Equititrust Ltd v Franks

Equititrust Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a loan agreement. The dispute arose from representations made by Equititrust to the respondents, Mr and Mrs Franks, regarding the application of a default interest rate. The Franks sought to rely on these representations to resist the claim for default interest.

The Court of Appeal was required to determine whether Equititrust was estopped from claiming default interest on the loan. Specifically, the court considered the nature and extent of the detrimental reliance by the Franks on Equititrust's representations. A further issue was whether the Franks could claim a set-off at law under section 21 of the *Civil Procedure Act 2005* (NSW) against Equititrust's claim for default interest.

The Court of Appeal held that Equititrust was estopped from claiming default interest. The court found that the representations made by Equititrust, that it would not charge the default interest rate, were clear and unambiguous. The Franks had relied on these representations to their detriment by not seeking alternative finance or taking other steps to avoid the default interest. Regarding the set-off, the court determined that the debt sought to be set-off was owed to the Franks jointly, but not jointly and severally, and therefore could not be set-off against a debt owed by the Franks to Equititrust.

The appeal was dismissed, and the orders of the primary judge were affirmed.