The lender obtained judgment for possession against a borrower and days before the eviction, the borrower negotiated an agreement to stay the eviction.
The agreement contained a term that if the borrower defaulted in any payment, the lender would enforce the judgment and warrant without notice. The borrower defaulted because the direct debit form was incorrectly completed by him and the first repayment was not processed. The lender evicted the borrower and the borrower sought damages.
The court noted that the final judgment and warrant extinguished the parties’ rights and liabilities in relation to the mortgage and loan, which were now subsumed by the judgment.
The borrower first argued that the stay agreement failed for lack of consideration because the sums involved were already owed under the loan. The court found that the benefit to the lender of avoiding a forced sale was sufficient consideration.
The second argument was that the agreement contained implied terms that the lender would no longer rely on the judgment and warrant upon any new default but would commence new enforcement proceedings and that notice would be given upon any default. That was rejected by the court because it conflicted with the agreement’s express terms.
The third argument was that the lender prevented the borrower from performing the agreement because it failed to notify him that he had incorrect completed the direct debit form. The court rejected this because the lender had attempted to notify the borrower by phone.
The fourth argument was that no Code notice had been given. The court found the Code notice requirement was inapplicable post judgment.
The fifth argument was that the lender waived its rights to rely upon judgment by accepting monthly repayments because it then continued to act as mortgagee. This was rejected because there was no waiver – it was not the case that the lender had failed to act immediately upon default.
The seventh argument was that the agreement was unjust. The court found it was not unjust under the Credit Code even if the terms were onerous. To find it unjust could lead to lenders not providing their debtors with “last chances”. It was also found not unjust under the Fair Trading Act because the borrower’s attention was drawn to the onerous provisions and he had already lost possession due to defaults.
The eighth argument was that it was unconscionable under the ASIC Act and Fair Trading Act given the lender’s knowledge of the error on the direct debit form. The court rejected this because the borrower was not under a special disability at the time of entry into the agreement.
The ninth argument was that it was misleading and deceptive conduct not to inform the occupier that the direct debit form had not been completed correctly. The court rejected this because as soon as the lender became aware the form was incorrectly completed it tried to contact the borrower but his number had been disconnected.
The tenth argument was that it was unconscionable for the lender to resile from the expectation created by its silence in not contacting the borrower that the form would be accepted. The court rejected this and found that the lender was entitled to assume that the borrower knew of the consequences of failing to properly complete the form.
The court found for the lender and dismissed all claims.