Lender fails in attempt to have fees paid due to a short term loan transaction not proceeding. The Supreme Court of NSW dismissed the lender’s claim of fees and expenses.
In Interim Finance v Bright Beginnings Learning Centre Glendenning  the Court found the lender did not have a caveatable interest in the security property. Further, the Court ordered the removal of the caveat registered over the property.
The penalty doctrine again came under the spotlight in Quantum Asset Management Pty Ltd v Love Properties (WA) Pty Ltd .
A 53% per annum interest rate may seem steep, but the Court declined to label it a penalty. The decision took into account the high-risk nature of the loan.
In a recent NZ Court of Appeal decision a late payment fee of over $30 million on a $37 million loan dodged the penalty tag. The Court held the fee to be proportionate to the lender’s interests and so enforceable.
What are the effects of this key judgment? It certainly issues a warning to commercial borrowers. Escaping late payment fees may not be as simple or clear cut.