In this case Challenger misread the handwriting on the PDC form and incorrectly entered the BSB. This resulted in the monthly interest payments defaulting. Each time this happened the borrower made its payment by cheque, but Challenger treated those as late payments and began to charge the higher rate. By July 2007 Challenger was alleging that the loan was $13,515.16 in arrears due to the borrower’s refusal to pay the additional interest. Justice McCallum noted that in every instance the borrower had made payments within the grace period (8 days) as soon as it had been notified by Challenger, holding:
Accordingly, I am satisfied that Challenger was not entitled to interest at the higher rate at any stage until the loan matured.