Noble Solutions Pty Limited v Young - [2014] NSWSC 1419

Supreme Court

New South Wales

Medium Neutral Citation: Noble Solutions Pty Limited v Young [2014] NSWSC 1419
Hearing dates: 12 September 2014
Decision date: 12 September 2014
Before: White J
Decision:
Refer to paras [14] and [16] of judgment.

Catchwords: INTEREST - recoverability of interest - where judgment in respect of loan agreement entered in plaintiff's favour and interest awarded at "usurious" contractual rate - whether plaintiff entitled to post-judgment interest at contractual rate - whether plaintiff entitled to post-judgment interest pursuant to Civil Procedure Act 2005 (NSW) s 101 - held plaintiff entitled to interest at statutory rate and not contractual rate;
COSTS - no issue of principle - no order as to costs
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Noble Solutions Pty Ltd v Young [2013] NSWSC 1371
Category: Principal judgment
Parties: Noble Solutions Pty Limited (Plaintiff)
Brian Andrew Young (Defendant)
Representation: Counsel:
N Craven (sol'r) - Plaintiff
Solicitors:
Bransgroves Lawyers - Plaintiff

File Number(s): 2013/84133

Judgment

HIS HONOUR: On 2 April 2012 the plaintiff agreed to lend the first and second defendants $17,930 on terms that McDougall J aptly described as "usurious" (Noble Solutions Pty Ltd v Young [2013] NSWSC 1371). The defendants failed to repay the loan by the due date and have not paid interest. The plaintiff claimed interest pursuant to the loan agreement at the default rate of 2.5 per cent per week. Interest is capitalised weekly. By a further amended notice of motion filed on 9 August 2013 the plaintiff moved the Court for orders including that, "1. Pursuant to rule 16.3 of Uniform Civil Procedure Rules the plaintiff be awarded judgment against the second defendant", and that, "2. Pursuant to rule 13.1 of the Uniform Civil Procedure Rules the plaintiff be awarded judgment against the first defendant." Orders were also sought for possession and for judicial sale of a property the subject of a mortgage given by the defendants to secure the loan.

On 6 September 2013 McDougall J found that the plaintiff was entitled to the relief sought subject to some adjustment in respect of costs which had been unnecessarily incurred (Noble Solutions Pty Ltd v Young [2013] NSWSC 1371). The first defendant had filed a defence but did not appear to oppose the plaintiff's claim for summary judgment. The second defendant did not appear.

His Honour said that:

"22 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…

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: [2014] NSWSC 1419
Decision Date: 12 September 2014

CaseChat Overview and Summary

In the case of Noble Solutions Pty Limited v Young, the dispute centred on the recoverability of interest in a loan agreement that was found to be usurious. The court was tasked with determining whether the plaintiff, Noble Solutions, was entitled to post-judgment interest at the contractual rate or whether it should be limited to the statutory rate. The proceedings took place in the Supreme Court of New South Wales.

The primary legal issues were whether the plaintiff could claim post-judgment interest at the usurious contractual rate and whether it could instead claim post-judgment interest under section 101 of the Civil Procedure Act 2005 (NSW). The court had to examine the enforceability of the usurious interest rate in light of statutory provisions governing post-judgment interest.

The court held that the plaintiff was entitled to post-judgment interest but not at the contractual rate as this would contravene public policy. Instead, the court applied the statutory rate provided under the Civil Procedure Act 2005 (NSW). The court reasoned that allowing interest at the contractual rate would effectively uphold the usurious terms of the loan agreement, which was against public policy. Therefore, the statutory rate was the appropriate measure for post-judgment interest.

The court did not make any order as to costs, indicating that there was no significant principle at stake regarding the allocation of costs between the parties. The decision clarifies that while the plaintiff is entitled to recover interest, the rate must align with statutory provisions rather than the original usurious contractual terms.

Orders