Stubbings v Jams 2 Pty Ltd [2022] HCA 6

Stubbings v Jams 2 Pty Ltd [2022] HCA 6

The respondents' system of asset-based lending deliberately avoided inquiry into the borrower's or guarantor's financial circumstances in the face of obvious risk and special disadvantage, amounting to unconscionable conduct in equity and statute. Certificates of independent advice did not absolve the respondents where their agent suspected special disadvantage and was wilfully blind to it; exploitation of the appellant's vulnerability rendered enforcement unconscionable.

Parties
Appellant: Jeffrey William Stubbings; Respondents: Jams 2 Pty Ltd & Ors
Jurisdiction
Australia
Judgment Date
16 March 2022
Procedural Posture
Appeal / Final Appellate Decision From High Court of Australia
Outcome
Appeal allowed
Legal Topics
Unconscionable Conduct, Asset Based Lending, Equitable Relief, Statutory Unconscionability, Special Disadvantage, Agency, Wilful Blindness
Equity Consumer Law Banking and Finance Unconscionable Conduct Asset Based Lending Equitable Relief Statutory Unconscionability Special Disadvantage +2 more

Case Brief

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Parties

Jeffrey William Stubbings

Appellant

Jams 2 Pty Ltd & Ors

Respondents

Procedural Posture

Appeal / Final Appellate Decision From High Court of Australia

Legal Issues

  1. 1 Whether the respondents engaged in unconscionable conduct in seeking to enforce rights under loan and mortgages against a vulnerable guarantor
  2. 2 Whether the lenders' system of asset-based lending and deliberate avoidance of information about the guarantor's financial and personal circumstances amounted to statutory or equitable unconscionability
  3. 3 Whether the lenders were entitled to rely on certificates of independent legal and financial advice as sufficient to avoid the consequences of unconscionable conduct

Ratio Decidendi

The respondents' system of asset-based lending deliberately avoided inquiry into the borrower's or guarantor's financial circumstances in the face of obvious risk and special disadvantage, amounting to unconscionable conduct in equity and statute. Certificates of independent advice did not absolve the respondents where their agent suspected special disadvantage and was wilfully blind to it; exploitation of the appellant's vulnerability rendered enforcement unconscionable.

Court Disposition

Appeal allowed

Orders

  • Set aside orders 2 and 3 made on 5 August 2020 and orders 2 and 3 made on 24 August 2020 by the Court of Appeal of Victoria; in lieu, vary primary judge's orders so that their date is the date of final orders in this proceeding; appeal otherwise dismissed; appellants to pay respondent's costs of application for...