ANZ Banking Group Ltd v Alirezai; Alirezai v ANZ Banking Group Ltd & Anor

[2004] QCA 6

Queensland Court of Appeal

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Interrogate

Catchwords

1. Equity
2. › Unconscionable dealing
3. › Third party mortgages
4. › Volunteer surety
5. › Whether bank put on inquiry of special disadvantage
6. › Whether close friendship based on shared cultural and religious values sufficient to require bank to take special care
7. › Whether bank required to disclose debtor's financial position to surety or surety's solicitor
1. Equity
2. › Unconscionable dealing
3. › Garcia principle
4. › Scope of relationships
5. › Whether principle limited to marriage or marriage-like relationships
6. › Whether applicable to non-commercial relationships of trust and confidence generally
1. Equity
2. › Unconscionable dealing
3. › Independent legal advice
4. › Certificate of independent advice
5. › Whether certificate sufficient to rebut presumption of unfairness where solicitor lacked information about debtor's financial position
1. Equity
2. › Undue influence
3. › Presumption from relationship of parties
4. › Whether relationship of trust and confidence between friends of shared cultural background gives rise to presumption
5. › Whether creditor's knowledge of relationship puts creditor on inquiry

Quick Take

The Garcia principle concerning unconscionable enforcement of sureties is not limited to marriage or marriage-like relationships; it may extend to other relationships of trust and confidence, though the precise scope remains to be determined by the High Court. However, a close friendship based on shared cultural and religious values, where the bank knows only that the parties are friends and one previously did the other a financial favour, does not in itself put the bank on inquiry requiring it to take steps beyond ensuring the surety obtains independent legal advice. The sufficiency of certificates of independent legal advice given without knowledge of the debtor's financial position remains a live issue, with Wilson J (in the majority on the result) expressing reservations about their adequacy.