Permanent Mortgages v Garton [2008] NSWSC 497

In this case the borrower commenced proceedings in the Consumer Tenancy Tribunal seeking declarations that the mortgage was unjust and should be re-opened. The lender retorted by commencing possession proceedings in the Supreme Court. The Judge approved the borrower’s argument that the borrower was first in best dressed and made a declaration that the Supreme Court had no jurisdiction. In the alternative the Court ordered the Supreme Court proceedings stayed. This was despite the fact the CTT has no power to award possession on the lender’s cross-claim.

Bransgroves submits this is an unsatisfactory outcome and that the appropriate order would have been to move the CTT proceedings to the Supreme Court on the grounds that Supreme Court is the only court with power to award the relief sought by both parties. This case opens up yet another avenue for borrowers to thwart the property rights of lenders in NSW which in turn keeps away interstate lenders and therefore competition.

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