Commonwealth Bank of Australia v Shahen Serobian [2009] NSWSC 302

New South Wales Supreme Court

CITATION : Commonwealth Bank of Australia v Shahen Serobian [2009] NSWSC 302

HEARING DATE(S) : 2,3,4,5,9,10,11,12,16,17 & 18 March 2009

JUDGMENT DATE : 24 April 2009

JUDGMENT OF : Hammerschlag J

DECISION : Judgment for the plaintiff against the first defendant and the second defendant, jointly and severally, for $8,007,806.85 and cross-claims dismissed. A warrant for possession of the Manly property may be issued forthwith. The first defendant and second defendant are to pay the plaintiff's costs including the costs of the cross claims.

CATCHWORDS : BANKER AND CUSTOMER – contract – plaintiff bank sues for repayment of two loans made to the defendant customers – held bank entitled to the repayment of the two loans - MORTGAGES - mortgages and charges generally – form and execution – whether a mortgage is void or voidable due to witnessing by an officer of a bank where the bank was a party to the mortgage – held that the officer of the bank was not a party to the mortgage, and that witnessing by the bank officer was not an action taken on behalf of the bank – held that the mortgage is valid - TRADE AND COMMERCE - Trade Practices Act 1974 (Cth) and related legislation - consumer protection – defendants claimed bank loans should be set aside or varied as the bank had engaged in misleading or deceptive conduct or conduct likely to mislead or deceive under s 52 – defendants disputed personal liability in relation to a loan of $2 million, claiming that the bank represented to them that in respect of this loan it would have no recourse to their personal assets, but only those of their company – defendants claimed that the bank represented to them that properties owned by them personally were not being provided as security for any of their debts or any of the debts of their company – defendants claimed that the bank represented that a fixed interest rate of 5.6%pa would apply to a $4.8 million loan, when the actual rate was higher – held that the bank did not make any such representations and that no breach of s 52 occurred - GUARANTEE AND INDEMNITY - the contract of guarantee - parties and capacity – whether guarantee executed by the defendants for the debts of their company should be set aside under s 7(1) of the Contracts Review Act 1980 (NSW) for being unjust – the first defendant claimed that the guarantee was unjust as he could not read, write or understand English, that he did not have legal advice, and that there was an inequality of bargaining power – the second defendant claimed that the guarantee was unjust as at the time the contract was entered into she was suffering from ill health, that she did not have legal advise and that there was an inequality of bargaining power – held that in respect of both the first and second defendant the guarantees were not in any was unjust in the circumstances in which they were entered into nor was there any basis upon which it could be held to be just to deprive the bank of its contractual rights under the guarantees.