Reflection 2 Scenario

Facts:

Lucille Price is the registered proprietor of a house property, which became subject to a mortgage to Eastpac Bank. The mortgage was given by Lucille as security for a loan made by the Eastpac to Lucille's husband, James Price, who was the sole proprietor of Price Consulting Services. The evidence is in November 2019 Lucille, an occupational therapist, had confidence in her husband who was continually in financial trouble. James Price was in debt for car payments, a Visa credit card debt and an Eastpac personal loan. He asked his wife to guarantee his debt with Eastpac and to put up the title to the home (registered in her name only), as security for debts totalling $180,000.

Lucille tried to ask her husband James questions about the Eastpac loan, but he put her off by saying "Don't you trust me and even if I did give you details you would not understand as you are stupid with money".

Eastpac Bank gave the mortgage and guarantee documents to the husband, James, and asked him to arrange his wife Lucille to sign the documents before an independent witness and return them to the bank. No representative of Eastpac was in attendance when she signed. Lucille was not given any chance to read the documents her husband presented to her for her signature and her attempts to ask questions only made her husband James angrier.

James arranged for a neighbour, Molly, to come into their home to witness the signatures on the Eastpac mortgage and guarantee documents including a Certificate that Lucille elected not to obtain independent legal and financial advice in relation to Eastpac's mortgage and guarantee. Molly noticed Lucille had tears running down his cheeks while Lucy was signing, and she was very quiet. Lucille understood her husband James' debts were for car payments, credit card payments and a business debt, but she knew neither the actual amounts owing nor that her husband James was in arrears of his car lease payments and credit card debts.

Lucille did not receive, and therefore could not read, the Eastpac Bank Guarantor's booklet 'What it Means to be a Guarantor'. Lucille did not know that she was signing a mortgage as such, she just knew it as loan documents or a Better Business Loan; she thought that she was guaranteeing her husband James' loan, but not giving a mortgage over her title to the home.

Lucille and James separated on 30 December 2019 and Lucille wishes to try and set aside the Eastpac mortgage and guarantee. are

Required:Students to complete the following AT2 question:

Question 2A.Please provide a written advice to Lucille Price as to whether she could successfully argue under contract law any bases (there are more than one) to set aside the Eastpac mortgage and guarantee. Quote cases to support views. Please write short paragraphs with one point per paragraph. Students answers should not be less than 40 lines and not more than 100 lines of typing. Please use 1.5 spacing. {Students will be helped by reading the Class notes on Duress, Undue Influence, Married Woman's Equity and Unconscionability (and see also chapter 13 of Graw's text). Further, the Additional Materials on Moodle will be of considerable assistance}.