Spina v Permanent Custodians Limited [2009] NSWCA 206

Spina v Permanent Custodians Limited [2009] NSWCA 206

The loan agreement and mortgage were unjust as against Angelina Spina because the respondent, through its lending process and solicitors, proceeded with a transaction by which an 86-year-old retired woman put her only substantial asset and apparent home at risk for the benefit of her son, without obtaining evidence that she personally received independent legal advice, without properly considering her ability to service the loan if Michael ceased doing so, and in circumstances involving significant departures from the lender's own guidelines. The appropriate relief was to declare and vary the loan agreement and mortgage as against Angelina so that her liability was confined principally to...

Jurisdiction
Australia
Judgment Date
22 July 2009
Procedural Posture
Appeal in Proceedings Seeking Relief Concerning a Loan Agreement and Mortgage Under the Contracts Review Act 1980 and Unconscionability Principles / Appeal From Hammerschlag J in the Supreme Court of New South Wales, Equity Division, Dismissing the Claim
Outcome
Appeal allowed with costs, subject to the respondent's costs thrown away by amendment of the notice of appeal; orders below set aside and relief granted under the Contracts Review Act.
Legal Topics
['contracts Review Act 1980' 'unjust Contracts' 'unconscionability' 'mortgage Lending' 'asset Lending' 'independent Legal Advice' 'power of Attorney' 'elder Law']
['contract Law' 'equity' 'civil Procedure'] ['contracts Review Act 1980' 'unjust Contracts' 'unconscionability' 'mortgage Lending' 'asset Lending' 'independent Legal Advice' 'power of Attorney' 'elder Law']

Case Brief

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Procedural Posture

Appeal in Proceedings Seeking Relief Concerning a Loan Agreement and Mortgage Under the Contracts Review Act 1980 and Unconscionability Principles / Appeal From Hammerschlag J in the Supreme Court of New South Wales, Equity Division, Dismissing the Claim

Legal Issues

  1. 1 ['Whether the loan agreement and supporting mortgage were unjust when entered into for the purposes of the Contracts Review Act 1980.' "Whether Permanent Custodians Limited engaged in unconscionable conduct in taking a mortgage over Angelina Spina's property." "Whether the lender's departure from its lending guidelines was relevant to unjustness." 'Whether legal advice given to Michael Spina as attorney was sufficient where Angelina Spina herself was not shown to have received independent legal advice.' 'What relief should be granted if the contract was unjust.']

Ratio Decidendi

The loan agreement and mortgage were unjust as against Angelina Spina because the respondent, through its lending process and solicitors, proceeded with a transaction by which an 86-year-old retired woman put her only substantial asset and apparent home at risk for the benefit of her son, without obtaining evidence that she personally received independent legal advice, without properly considering her ability to service the loan if Michael ceased doing so, and in circumstances involving significant departures from the lender's own guidelines. The appropriate relief was to declare and vary the loan agreement and mortgage as against Angelina so that her liability was confined principally to...

Court Disposition

Appeal allowed with costs, subject to the respondent's costs thrown away by amendment of the notice of appeal; orders below set aside and relief granted under the Contracts Review Act.

Orders

  • ['Appeal allowed.' 'Orders made by Hammerschlag J on 30 October 2008 set aside.' "Without affecting the respondent's rights against Michael Spina or Michael Spina's obligations to the respondent, the loan agreement made 22 October 2003 between Angelina and Michael Spina and the respondent was declared void as...