In De Pasquale v ASCF Managed Investments Pty Ltd, an appeal was brought against an Order for Possession made by a Master of the Supreme Court of South Australia on 19 December 2019 against the appellants’ property. In the appeal, Justice Livesay of the Supreme Court of South Australia considered the following:
In this instance, his Honour found in favour of the appellants, set aside the Order for Possession and ordered that the matter be transferred to the ordinary civil list of the General Division of the Supreme Court to continue on pleadings and discovery in the usual way.
The appellants, Mr and Mrs De Pasquale, were the registered proprietors and mortgagors of a property at West Beach, South Australia (the Property).
The appellants, in their personal capacities, and their companies (referred to collectively as the De Pasquale Entities), entered into a loan agreement with ASCF Managed Investments Pty Ltd (ASCF) (the respondent) to borrow $525,000 (the Current Loan) for the purpose of refinancing. As security for all monies (including future monies) owing by the De Pasquale Entities to ASCF, Mr and Mrs De Pasquale granted a registered mortgage in favour of ASCF over the Property.
Mrs De Pasquale, who had been wheelchair bound for 8 years and deaf since an early age, was the guarantor of the Loan. Her deafness together with her lack of language and comprehension ‘seriously’ impeded her capacity to function and as such, Mr De Pasquale was her fulltime carer. Neither of the appellants were able to work.
Of the funds borrowed, only $22,000 was to be retained by Mr and Mrs De Pasquale. That amount was retained by Mr De Pasquale only.
Of note, the security documents for the Current Loan were prepared by Summer Lawyers on behalf of ASCF. Summer Lawyers was the same firm that had previously sent the appellants (amongst others) letters of demand due to the failure to make interest repayments on a previous loan with an earlier lender (the Earlier Lender).
Ultimately, Mr and Mrs De Pasquale defaulted on the Current Loan and ASCF obtained an Order for Possession against the Property.
On appeal, Mr and Mrs De Pasquale’s arguments (which were not put before the Master) fell into two categories:
Common to each category was the argument that the appellants did not receive independent legal advice; particularly, Mrs De Pasquale did not receive advice independently of her husband.
The appellants also sought to rely on evidence not adduced before the Master, being:
On appeal, his Honour permitted Mr and Mrs De Pasquale to raise new contentions and admit further evidence on the following basis:
His Honour held that Mr and Mrs De Pasquale had established the following triable issues:
Throughout his judgment, his Honour frequently stated that it was neither necessary nor appropriate for him to make findings of fact on the appellants’ case. Rather, his role was to simply determine whether Mr and Mrs De Pasquale had established that there were real questions to be tried.
It appeared that his Honour used these statements as a means to consciously remind himself of his role on appeal. In reality, his detailed application of the case law to the facts, just falling short of reaching a conclusion, was suggestive of a desire to argue the issues in dispute (perhaps a glimpse into his Honour’s previous life as an eminent South Australian barrister).
South Australian possession proceedings are summary in nature; there is no discovery of documents. As such, lenders need to be aware that a Court may, on appeal, look favourably to exercise its discretion to permit new contentions to be raised or new evidence to be tendered provided it is in the interests of justice to do so. Should the Court deny an appellant the opportunity to raise new contentions or tender new evidence there is the risk that a ‘good claim’ will not be considered and the Court will be unable to effectively perform its simple appellate task of deciding whether there is an arguable case. Ultimately, this may lead to Orders for Possession being set aside, even if they were rightly made in the first instance.
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Fidelis McGarrigan, Partner
Hannah Tsavalas, Lawyer
  SASC 21.
 Battye v Shammall (2005) 91 SASR 315, .
 Andrew Garrett Wines Resorts Pty Ltd v National Australia Bank Ltd (2004) 206 ALR 69.
 (1998) 194 CLR 395.
 (1939) 63 CLR 649.
 Battye v Shammall (2005) 91 SASR 315, .