• Bank Wins Despite Claims of Fraud & Unconscionable Conduct

    wins recovery of possession

    Attempts by Borrowers to dodge Bank’s recovery of possession claim with an unlikely counterclaim backfires.

    In Australian and New Zealand Bank Group Ltd v Beamond & Anor [2017] QSC 208 the Supreme Court of Queensland rules in favour of Bank’s right to recovery of possession of mortgaged properties. The Court also dismisses all counterclaims submitted by Borrowers.

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  • Don’t Let Mortgage Fraud Blindside You

    mortgage fraud

    Mortgage fraud is of growing concern within the context of the Australian economy.  

    UBS, the investment bank, warns that up to a third of Australians are lying on their loan applications. Surveys conducted in 2016 and 2017 confirm this concerning trend. What can lenders do to protect their interests?

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  • Lender Gets an Enforcement Warrant Despite Delay

    enforcement warrant despite delay

    In a District Court of Queensland decision, a lender gets an enforcement warrant even though more than two years have passed since obtaining judgment for possession of the security property.

    In the recent ruling in Westpac Banking Corporation v Keppel & Anor [2017] QDC 223 the Court takes a cautionary approach. But the lender, in due course, gains the upper hand.

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  • Mortgagor Wins Right to File Cross-Claim Against Mortgagee

    to win cross-claim

    In a recent judgment of the Supreme Court of NSW a mortgagor obtains the right to file a cross-claim, but with restrictions. To pursue further claims an additional security amount is payable to the mortgagee.

    Australian Securities Ltd v Borina Pty Ltd [2017] NSWSC 1073 considers whether a mortgagor’s claims are futile and doomed to failure.

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  • Personal Property Securities Register: Perfecting Registration

    personal property securities register

    The Personal Property Securities Register (PPSR) is a national online register It protects parties purchasing personal property from either an individual or an entity. How can a lender perfect its registration so as to ensure protection?

    OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 highlights the importance of correctly registering a security interest on the Personal Property Securities Register.

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  • To Imply or Not to Imply: Examining the Duty of Good Faith

    duty of good faith

    Whether or not the elusive “duty to act in good faith” actually exists in commercial contracts is a matter of considerable debate.  The courts appear so uncertain in fact, that they explicitly accept the ambiguity and proceed “just in case” on the basis that such a duty does exist. 

    This occurred in Kosho Pty Ltd & Anor v Trilogy Funds Management Limited [2013] QSC 135. The Queensland Supreme Court acknowledged that there was little guidance around the existence and nature of a duty to act in good faith. And yet the Court proceeded on the assumption that such a duty existed regardless.

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  • Guarantees Tagged Unconscionable: What Can Lenders Do?

    unconscionable

    Claims of unconscionable conduct are a constant threat for lenders.  Lenders may feel confident that a guarantor secures the debt repayment, only to find the guarantees struck out as unconscionable. 

    Therefore, many lenders now structure their facilities to avoid guarantees by listing parties as co-borrowers.  However, a new line of cases may have extended the principles of unconscionable conduct to parties other than guarantors.

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  • Penalty Doctrine: High-Risk Loans Warrant Greater Returns

    penalty doctrine

    The penalty doctrine again came under the spotlight in Quantum Asset Management Pty Ltd v Love Properties (WA) Pty Ltd [2017].

    A 53% per annum interest rate may seem steep, but the Court declined to label it a penalty. The decision took into account the high-risk nature of the loan.

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  • Late Payment Fee Escapes the Penalty Tag

    late payment fee

    In a recent NZ Court of Appeal decision a late payment fee of over $30 million on a $37 million loan dodged the penalty tag. The Court held the fee to be proportionate to the lender’s interests and so enforceable.

    What are the effects of this key judgment? It certainly issues a warning to commercial borrowers. Escaping late payment fees may not be as simple or clear cut.

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  • Avoid Penalty Interest Rates: Pre-Paid vs Retained Interest

    pnealty interest rates

    Many lenders will be familiar with adjusting the amount of “pre-paid interest” in a loan advance to amend their LVR. And thereby manage their risk portfolio. However, in applying pre-paid interest, lenders may be exposing themselves to the age-old problem of penalty interest. 

    The New South Wales Supreme Court case of Re Funds in Court; Application of Mango Credit Pty Ltd [2016] NSWSC 199 (the Mango Credit case) provides a reminder that the courts may take any factor into account when considering whether a lender is imposing penalty interest rates – including use of pre-paid interest.

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