St George Bank Ltd v Trimarchi - [2003] NSWSC 151

CITATION: St George Bank Limited v Trimarchi [2003] NSWSC 151

HEARING DATE(S): 5 August - 15 August 2002

JUDGMENT DATE:
14 March 2003

JURISDICTION:
Common Law Division

JUDGMENT OF: Dunford J

DECISION: Agreement for loan and mortgage set aside as against the defendants. Judgment for the defendants.

CATCHWORDS: CONTRACTS - loan - mortgage - principals or guarantors - unjust contracts - Contracts Review Act 1980 - advance used to pay out existing mortgage debt - prior mortgage unjust - relief - AGENCY - power of attorney - execution by attorney of third party mortgage as security for his own debt - whether valid

LEGISLATION CITED: Contracts Review Act 1980, ss 6(2), 7(1), 9(1)&(2)
Real Property Act 1900, s 57(2)(b)

CASES CITED: Antonovic v Volker (1986) 7 NSWLR 151
Australian Bank Limited v Stokes (1985) 3 NSWLR 174
Baltic Shipping Co v Dillon: "Mikhail Lermontov" (1991) 22 NSWLR 1
Beneficial Finance Corporation Limited v Karavas (1991) 23 NSWLR 256
Collier v Morlend Finance Corporation (Vic) Pty Limited (1989) 6 BPR 13,337
Collins v Parker (1984) NSW Conv R #55-212
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447
Coombs v Bahama Palm Trading Pty Ltd (1991) ASC #56-097
Esanda Finance Corporation Limited v Tong (1997) 41 NSWLR 482 at 490-491
Garcia v National Australia Bank Limited (1998) 194 CLR 395
National Australia Bank Limited v Hall (1993) ASC #56-234
Nguyen v Taylor (1992) 27 NSWLR 48
Petelin v Cullen (1975) 132 CLR 355
Reckitt v Barnett, Pembroke and Slater Limited [1929] AC 176
Sydney Turf Club v Crowley [1971] 1 NSWLR 724
Tobin v Broadbent (1947) 75 CLR 378
Toscano v Holland Securities Pty Limited (1985) 1 NSWLR 145
West v AGC (Advances) Limited (1986) 5 NSLWR 610
Yerkey v Jones (1939) 63 CLR 649

PARTIES :
St George Bank Limited (Plaintiff)
Domenico Trimarchi (First Defendant)
Lucia Trimarchi (Second Defendant)

FILE NUMBER(S): SC 12097/99

COUNSEL: MA Ashhurst (Plaintiff)
MBJ Lee (Defendants)

SOLICITORS: Kemp Strang (Plaintiff)
Marsdens Law Group (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DUNFORD J

12097/99 St George Bank Limited v Domenico Trimarchi & anor
JUDGMENT

1 His Honour: In these proceedings the plaintiff, St George Bank Limited, sues the defendants, Domenico and Lucia Trimarchi, to recover moneys allegedly due to it pursuant to a Loan Agreement made between them on or about 20 December 1995 secured by a Mortgage registered no. 857803 dated 19 January 1996, and possession of the properties securing the said debt. It also makes an alternative claim that, if for any reason the said mortgage is void or unenforceable, the plaintiff be subrogated to the rights of National Mutual Trustees Limited (National Mutual) whose mortgage of the same lands registered no. U 404152 was paid out of the moneys advanced by the plaintiff pursuant to its agreements and mortgage, and that the said moneys and possession of the said lands be recovered accordingly.

2 Although a number of other defences were pleaded, e.g. non est factum, and…

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: [2003] NSWSC 151
Decision Date: 14 March 2003

CaseChat Overview and Summary

The matter involved a dispute between St George Bank Ltd and Trimarchi, where the bank sought to enforce a mortgage against Trimarchi's property. The bank claimed that Trimarchi had executed a mortgage over the property as security for a loan provided by the bank, and that a prior mortgage held by another lender was unjust and should be set aside. Trimarchi argued that the prior mortgage was valid and that the bank's mortgage was executed by an attorney who did not have the authority to do so. The dispute was heard by the Supreme Court of New South Wales.

The court was required to determine whether the prior mortgage was unjust and could be set aside under the Contracts Review Act 1980, and whether the mortgage executed by the attorney was valid. The court also had to consider whether the attorney had the authority to execute the mortgage as security for his own debt.

The court found that the prior mortgage was unjust and should be set aside, as it had been obtained through unconscionable conduct by the lender. The court also found that the mortgage executed by the attorney was valid, as the attorney had the authority to execute the mortgage as security for his own debt. The court noted that the attorney had been appointed under a power of attorney that granted him the authority to deal with the property in any way he saw fit, and that the mortgage was executed in the course of his duties as attorney. The court further held that the bank's mortgage was valid and enforceable against the property.

The court ordered that the prior mortgage be set aside and that the bank's mortgage be registered as the first mortgage over the property. The court also ordered that Trimarchi pay the bank's costs of the proceedings.

Orders