The bank sought possession of property, which secured the obligations of the guarantor of a company borrower’s debt. The guarantor raised the following defences:
- that the notice of demand was ineffective because it was dated a year earlier, as was the subsequent statutory notice which referred to the earlier notice by the date it should have borne;
- that the bank’s agreement with the guarantor to give him extra time to repay was Code regulated and unenforceable because the bank had not given him the opportunity to read or seek legal advice in relation to the agreement; and
- The court found both notices effective despite the incorrect date in the first notice because there was no evidence that the guarantor was misled or confused by it and the ordinary reasonable reader would have taken the reference in the statutory notice as being a reference to the notice received.
The deferral of a debt is credit for the purposes of the Code but the the borrower being a company not a natural person meant the loan was not code regulated. This is because a guarantee of a company debt can never be code regulated.
The court granted possession.