Chapman v CBA [2012] VSCA 162

In this decision of the Victorian Court of Appeal the borrower appealed on the basis that the Code procedure for the issue of notices prior to enforcement had not been met and so the proceedings were invalidated.

The borrower argued that prior to beginning proceedings seeking payment of the entire debt pursuant to an acceleration clause there was a requirement to give two notices, first one which sought rectification of the failure to pay interest, and, if that was unrectified in 30 days, second a notice claiming the entire principal.

The court of appeal found for the lender commenting:

In our opinion, the Bank was not required to serve a further notice. The letter of demand complied with the relevant legislative requirements. The appellant was in default: s 80(1). The Bank gave her a notice specifying the default and the action necessary to remedy it: s 80(3). It allowed her more than 30 days within which to effect that remedy: s 80(1)(a). In addition, it informed her that, if the arrears were not paid within the specified period (which was 38 days), the Bank would be entitled to exercise its right to accelerate payment of the whole of the outstanding balance, which it identified as $1,125,683.96: s 85(1)(b). Finally, it told her that if she paid the amount demanded by the notice and then failed to make another payment which fell due within the specified period of 38 days, the Bank could exercise the rights to which the letter had already referred: s 80(3).

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