Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41

New South Wales Court of Appeal

CITATION: Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41

HEARING DATE(S): 6 December 2005

JUDGMENT DATE: 20 March 2006

JUDGMENT OF: Spigelman CJ at 1; Handley JA at 99; Basten JA at 105

DECISION: 1 Grant leave to appeal; 2 Direct the Appellant to file a Notice of Appeal within 14 days hereof; 3 Appeal dismissed; 4 The Appellant to pay the Respondents' costs.

CATCHWORDS: CONTRACTS – Unjust contracts – Determination that a contract "unjust" – Appellate review – Nature of decision appealed from – Conclusion that "unjust" – Whether discretionary – Whether reviewable – Discussion – Contracts Review Act 1980, s7. - CONTRACTS – Unjust contracts – When contract "unjust" – Courts to apply contemporary standards of what is "unjust" – Court cannot be constrained by other decisions as if they were rules – Relevant circumstances – Where money borrowed for investment – Purpose of the loan– Lender's indifference to purpose of loan– Lender's failure to adhere to its own lending guidelines.

Contracts Review Act 1980: ss 7, 9 LEGISLATION CITED: Unfair Contract Terms Act 1977 (UK) Unfair Terms in Contract Regulations 1999 (UK)

Antonovic v Volker (1986) 7 NSWLR 151 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 Beneficial Finance Corp Limited v Karavas (1991) 23 NSWLR 256 Blackburn v Allianz Australia Insurance Ltd (2004) 61 NSWLR 632 Buck v Bavone (1976) 135 CLR 110 Buller v Black (2003) 56 NSWLR 425 Coal & Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447 Crowe v Commonwealth Bank of Australia [2005] NSWCA 41 CSR Ltd v Della Maddalena [2006] HCA 1 Dinsdale v The Queen (2000) 202 CLR 321 Director General of Fair Trading v First National Bank plc [2002] 1 AC 481 Elders Rural Finance Ltd v Smith (1996) 41 NSWLR 296 Elkofairi v Permanent Trustee Co Ltd (2003) 11 BPR 20,841 Esanda Finance Corp Ltd v Tong (1997) 41 NSWLR 482 Figliuzzi v Yonan [2005] NSWCA 290 Fleming v The Queen (1998) 197 CLR 250 Fox v Percy (2003) 214 CLR 118 George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 CASES CITED: House v The King (1936) 55 CLR 499 Karl Suleman Enterprizes Pty Ltd (in liq) v Babanour (2004) 49 ACSR 612 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Mulligan v Coffs Harbour City Council (2006) 221 ALR 764 Murphy v Overton Investments Pty Ltd [2002] FCAFC 129 Nguyen v Taylor (1992) 27 NSWLR 48 Norbis v Norbis (1986) 161 CLR 513 Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd (2001) 50 NSWLR 679 Permanent Trustee Australia Co Ltd v FAI General Insurance Co Ltd (2003) 214 CLR 514 Roy Morgan Research Centre Pty Ltd v State Revenue (Vict) (2001) 207 CLR 72 Russo v Aiello (2003) 215 CLR 643 SH Lock (Australia) Ltd v Kennedy (1988) 12 NSWLR 482 Singer v Berghouse (1994) 181 CLR 201 St Clair v Petricevic (1988) ASC 55-688 St George Bank Ltd v Trimarchi [2004] NSWCA 120 Warren v Coombes (1979) 142 CLR 531 Weiss v The Queen (2005) 80 ALJR 444 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 Wyong Shire Council v Shirt (1980) 146 CLR 40