Permanent Custodians Ltd v Upston - [2007] NSWSC 223

Reported Decision:
(2007) NSW ConvR 56-178

New South Wales

Supreme Court

CITATION: Permanent Custodians Limited v Carolyn Joy Upston [2007] NSWSC 223

HEARING DATE(S): 5, 6, 7 of March 2007

JUDGMENT DATE :
16 March 2007

JUDGMENT OF: Cooper AJ at 1

DECISION: See paragraph 183

CATCHWORDS: "Predominantly for personnel, domestic or househod purposes" s 6 Consumer Credit Code. - Expiry of Notice of Default not a bar to application under s 68 of Consumer Credit Code. - "Other reasonable cause" s 66 (1) Consumer Credit Code.

LEGISLATION CITED: Real Property Act 1900 ss 57 (2), 58, 60
Consumer Credit Code ss 6,11, 66, 68, 80,85,173
Conveyancing Act 1919

CASES CITED: Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451
Linkenholt Pty Ltd v Quirk [2000] VSC 166
McNally v Australia and New Zealand Banking Group (2001) ASC 155-047
Mattinson v Multiplo Incubators Pty Ltd 1977 1NSWLR 368

PARTIES: Permanent Custodians Limited - Plaintiff
Carolyn Joy Upston - Defendant

FILE NUMBER(S): SC 11782 of 2006

COUNSEL: M J Cohen - Plaintiff
T Maltz - Defendant

SOLICITORS: Gadens Lawyers - Plaintiff
Rice More & Gibson Solicitors - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Cooper AJ

16 March 2007

11782/06 PERMANENT CUSTODIANS LIMITED v CAROLYN JOY UPSTON
JUDGMENT

1 HIS HONOUR: In this case the plaintiff sues by Statement of Claim filed on 19 April 2006 to recover possession of land known as 22 Buckingham Street, Berkeley Vale and also to recover money.

2 The Statement of Claim alleges a loan agreement between the plaintiff and the defendant and default by the plaintiff in payments pursuant to that agreement. According to the affidavit of Jorge Ledesma sworn on 5 March 2007 the plaintiff claims that the amount owing to it by the defendant under the loan as at 28 February 2007 is $291,432.91 and that interest is currently accruing on the debt at the rate of $85.77 per day and is capitalised monthly.

3 The Statement of Claim also alleges that the defendant granted to the plaintiff a mortgage over the subject land to secure the loan and by reason of the default, the plaintiff is entitled to possession.

4 The default alleged is that there were failures to pay monthly instalments due on 22 December 2005, 22 January 2006 and 22 February 2006. The allegation is that the defaults in payment entitled the plaintiff to claim the total amount of the loan by way of acceleration that it has done so.

5 By her Defence filed on 15 September 2006, the defendant admits that she did not make the three payments as alleged and that the plaintiff required her to make certain payments. She also concedes the existence of the subject mortgage.

6 By way of defence to the whole claim, the defendant alleges that the plaintiff was in contravention of s 80(2) of the Consumer Credit Code when it commenced the present enforcement proceedings because a notice complying with that section had not at that time been served on her as required by ss 80(2) and 173(1)(a) of the Consumer Credit Code.

7 By Statement of Cross-claim filed on 15 September 2006, the defendant seeks an order pursuant to s 68 of the Consumer Credit Code that the payments or payment owed by the defendant to the plaintiff be postponed and/or that the time for payment be extended. The defendant also seeks an order pursuant to s 114(1) of the Consumer Credit Code for the payment of restitution or compensation by the plaintiff in respect of the plaintiff’s contravention of s 80 of the Consumer Credit Code.

8 On behalf to the plaintiff it is contended that the defendant’s Defence and Cross-claim are misconceived because the Consumer Credit Code has no application to the loan and mortgage, the subject of this action.

Is the Loan predominantly for personal, domestic or household purposes?

9 Section 6 of the Code in its relevant parts states:

(1) This code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of pre-contractual obligations) is proposed to be entered into —

(b) the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes”

10 It is the plaintiff’s contention that the credit was provided for business purposes and not for personal, domestic or household purposes.

11 Sub-sections 4 and 5 of s 6 state:

“(4) For the purposes of this section, investment by the debtor is not a personal, domestic or household purpose.

