Capital One Securities v Soda Kids Holdings [2012] VSC 163

The lender obtained summary judgment and an order for possession of the security. The borrower appealed. The test for summary judgment is that the claim or defence has no real prospects of success – section 63(1) Civil Procedure Act.

The Appeal Court found that the borrower had arguable defences on the following grounds:

  • The date for repayment was uncertain and had to be decided by a court given there were a number of possible interpretations;
  • The mortgage and guarantees were arguably signed under duress or were unconscionable given the solicitor acted for both the lender and borrower, and the borrower spoke limited English and did not receive independent advice; and
  • It is arguable whether the earlier guarantees secure the loan.

The Appeal Court found that summary judgment orders should not have been made and allowed the borrower’s appeal.

Click here to read the full judgment

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