STATE BANK OF NSW v. HIBBERT & ALSO GROOM v. HIBBERT [2000] NSWSC 628

STATE BANK OF NSW v. HIBBERT & ALSO GROOM v. HIBBERT [2000] NSWSC 628

The Bank was not liable to Mr Hibbert and was not shown to owe the alleged duties of disclosure or care, nor to have engaged in misleading and deceptive conduct. The Garcia/Yerkey wife-surety principles were not extended to Mrs Groom's de facto relationship with Mr Hibbert, and the Bank lacked knowledge sufficient to make enforcement unconscionable in equity. However, the transaction was unjust under the Contracts Review Act 1980 because, in its factual and commercial context, it was unfeasible, repayment depended on highly favourable Rite Air outcomes, further housing finance was necessary but unavailable in practical terms, and Mrs Groom received only a small benefit while assuming a...

Jurisdiction
Australia
Judgment Date
06 July 2000
Procedural Posture
Mortgage Possession Proceedings, Cross Claims for Equitable and Statutory Relief, and Property Adjustment Claim / Judgment After Hearing; Parties to Bring in Draft Short Minutes of Orders
Outcome
Mrs Groom was granted relief under the Contracts Review Act against the Bank's mortgage over her interest and her personal guarantee obligations on terms that she pay $7,962.81; Mr Hibbert was refused relief against the Bank; Mr Hibbert was held liable to Mrs Groom for misrepresentation and indemnity, with inquiries...
Legal Topics
['guarantee and Mortgage' 'unjust Contract' 'relief Under Contracts Review Act 1980' 'garcia Principles and De Facto Relationships' 'misrepresentation' 'misleading and Deceptive Conduct' 'duty of Care' 'property Adjustment']
['equity' 'contracts' 'mortgage' 'contracts Review Act' 'de Facto Relationships'] ['guarantee and Mortgage' 'unjust Contract' 'relief Under Contracts Review Act 1980' 'garcia Principles and De Facto Relationships' 'misrepresentation' 'misleading and Deceptive Conduct' 'duty of Care' 'property Adjustment']

Case Brief

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Procedural Posture

Mortgage Possession Proceedings, Cross Claims for Equitable and Statutory Relief, and Property Adjustment Claim / Judgment After Hearing; Parties to Bring in Draft Short Minutes of Orders

Legal Issues

  1. 1 ['Whether principles applied in Garcia v. National Australia Bank Ltd were available to a person in a de facto relationship who gave a guarantee and mortgage.' 'Whether the State Bank owed duties of disclosure or care to Mr Hibbert, Vertee Pty Ltd or Mrs Groom concerning the Rite Air investment and loan transaction.' 'Whether the Bank engaged in misleading and deceptive conduct in connection with the loan and mortgage.' 'Whether Mrs Groom was entitled to equitable relief against enforcement of her guarantee and mortgage.' 'Whether the loan and mortgage transaction was an unjust contract under the Contracts Review Act 1980.' 'Whether Mr Hibbert was liable to Mrs Groom for misrepresentation and indemnity.']

Ratio Decidendi

The Bank was not liable to Mr Hibbert and was not shown to owe the alleged duties of disclosure or care, nor to have engaged in misleading and deceptive conduct. The Garcia/Yerkey wife-surety principles were not extended to Mrs Groom's de facto relationship with Mr Hibbert, and the Bank lacked knowledge sufficient to make enforcement unconscionable in equity. However, the transaction was unjust under the Contracts Review Act 1980 because, in its factual and commercial context, it was unfeasible, repayment depended on highly favourable Rite Air outcomes, further housing finance was necessary but unavailable in practical terms, and Mrs Groom received only a small benefit while assuming a...

Court Disposition

Mrs Groom was granted relief under the Contracts Review Act against the Bank's mortgage over her interest and her personal guarantee obligations on terms that she pay $7,962.81; Mr Hibbert was refused relief against the Bank; Mr Hibbert was held liable to Mrs Groom for misrepresentation and indemnity, with inquiries...

Orders

  • ['Refuse to enforce any provisions of the mortgage against Mrs Groom and against her interest in 15 Moonbie Street, Summer Hill.' "Order under para 7(1)(d) requiring execution of an instrument varying the mortgage so as to release Mrs Groom's interest from the Bank's security and terminate her personal obligations."...