HSBC v Mavaddat [2015] WASC 153

The mortgage over the family home secured the home loan and a business loan.

The wife raised the wife’s equity defence.

She was found to have no possibility of success in relation to the home loan (but did have an arguable defence in relation to the business loan).

The bank then argued possession should be given so that it could recover the home loan.

The wife argued that possession should not be ordered pending a determination of her defence in relation to the business loan. This is because if the alleged misconduct had not occurred, the wife would easily be able to re-finance. The judge, in rejecting this, turned the argument around noting that even if she won she would have to do equity by repaying the first loan advance.

Accordingly the Court ordered that the property be sold by the bank, that the bank help itself to the money required to pay out the home loan, and the balance be paid into Court pending determination of the wife’s defence in relation to the business loan.

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