Satchithanantham v NAB [2009] NSWCA 268

This was a unanimous decision of the Court of Appeal delivered by Young JA. It involved a Sri Lankan woman who claimed, through the medium of her husband, relief on the grounds of the undue influence of her husband under the Yerkey v Jones principle and Contracts Review Act.

In relation to the husband’s involvement in the proceedings His Honour noted:

The husband appears to have been the author of many of the affidavits and submissions used in this case which have not assisted resolution of the real dispute between the parties either at first instance, or before us…. However, reading between the lines of the defence, …. the principal defence was that the mortgage and related documents were not signed by the appellant voluntarily; she signed them under the coercion and undue influence of her husband without clear understanding of their nature nor of their legal effect.

Because the appellant’s husband appears to be alleging that he still does not know why this Court would not permit him to “help” his wife on the appeal, I should say plainly that it would not serve the interests of justice principally for two reasons:

  1. the husband’s submissions made in this case previously have been of no assistance; and
  2. it is almost impossible for a court to accept as an appellant’s “McKenzie friend” the very person accused of applying undue pressure on the appellant. Reasons to this effect were given at the oral hearing.

The wife also claimed relief under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 on the basis that there were false and misleading misrepresentations made by the Bank. However, the trial judge found that the wife would have signed the documents whether or not she was labouring under any misapprehension and accordingly dismissed those claims.
The trial judge found the wife had not seen the mortgage documents or had any knowledge of their contents and that she had received no independent or other advice and was strongly influenced by her husband.

His Honour noted:

There was no plea of non est factum (nor could there have been), nor any plea of incapacity. The law clearly is that if a person signs a document which she knows is a contract, she is bound by the terms of that contract even though she may have thought that the contract she was signing was different: a fortiori if she doesn’t read it; see eg Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165. Of course there are exceptions, but none are applicable in the instant case.
On the Yerkey v Jones defence His Honour noted:

There is a very limited area where a wife can take advantage of the Yerkey v Jones principle where she receives some benefit, usually in the case where she is a director and shareholder of a corporate borrower… none of the [exceptions] would allow the Court to bring the present case under the Yerkey v Jones principle. The primary judge’s ruling on the issue was undeniably correct. The fact that the appellant cannot surmount is that she received an actual benefit from the Bank of approximately $408,000. In so far as she seeks relief in equity, the maxim applies that “she who seeks equity must do equity”. She needs to see that $408,000 is repaid or at least come to an acceptable commercial arrangement with respect to that sum. This she has never offered to do.

The wife was granted relief at first instance under the Contracts Review Act for that part of the borrowings which was on top of the amount refinanced. The claim on appeal was to obtain relief on the whole loan sum. His Honour rejected this noting:

The Court’s jurisdiction only goes so far as avoiding, as far as practicable, an unjust consequence or result. The circumstances of this case did not permit the primary judge to absolve the appellant from the consequences of entering into this written contract over and above that which was unjust and that, according to the primary judge, and in my view her Honour made no mistake in this, was limited to the amount over $408,000.

The appeal was then dismissed with costs.

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