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High Court of Australia - Appeal Short Particulars |
Last Updated: 23 May 2022
STUBBINGS v JAMS 2 PTY LTD & Ors (M13/2021)
Court appealed from: Supreme Court of Victoria (Court of Appeal)
[2020] VSCA 200
Date of judgment: 5 August 2020
Special leave granted: 12 February 2021
The respondents made an asset-based loan to a company owned and controlled by the appellant. An asset-based loan is a loan made on the basis of the security of a particular asset alone, without any consideration of the appellant’s ability to repay the loan from his income or other assets. Whether or not the making of an asset-based loan constitutes unconscionable conduct depends on ‘all the circumstances’ of the case, not just the fact that it is an asset-based loan.
The loan of $1,059,000 made by the respondents was to enable the appellant to purchase a property as a home. The security for the loan was a mortgage over the property as well as equity the appellant had in two other houses that he owned. At the time the appellant was unemployed and had no regular income. Interest under the loan was payable monthly in advance. The first and second interest payments were made but no further payments were made, and the respondents sought possession of the property. Possession was granted in a summary judgment.
The appellant appealed the summary judgment and alleged that the mortgage had been procured by unconscionable conduct. The trial judge accepted the unconscionable conduct defence and declared that the loan agreement was invalid, unenforceable and set aside.
The respondents sought leave to appeal to the Court of Appeal. Leave to appeal was granted by the Court of Appeal. The Court of Appeal allowed the appeal against the trial judge’s unconscionability finding and ordered judgment for the respondents for possession.
The grounds of appeal are that:
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URL: http://www.austlii.edu.au/au/other/HCAASP/2021/40.html