Serventy v Commonwealth Bank of Australia [No 2]

[2016] WASCA 223

Western Australia Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Equity
2. › Unconscionable conduct
3. › Enforcement of mortgage
4. › Asset-lending
5. › Whether unconscionable for bank to enforce mortgage where borrowers lacked capacity to service loan
6. › Whether bank had actual or imputed knowledge of borrowers' inability to repay
7. › Australian Securities and Investments Commission Act 2001 (Cth), s 12CB
8. › Trade Practices Act 1974 (Cth), s 51AC
1. Agency
2. › Mortgage brokers
3. › Whether mortgage broker was agent of lender or borrower
4. › Construction of intermediary agreement
5. › Whether broker's knowledge imputed to bank
6. › Turns on own facts
1. Practice and Procedure
2. › Summary judgment
3. › Serious question to be tried
4. › Whether arguable defence of unconscionable conduct precluded summary judgment

Quick Take

A mortgage broker operating under a standard banking intermediary agreement that expressly limits agency to identification verification functions is not the bank's agent for the purpose of receiving information from borrowers, so the broker's knowledge of a borrower's financial circumstances cannot be imputed to the bank. Without such imputed knowledge, a defence of unconscionable conduct based on 'asset-lending' will fail where the loan application presented to the bank did not reveal any inability to service the loan.