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Verduci v Golotta

Verduci v Golotta

Case [2010] NSWSC 506 20 May 2010

Limitation Periods

Equitable Estoppel

Unconscionable Conduct

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CITATION: Verduci & Anor v Golotta [2010] NSWSC 506
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 29-30 March 2010

JUDGMENT DATE :
20 May 2010

JURISDICTION: Equity

JUDGMENT OF: Slattery J at 1

DECISION: 1. The loan agreement and the mortgage made between Mr and Mrs Verduci and Mr Graziano Golotta in February 1988 is unjust in the circumstances relating to that contract at the time it was made.
2. The relief granted however is restricted to varying the interest rate so that interest accrues under the mortgage at the rate prescribed from time to time on judgments in this Court.
3. The clause permitting the compounding of interest will be deleted as part of the relief given.
4. Parties directed to bring in short minutes of order giving effect to reasons for decision.

CATCHWORDS: EQUITY - equitable remedies - 1988 loan and mortgage transaction - interest rate 20% - no enforcement action until 2009 - mortgage registered in 2008 - borrower claims action on loan and mortgage barred by Limitation Act - alternatively borrower seeks Contracts Review Act and other equitable relief - claims undue influence - unconscionable conduct - REAL PROPERTY - Torrens Title - lender seeks to exercise the power of sale as registered mortgagee under the Real Property Act - HELD - action on loan statute barred - but lender may exercise powers conferred on registered mortgagee under Real Property Act - loan and mortgage transaction "unjust" and varied under Contracts Review Act - equitable relief granted setting aside on terms as to repayment of principal and reasonable interest

LEGISLATION CITED: Contracts Review Act 1980 (NSW) ss 7, 9
Limitation Act 1969 (NSW) ss 27, 40, 42, 43
Real Property Act 1900 (NSW) ss 58, 60, 61

CATEGORY: Principal judgment

CASES CITED: Automobile and General Finance Co Ltd v Hoskins Investments Ltd (1934) 34 SR (NSW) 375
Bainbrigge v Browne (1881) 18 Ch D 188
Baltic Shipping Co v Dillon (“the Mikhail Lermontov”) (1991) 22 NSWLR 1
Bank of New South Wales v Rogers (1941) 65 CLR 42
Barron v Willis [1902] AC 271
Beneficial Finance Corporation v Karavas (1991) 23 NSWLR 256
Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30
Breskvar v Wall (1971) 126 CLR 376
Bullock v Lloyds Bank Ltd [1955] Ch 317
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447
Commonwealth of Australia v Mewett (1997) 191 CLR 471
Cunliffe Brooks & Co v Blackburn & District Benefit Building Society (1884) 9 App Cas 857
Dilosa v Latec Finance Pty Ltd (1966) 84 WN(Pt 1)(NSW) 557
Dowsett v Reid (1912) 15 CLR 695
Frazer v Walker [1967] 1 AC 569
Gleeson v Gleeson [2002] NSWSC 418
Haywood v Roadknight [1927] VLR 512
Hraiki v Beljon [2008] NSWSC 775
Johnson v Buttress (1936) 56 CLR 113
Khan v Khan (2004) 62 NSWLR 229
Kowalczuk v Accom Finance (2008) 252 ALR 55
Langman v Handover (1929)…

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 Verduci v Golotta

Details

AGLC: Verduci v Golotta [2010] NSWSC 506
Case: [2010] NSWSC 506
Decision Date: 20 May 2010

CaseChat Overview and Summary

In the case of Verduci v Golotta, the dispute involved a 1988 loan and mortgage transaction between the parties. The interest rate on the loan was 20%, and the mortgage was registered in 2008. The borrower, Golotta, argued that any action on the loan was barred by the Limitation Act, and sought relief under the Contracts Review Act, claiming undue influence and unconscionable conduct. The lender, Verduci, sought to exercise the power of sale as the registered mortgagee under the Real Property Act.

The court needed to determine whether the lender's action on the loan was barred by the Limitation Act, and if so, whether the lender could still exercise its powers as a registered mortgagee under the Real Property Act. The court also had to consider whether the loan and mortgage transaction was "unjust" and if it could be varied under the Contracts Review Act, and whether equitable relief could be granted to set aside the transaction on terms as to repayment of the principal and reasonable interest.

The court held that the lender's action on the loan was indeed statute-barred. However, as the mortgage had been registered, the lender could still exercise the powers conferred on a registered mortgagee under the Real Property Act. The court found the loan and mortgage transaction to be "unjust" and varied it under the Contracts Review Act, setting aside the transaction on terms as to repayment of the principal and reasonable interest. Equitable relief was granted in this case.

No further orders were made beyond the variation of the loan and mortgage transaction under the Contracts Review Act, and the granting of equitable relief to set aside the transaction on terms as to repayment of the principal and reasonable interest.

Orders