12 The Discounted Product Loan Agreement exhibited to the affidavit of John Meyer, Exhibit A, describes the loan amounts as follows:

13 At page 5 of that document, the purpose of the loan is described as “Business loan”.

14 Section 11 of the Code provides:

“(1) In any proceedings (whether brought under this Code or not) in which a party claims that a credit contract, mortgage or guarantee is one to which this code applies, it is presumed to be such unless the contrary is established.

(2) Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes).

(3) However, such a declaration is ineffective for the purposes of this section if the credit provider (or any other relevant persons who obtained the declaration from the debtor) knew, or had reason to believe, at the time the declaration was made that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes. For the purposes of this sub-section a relevant person is a person associated with a credit provider or a finance broker (or a person acting for a finance broker) through whom the credit was obtained.

15 The form of that declaration is prescribed in regulation 10 and is in the following terms:

“I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes).”

16 The declaration is to contain, immediately below the above words, a warning in the following form:

17 The statement on page 5 of the loan agreement referred to above contains no such declaration as is prescribed nor does it contain the warning that is prescribed. Accordingly the conclusive presumption under s 11(2) of the Code does not arise.

18 To better understand the parties’ submissions on this issue, it is necessary to examine some of the background facts.

19 The defendant first moved into the house at 22 Buckingham Street, Berkeley Vale in about April 2003 for the purpose of caring for her aged mother who was then the owner of the property.

20 Her mother died on 19 January 2005 having devised the property to the defendant and the defendant’s brother.

21 At the time of her death, the property was subject to a mortgage to St George Bank securing a loan of about $35,000, which had been taken out by the defendant’s mother for the purpose of buying a car.

22 The defendant wished to acquire the property as her own home. To do so, it was necessary for her to raise money to pay out her brother.

23 St George Bank would not lend her money because, at that stage she had not worked since 2003 because she had been caring for her mother.

24 She then obtained a loan from Perpetual Trustee Company of Victoria of $185,000 secured by way of mortgage over the property. This loan was intended to be used by her, and was in fact used by her, to pay out the mortgage to St George Bank and to acquire her brother’s interest in the property thereby giving her a house for occupation by herself and, at that stage, her daughter.

25 The defendant then decided to purchase a take-away business. To do so she needed $84,000.

26 She applied to her existing mortgagee, Perpetual Trustee Company of Victoria, for an increase of the loan by this amount. That request was refused.

27 She then approached a mortgage broker pointing out that she needed $180,000 to pay out the existing mortgage for the purpose of securing the roof over her head plus an additional $84,000 to acquire the business.

28 Ultimately, the broker introduced her to the plaintiff and the subject loan agreement and mortgages were entered into.

29 On behalf of the plaintiff, it is submitted that the only reason why the defendant went to the extra bother and considerable expense of the early discharge of one mortgage and entering into a new mortgage with the plaintiff was to provide her with the funds to enable her to buy the business. Consequently, the credit was provided for business reasons and not wholly or predominantly for personal, domestic or household purposes.

30 In the case of Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451 at 456 Shaw J quoted with approval the statement of Gillard J in Linkenholt Pty Ltd v Quirk [2000] VSC 166:-

“It is appropriate to consider what the money was used for in order to determine the purpose of the provision of the credit. In considering the question it is important to consider the substance of the transaction in the context of its performance.”

31 As I read this passage, it indicates that one has to look at the performance of the transaction; that is, what was actually done with the funds raised rather than the circumstances preliminary to the entering into of the transaction.

32 On the facts of this case, I am satisfied that the substance of the transaction as intended and as executed is that $180,000 of the funds raised was to provide the plaintiff with a house and is therefore a personal use. $84,000 was provided for business purposes.

33 Accordingly, I am satisfied that more than half of the total amount of the credit was intended to be used for the purpose of securing for the plaintiff her continued use, occupation and ownership of 22 Buckingham Street, Berkeley Vale as a home for herself and, when applicable, members of her family. This is clearly a personal use.

34 On behalf of the plaintiff, it was submitted that as the defendant has agreed that she was hoping that at some time in the future she would be able to use an increase in value of the property to provide money for her old age, and this amounted to the purpose of investment. Consequently, in accordance with s 6(4) of the Code, it was not a personal, domestic or household purpose.

