Nadia Morgan also known as Nadia Nikoloff v St. George Bank - a Division of Westpac Banking Corporation

[2022] WASCA 17

Western Australia Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Banking and Finance
2. › Loan agreements
3. › Variable interest rate provisions
4. › Power to vary interest rate
5. › Whether provision conferring power to change annual percentage rate 'at any time' was arguably void for uncertainty
6. › Whether power was unfettered discretion or constrained by reference to general product rate
1. Contract
2. › Certainty of terms
3. › Interest rate variation clause
4. › Unfettered discretion to vary
5. › Whether contractual provision giving lender power to change interest rate at any time without constraint or objective reference criteria was void for uncertainty
1. Practice and Procedure
2. › Summary judgment
3. › Setting aside summary judgment
4. › Whether defendant had arguable defence
5. › Standard for summary judgment — only in clearest cases where high degree of certainty about outcome
6. › Rules of the Supreme Court 1971 (WA), O 14 r 12

Quick Take

A variable interest rate clause in a loan agreement that, on its proper construction, arguably confers an unfettered discretion on the lender to change the borrower's specific interest rate at any time — as distinct from a power to change a general product reference rate — is arguably void for uncertainty and constitutes an arguable defence sufficient to resist summary judgment. Where the interest rate variation power is arguably void, the lender cannot establish with the requisite certainty that the borrower was in default, because the borrower may have been overcharged interest and entitled to a credit.