Bahadori v Permanent Mortgages Pty Ltd

(2008) 72 NSWLR 44; [2008] NSWCA 150

NSW Court of Appeal

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Interrogate

Catchwords

1. Consumer Credit
2. › Consumer Credit Code
3. › Application of Code
4. › Credit contract
5. › When credit contract entered into
6. › Extended definition of 'contract'
7. › Series or combination of contracts or contracts and arrangements
8. › Whether credit contract formed before borrower declarations
9. › Consumer Credit (New South Wales) Code 1995, ss 5, 6, 11, Sch 1
1. Consumer Credit
2. › Consumer Credit Code
3. › Borrower declarations
4. › Presumption under s 11(2)
5. › Whether declaration made before entering into credit contract
6. › Whether credit provider knew or had reason to believe declaration was false
7. › Consumer Credit (New South Wales) Code 1995, ss 11(2), 11(3)
1. Consumer Credit
2. › Consumer Credit Code
3. › Purpose of credit
4. › Whether credit provided wholly or predominantly for personal, domestic or household purposes
5. › Objective test
6. › Onus on credit provider to establish contrary
7. › Consumer Credit (New South Wales) Code 1995, ss 6(1)(b), 11(1)
1. Administrative Law
2. › Tribunals
3. › Consumer, Trader and Tenancy Tribunal
4. › Jurisdiction
5. › Appeal under s 67(1) confined to questions of law
6. › Prerogative relief under s 65(2)
7. › Whether Court of Appeal could make findings of fact
8. › Consumer, Trader & Tenancy Tribunal Act 2001 (NSW), ss 65, 67

Quick Take

Where a loan transaction involves a series of contracts or arrangements (such as a letter of offer followed by mortgage documentation), the credit contract is entered into at the time of the first arrangement in the series, not at the time of final settlement. A s 11(2) declaration must therefore be made before the first arrangement. Credit providers and their agents are fixed with constructive knowledge from borrowers' financial applications and surrounding circumstances when assessing whether they had 'reason to believe' a declaration was false under s 11(3). The onus lies on the credit provider to establish that credit was for business or investment purposes under s 6(1)(b).