McLean v Westpac Banking Corporation  WASCA 152
The Western Australian Court of Appeal recently upheld earlier decisions of the NSW Supreme Court in Westpac Banking Corporation v Mason, and the Victorian Supreme Court in National Australia Bank v Norman,  in rejecting a ‘defence of securitisation’ from the defaulting mortgagor.
Westpac commenced two actions for possession against the mortgagor in relation to two loan agreements, each supported by mortgages.
The mortgagor raised identical ‘securitisation’ defences to both actions. The mortgagor argued that as Westpac engaged in securitisation, if the loans and mortgages had been securitised then Westpac could not enforce the mortgages and keep the benefit of such enforcement because Westpac:
had already received a benefit for assigning its interest in the loans and mortgages;
would suffer no loss or damage from the defaults, with any loss being suffered by a third party; and
would be ‘doubly compensated’ if it was allowed to enforce the loans and mortgages.
The mortgagor argued that Westpac could not satisfy an essential element of an action for debt - i.e. that the mortgagor owed it money.
Findings at first instance
The mortgagor called an expert witness on securitisation, who was unable to say whether or not the loans had been ‘securitised’. An officer of Westpac gave evidence that the respondent’s records showed that the mortgagor’s loans had not been securitised.
The primary judge concluded that ‘securitisation’ was not a precise term. His Honour considered that it was “a generic term referring to a transaction involving the marketing of a parcel of debts as a means of raising funds”. The use of the term by the mortgagor was, “at best obscure”.
In any event, the primary judge found that the mortgagor’s claim that the loan agreements and the mortgages had been securitised was not made out, and went on to find that, in any case, there was no substance in the ‘securitisation’ defence.
The appellant put forward several grounds of appeal, including that the primary judge had pre-judged the issue and erred in law and practice in relation to the acceptance of sworn evidence.
On appeal the Court found that “the appellant’s so-called defence of securitisation was in law no defence at all. So far as it was given any specific meaning, the 'securitisation' alleged involved an equitable assignment of the respondent's interest in the loan agreements and the mortgages to a third party. That, contrary to the appellant's case, did not have the effect that the respondent was no longer able to enforce its securities”.
Accordingly, the appeals were dismissed.
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1.  NSWSC 1241
2.  VSC 14
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