GKQ Mortgages v Forsyth [2010] NSWSC 1305

The lender obtained judgment on 9 October 2009. The borrowers obtained several stays and were also allowed back onto the security property by agreement with the lender on several occasions. The borrowers then sought a stay pending hearing of an application to set aside default judgment and file a defence. The borrowers had already been refused a stay three weeks earlier. The Judge dismissed the application on several grounds as follows:

  1. There had not been a material change in circumstances since the previous stay application;
  2. The borrowers failed to mention the earlier judgment and therefore did not give full and frank disclosure;
  3. The borrowers knowingly falsely executed a declaration as to business and investment purposes (and the loan would not otherwise have been made) and therefore did not have clean hands; and
  4. One of the borrowers was bankrupt and could not prosecute the motion.

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