Clarke v Lopwell [2008] NSWSC 615

In this case there was guarantee and mortgage given by dairy farmers to support a loan that went to a third party. The third party was introduced to the borrowers by their accountant. They received no independent legal advice. The loan was $1,473,000 and the interest rate was 216%per annum. The guarantees were set aside on the grounds of unconscionability. In this case the lender made a big mistake in attempting to enforce the 216% interest rate. The facts were marginal and if the lender had reduced its claim to simply seeking a return of the principal it might have succeeded – this was alluded to by the Judge.

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