Lawteal v Ofo [2006] NSWSC 365

 In this case Hall J heard and appeal from the decision of an Associate Judge which itself was a review/appeal from the decision of a Registrar upon an application to have default judgment set aside so a Contracts Review Act defence could be raised.

The borrower argued a Contracts Review Act defence based on the principles in Perpetual Trustee Company Limited v Koshaba [2006] NSWCA 41 was available because prior to the mortgage proceeding the borrower’s solicitor had written a letter stating:

We are unable to furnish you with an accountant’s certificate due to the fact that our client on her present income cannot possibly make the re-payments in terms of the mortgage and support herself at the same time.

However the Court decided that any such action would be mostly futile noting:

In determining this appeal adversely to Ms. Ofo, I have had regard to the fact that she has obtained the benefit of the loan monies in the sum of $251,250 derived from the loan transactions which were applied by her in the re-financing of her property. A Court in an application to set aside judgment in those circumstances is required to have regard to that benefit and the amount of it and that she would be required, in any event, to pay, at least, a reasonable of interest: see Elkofairi (supra) at [80] and [81]. Having regard to the evidence as to the approximate likely value of the property and the amount of the outstanding loan monies under the mortgages, as a matter of discretion these are matters that I am entitled to have regard to in determining the utility of an application to set aside default judgment. That matter, in my opinion, is an additional matter which would warrant the dismissal of the appeal.

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