An international flight attendant who had no recollection of signing loan documents for the advance of $265k for her Toowong unit in 2006 has disputed that the lender had ever advanced the funds at all.
Elizabeth Mason had acquired the unit in 2001 in a transaction when aged 19 with funding from St George through her father’s finance broker contact.
A year or two later she moved to the UK to accept a tennis coaching position.
In March 2006 she used the unit as collateral for a loan from Perpetual to buy a home in Taylor Street, Toowoomba in an arrangement – put together by her father as before – that also paid out the St George loan.
Ms Mason was by then working for Virgin Australia.
The Toowoomba home was badly damaged by tenants in mid 2012. She approached the same broker that had been engaged in 2006 to secure an additional $22.5k line of credit under the Perpetual loan to meet the repair costs.
There was no contest that she had completed the second loan application in her own handwriting as “an adult woman living an independent life” but again did not recall signing the document. That application recorded the total borrowings under both loan facilities at $287k.
She sold the Taylor Street residence – for which she had paid $190k – in December 2012 for $240k as a result of which the balance of the mortgage debt was from then secured only by the Toowong unit.
Ms Mason defaulted in June 2017 – triggering an interest rate escalation of 4% to 11.29 percent – and refused to surrender possession of the Toowong unit.
She prepared and filed her own Defence to the proceedings filed by Perpetual in mid-2018 to recover the debt and possession of the property.
She contended she was not bound – because of the incorrectly signed loan docs and other procedural irregularities – and that she entered into the loan only as a result of manipulation by her father without the benefit of legal advice.
Perpetual filed an application for summary judgement for recovery of the total debt of $356k in February 2022, seeking in the alternative that the defence be struck out for non-compliance with the minimum UCPR requirements.
When the matter came before Judge Bernard Porter KC in the District Court in Brisbane, she swore that her father, Wayne Mason – who died in June 2022 – “simply took it on himself to do things supposedly on my behalf” without any advice or explanation.
She disputed the funds were ever advanced at all and claimed never to have met the Commissioner for Declarations who witnessed her signature on the first loan document.
Judge Porter observed that a loan agreement is “a simple contract” and does not require witnessing to be binding and it was strictly irrelevant whether it was witnessed in the borrower’s presence or not.
He rejected the argument that if a registered mortgage is irregularly executed, the mortgagee is denied the benefits of indefeasibility, explaining that a registered interest cannot be defeated by a defect in the process of registration or in the instrument itself.
Given it was not alleged that Perpetual took any “unconscientious advantage of Ms Mason’s vulnerability” he also dismissed the contention that her father’s alleged control of her affairs somehow thwarted its position.
By the end of the two day trial Mason resiled from the contention that the amount of the first loan had not in fact been advanced.
His honour was of the view that even if the witness had applied her signature after and separately from the borrower as alleged, she had “no real prospect of defending the case on any of the bases” she contended for.
In the absence of any circumstances why the matter should otherwise be allowed go to trial, he ordered summary judgement should be given against the borrower under rule 292(1).
The judgment of $377k entered in favour of the lender included a body corporate levy debt of 27k and associated legal recovery costs at a staggering $86k – the amount of which Mason claimed to have been unconscionable – that the lender had been called on to pay out in 2021.
Even though the loan and mortgage allowed for recovery of legal costs on the indemnity basis, Judge Porter was not satisfied that entitlement was “made out on the evidence such that it could be included in a judgment”.
He observed such contractual provision was relevant in the exercise of the court’s discretion on costs, but nevertheless ordered that the borrower’s liability on costs should be on a standard basis only.
Perpetual Trustees Victoria Limited v Mason [2022] QDC 246 Porter KC DCJ, 11 November 2022
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