The borrower argued that the mortgage was “unjust” because it was an “Easy Doc” loan and the lender had not required the borrower to produce any proof of her ability to service the loan, and she did not have the financial capacity to make the repayments required. She argued that the mortgages and loans had been “predatory lending” and “asset lending”, and that the lender had been indifferent to her ability to repay the loan.
The Court of Appeal held that it was fatal to the borrower’s case that she had not given evidence as a witness, because there was no evidence before the court about why she had proceeded with the loans if she knew she could not repay them, and why she was not able to protect her own interests.
The documentary evidence showed that the borrower had signed a declaration she was able to repay the loan. Because she did not give evidence as a witness, the court had to find that if it was true that she could not repay it then she must have been aware of that – which meant her declaration was false. That did not make the loan unjust.
The court decided that the lender was not indifferent as to whether the borrower had the capacity to meet her obligations because it had obtained the declaration (which it did not know or suspect to be false), even though it had not required any proof to substantiate that ability.