Mark Pearson made urgent application for a “stay” to prevent Pioneer Mortgages executing a warrant to recover possession of his unit at 1/296 the Esplanade Miami over which it held security.

Pioneer obtained judgment in October 2013 against Pearson “by default”, ie by reason of Pearson not filing a defence to its claim within the specified period.

Pearson  who claimed that Pioneer’s proceedings were served at an “ineffective” PO Box address – although it was indeed his and one in respect of which the lender had obtained an order of substituted service – applied to have the default judgment set aside in December.

He contended Pioneer’s loan was “unconscionable” because the transaction taken out to pay out the NAB in July 2008, was approved on the basis of income figures that had been “fudged” by his mortgage broker. He had, he claimed, signed a partly completed application that the broker amended without his knowledge and consent to “grossly overstate his income”.

He had gone into arrears as from January 2011 and made no payments since. After repossession by Pioneer, he “interfered with premises by changing locks and challenging tenants”.

Pearson asserted that because “he assumed responsibility for a debt which he could not service”, Pioneer’s conduct amounted to “asset lending”.

The District Court in December ruled against all of his arguments. It refused to set aside the default judgment because “there were no real prospects of any successful defence to the mortgagee’s claim”.

Had the deal been a consumer loan to which the Queensland consumer credit code was applicable – rather than for for business or investment purposes – Pearson may have had been entitled to hearing to determine whether or not the transaction was “unjust”.

The January court thought in relation to the appeal “its lack of merit is palpable”. It refused to grant the “stay” to prevent recovery of possession of the Miami unit on Sunday 2 February, pending the appeal’s finalization in coming months.

Pioneer Mortgages Limited v Pearson [2014] QDC 16 Brisbane Reid DCJ 31/01/2014


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