Permanent Trustee Company Limited v Gillian O'Donnell Permanent Trustee Company Limited v Di Benedetto Tonto Home Loans Australia Pty Ltd v Tavares [2009] NSWSC 902

Permanent Trustee Company Limited v Gillian O'Donnell Permanent Trustee Company Limited v Di Benedetto Tonto Home Loans Australia Pty Ltd v Tavares [2009] NSWSC 902

Loan agreements and mortgages advanced through Lo Doc loans by lenders, Permanent and Tonto, were unjust in the circumstances at the time they were made. The unjustness arose from the fraudulent conduct of Streetwise (broker acting as agent for lenders), conflict of interest, misrepresentations in loan documents, breach of lending guidelines, asset-based lending risking the borrowers’ family homes, and procedural unfairness. As Streetwise was acting with actual authority of the lenders, its knowledge (including borrowers’ true financial position and inability to repay) was imputed to the lenders. Therefore, the loans were asset-based, lent solely on security, without regard to capacity to...

Jurisdiction
Australia
Judgment Date
04 September 2009
Procedural Posture
Civil / Final Judgment
Outcome
Plaintiffs’ claims dismissed; loan agreements and mortgages declared void under Contracts Review Act 1980; mortgagees ordered to remove mortgages from title. Partial repayment ordered where borrower obtained a benefit.
Legal Topics
['unjust Contracts' 'lo Doc Loans' 'fraud' 'agency' 'asset Based Lending' 'mortgage Disputes' 'contracts Review Act' 'principal and Agent' 'consumer Protection']
['contracts' 'consumer Law' 'property Law'] ['unjust Contracts' 'lo Doc Loans' 'fraud' 'agency' 'asset Based Lending' 'mortgage Disputes' 'contracts Review Act' 'principal and Agent' 'consumer Protection']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 ['Whether loan agreements and mortgages advanced through Lo Doc loans are unjust contracts within the meaning of the Contracts Review Act 1980' 'Whether fraud of the finance broker, Streetwise, renders the loan contracts voidable' 'Whether Streetwise acted as agent for the lenders and if knowledge is imputed to lenders' 'Whether asset lending is unjust where borrowers cannot afford to repay except through sale of family home' "Whether lenders' failure to follow lending guidelines contributes to unconscionability"]

Ratio Decidendi

Loan agreements and mortgages advanced through Lo Doc loans by lenders, Permanent and Tonto, were unjust in the circumstances at the time they were made. The unjustness arose from the fraudulent conduct of Streetwise (broker acting as agent for lenders), conflict of interest, misrepresentations in loan documents, breach of lending guidelines, asset-based lending risking the borrowers’ family homes, and procedural unfairness. As Streetwise was acting with actual authority of the lenders, its knowledge (including borrowers’ true financial position and inability to repay) was imputed to the lenders. Therefore, the loans were asset-based, lent solely on security, without regard to capacity to...

Court Disposition

Plaintiffs’ claims dismissed; loan agreements and mortgages declared void under Contracts Review Act 1980; mortgagees ordered to remove mortgages from title. Partial repayment ordered where borrower obtained a benefit.

Orders

  • ["In Permanent Trustee Company Limited v Gillian O'Donnell and John Robert O'Donnell: plaintiff's claim dismissed; loan agreement and mortgage declared void; mortgagee to execute and deliver any instrument required to remove mortgage from title; plaintiff to pay defendants’ costs." "In Permanent Trustee Company...