Perpetual Trustees Victoria v Longobardi [2009] NSWSC 654

A husband and wife entered into a mortgage with Perpetual to prop up their failing florist shop. The husband was subsequently hospitalised and given electroconvulsive therapy for depression and hypermania. The couple then defaulted and Perpetual sought possession.

The couple’s defence was that the mortgage was “unjust” for the purposes of the Contracts Review Act and “unconscionable” for the purposes of ss 12CB and 12CC of the Australian Securities and Investments Commission Act 2001.

The Judge found that there was no unconscionable behaviour by the lender in terms of the ASIC Act nor was it unjust in terms of the Contracts Review Act. The judge noted that to succeed in demonstrating unconscionability:

They must show at least that the relevant conduct of Perpetual showed no regard for conscience, or was irreconcilable with what was right and reasonable.

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