Geoghegan v Stankovich [2008] NSWDC 289

New South Wales District Court

CITATION: Geoghegan v Stankovich [2008] NSWDC 289

HEARING DATE(S): November 5 - 6, 2008

JUDGMENT DATE: 12 December 2008

JURISDICTION: Civil

JUDGMENT OF: Murrell SC DCJ

CATCHWORDS: CONTRACTS - general contractual principles - parties - discharge, breach and defences to action for breach - RESTITUTION - general principles

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 CASES CITED: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337. Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516 Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165.

PARTIES: Geoghegan Stankovich

FILE NUMBER(S): 469/07

COUNSEL: Mr Tregenza Mr Hall

Background

1. Mr and Mrs Stankovich owned a 2.14 ha unserviced "bush block" in an outer Sydney suburb undergoing significant development. The block was burdened by a mortgage securing a loan from the Commonwealth Bank of Australia (CBA). Mr and Mrs Stankovich were having difficulty in meeting their repayment commitments. It was anticipated that the block would be subdivided. On 28 October 1996, Mr and Mrs Stankovich entered a deed ('the deed') with Mr Geoghegan, a friend of Mr Stankovich. Mr Geoghegan was to meet the CBA loan repayments. In return, he was to receive a benefit when the block was subdivided.

2. On 13 January 1997 the first CBA mortgage was discharged and a second CBA mortgage was entered, naming Mr Geoghegan and his wife as borrowers. In July 2000, the second CBA mortgage was discharged and the loan was refinanced through Suncorp-Metway Limited (Suncorp). Mr Stankovich and Mr Geoghegan still believed that the property would be developed. The Suncorp mortgage named Mr and Mrs Stankovich and Mr and Mrs Geoghegan as borrowers. Mr Geoghegan made all necessary loan repayments to the CBA and Suncorp, either from an account that he held with his wife or as a direct deduction from his wages.