A bank customer fails in a claim that the bank wrongfully paid loan monies into the wrong account causing him loss …

Murray Willson and his wife, Barbara Willson, agreed in family law proceedings to settle the financial matters between them by, in part, the sale of property at 90 Jutland St in Brisbane by Mrs Willson. At settlement, Mr Willson was to receive $312,500 from the sale proceeds as part of the family law settlement agreement.

In separate proceedings in the Supreme Court of Queensland the Bank of Queensland commenced proceedings against Mr Willson as the guarantor of a debt owed by Prestige Pools Paving and Landscapes Pty Ltd. Mr Willson defended the proceedings claiming that the money advanced by the bank was paid into the wrong account in breach of duties that the bank owed himself and his company and thereby preventing him from being in a position to pay the debt that he had guaranteed.

The account into which the bank paid the money was a joint account opened by Mr Willson and his wife, Mrs Willson on 30th October 2008. Mr Willson claimed that the joint account was opened for Mrs Willson’s benefit and he had no obligation to repay any of this money. He further claimed that the bank had no authority to pay the money into the joint account. Mr Willson also claimed that his business collapsed because of the bank’s actions in paying the money into what he claimed was the wrong account.

The court did not accept the evidence of Mr Willson and found that the joint account where the money was paid by the bank had been opened at the request of Mr Willson to advance an investment opportunity of his own.

The court held that the bank had not breached any duty owed to Mr Willson.

IT IS POSSIBLE TO CLAIM OWNERSHIP OF LAND EVEN IF YOU ARE NOT REGISTERED ON THE TITLE …

In Western Australia. the successors in title to their father Hadley George Bowman, sued Gary Tremaine for trespass of land that was in their name following the death of their father. The strip of land was approximately 134 sqm in size, extended along the boundary of the properties owned by the parties and was of varying width.

In a counterclaim, Mr Tremaine claimed ownership of the land by adverse possession. Mr Tremaine gave evidence that the disputed land was physically incorporated as part of his property when a limestone retaining wall was constructed in about 1957. Other things were done on the disputed land since the early 1950s such as, the planting of trees and the erection of water tanks. It was claimed that the plaintiffs’ family were never granted use or possession of the land.

The plaintiffs disputed the evidence of the defendant on the counterclaim. They said that the retaining wall was erected without permission or authority and that Mr Bowman regularly visited the land doing repairs and the like. The evidence was that Mr Bowman complained of the use of the land by Mt Tremaine’s family.

In the 1990s, the plaintiffs asserted entitlement to the whole of the land including by erecting a ring lock fence .

The defendant had to prove actual possession of the land and also an intention to possess the land. Having considered the history of how the land was dealt with by the parties, His Honour found the actions of Mr Hugill, the predecessor in title to Mr Tremaine, made it clear that he had taken possession of the land and intended to retain it. Mr Hugill’s possession started in the early 1950s and continued without any complaint by Mr Bowman. His Honour pointed out that by the time the complaint was made in the 1990s any challenge to possession by Mr Hugill was statute barred.

The claim by Mr Bowman’s family for trespass by Mr Tremaine was dismissed and Mr Tremaine was successful in his claim for ownership of the disputed land.

Depositing the certificate of title with the lender’s solicitor can create an equitable mortgage…

In some instances, the Supreme Court can order the sale of a property to repay the debt. This was examined in the case of Hatala v Graglee Pastoral Company Pty Ltd [2017] NSWSC 155.
In May 2013 Mr Hatala and Mr Daniel lent Grag Group Pty Ltd the sum of $300,000 and a property at Sutton Forest was used as security for the loan.

At that time, the husband (Mr Coady) was the sole director, secretary and shareholder of the borrower company (Grag Group Pty Ltd) while his wife (Mrs Coady) was the sole director, secretary and shareholder of Graglee Pastoral Company Pty Ltd who was the registered proprietor of the Sutton Forest property.

Shortly before the loan was advanced, the husband delivered the loan agreement signed on behalf of the borrower company together with the certificate of title of the Sutton Forest property to his solicitor, Mr Silk. Mrs Coady did not sign the loan agreement. A day later, the lenders visited Mr Silk’s office and the latter showed each of them the certificate of title of the Sutton Forest Property. The lenders then signed the loan agreement and they each transferred $150,000 into the bank account of Grag Group Pty Ltd.

Grag Group Pty Ltd defaulted on the loan and the lenders commenced recovery proceedings. The lenders claimed that by depositing the certificate of title an equitable mortgage was created and they were entitled to ask the court to appoint a receiver to sell the property and recover the money owing to them.
The evidence was that Mr Silk, the solicitor, told the husband, Mr Coady that the certificate of title for the Suttons Forest property would be held as security for the loan. Furthermore, the loan agreement prepared by Mr Silk said that the certificate of title was to be held as security.

In his judgment, Justice R Darke referred to earlier cases and said that an equitable mortgage can be created by lodging the certificate of title even if there is no writing. The one difficulty that the lenders had was that the wife, never signed the loan document. However, based on the evidence before him, His Honour was satisfied that Mr Coady was acting with the knowledge and consent of his wife.
His Honour made a declaration that the lenders had an equitable mortgage over the Sutton Forest property and ordered that a receiver be appointed to sell the property in order to repay the debt.

The COVID-19 pandemic and business interference insurance …

Many business operators had taken out business interference insurance and claimed on those policies after they suffered loss because of lockdowns imposed by state governments during the COVID-19 pandemic. The insurance companies are denying liability and it is now for the courts to determine the issue of responsibility.

The most recent decision followed proceedings brought by the owner and operator of the Vanilla Lounge cafe. In this action, the Federal Court was asked to answer a specific question: can liability be excluded (under the particular insurance policy) if the claim arises directly or indirectly or contributed by a human disease specified in a declaration of a human bio security emergency made under the Biosecurity Act 2015 (Cth.). The insurance company argued that the reason for the lockdown (and therefore the loss) was the state governments declaration under the state law not the declaration made by the Commonwealth government. The Judges answer was “no”, that liability cannot be excluded.

It is understood that leave will be sought to appeal the decision to the High Court.

There have been other decisions that similarly are opening the door for business owners to claim on their policies.

For more information about your rights, contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jackasonassoc.com.au

Peter Jackson, Costin Stan and Jason Tran from Jackson & Associates, Solicitors wish our friends, clients and readers of our newsletter the best wishes for the holiday season and the coming year.

Our offices will be closed between 23 December 2020 and 4 January 2021.

For urgent matters during the holiday period please contact Peter Jackson at pjackson@jacksonassoc.com.au or Costin Stan at cstan@jacksonassoc.com.au

Unfair contract terms declared void…

JJ Richards & Sons Pty Ltd (JJ Richards) is a large waste disposal company. The Federal Court declared, by consent, that eight of the standard contract terms of the company with small businesses were void because they breached the Australian Consumer Law provisions designed to protect small business operators. This was the first case following the introduction of the provisions in 2016.

The contract terms that were declared void allowed JJ Richards to increase its prices, remove any liability from itself, charge for services not rendered and a number of other one sided provisions. Like standard contract terms in small business contracts these were non-negotiable standardized terms .

A term in a standardized form contract will generally be unfair if it is one-sided and excessive and is not reasonably necessary to protect the interests of the company.

It should be noted that contract terms may not be unfair if they are clearly drawn to the other parties attention before entering into the contract.