Noble Solutions v Young [2013] NSWSC 1371

This case concerned an equitable mortgage which provided for an exceptionally high interest rate of 130% p/a but somewhat surprisingly the borrowers failed to plead that this rate was unconscionable in their defence.

Instead the husband pleaded a defence of non est factum and the wife filed no defence. There was no evidence of the forgery so summary judgement was possible.

The court next considered the interest rate and held:

I have some considerable difficulty in seeing why a Court of Equity – as it used to be called, a court of conscience – should lend its aid to enforcing an usurious mortgage. However, with some reluctance, I conclude that the evidence makes good the proposition that the plaintiff and the first and second defendants have reached a short term agreement, enforceable at law, under which the defendants were not able to meet their commitment. In those circumstances, and as I have said with considerable reluctance, I do not think that I should enquire further into the conscionability of the interest rate.

The court ordered judicial sale and possession, noting that the registered mortgagee was at liberty to exercise its rights.

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