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Charging Clauses Not Void for Uncertainty
Charging clauses in loan agreements and guarantees entitling a lender to call for a mortgage on terms and conditions yet to be determined are not void for uncertainty.
In GE Commercial Corporation (Australia) Pty Ltd v Future Network (Albury) Pty Ltd [2013] NSWSC 1228 the Supreme Court of New South Wales rejected a guarantor’s attempt to have a guarantee provision declared void because of uncertainty
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FOS Creates New Rights for Dispute Resolution
External Dispute Resolution bodies like the Financial Ombudsman Service (FOS) are able to create new rights between parties. By contrast, courts generally only ascertain and enforce existing rights.
In Utopia Financial Services v Financial Ombudsman Service [2012] WASC 279, the Supreme Court of Western Australia affirmed the exceedingly wide powers FOS has at its disposal to resolve disputes involving its members, even if this means creating new rights and obligations.
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Mortgagor Unlawfully Takes Possession of Security Property
What happens when a mortgagor unlawfully re-takes possession of a security property?
In J P Morgan Trust Australia Limited v Anthony Robert Bridge [2013] NSWSC 668, the Court was required to consider the rights and standing of a mortgagor who re-enters possession of a property after execution of a writ by the sheriff.
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Asset Lending Not Necessarily Prohibited By Public Policy
Public policy does not necessarily require that asset lending be prohibited, or even deterred.
In Provident Capital Ltd v Papa [2013] NSWCA 36 the New South Wales Court of Appeal found that a loan was not unconscionable simply because it was “asset lending”.
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Execution of a Writ of Possession Stayed by Supreme Court
The NSW Supreme Court exercises its discretion and stays the execution of a writ of possession.
In Secure Funding Pty Ltd v Colin West [2013] NSWSC 746 a short stay of execution was granted by the Supreme Court to allow the borrowers to make the missed payments and to provide evidence of the progress of an application for further finance. The decision demonstrates the scope of the court’s discretionary power to stay proceedings.
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Lender Fails to Insist on Independent Legal Advice
Another lender fails to insist on its borrower obtaining independent legal advice.
In Paccar Financial Pty Ltd v Menzies[2013] NSWSC 772 the critical issue before the court was whether certain loan documents had been signed and/or sufficiently explained to the borrower by the lender. None of which would have been required had the lender insisted on independent legal advice.
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All Monies Mortgages Still in Use Despite Exposing Lenders
All monies mortgages still in use despite repeated warnings about exposure to the lender.
In Hunt & Hunt Lawyers (a firm) v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10 the High Court was required to consider whether the liability for damage suffered by a lender was solely attributable to the negligent conduct of the lender’s solicitor or whether a proportion of this liability could be attributed to the fraudulent conduct of other parties.
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Mortgagee Delays in Selling Security Property Impacts Rights
Delays by the mortgagee in selling a security property may impact its rights against the borrower and guarantor.
Is a lender precluded from enforcing its rights against a guarantor if there is a period of inactivity after it takes possession of a security property? The Supreme Court of News South Wales was recently required to consider this issue in the matter of Commonwealth Bank of Australia v Thompson [2013] NSWSC 149.
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Guarantees: Must Guarantor Receive Benefit?
Guarantees – is there a requirement for a lender to ensure that a guarantor receives some form of personal benefit from the transaction? And, does a mortgagee’s failure to sell a security property at full value give rise to a caveatable interest?
The Supreme Court of New South Wales confirms that there is nothing improper in lending to an elderly borrower even in circumstances where he obtained no personal benefit from the transaction. We also revisit a decision of the Supreme Court of South Australia which considered the ability of a mortgagor to lodge a caveat to prevent the mortgagee exercising its power of sale.
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Judgment for Possession: Compromise if Mortgagee Delays?
Does a mortgagee compromise its rights under a judgment for possession if it allows the mortgagor time in which to discharge the debt rather than immediately taking possession of the mortgaged property?
In Wolfe v Permanent Custodians Limited [2012] VSC 275 the Supreme Court of Victoria dismissed several claims made by a plaintiff borrower. An agreement whereby the lender agreed to refrain from enforcing a judgment and warrant for possession over the borrower’s property in return for payment of the owed money was held to not interfere with the lender’s right to enforce a judgment and Warrant of Possession.
