Sgargetta v NAB [2014] VSCA 159

The lender sued for possession and the parties entered into a deed of settlement. The borrower failed to comply with the deed and provide finance approval acceptable to the lender for a specified sum but nevertheless attempted to pay that sum to the lender at trial.

The court held that the borrower’s failure to comply entitled the lender to continue with its possession proceedings as provided for specifically in the deed. The court held that the lender’s conduct was not unconscionable as the lender did no more than rely on the deed. Further, the lender did not contravene section 83 of the National Credit Code, which requires a lender to provide a borrower with the pay out figure within 7 days after request, because settlement was called off by the borrower and compliance with section 83 is not a condition precedent to bringing proceedings. The borrower appealed.

The appeal court agreed that the lender was entitled to refuse the bank cheque offered by the borrower at trial because the borrower was in breach of the settlement deed. The appeal court said:

The conduct of NAB was not such as to attract moral opprobrium. It is not unconscionable for a party to rely upon its agreed contractual rights in these circumstances.

The appeal court also agreed with the trial judge that the borrower’s request had been retracted.

The appeal was dismissed.

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