Bank of Western Australia v Tannous (No. 4) [2013] NSWSC 182

BankWest claimed possession from two elderly non-English speakers.

The parents defended on the basis that the loan were forged by their son, or that the contracts were unjust under both the Contracts Review Act.

In a sworn affidavit the son admitted he forged the BankWest loan. He also admitted forging an earlier ING mortgage which was refinanced by the BankWest loan.

The parents sought to cross claim against ING. The previous judge held

Where there is an issue about the unjustness of a contract or mortgage paid out by an incoming mortgagee who is the Plaintiff in proceedings, the issue is not determined by joining that prior mortgagee as a party to the proceedings… There is no justiciable issue between the Defendants and the mortgagee/lender whose contract has been completed and whose mortgage has been discharged.

The parents failed in their cross claim against ING as the prior mortgagee.

BankWest then amended its claim, seeking (in the event it failed in the claim for possession and the money due under the loan agreements) restitution from the parents in the amount that BankWest paid to ING to discharge ING’s mortgage.

The parents then sought to claim against ING. They sought a declaration that the loan agreement and mortgage with ING was void and and that the purported directions to BankWest as to payment to discharge the ING mortgage were void and of no effect.

ING argued the proposed claim by the parents was an abuse of process and prevented by Anshun Estoppel – the claim not differing in substance from the one already dealt with. The judge rejected this because no relief for false and misleading conduct had been sought in the previous cross claims and it was not unreasonable to plead this new cause of action in light of Bank West added its plea for restitution.

ING appealed this finding and failed. The judge noted an additional basis for finding against ING, namely that the earlier judgment was interlocutory (and so Anshun is not engaged).

Moreover the court found that it should not have entered judgment for ING because ING only sought the dismissal and this was corrected under the slip rule to provide for dismissal only.

However the court did not allow the parents to plead actions which did not concern Bank West’s mistaken belief or which could have been pleaded in the previous cross-claims.

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