Westpac v Diakakis [2014] NSWSC 928

A father and son obtained finance to purchase an apartment and granted a mortgage. The loan went into default and the lender sued for possession. The father argued that he was induced to sign the loan and mortgage under the influence of his son and those agreement were void and unjust. At the hearing, the father did not appear and no evidence was filed.

The court held that there was nothing to show that the lender was aware of any unfairness (and none was revealed by the evidence), much less responsible for it. It had no direct contact with either of the borrowers. The court found no evidence to suggest that it was beyond the means of the borrowers to repay it. The fact that they complied with the loan for the first seven years of its operation was powerful evidence that it was within their means and that they had freely and voluntarily signed the loan documents presented to them and received an incontrovertible benefit from the loan.

The court said:

The general policy of the law is that people should honour their contracts. That policy forms part of our idea of what is just.

The court did not regard the father’s age, the fact he was born in Greece and his status as a pensioner as creating any unjustness. The court noted:

A contract is not unjust merely because a person is unable to pay the debt when called upon do to so, or because its enforcement will lead to the loss of a home.

The court gave the lender possession.

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