LACEY v BANK OF NEW ZEALAND [1997] NSWCA 182

LACEY v BANK OF NEW ZEALAND

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

HANDLEY, SHELLER and BEAZLEY JJA 5 November 1997, 5 December 1997 [1997] NSWCA 182

TRADE PRACTICES — misleading and deceptive conduct — damage MORTGAGE — sale by mortgagee — duty to mortgagor

The Bank sued to recover a debt under a mortgage granted in 1989. Mrs Lacey filed a cross-claim alleging that the Bank had misled her about the terms of the mortgage which was intended to be "portable" ie transferable to another property. Mrs Lacey planned to transfer the mortgage to a rural property but the mortgage did not permit its transfer to such a property.

Mrs Lacey contracted to sell the mortgaged property but refused to complete for reasons which were not related to the Bank's misleading or deceptive conduct. The trial Judge found that no damage had resulted from the Bank's conduct as the mortgage could not be transferred to another property until the first property was sold.

In 1991 the Bank exercised its power of sale. Mrs Lacey alleged in another cross-claim that the power had been improperly exercised. The trial Judge found for the Bank in its claim for debt and dismissed Mrs Lacey's cross-claims.

HELD: (1) As the appellant had not filed a proper defence, she had to begin at the trial by calling evidence in support of her cross-claims. No denial of procedural fairness had been shown. (2) The appellant failed to prove that any damage had flowed from the Bank's misleading and deceptive conduct. (3) There was no evidence that the Bank had acted in bad faith in the conduct of the auction, or had acted wilfully against the interests of Mrs Lacey. (4) Special grounds for the admission of fresh evidence had not been made out.

Handley JA This is an appeal from a decision of Herron DCJ in proceedings commenced by the Bank to recover a debt. The proceedings were commenced in the Local Court, but then transferred to the District Court. The claim arose under a mortgage executed on 9 May 1989 over property owned by Mrs Lacey on Dangar Island.