Category: Banking and Finance
The decision of the High Court of Australia confirms and explains the application of the equitable doctrine of contribution between co-sureties. It provides a helpful summary of the law in respect of co-ordinate liabilities and the nature of covenants not to sue, all of which should be kept in mind by co-sureties when settling recovery proceedings brought against them by a lender.
Justice Hargrave has declined to follow the earlier decision of Justice Pagone in Solak v Bank of Western Australia Ltd  VSC 82. The cases involved the construction of a registered “all monies” mortgage which included a forged mortgage document and a forged loan agreement. Justice Hargrave followed New South Wales Court of Appeal decisions in holding that the mortgage effectively secures nothing because the underlying loan documents had been forged.
The decision of the Victorian Court of Appeal in favour of the Financial Ombudsman Service Ltd (FOS) highlights the difficulties for financial services providers in trying to challenge decisions of FOS and the dispute resolution process under the terms of reference (TOR). The TOR operate as a binding contract with a finality clause in favour of FOS’ decisions and determinations.
Co-authored by Kieran Hickie and Andrew Kirby. The decision of the Victorian Court of Appeal in favour of the NAB highlights some difficulties that might arise between lenders and recalcitrant borrowers in relation to terms of settlement for the compromise of repossession proceedings. The Court of Appeal’s decision demonstrates that borrowers who enter terms of settlement must comply with the conditions of the terms of settlement.
Co-authored by Andrew Kirby and Kieran Hickie: The Court of Appeal has affirmed the importance of solicitors acting for mortgagees to ensure payout figures and settlement instructions provided to settlement agents are accurate. Following settlements of refinancing transactions, an outgoing mortgagee will not necessarily be prevented from asserting that settlement funds are insufficient to finalise settlement. Rather, they may demand the return of a discharge of mortgage handed over at settlement on the basis the borrower has not complied with its obligation to pay out the registered mortgagee in full.
Co-authored by Andrew Kirby and Kieran Hickie: Guarantors commonly have some association or relationship with a principal debtor. If proceedings are taken against a principal debtor, but not a guarantor, resulting in a binding judgment, the Victorian Supreme Court has recently held that in subsequent proceedings against a guarantor, the guarantor is not a ‘privy’ of the principal debtor and therefore is not bound by the determination of issues in the earlier proceeding.
The Bank of Queensland (BOQ) has recently won a large class action proceeding in the New South Wales Supreme Court. The Bank successfully defended claims of misleading and deceptive conduct, unconscionable conduct and negligence brought by franchisees who claimed loss and damage caused by the failure of their franchise branches.
In a land mark judgment handed down on 5 February 2014 by the Federal Court, Gordon J held that late payment fees charged by the ANZ Bank infringed the doctrine of penalties.
This case involved enforcement of a foreign award in Australia. Orders were made in aid of enforcement to prevent dissipation of shares in Australian companies owned by the award debtors. The award debtors were not permitted to re-agitate as a ground for resisting enforcement, a ground unsuccessfully agitated by them before the court at the seat of the arbitration to set aside the award.
In this case Mr Schmidt obtained a line of credit facility from Perpetual Trustees Australia Limited (Perpetual) and gave a mortgage over his home as security for the facility. Violet Homes Pty Ltd (Violet) was the mortgage originator and manager and processed the loan application on behalf of Perpetual. Mr Schmidt borrowed the money to invest in what he thought were property developments. He was duped into doing so by Mr Maddock, who has since been convicted of fraud. Most of the money advanced by Perpetual to Mr Schmidt was paid directly or indirectly to Mr Maddocks and was lost.
Sharpe & Ors v PSAL Ltd  QCA 371 Facts The first appellant was an experienced investor and sole director of the second appellant. On 29 October 2009 the second appellant purchased a rural...
Bank of Western Australia Ltd v Abdul  VSC 222 – Justice Croft The Bank of Western Australia Ltd (Bankwest) sought to enforce a loan with the defendants Naseem Abdul (the first defendant) and...