Sgargetta v NAB [2014] VSCA 189

This case arose initially out of a mistake made by the bank in relation to its pay out figure, quoting a figure less than the correct amount of the mortgage debt, but it corrected the mistake before the borrower’s scheduled settlement to discharge the debt. However the borrower reacted to the mistake by cancelling the sale and ceasing all payments on the loan. The lender sued and a settlement was reached with the borrower. The lender obtained judgment against the borrower for the full amount of the mortgage debt when the borrower breached its settlement deed. The borrower appealed and failed.

The Appeal Court found that the lender was entitled to enforce its loan and it was not unconscionable for it to do so. The borrower then sought a stay pending appeal to the High Court.

The Appeal Court refused a stay given there was no evidence of special circumstances and the proposed appeal to the High Court was hopeless. The Court said that the bank was entitled to the benefit of its judgment. The court noted:

We accept that Mr Sgargetta feels a genuine grievance with respect to the erroneous notice he initially received. Nevertheless that notice was overtaken by the settlement agreement. In our view, none of the matters agitated raise any serious doubt as to the correctness of the decision made on appeal. No actionable acts of reliance based upon the payout notice have been articulated and no claim of this kind was raised below.

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