Secure Funding v Deren [2014] NSWSC 348

The borrower’s property was severely damaged by storms and he claimed on his insurance. Various offers by the insurer were refused by the borrower and in the meantime he defaulted on his loan. The lender sought possession and the borrower cross-claimed that he should be relieved from his obligation to repay because of the lender’s unfair conduct in relation to his insurance dispute, making both the loan and mortgage unconscionable. The insurance monies were eventually to reduce the mortgage debt owing to the lender.

The court found that the evidence did not show that the lender was responsible for the delay and that neither the loan nor mortgage required the lender to assist the borrower in his claim from the insurer or that the lender had exercised its rights unconscionably. The court found that the delay was the result of the borrower’s refusal of offers which were to his considerable detriment because the mortgage arrears continued to attract interest.

The court said:

The evidence shows that the unfortunate position in which the borrower now finds himself is the result of his own refusal of offers which both the NRMA and the lender made to him, at various times, offers which would have left him much better off than he is now, had he accepted them.

The court granted the lender possession and a money judgment.

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