Hoho Property Pty Ltd v Bass Finance No 37 Pty Ltd [2023] NSWSC 411

Supreme Court New South Wales

Medium Neutral Citation: Hoho Property Pty Ltd v Bass Finance No 37 Pty Ltd [2023] NSWSC 411 Hearing dates: 5-14 December 2022 Date of orders: 21 April 2023 Decision date: 21 April 2023 Jurisdiction: Equity - Commercial List Before: Rees J Decision: See [422]. Catchwords: BANKING AND FINANCE — Vietnamese couple venture into property development – acquire development site with one-year loan – retain mortgage broker to obtain refinance and construction loan – new lender fixes completion date before Christmas – existing loan yet to expire, with no discount for early repayment – borrower's solicitor says clients need interpreter – broker and lender regard as delaying tactic – lender declines to provide loan if borrower's solicitor continues to act – broker arranges new solicitor and termination of existing solicitor's retainer – borrowers told they have no other option – borrowers say they don't need an interpreter – borrowers advised by new solicitors without interpreter – borrowers default— site sold — principal repaid. DOBBS' CERTIFICATE — lender relied on certificate as evidence of amount owing — certificate signed by one of three directors — on letterhead of different company – principles at [289]-[296] – whether certificate conformed to requirements of the contract. MORTGAGE BROKER — obliged to use "best endeavours" — scope of contractual obligation at [310]-[314] – required standard of performance — implied duty of reasonable care and skill at [315]-[316] — whether implied term not to exert duress or engage in unconscionable conduct at [317]. DURESS — principles at [321]-[326] — duress is limited to actual or threatened unlawful conduct — lender's threats were not unlawful – broker's unlawful conduct was not the relevant pressure inducing entry into the contract. UNCONSCIONABLE CONDUCT — equity — special disadvantage – lack of English proficiency – principles at [329]-[335] — whether corporation can suffer special disability at [336]-[338] – combination of circumstances led to special disadvantage – whether contracts can be invalidated by unconscionable conduct of third party at [378] – whether declaratory relief will be granted disentitling broker of its fee accrued prior to and independently of unconscionable conduct at [380]. UNCONSCIONABLE CONDUCT — statutory unconscionability — relevance of knowledge at [388]. WORDS and PHRASES – "certificate" at [303] – "best endeavours" at [310]-[311]. Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAB, 12CA, 12CB, 12CC, 12GM Competition and Consumer Act 2010 (Cth) s 131A, sch 2, s 243 Contracts Review Act 1980 (NSW) ss 6, 7, 9 Corporations Act 2001 (Cth) s 127 Cases Cited: Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 Assafiri v The Shell Co of Australia Ltd [2010] NSWSC 1058 Attorney General (NSW) v World Best Holdings Ltd [2005] NSWCA 261; (2005) 63 NSWLR 557 Australia and New Zealand Banking Group Ltd v Couanis [2020] WASC 125 Australia and New Zealand Banking Group Ltd v Karam [2005] NSWCA 344; (2005) 64 NSWLR 149 Australia and New Zealand Banking Group v Smith [2009] VSC 556 Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51 Australian Competition and Consumer Commission v Geowash Pty Ltd (subject to a deed of company arrangement) (No 3) [2019] FCA 72; (2019) 360 ALR 441 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd and Another [2021] FCAFC 40; (2021) 285 FCR 133 Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCAFC 4; (2002) 117 FCR 301 Australian Guarantee Corp Ltd v McClelland (1993) ATPR 41-254 Australian Securities & Investments Commission v Cash King Pty Ltd [2005] FCA 1429 Australian Securities and Investments Commission v Kobelt [2019] HCA 18; (2019) 267 CLR 1 Beefeater Sales International Pty Ltd v MIS Funding No 1 Pty Ltd [2016] NSWCA 217 Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 39 WAR 1; [2008] WASC 239 Bennett v Minister for Community Welfare (1992) 176 CLR 408 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council [1977] HCA 23; (1977) 180 CLR 266 Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 Commercial Bank of Australia v Ridout Nominees [2000] WASC 37 Commercial Base Pty Ltd v Watson [2013] VSC 