Accom Finance Pty Limited v Mars Pty Limited, Accom Finance Pty Limited v Kowalczuk [2007] NSWSC 726

New South Wales Supreme Court

CITATION : Accom Finance Pty Limited v Mars Pty Limited, Accom Finance Pty Limited v Kowalczuk [2007] NSWSC 726 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 13, 14, 15, 16 and 19 March and 16 April 2007

JUDGMENT DATE : 6 July 2007

JURISDICTION : Equity Division

JUDGMENT OF : Windeyer J at 1

DECISION : Cross-claims dismissed in both proceedings. Orders for Judicial Sale to be made when pleading amended

CATCHWORDS : Estoppel – Res Judicata – Issue estoppel – Anshun estoppel – Default judgment in action by mortgagee for possession and for money sum due under mortgages in first proceedings – Defendant sought to bring cross claim for damages under Trade Practices Act – Whether defendant estopped from bringing cross claim – Issue raised in new proceedings must be on precise issue determined in original proceedings – No estoppel - Equity – Trade Practices Act – Unconscionable conduct – Where cross-claimant gave mortgage due to fraudulent conduct of third party – Cross-claimants not in a position of special disadvantage – Lender did not have knowledge of third party's fraud – No unconscionable conduct - Contracts – Unjust contracts – Contracts Review Act – When contract "unjust" – Where borrower did not have means to repay loan – Where lender given fraudulent information about borrower's ability to repay loan – Where rates of interest unrelated to lender's risk – Where contract was a bad bargain – Contract not unjust – Whether strong possibility of default under mortgage triggering very high default rate could amount to predatory conduct – Contracts Review Act 1980 ss 7, 8, 9 - Legal Practitioners – negligence and retainer - Duties and liabilities – To client – Solicitor advising on security documents – Scope of duty – No obligation to advise client on financial sense of mortgage – No obligation to recommend client obtain financial advice – Scope of Rule 45 of the Solicitor's Practice Rules - Mortgages – Gap between higher rate and lower rate – In reality lower rate not concessional rate but expected rate