Pambris v Makis [2024] NSWSC 1289

Supreme Court New South Wales

Medium Neutral Citation: Pambris v Makis [2024] NSWSC 1289 Hearing dates: 26, 27, 28 September, 17 October 2023, final written submissions received 3 November 2023. Date of orders: 14 October 2024 Decision date: 14 October 2024 Jurisdiction: Equity Before: Slattery J Decision: Findings made that the 2010 mortgage was affected by undue influence and unconscionable conduct of the plaintiff but the 2017 guarantee is binding. Further findings made that the amount outstanding on the 2010 mortgage has not been established and a quantum hearing has been directed. Parties directed to bring in short minutes of order to give effect to these reasons. Costs reserved. Catchwords: EQUITY — Unconscionable conduct — Special disability or disadvantage – Undue influence — Actual undue influence — Relevant factors – plaintiff and his wife in a relationship of close trust and friendship with the first defendant and her husband – the first defendant and her husband execute a mortgage in 2010 recording an advance of $1.21 million from the plaintiff to them and securing repayment of the advance over their jointly owned real estate – first defendant's husband becomes bankrupt – plaintiff sues the first defendant on the mortgage - the first defendant disputes that the advance alleged by the plaintiff was made pursuant to the mortgage and seeks to set the mortgage aside – after her husband's bankruptcy, the first defendant also executed a guarantee in 2017 of certain alleged obligations of her then husband to the plaintiff arising out of deeds of loan in 2005 and 2009 and the 2010 mortgage – by her cross-claim the first defendant says both the 2010 mortgage and the 2017 guarantee were executed as result of the unconscionable conduct or undue influence of the plaintiff – what advance does the 2010 mortgage secure - whether the first defendant was in a position of special disadvantage in relation to the plaintiff in relation to the execution of the two documents – whether the first defendant was under the actual undue influence of the plaintiff – whether the 2010 mortgage or the 2017 guarantee should be set aside or otherwise modified. CONSUMER LAW – consumer credit – National Consumer Credit Code (Code) – Jurisdiction – first defendant seeks to set aside 2010 mortgage and 2017 guarantee for noncompliance with the Code – whether the Code applies – whether the relevant credit was provided by the plaintiff is "in the course of a business of providing credit". Legislation Cited: Australian Consumer Law, s 20, 232, 236 Civil Procedure Act 2005, s 26 Contracts Review Act 1980 Family Law Act 1975 (Cth), ss 79, 90C National Consumer Credit Protection Act 2009 (Cth), ss 180 National Credit Code, ss 5, 76, 77 Cases Cited: Aboody v Ryan [2012] NSWCA 395 ACCC v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 Allcard v Skinner (1887) 36 Ch D 145 ASIC v Australian Lending Centre Pty Ltd (No 3) (2012) 213 FCR 380 Avery v Saree Holdings Ltd; Lava Ltd v Avery [2012] NSWSC 463 Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30 Blomley v Ryan (1956) 99 CLR 362 Close Asset Finance Ltd v Derek Allan Taylor [2006] EWCA 788 Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 Fabre v Arenales (1992) 27 NSWLR 437 Federal Commissioner of Taxation v Whitford's Beach Pty Limited (1982) 150 CLR 355 Johnson v Butress (1936) 56 CLR 113 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Hart v O'Connor [1985] AC 1000 Hewitt v Gardner [2009] NSWSC 1107 Hyde v Sullivan (1956) 56 SR (NSW) 113 Kakavas v Crown Melbourne Limited (2013) 250 CLR 392; [2013] HCA 25 Lauvan Pty Limited & Anor v Bega & Anor [2018] NSWSC 154 Lewes v Morgan (1817) 5 Price 42 Louth v Diprose (1992) 175 CLR 621 Minot v Eaton (1826) 4 LJ OS Ch 134 Nature Resorts Ltd v First Citizen Bank Ltd [2022] 1 WLR 2788, [2022] UKPC 10 Nuhic v Rail & Road Excavations [1972] 1 NSWLR 204 Payne v Parker (1976) 1 NSWLR 191 Royal Bank of Scotland plc v Etridge (No. 2) [2002] 2 AC 773; [2001 UKHL 44 Sims v Lowe 1988 1 NZLR 656 Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6 Taylor v Johnson (1983) 151 CLR 422 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Tonto Home Loans Australia Pty Ltd v Tavares (2011) ASC 155-107; [2011] NSWCA 389 Torok v Becker [2020] NSWSC 1570 Turner v Windever [2005] NSWCA 73 Williams v ATM & CPA Projects Pty Limited [2015] NSWSC 703 Texts Cited: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths) ELG Tyler, PW Young and CE Croft, Fisher and Lightwood's Law of Mortgage, 3rd Australian Edition, LexisNexis – Butterworths, Australia 2014 PW Young, C Croft, ML Smith, On Equity (2009, Thomson Reuters) Category: Principal judgment Parties: Plaintiff: Sam Thomas Pambris First Defendant: Andrea Makis Second Defendant: Perpetual Trustee Company Limited (ACN 000 001 007) Representation: Counsel: Plaintiff: Mr D.C. Price First Defendant: Mr M.R. Hall SC; Ms M.A. McGrath