334 Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 Dewar v Ollier [2018] WASC 212 Dinh v Commonwealth Bank of Australia [2021] WASCA 127 Dobbs v National Bank of Australasia Ltd [1935] HCA 49; (1935) 53 CLR 643 Doggett v Commonwealth Bank of Australia (2015) 47 VR 302 Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24 Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36 Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2003] FCAFC 313; (2003) 134 FCR 522 Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 Furphy v Nixon (1925) 37 CLR 161 Golden Strait Corp v Nippon Yusen Kubishika Kaisha ("The Golden Victory") [2007] 2 AC 353; [2007] UKHL 12 HECEC Australia Pty Ltd v Hydro-Electric Corporation [1999] FCA 822 Henville v Walker (2001) 206 CLR 459 IBM United Kingdom v Rockware Glass Ltd (1980) FSR 335 J Hutchinson Pty Ltd v Transcend Plumbing and Gasfitting Pty Ltd [2023] VSC 39 Joelco Pty Ltd v Balanced Security Ltd [2009] QSC 236 Joseph Street Pty Ltd v Tan (2012) 38 VR 241 Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 Koufos v C Czarnikow Ltd ("The Heron II") [1969] 1 AC 350 Louth v Diprose (1992) 175 CLR 621 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Luong v Du [2013] VSC 723 Lym International Pty Limited v Marcolongo (2011) 15 BPR 29,465; [2011] NSWCA 303 McCrohon v Harith [2010] NSWCA 67 Monarch SS Co Ltd v A/B Karlshamns Oljefabriker [1949] AC 196 New South Wales v Stevens (2012) 82 NSWLR 106 ; [2012] NSWCA 415 Nitopi v Nitopi [2022] NSWCA 162 Owerhall v Bolton & Swan Pty Ltd [2016] VSC 91 Owners – Strata Plan No 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317 at [507]; (2013) 85 NSWLR 479 OzEcom Ltd v Hudson Investment Group [2007] NSWSC 719 Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (In Liq) [2020] FCA 137; (2020) 379 ALR 732 Provident Capital Ltd v Papa [2013] NSWCA 36 Quikfund (Australia) Pty Ltd v Airmark Consolidators Pty Ltd [2014] FCAFC 70; (2014) 222 FCR 13 Re Dila Pty Ltd [2023] VSC 176 Re Takata Air Bags Class Action – Common Questions [2018] NSWSC 1868 Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968) 120 CLR 516 Rosenberg v Percival (2001) 205 CLR 434 Rozenbilt v Vainer [2019] VSC 316 Shomat Pty Ltd v Rubinstein (1995) 124 FLR 284 Smith New Court Securities Ltd v Citibank NA [1997] AC 254 Smith v William Charlick Ltd [1924] HCA 13; (1924) 34 CLR 38 Spira v Commonwealth Bank of Australia [2003] NSWCA 180; (2003) 57 NSWLR 544 State Bank of New South Wales Ltd v Chia [2000] NSWSC 522; (2000) 50 NSWLR 587 Stepping Stones Child Care Centre (ACT) Pty Ltd v Early Learning Services Ltd [2013] ACTSC 173 Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 399 ALR 300 Suncorp-Metway Ltd v Nam Property Holdings Pty Ltd (2010) 16 BPR 30,859; [2010] NSWSC 1078 TA Sundell & Sons Pty Ltd v Memm Yannoulatos (Overseas) Pty Ltd [1956] SR (NSW) 323 The Owners of the Steamship "Mediana" v The Owners, Master and Crew of the Lightship "Comet" [1900] AC 113 Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85 Toscano v Holland Securities Pty Ltd (1985) 1 NSWLR 145 Transfield Pty Ltd v Arlo International Ltd [1980] HCA 15; (1980) 144 CLR 83 Turner v Windever [2003] NSWSC 1447 Vannin Capital Operations Ltd v QNI Resources Pty Ltd [2023] QSC 001 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Wenham v Ella (1972) 127 CLR 454 Weston v Publishing and Broadcasting Ltd (2011) 83 ACSR 206; [2011] NSWSC 422 Wily v Terra Cresta Business Solutions [2006] NSWSC 1042 Wu v Ling [2016] NSWCA 322 Zhou v Kousal [2012] VSC 187; (2012) 35 VR 419 Texts Cited: J W Carter, Contract Law in Australia (7th edition) H Beale, Chitty on Contracts (33rd ed, 2018, Vol 1) N C Seddon and R A Bigwood, Cheshire & Fifoot Law of Contract (11th edition) Category: Principal judgment Parties: Hoho Property Pty Ltd (First Plaintiff/Cross-Defendant) Thu Duong Ly (Third Plaintiff/Cross-Defendant) Trung Hieu Ho (Fourth Plaintiff/Cross-Defendant) Bass Finance No 37 Pty Ltd (First Defendant/Cross-Claimant) Premier Finance Australia Pty Ltd (Second Defendant/Cross-Claimant) Representation: Counsel: Mr T Alexis / P Afshar (First, Third and Fourth Plaintiffs/Cross-Defendants) Mr CRC Newlinds SC / Mr TM Rogan (First Defendant/Cross-Claimant) Ms FT Roughley (Second Defendant/Cross-Claimant)