First Option Credit Union v Williams [2005] NSWSC 855

This was an application by the defendant to amend the defence and also to have the proceedings dismissed as frivolous or vexatious, or no reasonable cause of action was disclosed, or because the proceedings were an abuse of the process of the court: UCPR 13.4. The defendant was borrower, mortgagor and guarantor of a loan with the plaintiff. The loan was in respect of the purchase of an investment property.

The proposed amendments were that the lender had not served notice pursuant to s 80 of the Consumer Credit Code (“the Code”), that the plaintiff purported to activate an acceleration clause at the date of the Notice (as distinct from at the expiry of the notice) in breach of the Code, and that the s 80 Notice overstated the amount due in relation to one instalment and enforcement costs.

The lender put on evidence that showed it had served a s 80 Notice, but denied that the Code was applicable anyway since the loan was for an investment purpose not for a personal, domestic or household purpose: s 6(1)(b) and (4) of the Code. Asscoaite Justice Harrison found that there was no evidence to be able to decide that issue.

In the notice of default the lender had included a payment which was due after the expiry of the notice. In similar cases the overstatement of the amount in default was fatal.

The Associate Justice found  that all the issues raised by the amendments were either issues of fact to be determined at trial or were arguable at final hearing. The amendments were allowed but the application to dismiss the statement of claim was dismissed, with costs ordered in favour of the lender.

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