Lawteal Finance v Chrapacz [2010] NSWSC 73

In this case the lender obtained default judgment and a writ of possession. The writ of possession was stayed pending repayment by the borrower. However, the borrower then filed an application to set aside the judgment and filed a defence. The defence raised arguments of unjustness under the Contracts Review Act and the Consumer Credit Code. 

The borrower, a 74 year old single woman with dementia attended court in a wheelchair. The evidence filed on her behalf suggested that she may have been the victim of mortgage fraud by Evangelous Georgiou, a family friend.  She claimed she either did not sign the mortgage document or if she did, she did not know it was a mortgage document. The lender argued that if her evidence was accepted the mortgage would acquire indefeasibility and there would be no defence. Justice Hislop set aside the default judgment and granted leave to file a defence commenting:

There exists a real possibility the defendant was the victim of deception and may have signed the mortgage documents in circumstances which would entitle her to relief pursuant to the Contracts Review Act and/or the Consumer Credit Code.

This would only be possible if the old lady was disbelieved and it was found that she knew she was signing a mortgage. This is because both of the explanations offered by her would give rise to a non est factum defence and therefore preclude relief under the Contracts Review Act or the Code.

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