JP Morgan v Hammond [2012] NSWSC 317

 “There was an earlier decision in this case, click here to read our report”.

The court again rejected the husband’s application to appear for his wife given the conflict of interest between them. The husband acted as broker on his wife’s mortgage application in her purchase of property. The wife described herself as self-employed with an annual income of $135,000 in her application. The court permitted the hearing to proceed in the wife’s absence given there was no application for an adjournment.

The court found that it was a straight forward loan application. The wife had legal advice and the assistance of her husband, an experienced mortgage broker. The court found default was clearly established. The court rejected the wife’s cross-claim and found no deficiency by the lender in approving the loan. The court found that the lender had made a careful assessment of the loan. The court also rejected that the lender owed the borrower a duty of care or a duty to undertake its own due diligence to examine all aspects of the loan application. The court found no duty on the part of the lender to investigate and detect a false statement made by the wife as to her income and employment status. The court also rejected that it was a third-party mortgage prohibited under section 44 Consumer Credit Code since the wife was the sole borrower and mortgagor.

The court said that:

There can be no doubt that the Borrower was aware of the nature of the agreement that she was entering into, and the consequences of default, including the Lender seeking an order for possession of the Faulconbridge property….this is a straightforward case of mortgage default with the Lender establishing an entitlement to an order for possession of the Faulconbridge property.

The court granted possession for the lender and dismissed the cross-claim.

Click here to read the full judgment

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