Guarantees

Capital Finance Australia v Smith [2009] NSWSC 249

This case clearly demonstrates why it is important to use experienced lawyers when enforcing your mortgage. Bransgroves always tell lenders that unless a borrower is self-represented never bring an application for summary judgment. The futility of doing so is clearly attested to by the results achieved by everyone who does (in this regard visit see …

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Permanent Custodians v Barton [2008] NSWSC 1355

This was an application by the mortgagors to set aside default judgment and file a defence to the claim on the following grounds: undue influence and/or unconscionability, of which the lender had notice the “unjustness” of the mortgage under the Contracts Review Act 1980 The mortgagors guaranteed a loan for $220,000 on the promise from …

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Bofinger v Kingsway Group [2008] NSWCA 332

In this appeal court case first and second mortgages over the development property were bolstered by first and second mortgages over the guarantors’ home. When the development went bad the guarantors voluntarily sold their home and the whole proceeds were paid to the first mortgagee. The first mortgagee sold the development property and after it …

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Kimberley Securities v Esber [2008] NSWCA 301

This appeal court case involved a loan of $2.7 million. No interest was to be charged, instead there was a fee payable by the borrower of $2 million. Mortgages were given by two guarantors. However, the guarantees were limited to the $2.7 million (and did not extend to the $2 million fee). The two guarantors …

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Equititrust v Norman Clifford Boyle and Richard Lee Woods

In this case the lender sought to enforce guarantees against the defendants. Mr Norman Clifford Boyle entered into an arrangement under Part X of the Bankruptcy Act and so did not take part in hearing. Richard Lee Woods represented himself and argued that the guarantee was unenforceable until the main security had been sold. He …

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Galadriel Lothlorien v Station 1 [2008] NSWSC 91

The mortgage in this case was a “caveat loan” with a extraordinary high interest rate of 87 percent (lower) and 174 percent (higher rate) with a provision for the interest to compound with daily rests. The loan of $240,000 advanced in March 2005 had by June 2007 been calculated at $11,588,845. The court heard that …

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Kasparian v Burns [2007] NSWSC 895

In this case Bransgroves acted for the lender. A loan agreement and mortgage was entered into for $755,000 in December 2003 for a one year term. Shortly before expiry the mortgage was varied to extend for three months and increase the principal by $100,000. The securities were sold with a shortfall and the directors/guarantors were …

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Bakarich v CBA [2007] NSWCA 169

This case was a decision by the Court of Appeal in relation to a defence raised by mortgagor/guarantors under the Trade Practices Act, Contracts Review Act and Unconscionability. One significant pronouncement made in the course of the decision by Hodgson JA that has since been quoted was: I will focus on questions arising under the …

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