Steve Karamihos & Anor v Bendigo and Adelaide Bank Limited

[2014] HCASL 176

STEVE KARAMIHOS & ANOR

v

BENDIGO AND ADELAIDE BANK LIMITED

[2014] HCASL 176
S49/2014

1. On 1 May 2007, the applicants applied for a $1.2 million loan ("the loan") from the respondent.  The loan was approved by the respondent, and the applicants subsequently defaulted on their loan repayments. 

2. The applicants commenced proceedings in the Supreme Court of New South Wales seeking to vary the loan on the basis that it was "unjust" within the meaning of s 76 of the National Credit Code ("NCC") and s 9 of the Contracts Review Act 1980 (NSW) ("CRA"). On 8 March 2013, the primary judge (Pembroke J) upheld the applicants' claim. His Honour found that the respondent should have verified the value of the applicants' business premises before granting the loan and that the applicants could not fully comprehend the documents they signed. His Honour ordered that the loan be varied so as to reduce the applicants' indebtedness.

3. On 14 February 2014, the Court of Appeal of the Supreme Court of New South Wales (Macfarlan JA, Ward JA and Sackville AJA agreeing) allowed the respondent's appeal. Macfarlan JA decided the appeal by reference to the CRA on the footing that there was no material difference between the NCC and the CRA regarding "unjust" transactions which would assist the applicants. His Honour held that the primary judge had erred. There was insufficient evidence to support his Honour's findings of fact.

4. The applicants now seek special leave to appeal to this Court.  They do so on the ground that the Court of Appeal erred in failing to consider whether the $1.2 million loan was "unjust" under the NCC.  The application does not have sufficient prospects of success to warrant the grant of special leave.  Special leave should be refused.

5. Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs.

S.M. Kiefel
11 September 2014 P.A. Keane