In cross-examination the first defendant conceded that if the real purpose of the loan was residential finance then the declaration by himself and the second defendant was untruthful.
13 The significance of this matter is initially whether the defendants are excluded from any of the protections which might otherwise be derived from the Consumer Credit Code. Clause 11(2) of that code provides:
"Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares before entering into the credit contract that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes)."
14 I do not ignore the following subsection 3 which provides:
"However such a declaration is ineffective for the purposes of this section if the credit provider (or any other relevant person who obtained the declaration from the debtor) knew, or had reason to believe at the time the declaration of made, that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes. For the purposes of this subsection a relevant person is a person associated with the credit provider or a finance broker (or a person acting for a finance broker) through whom the credit was obtained."
15 Whether the solicitor acting for the mortgagors who witnessed the declaration could be categorised in terms of section 11(3) as acting for the finance broker may be debatable but, in any event, as a matter of apparent precaution the solicitors for the mortgagee dispatched requisite notices under clause 80 of the Code in any event.
16 The defendants deny receipt of the clause 80 notices. I am satisfied that they were dully dispatched. If clause 80 has become operative then dispatch is what was required.
17 The defendants raise the credibility of the witness, Ms Pozdnyak, who was at one time a receptionist employed by the mortgagee's solicitors. Cross-examination of this witness showed that she had very poor memory but, in my view, what is important is that the integrity of the file memo, which recorded what she had done, was not challenged. I therefore accept that she did as she deposes in dispatching the notices, supported, as the evidence is, by the apparently contemporaneous record.
18 Neither am I persuaded that there was any cause for Mrs Saade, (formerly Ms Khoury) to suspect that the documentation submitted on behalf of the defendants, which included the declaration of business and investment purpose, should not have been received by her as other than genuine. The fist defendant is an accountant. This is stated on the application for finance. That of itself would hardly provoke Mrs Saade to suspect possible falsehood.
19 This is not an a case where the lender should have been aware, (nor were they the facts) of multiple defaults on the part of the applicant for finance or of inability to service the loan. I observe that in the application for loan the first defendant described himself as self employed accountant and the schedules of assets, which included two motor vehicles said to be worth $30,000 showed a surplus of joint assets over liabilities of something in the order of $400,000.
20 I am satisfied that the plaintiff has demonstrated that the application of the Consumer Credit Code has been excluded. As I have just indicated, even if that conclusion were wrong the plaintiff has complied with what would be required pursuant to clause 80 as a precaution and would be entitled, therefore, to enforce the mortgage.
21 Paragraph 4 of the defence states:
"Notwithstanding the unenforceability of the plaintiff's documents the defendants are not liable for certain debt components the statement of claim."
Exactly what this is intended to comprehend has not been identified and in that absence I can find that it offers no inhibition against the remedy being sought by the plaintiff.
22 The first defendant, in the course of his submissions, sought to make reference to some cases and I should record some matters in respect to them. Before doing that I should deal with the reserved question of the costs thrown away as a result of the adjournment from yesterday when the trial would obviously have concluded but for the defendants' application so to do. The defendants must pay these costs which have been thrown away.
23 The other issue relates to the terms upon which judgment in earlier litigation concerning the same parties and on the same issue was set aside. The term sought was that the defendants not be allowed to rely upon paragraph 3 of the defence in particular. As the defence in that paragraph has not been sustained it is sufficient for present purposes to record that I would not have imposed that term upon the defendants in case it could be demonstrated that the defence might have some merit. I was not in a position in advance to gauge that although, of course, in the event I have come to the conclusion that the defence as pleaded in paragraph 3 has not been sustained.
24 In terms of the cases referred to by the first defendant in his submissions I make the following comments: Carter v Schmierer [2003] QSC 035 dealt with authority to execute on behalf of a corporation. For reasons already given the mortgage in this case has the benefit of registration under the Real Property Act and the consequences which follow that. This case is of no assistance to the defendants. It suffices to say that Benjamin v Ashikian [2007] NSWSC 735 and Bahadori v Permanent Mortgages Pty Ltd [2008] 72 NSWLR 44 are each distinguishable upon their facts. Simply reading the background in paragraphs 10 onwards of Benjamin cogently demonstrates the difference between what the lender should have been alerted to in that case contrasted with the situation in the present case, in particular given the surplus claim of assets over liabilities and the occupation of the first defendant, a man who represented that he was in active practice as a self employed accountant.
25 Without recounting all the contrasts which are detectable Bahadori, at paragraph 82, it includes an observation in the Court of Appeal: "It may be inferred that Kremnizers were a willing, if not the moving party, with respect to the refinancing." That is very different from the present case. I note that Kremnizers is a reference to the solicitors acting for the lender, both in that case and in the present instance.
26 Finally, the first defendant referred to Cook v Permanent Mortgages Pty Ltd [2007] NSW 219. That case was focussed upon costs and I do not perceive it to offer any assistance to the defendants' submissions.
27 It follows, therefore, that the defences relied upon have failed and, necessarily, there must be judgment for the plaintiff. I propose to direct entry of judgment for possession and the issue of the appropriate writ.
28 I direct that judgment be entered for the plaintiff, that it have possession for the property identified as 5/SP12139 also known as 5/567-569 Pacific Highway, Killara. I direct that a writ of execution may issue, the writ to lie in the office for twenty-eight days from today.
29 I order the defendants to pay the plaintiff's costs thrown away as a result of the adjournment from yesterday until today.
ADJOURNED