PAGE and ANOR v COMMONWEALTH BANK OF AUSTRALIA [1995] NSWCA 350

PAGE and ANOR v COMMONWEALTH BANK OF AUSTRALIA SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, PRIESTLEY and MEAGHER JJA 6 October 1995, 6 October 1995

[1995] NSWCA 350

EQUITY — UNCONSCIONABILITY — mortgage granted over home to bank — whether unconscientious for bank to enforce security — no error in conclusion that not unconscionable.

EQUITY — UNCONSCIONABILITY The appellants gave a mortgage over their home to secure a borrowing from a bank by a company in which they had a one-third interest. The business of the company failed. The reasons for that failure were not examined in any detail. It was argued that it was unconscientious for the bank to enforce its security. The trial judge rejected that contention — HELD — No error had been shown.

Gleeson CJ This is an appeal from a decision of Giles J in the Commercial Division of the court. His Honour's decision was given on 15 November 1994. Although the case for the appellant has been argued forcefully and clearly by Mr Lawler, I have formed a clear view that the appeal must fail and there is no reason to delay the giving of the reasons for that conclusion.

In giving those reasons, however, I will not attempt either to repeat or to summarise the reasoning of Giles J. It will be assumed that this court's reasons for judgment will be available to be read together with his Honour's reasons and, for my part, I intend to refer only to so much of the relevant facts and legal principles as is necessary to deal with the arguments that have been advanced in this court on behalf of the appellants.

The appellants, in the course of a business transaction in which they had a personal financial interest, entered into certain contractual arrangements with the Commonwealth Bank of Australia. In particular, they gave a mortgage over their home for the purpose of securing a loan by the bank to a company named Rosehall Pty Ltd and they undertook certain personal financial obligations concerning the repayment to the bank of the indebtedness of Rosehall. The business venture failed and Rosehall ended up owing the bank a substantial amount of approximately $400,000.