Steve Karamihos And Aristea Karamihos and Bendigo And Adelaide Bank Limited

In the Supreme Court of Victoria, Bell J considered a dispute between Steve Karamihos and Aristea Karamihos (the borrowers) and Bendigo and Adelaide Bank Limited (the bank). The borrowers sought to set aside a mortgage over their property, alleging that the bank had engaged in misleading and deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and the *Australian Securities and Investments Commission Act 2001* (Cth). They also sought to rely on the defence of unconscionability under the *Contracts Review Act 1980* (NSW), although the mortgage was governed by Victorian law.

The central legal issues before the court were whether the bank had engaged in misleading or deceptive conduct by representing that the loan facility was a "line of credit" when it was, in fact, a "term loan" with a fixed repayment schedule. The court also had to determine whether the borrowers had established a claim for unconscionable conduct, considering the circumstances surrounding the loan agreement and the borrowers' financial situation and understanding. Furthermore, the court was required to consider the applicability of the *Contracts Review Act 1980* (NSW) to a loan agreement governed by Victorian law.

Bell J found that the bank had not engaged in misleading or deceptive conduct. His Honour concluded that the term "line of credit" was used in a context that accurately reflected the nature of the facility, which allowed for redraws up to a certain limit, and that the borrowers were aware of the repayment obligations. The court also determined that the *Contracts Review Act 1980* (NSW) was not applicable as the contract was governed by Victorian law. Consequently, the borrowers' application to set aside the mortgage was dismissed.