The Commercial Bar Association of Victoria Inc. A0120851O
Litigation resulting from a vaguely-drafted deed of loan involving distressed borrowers tasked the NSWSC with a substantial exercise in characterisation of the deed’s operative provisions, resulting in a finding of a mortgage and revisiting of modern status of clogs on equity of redemption.
A combination of years’ delay in enforcement and complex loan documentation created an evidentiary ‘perfect storm’ for the lender, which found itself saddled with documentation that did not tell a coherent story, leaving even the identity of the lender in dispute.
This recent decision illustrates how a broad approach to the slip rule allowed the bank to amend its order for possession, despite the same error appearing in the description of the security property on a notice sent under the mortgage, and also in the bank’s statement of claim.
The decision of the New South Wales Court of Appeal demonstrates how a strict approach to granting summary judgment still prevails in that jurisdiction. There is in pronounced contrast to the post – Civil Procedure Act landscape in Victoria, where novel claims (unknown to Australian law in its current state) need to be supported by compelling submissions in order to survive the ‘no real prospects of success test’.
The decision of the Victorian Court of Appeal confirms that the Banking Code obligation to exercise care skill and diligence in assessing credit can (and will often) be incorporated as a contractual term into guarantees. This finding is likely to affect lenders’ risk assessments when considering ‘riskier’ loans
The revelations in the case around FOS staffing, expertise and decision-making make for interesting reading for those involved in banking enforcement litigation and the reasons in the case provide helpful guidance on construing the TOR.
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.