Citigroup Pty Limited v Middling (No. 4) [2015] NSWSC 221

Supreme Court New South Wales

Medium Neutral Citation: Citigroup Pty Limited v Middling (No. 4) [2015] NSWSC 221 Hearing dates: 2 - 3 March 2015 Decision date: 17 March 2015 Jurisdiction: Common Law Before: Adamson J Decision: (1) Judgment for the first cross-defendant on the cross-claim. (2) Unless either party makes an application for a different order for costs, order the cross-claimant to pay the first cross-defendant's costs of the proceedings, other than the costs of the adjournment and amendment ordered on 1 May 2014, which are the subject of a separate application. Catchwords: CONTRACT – agency – no relationship of agency between lender or manager and mortgage originator – originator acting on its own behalf when filling out loan application for borrower and including false statements of borrower's income and employment – borrower authorised lender to pay funds to originator's sole director – lender not liable for alleged misappropriation CONTRACT – Contracts Review Act 1980 (NSW) – no basis for relief made out in pleading – importance of pleadings and particulars to inform lender of case it has to meet – cross-claim statute-barred in any event – relief under Act intended to be used as a shield not a sword – subs 16(c) of the Contracts Review Act UNCONSCIONABLE CONDUCT – requirement of moral obloquy not present – lender unaware of dishonest conduct by mortgage originator Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 57, 58 Contracts Review Act 1980 (NSW), ss 4, 7, 9, 16(c) Evidence Act 1995 (NSW), s 91 Interpretation Act 1987 (NSW), ss 34(1), 34(2) Real Property Act 1900 (NSW), s 57(2)(b) Trade Practices Act 1974 (Cth), s 51AC Cases Cited: Aon Risk Services Australia v Australian National University [2009] HCA 27; 239 CLR 175 Baltic Shipping Co. v Merchant "Mikhail Lermontov" (1994) 36 NSWLR 361 Citigroup Pty Limited v Middling [2014] NSWSC 474 Davis v Williams [2003] NSWCA 371 Heperu Pty Ltd v Morgan Brooks Pty Ltd (No. 2) [2007] NSWSC 1438 Kirkpatrick v Kotis [2004] NSWSC 1265; 62 NSWLR 567 Landa v Perpetual Trustees Victoria Ltd [2014] NSWCA 393 Lloyd v Grace Smith & Co. [1912] AC 716 Michalopoulos v Perpetual Trustees Victoria Limited [2010] NSWSC 1450 Murphy v Overton Investments Pty Ltd [2002] FCAFC 129 Peddie v Stein (Unreported, Young J, 26 March 1987) Perpetual Trustees Victoria Limited v Schmidt [2010] VSC 67 Provident Capital Ltd v Papa [2013] NSWCA 36 Tonto Home Loans Australia Pty Limited v Tavares [2011] NSWCA 389 Tran v Perpetual Trustees Victoria Limited [2012] NSWSC 1560 Uxbridge Permanent Benefit Building Society v Pickard [1939] 2 KB 248 Texts Cited: John R Peden, Harsh and Unconscionable Contracts: Report to the Minister for Consumer Affairs and Co-operative Societies and the Attorney-General for New South Wales, (1976). John R Peden, The Law of Unjust Contracts, (1982, Butterworths). Category: Principal judgment Parties: Citigroup Pty Limited (Plaintiff/First Cross-Defendant) Dennis James Middling (Defendant/Cross-Claimant) Perpetual Trustees Victoria Limited (Second Cross-Defendant) Representation: Counsel: DW Elliott (Defendant/Cross-Claimant) M Ashhurst SC/P Newton (Second Cross-Defendant)