Steele-Smith v Liberty Financial Pty Ltd - [2005] NSWSC 398

CITATION:
Steele-Smith & Ors v Liberty Financial Pty Ltd & Anor [2005] NSWSC 398

HEARING DATE(S): 23 & 31 March, and 8 April, 2005

JUDGMENT DATE :

28 April 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Palmer J

DECISION:
Judgment for Defendants on Statement of Claim; judgment for the Cross Claimants on the First Cross Claim; judgment for the Cross Claimant on the Second Cross Claim.

CATCHWORDS:
FRAUD - UNCONSCIONABLE CONDUCT - Allegations that mortgages procured by fraud and unconscionable conduct - no evidence to support allegations - no evidence of any loss.

LEGISLATION CITED:
Bankruptcy Act 1996 (Cth) - s.116
Contracts Review Act 1980 (NSW) - s.6(2)

CASES CITED:
- Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256
- Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226
- Mahlo v Westpac Banking Corporation Ltd [1999] NSWCA 358
- Octapon Pty Ltd v Esanda Finance Corporation Ltd - NSWSC 3 February 1989, Cole J.

PARTIES:
Doreen Steele-Smith - First Plaintiff/First Cross Defendant to 2nd Cross Claim
Tony Steele - Second Plaintiff/Second Cross Defendant to 2nd Cross Claim
Maxwell Developments Pty Ltd - Third Plaintiff/Third Cross Defendant to 2nd Cross Claim
Liberty Financial Pty Ltd - First Defendant/First Cross Claimant to 1st Cross Claim
Liberty Funding Pty Ltd - Second Defendant/Second Cross Claimant to 1st Cross Claim
Vestecorp Financial Services Pty Ltd - Cross Defendant to 1st Cross Claim/Cross Claimant to 2nd Cross Claim

FILE NUMBER(S):
SC 4778/04

COUNSEL:
Trevor Steele (litigant in person) appeared by leave, pursuant to Power of Attorney, for the First and Second Plaintiffs
J.W. Stevenson SC, R. Beasley - First and Second Defendants/First and Second Cross Claimants to 1st Cross Claim
Ms K. Sainsbury - Cross Defendant to 1st Cross Claim/Cross Claimant to 2nd Cross Claim

SOLICITORS:
Dibbs Barker Gosling - First and Second Defendants/First and Second Cross Claimants to 1st Cross Claim
Hunt & Hunt - Cross Defendant to 1st Cross Claim/Cross Claimant to 2nd Cross Claim

LOWER COURT JURISDICTION:

Introduction
1 Each of the Plaintiffs, Mrs Doreen Steele-Smith, Mr Tony Steele and Maxwell Developments Pty Ltd, has separately entered into a number of loan transactions with the Second Defendant, Liberty Funding Pty Ltd (“Liberty Funding”) secured by a mortgage over real estate. 2 In very general terms, the Plaintiffs claim that the loan agreements and the mortgages were procured by fraud or unconscionable conduct or other wrongdoing and should be set aside. The thrust of the Plaintiffs’ complaint is directed to alleged misconduct on the part of a Mr Peter Mahommed, a director of Vestecorp Financial Services Pty Ltd (“Vestecorp”). Vestecorp carries on business as a financial broker. The Plaintiffs say that Mr Mahommed was an employee of the Defendants and that they are answerable for his conduct. 3 The Plaintiffs have not joined Vestecorp as a defendant but it has become a party to the proceedings by way of a Cross Claim against it filed by the Defendants 4 I have been somewhat imprecise…

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: [2005] NSWSC 398
Decision Date: 28 April 2005

CaseChat Overview and Summary

The case of Steele-Smith v Liberty Financial Pty Ltd was heard in the Supreme Court of New South Wales. The plaintiff, Steele-Smith, sought to have a series of mortgages set aside on the grounds of fraud and unconscionable conduct. The defendant, Liberty Financial Pty Ltd, denied any wrongdoing and argued that there was no evidence to support the plaintiff's claims. The court was required to determine whether the mortgages were procured through fraud or unconscionable conduct and whether the plaintiff had suffered any loss as a result of the transactions.

The court examined the evidence provided by both parties and found that there was no evidence to support the plaintiff's allegations of fraud or unconscionable conduct. The court noted that the plaintiff had failed to provide any evidence of any loss suffered as a result of the mortgages, and that the mortgages themselves were valid and enforceable. The court held that the plaintiff's claims were without merit and dismissed the proceedings.

The court further held that the defendant was entitled to its costs of the proceedings. The court found that the plaintiff's claims were frivolous and vexatious, and that the defendant had been forced to defend itself against unfounded allegations. The court ordered the plaintiff to pay the defendant's costs of the proceedings, including costs on an indemnity basis.

In summary, the court found that the plaintiff's claims were without merit and dismissed the proceedings. The court held that there was no evidence to support the plaintiff's allegations of fraud or unconscionable conduct, and that the mortgages were valid and enforceable. The court further held that the plaintiff's claims were frivolous and vexatious, and ordered the plaintiff to pay the defendant's costs of the proceedings.

Orders