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LNCP002 Pty Ltd v Feridun Akcan

LNCP002 Pty Ltd v Feridun Akcan

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Case Copied 16 July 2021 57 min read

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Supreme Court

New South Wales

Medium Neutral Citation: LNCP002 Pty Ltd v Feridun Akcan [2021] NSWSC 848
Hearing dates: 10-12 May 2021
Date of orders: 16 July 2021
Decision date: 16 July 2021
Jurisdiction: Common Law
Before: N Adams J
Decision:
See [242].

Catchwords:
CONTRACTS — Breach of contract — alleged default by borrower under mortgage – where due date for payments disputed – whether due date varied orally or in writing by parties – held, due date was varied as advanced by lender
CONTRACTS — Implied terms — Terms implied in fact – whether it was an implied term of the loan agreement that the lender would provide a loan statement upon request – where borrower had express right to early repayment of loan – where borrower had to give irrevocable notice specifying the amount to be repaid – held, necessary to imply such a term
ESTOPPEL — Promissory estoppel — where borrower believed payment was due on 11th – where lender previously accepted payment on 11th – whether lender entitled to issue default notice due to failure to pay on 8th of the month – held, lender was estopped from issuing default notice
CONSUMER LAW — Unconscionable conduct — In connection with goods or services — System of conduct or pattern of behaviour – where lender failed to issue loan statement without reasonable excuse – where lender entered negotiations for deed of forbearance during COVID-19 shutdown – where lender issued default notice during negotiations – where default notice issued two days before borrower believed payment was due – held, lender acted unconscionably under s 21 of the ACL
CONSUMER LAW — Misleading or deceptive conduct — Representations as to future matters – where lender said it would “action” request for a loan statement “now” – where lender failed to do so – held, not misleading and deceptive conduct

Legislation Cited:
Australian Securities and Investments Commission Act2001 (Cth), ss 12BB, 12DA
Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, ss 18, 20, 21, 22, 232, 236
Conveyancing Act1919 (NSW), s 93
Real Property Act 1900 (NSW), s 57(2)(b)

Cases Cited:
Australian Competition and Consumer Commission (ACCC) v Get Qualified Australia Pty Ltd (In Liq) (No 2) [2017] FCA 709
Australian Competition and Consumer Commission v Medibank Private Ltd (2018) 267 FCR 544; [2018] FCAFC 235
Australian Competition and Consumer Commission (ACCC) v Lux Distributors Pty Ltd [2013] FCAFC 90
Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18
Awad v Twin Creeks Properties Pty Limited [2012] NSWCA 200
B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81
Butt v McDonald (1896) 7 QLJ 68
City of Botany Bay Council v Jazabas Pty Limited(ACN 060 105 053) [2001] NSWCA 94
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184
Heilbut, Symons & Co v Buckleton [1913] AC 30

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] NSWSC 848
Decision Date: 16 July 2021

CaseChat Overview and Summary

In the matter of LNCP002 Pty Ltd v Feridun Akcan, the Federal Court was tasked with resolving disputes surrounding the terms of a loan agreement, the lender's obligations under the agreement, and the conduct of the lender during the COVID-19 pandemic. The central issues in this case involved whether the due date for loan payments had been varied, whether certain terms were implied in the loan agreement, the applicability of promissory estoppel, and whether the lender's conduct amounted to unconscionable and misleading or deceptive conduct under the Australian Consumer Law.

The legal issues before the court included the determination of whether the due date for loan repayments had been varied from the eighth to the eleventh of each month, either orally or in writing. The court also needed to decide whether a term could be implied in the loan agreement that required the lender to provide a loan statement upon request, given the borrower's express right to early repayment. Additionally, the court had to consider whether promissory estoppel applied, preventing the lender from issuing a default notice due to the borrower's belief that the payment was due on the eleventh of the month. Finally, the court examined whether the lender's conduct, including failing to issue a loan statement, entering into negotiations for a deed of forbearance, and issuing a default notice during these negotiations, amounted to unconscionable or misleading or deceptive conduct under the Australian Consumer Law.

The court found that the due date for loan repayments was indeed varied as claimed by the lender, from the eighth to the eleventh of each month. It was held that an implied term was necessary in the loan agreement to require the lender to provide a loan statement upon request, due to the borrower's right to early repayment. The court also ruled that promissory estoppel applied, precluding the lender from issuing a default notice because the borrower reasonably believed the payment was due on the eleventh of the month, based on the lender's previous acceptance of payments on that date. Lastly, the court determined that the lender's conduct was unconscionable under section 21 of the Australian Consumer Law, as it failed to issue a loan statement without reasonable excuse and issued a default notice just two days before the borrower believed the payment was due. The court held that the lender's representation that it would "action" the request for a loan statement "now" did not constitute misleading or deceptive conduct because the lender did not actually act on this promise.

The court ordered that the lender's default notice was invalid and that the lender was estopped from enforcing the original due date for loan repayments. Furthermore, the court declared that the lender's conduct was unconscionable and in breach of the Australian Consumer Law, providing relief to the borrower.

Orders