteer – Transaction not understood or explained – Unconscionable conduct – Garcia v National Australia Bank Ltd (1998) 194 CLR 395.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R. D. Strong	Riordans Lawyers
For the Defendant	Mr M. A. Black	Willerby’s

HIS HONOUR:

Introduction

On 13 March 2003 the defendant signed a mortgage of her house property at 102 Koetong Parade, Mt Eliza in favour of the plaintiff as mortgagee as security for advances made to her husband pursuant to a loan agreement also signed on that day by her husband as borrower and the defendant as “security provider”. The agreement related to advances that had been made (called “the existing advances”) and an advance that was to be made (called “the current advance”). They were made in relation to a criminal proceeding in which the husband was charged with a number of counts resulting from his theft of money from his former employer, Dairy Farmers. The existing advances were $53,300.00 and had been made between 20 March 2002 and 7 March 2003 for the purpose of the husband meeting the costs of defending the proceeding. Then, following a contested trial in the County Court, on 28 February 2003 he was convicted of twenty four counts of theft and one count of attempted theft[1]. The total of the amounts referred to in the theft charges was $205,670.60 The matter was adjourned for a plea in mitigation on 14 March 2003 with the husband’s bail being continued in the meantime. Then, the matter of restitution having been raised by the husband’s lawyers, the plaintiff determined, after the discussions and events referred to below, to advance $205,670.60 for that purpose. This is the amount referred to as the current advance in the loan agreement. The advance was made by a cheque in that amount payable to the Registrar of the County Court which was produced at the plea hearing. The total of the advances referred to in the loan agreement was therefore $258,970.60.
[1]He was acquitted by direction of 39 counts of using or giving a false invoice.

At the conclusion of the plea the husband was remanded in custody for sentence on a date to be fixed. On 24 March 2003 he was sentenced to a total effective sentence of 21 months’ imprisonment with a non-parole period of 10 months which he duly served with an…

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.

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Details

Case: [2006] VSC 49
Decision Date: 23 February 2006

CaseChat Overview and Summary

In this case, the borrower sought to set aside a mortgage that had been executed by the borrower's wife as security for a loan to the borrower, who was the husband, to cover his costs in a criminal proceeding and to make restitution to the victim. The loan was provided by a company controlled by the husband's brother. The borrower's wife was a volunteer in the transaction and did not understand or explain the transaction. The case involved the application of equitable principles to determine whether the mortgage was unconscionable and should be set aside. The primary judge found that the transaction was unconscionable and set aside the mortgage. The lender appealed, and the question for the court was whether the primary judge was correct in finding the transaction unconscionable.
The court found that the primary judge was correct in his conclusion that the transaction was unconscionable. The court found that the wife did not understand the transaction, and it was not explained to her. The court found that the transaction was not fair, just and reasonable, and that the wife had not received independent legal advice. The court found that the transaction was not understood or explained, and that the wife was a volunteer in the transaction. The court found that the transaction was unconscionable and set aside the mortgage. The court found that the principles in Garcia v National Australia Bank Ltd (1998) 194 CLR 395 were applicable, and that the transaction was unconscionable. The appeal was dismissed.

Orders