Australia: Contracts Review Act claim unsuccessful in court of appeal due to failure to particularise 'unjustness'

Last Updated: 17 December 2014
Article by Robert Iaconis and Emma Hodgman
Focus: Landa v Perpetual Trustees Victoria Ltd [2014] NSWCA 393
Services: Financial services
Industry Focus: Financial services

Landa v Perpetual Trustees Victoria Ltd [2014] NSWCA 393

In a recent NSW Court of Appeal decision, the appellant was unsuccessful in his claim under the Contracts Review Act 1980 (NSW) that the lending structure, under which he had borrowed funds, exposed him to fraud by a third party.


Perpetual Trustees Victoria Ltd (Perpetual) appointed Interstar Management Pty Ltd (Interstar) to be responsible for arranging, disbursing and managing secured loans on behalf of Perpetual.

Interstar then entered into successive loan origination and management agreements with Morgan Brooks Pty Ltd (Morgan Brooks). Under these agreements, Morgan Brooks was given the right to request that Interstar arrange for Perpetual to advance monies on the security of mortgages, and also empowered Morgan Brooks to act as the servicer and supervisor of the mortgages granted (the Structure).

The fraud

Mr Cincotta, acting as an agent of Morgan Brooks, arranged for Dr Landa to borrow money under three loan contracts entered into with Perpetual. The loans were secured by three properties owned by Dr Landa, one of which was his principal residence.

Dr Landa entrusted to Mr Cincotta the monies advanced by Perpetual, together with other personal funds for the purposes of investing those monies. The monies were misappropriated by Mr Cincotta.

The claim

Dr Landa commenced proceedings against Perpetual, seeking declarations that the loan contracts and mortgages were void or voidable and should be set aside. Dr Landa claimed relief on two grounds:

  1. The principal basis being the allegation that when Mr Cincotta engaged in the relevant fraudulent activity he was acting within the scope of his authority from Perpetual and, therefore, Perpetual was responsible for the relevant fraudulent activity, and
  2. In the alternative, Dr Landa asserted that the loan contracts were "unjust in the circumstances" at the time they were made, within the meaning of the Contracts Review Act 1980 (NSW) (the Act).

In respect of Dr Landa's claim under the Act, Dr Landa argued that the unjustness arose from the structure used by Perpetual, which sought to distance Perpetual from the loan process, while also providing Perpetual with the benefit of the process, but without adequate monitoring of mortgage originators and managers to detect abuse.

Dr Landa gave no particulars of the manner in which the Structure facilitated the fraudulent activities of Mr Cincotta, or what steps Perpetual should, or could have, taken to monitor such activities to detect and prevent them.

The Court dismissed Dr Landa's claim concluding that Perpetual was not responsible for the acts of Mr Cincotta, and that the Act had no application.


On appeal Dr Landa relied only on his claim under the Act. He did not press his claim that Perpetual was responsible for the fraudulent activity of Mr Cincotta, which was the main focus of his claim at first instance.

The Act

Dr Landa asserted that the primary judge erred in failing to give adequate reasons for concluding (for the purposes of section 7 of the Act) that the loan contracts between he and Perpetual were not unjust in the circumstances. Also, assuming that the primary judge's reasons were accepted as adequate, that His Honour failed to consider all of the circumstances of the case as required by section 9(1), as well as the matters referred to in section 9(2).

While the Court of Appeal suggested that "some criticism could be directed at the brevity of the reasons of the primary judge in dealing with the claims under the [Contract's] Review Act", the Court went on to find that:

  • Dr Landa's claim that Mr Cincotta was acting as agent for Perpetual and Interstar was inextricably tied up with his claim under the Act
  • on that basis, and in circumstances where the primary judge dealt with the agency claim at some length, very little was left to be said of Dr Landa's claims under the Act. The Court was not persuaded that there was a failure to give adequate reasons
  • Dr Landa's failure to give the particulars of his claim under the Act referred to above was a "fatal difficulty"
  • if the primary judge's reasons were read as a whole, it was clear that the reference to "s 9" of the Act included a reference to section 9(1), which is apparent from His Honour's conclusion that Dr Landa's loss occurred as a result of Mr Cincotta's deception, and not because of any unjust contract. The Court held that it was difficult to see how His Honour could have come to that view if he had regard only to the matters set out in section 9(2).
  • Dr Landa's decision to entrust the funds to Mr Cincotta had nothing to do with, and was not induced by Perpetual or Interstar
  • the primary judge correctly found that the real cause of Dr Landa's loss was the fraud of Mr Cincotta and not any unjust contract between Dr Landa and Perpetual (noting that the investment of money by Dr Landa through Mr Cincotta commenced months before Dr Landa had any involvement with Perpetual).


Many lenders structure their lending process in a similar way to Perpetual in this case. The outcome is good news for those lenders, however, the result may have been different if Dr Landa was able to particularise how Perpetual's Structure facilitated the fraud, or what steps Perpetual should have taken to detect the fraud. The absence of those particulars were fatal to Dr Landa's claim for relief under the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.