Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors [2007] NSWSC 1153

Reported Decision : (2008) NSW Conv R 56-198 (2007) ANZ Conv R 615

New South Wales Supreme Court

CITATION : Riz & 1 or v Perpetual Trustee Australia Ltd & 4 ors [2007] NSWSC 1153

HEARING DATE(S) : 24 July - 17 August 2006

JUDGMENT DATE : 18 October 2007

JURISDICTION : Common Law Division

JUDGMENT OF : Brereton J

DECISION : Borrowers' claim to avoid or vary mortgage and loan contract under Contracts Review Act and for unconscionability dismissed. Judgment that borrowers pay lender outstanding balance of loan and for possession. Judgment that solicitors pay borrowers damages for breach of professional duty.

CATCHWORDS : CONTRACTS – Unjust contracts – Mortgage and loan contract – Relevant circumstances – Where money borrowed for improvident investment – Purpose of the loan – where lender aware that loan for purposes of investment but not of particular investment proposed nor of improvidence – where false information provided to lender by borrowers' agent – where lender considered and was satisfied that loan was serviceable – where unfair tactics used against borrower by promoters of investment scheme but not by or on behalf of lender – whether lender engaged in "asset lending" – whether unjust that lender failed to detect false information supplied to it – NEGLIGENCE – professional liability – solicitors – independent advice – where solicitor retained to advise on mortgage and loan contract – where solicitor not retained to provide advice on proposed investment – where client about to enter into improvident transaction which ought to have been apparent to solicitor – whether solicitor had or ought to have had knowledge of extraordinary risk associated with investment – where investment subsequently failed – whether solicitor liable for failure to advise on investment – whether suggestion that solicitor should obtain independent legal and financial advice sufficient