-
Unconscionable Conduct: Can a Lender Protect Itself?
Can a lender do anything to protect itself from allegations of unconscionable conduct?
Too often commercial lenders have to contend with allegations made by defaulting borrowers that they are guilty of unconscionable conduct. An easy phrase to include in a letter or a pleading; but what does it really mean? And is there anything a lender can do to protect itself from these allegations?
-
Statutory Demands and Genuine Dispute Regarding the Debt
What are the implications for those seeking to set aside a statutory demand?
In Plate Impressions Pty Ltd v JRL Consortium Group Pty Ltd [2016] QSC 274, the Supreme Court of Queensland considered both the requirements for the effective form of a statutory demand and the impact of a genuine dispute regarding the debt.
-
Short-Term Loans Clamp Down: Rejected.
Federal Court of Australia Rejects ASIC’s Effort to Clamp Down On Access to Short-Term Loans.
In the matter of Australian Securities and Investments Commission v Teleloans Pty Ltd [2015] FCA 648, the Federal Court of Australia has dismissed a bid by ASIC to shut down the short-term lending business of a Gold Coast-based lender represented by Elliott May Lawyers.
-
Transfer of Mortgage: 2nd Mortgagee vs Borrower?
Can a borrower rely on s.94 Conveyancing Act 1919 to compel a transfer of a prior mortgage to itself when a subsequent mortgagee has also sought to compel a transfer of that prior mortgage?
In Geitonia Pty Ltd t/as Trustee for the Annandale Unit Trust v Westpac Banking Corporation [2015] NSWSC 419 the court was required to decide whether the 1st mortgagee was required to transfer its mortgage to the borrower or to the 2nd mortgagee.
-
Courts Won’t Assist Borrowers with Imprudent Transactions
The courts will not intervene to assist borrowers who become the victim of their own imprudent transactions, even where they have not been advised to seek independent legal and financial advice.
In the matter of Donnelly v Australia and New Zealand Banking Group Ltd [2014] NSWCA 145 the court held that a borrower who voluntarily engages in risky business is not entitled to call upon equitable principles to be redeemed from the consequences inherent in taking those risks.
-
FOS Creates New Rights for Dispute Resolution
External Dispute Resolution bodies like the Financial Ombudsman Service (FOS) are able to create new rights between parties. By contrast, courts generally only ascertain and enforce existing rights.
In Utopia Financial Services v Financial Ombudsman Service [2012] WASC 279, the Supreme Court of Western Australia affirmed the exceedingly wide powers FOS has at its disposal to resolve disputes involving its members, even if this means creating new rights and obligations.
-
Asset Lending Not Necessarily Prohibited By Public Policy
Public policy does not necessarily require that asset lending be prohibited, or even deterred.
In Provident Capital Ltd v Papa [2013] NSWCA 36 the New South Wales Court of Appeal found that a loan was not unconscionable simply because it was “asset lending”.
-
Execution of a Writ of Possession Stayed by Supreme Court
The NSW Supreme Court exercises its discretion and stays the execution of a writ of possession.
In Secure Funding Pty Ltd v Colin West [2013] NSWSC 746 a short stay of execution was granted by the Supreme Court to allow the borrowers to make the missed payments and to provide evidence of the progress of an application for further finance. The decision demonstrates the scope of the court’s discretionary power to stay proceedings.
-
Lender Fails to Insist on Independent Legal Advice
Another lender fails to insist on its borrower obtaining independent legal advice.
In Paccar Financial Pty Ltd v Menzies[2013] NSWSC 772 the critical issue before the court was whether certain loan documents had been signed and/or sufficiently explained to the borrower by the lender. None of which would have been required had the lender insisted on independent legal advice.
-
Penalty Interest: Higher & Lower Interest Rate Permissible
Penalty Interest – Court of Appeal confirms that it is permissible for a lender to charge a higher and a lower rate of interest.
In Kellas-Sharpe & Ors v PSAL Limited [2012] QCA 371, the Queensland Court of Appeal considered whether the charging of a lower concessionary rate of interest and a higher standard rate of interest gives rise to the operation of an unenforceable penalty rate of interest.
