In this case an elderly non-English speaking couple took out high interest loans so their daughter could pay her violent and abusive boyfriend and his associates $385,000. The judge was deeply moved by this commenting:
The intimidation involved incidents of intensely ugly forms of humiliation. Most forms of objective language are ill equipped to convey the distress that these incidents undoubtedly caused to her. I accept all Vanessa’s evidence on this subject and find that overwhelming threats and intimidation caused her to pay away all the liquid funds that the family raised in the second half of 2007.
There was no suggestion that the lender, or any persons associated with it, had any connection whatsoever with these threats and this intimidation. Nevertheless they still counted with the judge in finding the loans were unjust under the Consumer Credit code and the Contracts Review Act.
The judge found the Business Purposes Declaration was ineffective in deeming the loan to be for business purposes because it;
1. named the wrong lender;
2. was signed by power of attorney;
3. the lender’s agent had reason to believe the borrowers were lying to him.
At 36,000 words the judgement was insufferably and unnecessarily long. A significant part was taken up by the judge considering the facts that established 3. Yet this was (by the judge’s own admission) unnecessary because he had already decided on 1 and 2. Judges should fossick out the quickest way to dispose of the cases before them the imperatives of efficiency should apply to judicial decisions like everything else. After all if Red Adair can extinguish a blaze using an explosion there is no need for him to douse it with sand, freeze it, cap it and drill a relief well is there?
There was an general charging clause in the mortgage that was found to be void pursuant to s40 of the Code (which prohibits mortgages over unidentified property). It was also found to be unjust under the Contracts Review Act, with the judge commenting:
The actual use of the charging clause from the earlier loan at the time of the later loan is a factor inclining the Court to the view that the charging clause should be treated as void.
His Honour was wrong to consider what happened after the contract was made because section 7 of the Contracts Review Act reads:
Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made.
The court reduced the interest rates under the loans and stayed execution of the judgement until a notice pursuant to s80 of the Consumer Credit code had been served.