MCLEAN and PERMANENT CUSTODIANS LTD

In the matter of McLean and Permanent Custodians Ltd, the respondent sought to challenge a loan agreement and associated mortgage on the grounds that the applicant's declaration of the purpose of the loan was false and that the loan was actually intended for personal, domestic, or household purposes. The dispute was heard in the Supreme Court of New South Wales. The respondent argued that the applicant's declaration that the loan was for investment or business purposes was false and that the credit was intended for personal use. The court had to determine whether the applicant's declaration was false and, if so, whether the finance broker who facilitated the loan knew or ought to have known of the falsity. The court also needed to decide whether the broker was an agent of the lender and whether the proceedings in the Tribunal were an abuse of process. Additionally, the court considered whether the subsequent advance of funds constituted a fresh agreement and whether the declaration made in relation to the initial advance was effective in relation to the subsequent advance.

The court held that the test for determining the intended purpose of a loan involves examining the circumstances surrounding the loan and the conduct of the parties. The court found that the applicant's declaration was false and that the loan was intended for personal, domestic, or household purposes. The court also determined that the finance broker was not an agent of the lender and that the proceedings in the Tribunal were not an abuse of process. The court further held that the subsequent advance of funds constituted a fresh agreement and that the declaration made in relation to the initial advance was not effective in relation to the subsequent advance. The court granted the respondent's application for relief and ordered the loan agreement and associated mortgage to be set aside.