NAB v Morgan [2009] NSWSC 647

The borrower claimed her loan from NAB was unconscionable because it should have been obvious to the bank, that an overdraft of $100,000 could not be discharged within 12 months as stipulated.  The judge refused to strike out the defence noting:

To my mind the defence raises issues of unconscionability, the question of asset lending so much as may be unconscionable, and issues capable of founding an equitable set-off.

Lender’s should note that this was merely an interlocutory determination. The facts indicate the case is extremely weak and that explains why the lenders sought summary judgement. Although the threshold for summary judgement was not reached it is extremely unlikely the woman will succeed on unconscionability. There might be a possibility she will succeed under the Contract’s Review Act in having some of the interest or charges remitted – but she did not plead it. The judge was kind enough to make the oblique suggestions (by reference to asset lending) that she do so. 

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