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Suncorp-Metway Ltd v Bellairs

Suncorp-Metway Ltd v Bellairs

Case [2009] NSWSC 135 12 March 2009

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CITATION: Suncorp-Metway Ltd v Bellairs [2009] NSWSC 135

HEARING DATE(S): 4 February 2009, 5 February 2009

JUDGMENT DATE :
12 March 2009

JURISDICTION: Common Law

JUDGMENT OF: Rothman J

DECISION:
(i) Judgment for the cross-claimants/defendants on the cross-claim;
(ii) The parties are, within 14 days of the date of this judgment, to provide the Court with short minutes of order reflecting the foregoing judgment;
(iii) The possession proceedings be stayed for six months from the date hereof;
(iv) The parties have liberty to apply to the Court on the question of costs and any other consequential order, including submissions on the minutes.

CATCHWORDS: MORTGAGE – Contracts Review Act 1980 (NSW) – imposition of condition to reduce principal – knowledge of cash flow difficulties – unnecessary for protection of legitimate interests – contract unjust – remedy granted – parties to recalculate amount owing without default interest and charges

LEGISLATION CITED: Contracts Review Act 1980
Evidence Act 1995
Farm Debt Mediation Act 1994

CATEGORY: Principal judgment

CASES CITED: Arnison v Smith (1889) 41 Ch D 348
Beneficial Finance Corporation Ltd v Karavas & Ors (1991) 23 NSWLR 256
Berrigan Shire Council v Ballerini [2005] VSCA 159
Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Elkofairi v Permanent Trustee Co Ltd [2002] NSWCA 413
Hadley v Baxendale (1854) 9 Exch 341
Lawloan Mortgages Pty Ltd v Young [2008] NSWSC 1180
Laws v GWS Machinery Pty Ltd & 2 Ors; Laws v GWS Machinery Pty Ltd & Anor [2007] NSWSC 316
Municipal Officers' Association of Australia v Lancaster [1981] FCA 151; (1981) 54 FLR 129
Nguyen v Taylor (1992) 27 NSWLR 48
Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41
TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130
West v AGC (Advances) Ltd (1986) 5 NSWLR 610

PARTIES: Suncorp-Metway Ltd (Plaintiff/Cross-Defendant)
Anthony James Bellairs (First Defendant/First Cross-Claimant)
Alan Barry Pike (Second Defendant/Second Cross-Claimant)

FILE NUMBER(S): SC 14346/2007

COUNSEL: J White (Plaintiff/Cross-Defendant)
C Simpson (Defendants/Cross-Claimants)

SOLICITORS: Corrs Chambers Westgarth Lawyers (Plaintiff/Cross-Defendant)
Somerville Laundry Lomax Solicitors (Defendants/Cross-Claimants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ROTHMAN J

12 MARCH 2009

14346/07 Suncorp-Metway Ltd v Anthony James Bellairs & Anor
JUDGMENT

1 HIS HONOUR: The plaintiff, Suncorp-Metway Limited (“Suncorp”) seeks possession of property for which it is a mortgagee on account of the default of the defendants Mr Bellairs and Mr Pike. The mortgage secured a loan, originally for $535,000, which was used by the defendants to purchase the land and a business called Valleyview Nursery.

2 As the name suggests, the business was a nursery and was purchased by the defendants for $675,000. The defendants, subject to a cross-claim and/or defence under the Contracts Review Act 1980 (the Act), concede that Suncorp is entitled to the possession orders that are sought. The defence and/or cross-claim seeks relief from the orders sought by Suncorp on the ground that the loan agreement (or provisions of it), secured by the…

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.

Continue reading Suncorp-Metway Ltd v Bellairs

Details

AGLC: Suncorp-Metway Ltd v Bellairs [2009] NSWSC 135
Case: [2009] NSWSC 135
Decision Date: 12 March 2009

CaseChat Overview and Summary

The dispute in Suncorp-Metway Ltd v Bellairs involved the plaintiff, Suncorp-Metway Ltd, and the defendant, Bellairs. The plaintiff sought to enforce a mortgage that included a condition requiring the defendant to reduce the principal amount owed. Bellairs argued that this condition was unjust due to the plaintiff's knowledge of her cash flow difficulties and the lack of necessity for protecting legitimate interests. The matter was heard in the Supreme Court of New South Wales.

The central legal issues were whether the condition imposed by the plaintiff was necessary for its legitimate interests, and if the condition rendered the contract unjust. The court needed to determine if the condition was unconscionable or unjust, and whether it could be enforced under the Contracts Review Act 1980 (NSW). Additionally, the court had to consider what remedy would be appropriate if the condition was found to be unjust.

The court found that the condition imposed by the plaintiff was unnecessary for the protection of its legitimate interests, given its knowledge of Bellairs' cash flow difficulties. The court concluded that the condition was unjust and therefore unenforceable. The court granted the defendant the remedy of recalculating the amount owing without default interest and charges. The court ordered the parties to recalculate the principal amount owing, excluding the default interest and charges that were contingent upon the unjust condition.

Orders