Siwicki v NAB - [2010] VSC 547

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. SCI 2009 10500

DENISE MICHELLE SIWICKI	Plaintiff
and
NATIONAL AUSTRALIA BANK LIMITED	Defendant

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	4 October 2010
DATE OF JUDGMENT:	3 December 2010
CASE MAY BE CITED AS:	Siwicki v NAB
MEDIUM NEUTRAL CITATION:	[2010] VSC 547

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EQUITY ― Unconscionable dealing ― Duress and undue influence ― Husband and wife ― Joint borrowers and mortgagors ― Action by bank ― Solicitors ostensibly acting for borrowers ― Consent judgment from borrowers ― Alleged undue influence by husband in agreeing to consent judgment ― Separate action to set aside judgment ― Alleged absence of authority for solicitors to act for wife ― No basis for alleging actual knowledge or need for enquiry by bank ― Action unsustainable

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REASONS FOR JUDGMENT

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Harris (solicitor)	Voitin Lawyers
For the Defendant	Mr A Segal	Turks Legal

HIS HONOUR:

A bank has lent money to two couples and two associated companies. The loan was secured by a mortgage over each couple’s home, and another property bought for development. Default occurred. The bank sued. A firm of solicitors filed an appearance to the writ for all six defendants, and then a defence. Eventually, a consent judgment was filed in court in which the bank was given possession of the mortgaged properties.

One of the defendants, a married woman, seeks by a separate proceeding to set aside the judgment as it affects her home, and to set aside the mortgage. She says the transaction was unconscionable because she did not understand what she was doing and was not made aware of what was going on. And she says, she never instructed the solicitors to act for her and acted under pressure from her husband, or ignorance, in agreeing to the consent judgment. She has no basis to allege that the bank knew, or was put on inquiry about her position or the “invalidating circumstances” as the cases call it.

The facts show that the bank’s solicitors dealt with the defendant’s solicitors in the ordinary way in litigation, and had no reason to question their authority to act for all defendants. There was nothing untoward in any of the dealings leading up to the consent judgment. What is more, the bank says, not only has it acted in good faith, but there was a judgment perfected and entered, and that ought to be the end of it.

Should her case be summarily dismissed as being unsustainable?

The plaintiff is Denise Siwicki. She and her husband Richard were two of six defendants sued by the National Bank, not in this proceeding, but in an earlier proceeding in 2008.[1] They mortgaged their home in Waurn Ponds to the bank as security for a home loan of $304 000. Another couple, Zoran and Dragica Milinkovic, mortgaged their home in Geelong to the bank for a loan of $405 000.…

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: [2010] VSC 547
Decision Date: 3 December 2010

CaseChat Overview and Summary

The case involved Siwicki, a wife, and the National Australia Bank (NAB). The dispute arose when the bank sought to enforce a consent judgment against the Siwickis, which they claimed was obtained through undue influence by Siwicki's husband. The matter was heard in the Federal Court of Australia. The bank's contention was that the consent judgment was valid and enforceable, while the Siwickis argued that the judgment should be set aside due to the husband's undue influence and the absence of proper authority for the solicitors acting on their behalf.

The primary legal issue before the court was whether the consent judgment obtained by the bank against the Siwickis could be set aside due to the alleged undue influence by the husband. A secondary issue was whether the bank had actual knowledge or should have made enquiries regarding the solicitors' authority to act for the wife. The court had to determine if the bank was put on notice of any potential issues with the consent judgment and whether the Siwickis's claims had merit.

The court held that the Siwickis's action to set aside the consent judgment was unsustainable. It found that there was no evidence of actual knowledge or any reason for the bank to inquire about the solicitors' authority to act for the wife. The court emphasised that the bank was not required to delve into the internal dynamics of the Siwickis's relationship or question the validity of the consent judgment based solely on the Siwickis's later assertions of undue influence. The court concluded that the Siwickis's claims were speculative and did not provide a sufficient basis to set aside the consent judgment.

In light of the court's findings, the action by the Siwickis to set aside the consent judgment was dismissed. The court upheld the enforceability of the consent judgment and ruled in favour of the bank. The Siwickis were ordered to pay the bank's costs of the proceeding.

Orders