Steve Karamihos and Aristea Karamihos v Bendigo and Adelaide Bank Limited, Bendigo and Adelaide Bank Limited v Steve Karamihos and Aristea Karamihos [2013] NSWSC 172

Supreme Court New South Wales

Medium Neutral Citation: Steve Karamihos and Aristea Karamihos v Bendigo and Adelaide Bank Limited, Bendigo and Adelaide Bank Limited v Steve Karamihos and Aristea Karamihos [2013] NSWSC 172 Hearing dates: 25 and 26 February 2013 Decision date: 08 March 2013 Before: Pembroke J Decision: See paragraph 49 Catchwords: 'Unjust contract' - elderly borrowers - necessity for exit strategy given age and term of loan - failure by bank to make reasonable enquiry of value of collateral property on which exit strategy depended Legislation Cited: Contracts Review Act 1980 National Consumer Credit Protection Act 2009 (Cth) Cases Cited: Antonovic v Volker (1986) 7 NSWLR 151 Beneficial Finance Corporation Limited v Karavas (1991) 23 NSWLR 256 Knowles v Victorian Mortgage Investments Ltd [2011] VSC 611 Perpetual Trustee Company Limited v Khoshaba [2006] NSWCA 41 Riz v Perpetual Trustee Australia Limited [2007] NSWSC 1153 Category: Principal judgment Parties: Steve Karamihos - first plaintiff Aristea Karamihos - second plaintiff Bendigo and Adelaide Bank Limited - defendant Representation: Margiotta Solicitors & Attorneys – for the plaintiff Gadens Lawyers – for the defendant JF Merkel – for the plaintiffs RI Bellamy – for the defendant File Number(s): 2012/00334829, 2009/14393

Judgment

Introduction 1Mr and Mrs Karamihos are the borrowers pursuant to a loan from a Bendigo and Adelaide Bank Limited (BAB). They have defaulted. They contend that their loan and mortgage transaction was, in the circumstances that prevailed at the time that it was entered into, 'unjust' within the meaning of section 76(1) of the National Credit Code and section 7(1) of the Contracts Review Act. For the reasons that follow, I have reached the view that their contract was unjust in the statutory sense and that they are entitled to relief.