35 The short answer is that the hope of future increase in the value of a house intended to be used, and in fact used, for personal occupation does not, in my view amount to a purpose of investment. The purpose is personal occupation. Any increase in value is something which may or may not arise in the future. It is not the predominant purpose for acquiring the house.

36 For these reasons I hold that the Code does apply to this transaction.

Did the Defendant receive the Notice of Default?

37 The next matter to consider is the defendant’s allegation that the plaintiff has contravened s 80 of the Consumer Credit Code.

38 This section provides that a credit provider must not begin enforcement proceedings against the debtor in relation to a credit contract unless the debtor is in default under the credit contract and the credit provider has given the debtor a Default Notice complying with the section allowing the debtor a period of at least 30 days from the date of the notice to remedy the default and the default has not been remedied within that period.

39 It also provides that a credit provider must not begin enforcement proceedings against the mortgagor to recover payments of money due or take possession of, sell, appoint a receiver for, or foreclose in relation to property subject to a mortgage unless the mortgagor is in default under the mortgage and the credit provider has given the mortgagor a Default Notice complying with the section allowing the mortgagor a period of at least 30 days from the date of the notice to remedy the default, and the default has not been remedied within that period.

40 The evidence on behalf of the plaintiff is that a Default Notice pursuant to s 80 of the Consumer Credit Code and s 57(2)(b) of the Real Property Act 1900 was served upon the defendant on 15 February 2006, by being left in a sealed envelope in her letter box at 22 Buckingham Street, Berkeley Vale.

41 A copy of the form of notice appears at pages 30 and 31 exhibited to the affidavit of John Meyer, Exhibit A.

42 There is no suggestion on the part of the defendant that the notice is defective in form.

43 The evidence of the defendant is that she did not receive that Notice of Default because her address was always given as PO Box 5301 Chittaway Bay 2261 and that the only mail delivered to her letterbox was junk mail which was thrown away.

44 Her evidence continues that it was not until 21 July 2006, at a conference with her solicitor, that she read through the exhibits annexed to an affidavit of Mr Meyer and then saw the Default Notice for the first time.

45 Section 172 of the Code provides that a document may be given to a natural person by leaving it at an appropriate address of the person.

46 It is not in dispute that 22 Buckingham Street, Berkeley Vale was an appropriate address.

47 Section 173 makes provision for ascertaining the date on which a notice is given in the case of personal service, in the case of service by post, or service by electronic transmission, and says, for the purposes of the Code, the date of the notice or other document is the date it is taken to be given in accordance with the section.

48 As I understand the defendant’s submission, this means that because the document did not come to her notice until 21 July 2006, it was not given prior to the commencement of the present proceedings and therefore there is a breach of s 80 of the Code.

49 It is not necessary for me to consider this submission because of the evidence of Mr John Gharibian.

50 The Notice Of Default at paragraph 3 states:

“The overdue amount and enforcement expenses (total amount due) must be paid to the lender no later than 31 days after the date of service of this notice (contact John Gharibian on 02 82953749). Interest fees and charges will continue to accrue on this amount until paid in accordance with the terms and conditions of the facility and the security.”

51 The affidavit of Mr Gharibian, Exhibit C, states that on 21 February 2006 he received a telephone call on the phone line with the number stipulated in the Default Notice from the defendant.

52 According to his affidavit the following conversation ensued:

“Gharibian: Hello, this is John Gharibian.

Defendant: This is Carolyn Upston calling about the Default Notice for account number 8002346. I am sorry for not calling earlier than today, as I feel very embarrassed by the whole arrears situation. The situation now is that $80,000 was used to purchase a take-away food shop, the business was very bad. The business is now for sale, and I hope to receive about $55,000 upon sale soon. I am going back to my old job in middle management in local government, having found a job that pays $100,000 which I will start next week.

Gharibian: Have you received the default notice sent to you last week?

53 In paragraph 12 of his affidavit, he claims that the defendant phoned him again on 8 March 2006 and said:

“This is Carolyn Upston. I want to give you a further telephone contact number. I also want to inform you that I have located a buyer for the take-away business, so hopefully I can clear the arrears fully before the Default Notice expires on 20 March.”

54 In each of these two conversations, there is express reference to the Default Notice and in one of them, to the date on which it expires.

