Insurance Australia Ltd v Holden & Ors [2021] NSWDC 142

District Court New South Wales

Medium Neutral Citation: Insurance Australia Ltd v Holden & Ors [2021] NSWDC 142 Hearing dates: 16, 17, 18, 19 March 2021 Date of orders: 30 April 2021 Decision date: 30 April 2021 Jurisdiction: Civil Before: Russell SC DCJ Decision: (1) Judgment for the plaintiff against the first defendant for $529,148.05. (2) Order the first defendant to pay the plaintiff's costs. (3) Judgment for the plaintiff against the second, third and fourth defendants for $529,148.05. (4) Order the second, third and fourth defendants to pay the plaintiff's costs. (5) Grant leave to approach my Associate by email, within 7 days, if any different costs orders are sought. Catchwords: CONSTRUCTION OF INSURANCE POLICY – Home Owners Warranty insurance policies issued by insurer to a building company on basis that deeds of guarantee and indemnity would be executed – whether the first defendant entered into a valid deed of guarantee and indemnity CONSTRUCTION OF A GUARANTEE – Whether the first defendant is bound by first and/or second deeds of guarantee and indemnity – whether deeds of guarantee and indemnity are enforceable CONSTRUCTION OF DEED OF RELEASE – whether bringing of proceedings by the plaintiff against the first defendant was a breach of a covenant not to sue in release deed signed by the parties UNJUST CONTRACTS – whether guarantee is an unjust contract pursuant to s 7 of the Contracts Review Act 1980 (NSW) UNCONSCIONABILITY – whether an independent and adequate explanation of the legal effect of executing a guarantee was provided – whether the first defendant acted in reliance upon statements from her husband, family members and/or insurer UNCONSCIONABLE CONDUCT – equitable doctrine of unconscionable dealing – meaning and scope of unconscionability under s 21 of the Australian Consumer Law – whether the s 22 factors that assist in determining if a person has engaged in unconscionable conduct are relevant to the relationship between an insurer and a guarantor – whether the s 22 factors are restricted to the relationship between the insurer as the "supplier" and the insured business as a "customer" EVIDENCE – absence of handwriting expert evidence – no evidence presented that first defendant did not understand the purport and effect of the transaction Legislation Cited: Australian Consumer Law (Cth), ss 21, 22 Australian Securities and Investments Commission Act 2011 (Cth) Civil Procedure Act 2005 (NSW), s 100 Contracts Review Act 1980 (NSW), ss 7, 9 District Court Act 1973 (NSW), ss 4(1), 134(1) Home Building Act 1989 (NSW), ss 18B, 102BB, 103BB Insurance Act 1973 (Cth), Pt III Div 3A, ss 17E, 17F, 17G Penalties Interest Rates Act 1983 (Vic), s 2 Cases Cited: Australian Competition and Consumer Commission v Quantum Housing Group Pty Limited [2021] FCAFC 40 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 Commonwealth Bank of Australia v Hadfield [2001] NSWCA 440; (2001) 53 NSWLR 614 Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395 Good Living Company Pty Limited v Kingsmede Pty Limited [2021] FCAFC 33 Karam v ANZ Banking Group Limited & 1 Ors [2001] NSWSC 709 Kolavo v Pitsikas [2003] NSWCA 59 Unique International College Pty Limited v Australian Competition and Consumer Commission [2018] FCAFC 155; 266 FCR 155; 266 FCR 361 Texts Cited: O'Donovan, "Modern Contract of Guarantee", Westlaw AU Category: Principal judgment Parties: Insurance Australia Ltd (Plaintiff) Dorthe Holden (First Defendant) Sharlene Holden (Second Defendant) Margaret May Holden (Third Defendant) Margaret May Holden as Administrator of the Estate of the Late James Holden (Fourth Defendant) Representation: Counsel: C Purdy (Plaintiff) G George (Defendant)