Commonwealth Bank of Australia v Shahen Serobian [2009] NSWSC 302

Commonwealth Bank of Australia v Shahen Serobian [2009] NSWSC 302

The Bank was entitled to judgment because the mortgage over the Manly property was valid; the defendants failed to prove the alleged oral representations about a 5.6% fixed rate, separation of the $2 million facility from personal liability, or return of Cranebrook and The Entrance titles; the facility documents and contemporaneous conduct contradicted those allegations; the Bank did not engage in misleading or deceptive conduct causing loss; and the guarantees were not unjust in the circumstances in which they were entered into, nor was it just to deprive the Bank of its contractual rights.

Jurisdiction
Australia
Judgment Date
24 April 2009
Procedural Posture
Bank Sues Customers for Repayment of Loan Monies Secured by Mortgage; Defendants Cross Claim for Statutory Relief Concerning Guarantees and Alleged Misleading or Deceptive Conduct / Judgment After Hearing
Outcome
Judgment for the plaintiff against the first defendant and the second defendant, jointly and severally, for $8,007,806.85; cross-claims dismissed.
Legal Topics
['repayment of Bank Facilities' 'validity of Mortgage Attestation' 'misleading or Deceptive Conduct Under S 52 of the Trade Practices Act 1974 (cth)' 'relief Under S 87 of the Trade Practices Act 1974 (cth)' 'unjust Contracts Under S 7(1) of the Contracts Review Act 1980 (nsw)' 'personal Guarantees' 'interest Rate Representations']
['banking and Finance' 'mortgages' 'trade Practices and Consumer Protection' 'contracts' 'guarantee and Indemnity'] ['repayment of Bank Facilities' 'validity of Mortgage Attestation' 'misleading or Deceptive Conduct Under S 52 of the Trade Practices Act 1974 (cth)' 'relief Under S 87 of the Trade Practices Act 1974 (cth)' 'unjust Contracts Under S 7(1) of the Contracts Review Act 1980 (nsw)' 'personal Guarantees' 'interest Rate Representations']

Case Brief

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Procedural Posture

Bank Sues Customers for Repayment of Loan Monies Secured by Mortgage; Defendants Cross Claim for Statutory Relief Concerning Guarantees and Alleged Misleading or Deceptive Conduct / Judgment After Hearing

Legal Issues

  1. 1 ["Whether the mortgage over the Manly property was void or voidable because the mortgagors' signatures were witnessed by an officer of the Bank." 'Whether the Bank represented that the $4.8 million facility would have a fixed interest rate of 5.6% for 5 years, or otherwise misled the defendants about the interest rate.' 'Whether the Bank represented that the $2 million facility was to be made available to Schypsl and kept separate from the defendants personally and their assets.' 'Whether the Bank represented that Cranebrook and The Entrance would not be taken as security and that the titles would be returned.' "Whether the defendants' guarantees and extensions of guarantee should be set aside or otherwise relieved against under the Contracts Review Act 1980 (NSW) or the Trade Practices Act 1974 (Cth)."]

Ratio Decidendi

The Bank was entitled to judgment because the mortgage over the Manly property was valid; the defendants failed to prove the alleged oral representations about a 5.6% fixed rate, separation of the $2 million facility from personal liability, or return of Cranebrook and The Entrance titles; the facility documents and contemporaneous conduct contradicted those allegations; the Bank did not engage in misleading or deceptive conduct causing loss; and the guarantees were not unjust in the circumstances in which they were entered into, nor was it just to deprive the Bank of its contractual rights.

Court Disposition

Judgment for the plaintiff against the first defendant and the second defendant, jointly and severally, for $8,007,806.85; cross-claims dismissed.

Orders

  • ['Judgment for the plaintiff against the first defendant and the second defendant, jointly and severally, in the amount of $8,007,806.85, subject to any adjustment in short minutes up to date.' 'A warrant for possession of the Manly property may be issued forthwith.' 'The cross claims are dismissed.' "The first...