Credit Connect v Carney Credit Connect v Smit [2010] NSWSC 910

New South Wales Supreme Court

CITATION : Credit Connect v Carney Credit Connect v Smit [2010] NSWSC 910

HEARING DATE(S) : 03/06/10

JUDGMENT DATE : 16 August 2010

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

EX TEMPORE JUDGMENT DATE : 13 September 2010

DECISION : In matter 2009/00291732 I dismiss the notice of motion filed 9 December 2009 by Credit Connect Pty Limited with costs.

CATCHWORDS : Practice and procedure. Summary judgment application refused. - Conveyancing, Land Titles under the Torrens system. Forged mortgage. Consideration of whether agent's fraud is attributable to the mortgagee. Consideration of whether Consumer Credit Code and ASIC Act apply to the forged mortgage.

MONICA SMIT v JOHN ARTHUR CARNEY PARTIES : CREDIT CONNECT PTY LIMITED v MONICA SMIT

FILE NUMBER(S) : SC 2009/00291283 ; 2009/00291732

COUNSEL : Mr M Young for plaintiff Mr N Kabilafkas for defendant

SOLICITORS : Bransgroves Lawyers for plaintiff Hunt and Hunt Solicitors for defendant

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Associate Justice Macready

Monday 16 August 2010

2009/00291283 MONICA SMIT v JOHN ARTHUR CARNEY

2009/00291732 CREDIT CONNECT PTY LIMITED v MONICA SMIT JUDGMENT 1 His Honour: This is the hearing of a notice of motion filed 9 December 2009 by Credit Connect Pty Limited in matter 2009/00291732 seeking summary judgment for possession of a property of the defendant, Mrs Monica Smit, over which it holds a registered mortgage. It does not proceed on orders 5 and 6 in the notice of motion. Background facts 2 These are usefully set out in the parties' submissions which I will incorporate with some amendment. 3 Mrs Smit was born in 1935 and was 73 years of age at the time of the relevant events. She worked as a physiotherapist but retired in December 2004. Since then, the sole source of her income has been the aged pension. She divorced her husband in 1987 and he subsequently died in June 1996. 4 Mrs Smit's son moved in to live with her in August 2005 after his marriage failed and he had subsequent financial difficulties. From that time onwards he continually asked her for money to support him. Although Mrs Smit gave him small sums from time to time, she continually refused to take a mortgage on her only substantial asset, her property at Frenchs Forest ("the property"). 5 In February 2009, Greg Smit wished to finance a rock concert and required over $300,000 to do so. His mother again refused to provide him with access to her property for the purpose of raising those funds. It was at that point that he embarked upon a scheme to obtain those funds fraudulently. 6 He sought the assistance of a finance broker, Dave Cacciola, who, it appears, attempted to interest a number of lenders and was able to receive only one offer from Credit Connect. The terms of the offer were a loan advance of $425,000 for a term of 120 days with capitalised interest of $136,000 so that the total for repayment would be $561,000. Interest would then accrue at 12 per cent per 30 days thereafter. The equivalent annual rate of interest, assuming default, was 146 per cent. Given that the property was worth approximately $800,000 Mrs Smit's equity in the property would be dissipated in approximately 110 days. 7 Greg Smit received the loan offer on or about 11 March 2009. He spent much of the next month attempting to find a solicitor to witness the loan and mortgage documents, especially the solicitor's certificate. In so doing he contacted three solicitors, Mr Rahme, Mr Dib and Mr Antoniou, and a justice of the peace, Mr Singh. Credit Connect and its solicitors at no stage contacted Mrs Smit personally. 8 Mr Benson, the credit manager of Credit Connect, attended the property with Greg Smit on or about 13 March 2009 whilst Mrs Smit was present but, according to Greg Smit, declined Greg Smit's invitation to meet with her. Although he attended the property the reason why he did not see Mrs Smit is in issue in the proceedings. 9 Greg Smit forged his mother's signature on the loan documentation including the mortgage and prevailed upon Mr Singh, the justice of the peace, to witness her signature to the mortgage without seeing her. 10 On 16 or 17 April 2009, Credit Connect registered the forged mortgage on the property. Of the $338,892 actually placed into Mrs Smit's account without her knowledge, her son took $333,028. On 15 August 2009 when the payment came due under the loan Mrs Smit fell into default and by 7 December 2009 she owed $836,414.36, which was more than the value of her property. 11 Credit Connect commenced proceedings on 8 October 2009.