The borrowers argued that the bank granted the loans in violation of the National Credit Code and principles of unconscionable equity. They claimed that the bank knew or ought to have known that they were not in a position to repay the loans. The borrowers assert that they live in their property with a daughter and a disabled daughter and two grandchildren, they suffer depression and stress because they have lost their business and are facing the loss of their home, and that they suffer anxiety. They seek relief and justice “on the grounds of public interest” and the case of Commercial Bank of Australia Ltd v Amadio  HCA 14.
The bank sought summary judgement. The Master held that no evidence was put before the Court of any special disability on the part of the borrowers at the time they borrowed funds from the lender, nor was there any evidence put forward that demonstrated that their business was in a vulnerable state at the time that the bank advanced money to it. There was no evidence of any ill health of the defendants at the time the funds were borrowed.
The evidence showed that the borrowers were able to service the loans for a period of some years following their execution. It appears that default was due to their business closing down and the failure of a property development to return profits but these events occurred after the loans were entered into and therefore irrelevant. The court also found no evidence of breach of the Code. The Master ordered possession and the borrowers appealed to judge. Justice Gray held:
I consider that the borrowers should have the opportunity to have the strength of their claims for relief assessed prior to the order for possession taking effect in respect of their home property. I am prepared to grant an interim order as sought to allow this to occur.
This was a strange, and with respect blatantly illegal, decision. The whole purpose of a summary judgement application is to dispose of cases with no strength. The judge gave no reasons for deviating from the trial judge’s conclusion. He seemed to agree with everything that the Master held but regardless he decided against the lender. He felt “the borrowers should have the opportunity to have the strength of their claims for relief assessed” and yet this is exactly what had just occurred. It was almost as if he were a judge in some tin-pot corrupt Third World country where the rule of law has no meaning.
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