Hoho Property Pty Ltd v Bass Finance No 37 Pty Ltd (No 2) [2023] NSWSC 493

Supreme Court New South Wales

Medium Neutral Citation: Hoho Property Pty Ltd v Bass Finance No 37 Pty Ltd (No 2) [2023] NSWSC 493 Hearing dates: 5 – 14 December 2022 Date of orders: 11 May 2023 Decision date: 11 May 2023 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Provisions in contract declared void. Catchwords: CONTRACTS — unjust contracts — Contracts Review Act 1980 (NSW) — company obtains refinance — company director and wife provide guarantee and mortgage over family home – couple of financial substance and business experience but limited English – lender fixes completion date before Christmas – existing loan yet to expire, with no discount for early repayment – borrower's solicitor says clients need interpreter – lender regards as delaying tactic – lender declines to provide loan if borrower's solicitor continues to act – new solicitor engaged to meet deadline – borrowers advised without interpreter – whether contract for purpose of a trade, business or profession, s 6(2), at [25] – principles at [27]-[36] – material inequality in bargaining power – no negotiation – not reasonably practical to negotiate given change of solicitors required by the lender – unfair tactics – default interest provisions declared void to extent payable after default remedied – Intensive Loan Management Fee declared void. Legislation Cited: Contracts Review Act ss 5, 6, 7, 9 Cases Cited: Australian Guarantee Corp Ltd v McClelland (1993) ATPR 41-254 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 Capital Securities XV Pty Ltd (in liquidation) v Calleja [2020] NSWSC 301 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41; (2005) 14 BPR 26,639 Provident Capital Ltd v Papa [2013] NSWCA 36; (2013) 84 NSWLR 231 Quikfund (Australia) Pty Ltd v Airmark Consolidators Pty Ltd [2014] FCAFC 70; (2014) 222 FCR 13 Riz v Perpetual Trustee Australia Ltd [2007] NSWSC 1153; (2007) ANZ ConvR 615 Toscano v Holland Securities Pty Ltd (1985) 1 NSWLR 145 WFM Motors Pty Ltd v Bar M Pty Ltd [2022] NSWSC 1500 Texts Cited: 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 SC / 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)