55 In paragraph 13, he deposes to a further telephone conversation on 16 March 2006 when the defendant phoned him and he told her, amongst other things:

“You must understand that the Default Notice expires on 20 March 2006 and if the notice is not satisfied I will have to proceed with further recovery action. This is a new loan, and the arrears are unacceptable”.

56 In paragraph 14 of his affidavit, Mr Gharibian says that shortly after each of the conversations, he made contemporaneous file notes into an electronic log and has relied upon them to refresh his memory as to the substance of those conversations. A printout of those electronic file notes is annexed to his affidavit.

57 He explained that the notes are automatically dated by the computer and that, if an alteration was made on a different date, that different date would appear. The file notes are in abbreviated form but clearly support the amplified form within the affidavit.

58 In cross-examination of the defendant (at p 41) the terms of the conversation of 21 February 2006 as alleged by Mr Gharibian were put to the defendant. She replied:

“I am not denying that I had a conversation with John Gharibian about the Default Notice. I’m just denying that I received the Default Notice.”

59 There is an inconsistency within this answer. If she had a conversation about the Default Notice then she must have known what it looked like and what it contained. If she did not have this knowledge, then one would reasonably have expected her to say words to the effect “what are you talking about? I haven’t received any such notice.”

60 At page 46, she was asked:

61 I find this explanation hard to accept.

62 At page 84, she was asked:

Q. Its been put to you that Mr Gharibian asked you on 21 February 2006 a question using words to the effect of “have you received the Default Notice sent to you last week?” Is it possible that Mr Gharibian asked you that question?
A. Oh its quite possible he asked me that question.

Q. Do you have a recollection of him asking you that question?
A. No.

63 The defendant is a lady who has had many years of experience in managerial positions. She is quite intelligent and articulate. The probabilities are that If she had been asked this question and if she had not received the Default Notice the preceding week, she would have responded with words to the effect of “Are you talking about a document? No, I never received a document.”

64 In cross-examination at pages 100-101, Mr Gharibian was asked:

“Q. You accept that in that text attributed to you at the top of page 4 you may not have said the words in the first sentence “you must understand that the Default Notice expires on 20 March 2006”, and so on; you might have said different words such as, “Mrs Upston, on 20 March 2006 your time runs out. We’re going to sue you” or similar words?
A. That is correct.

65 Mr Gharibian agreed that he did not explain to the defendant what a Notice of Default looks like.

66 He also gave evidence that the form of affidavit was given to him for his approval and, apart from the addition of dates, he made no further alteration.

67 Having had the benefit of hearing and seeing both the defendant and Mr Gharibian giving evidence, I found myself extremely impressed by Mr Gharibian and also by his contemporaneous file notes.

68 The upshot is that I am more than comfortably satisfied on the probabilities that the defendant did receive and actually see the Default Notice left in her letterbox on 15 February 2006 and was well aware of its contents by the time of her first discussion on the telephone with Mr Gharibian on 21 February 2006.

69 Accordingly, I am satisfied that there has been no breach of s 80 of the Code and that Defence to the action fails.

70 I now pass to the defendant’s claim for relief under the cross-claim.

Can a Claim for Relief under s. 68 of the Code be entertained after the expiration of the Notice of Default?

71 There is a preliminary point to be considered on this claim. The plaintiff submits that no claim for relief can be made once the Notice of Default has expired and the acceleration of payments has been stipulated and arises.

72 The subject mortgage between the parties contains a provision whereby, upon default in payment of any instalment, the mortgagee may declare the whole of the balance immediately due and payable. This is referred to as the acceleration clause.

73 Section 85(1) of the Consumer Credit Code states:

“(1) An acceleration clause is to operate only if the debtor or mortgagor is in default under the credit contract mortgage and
(a) the credit provider has given to the debtor and any guarantor, or to the mortgagor, a default notice under s80; and
(b) the default notice contains an additional statement of the manner in which the liabilities of the debtor or mortgagor under the contract or mortgage would be affected by the operation of the acceleration clause and also of the amount required to pay out the contract (as accelerated brokered); and

(c) the default has not been remedied within the period specified in the default notice brokered unless the credit provider believes on reasonable grounds that the default is not capable of being remedied.”

74 For reasons already stated, a notice in the appropriate form has been duly served upon the defendant. Furthermore, the defaults were not remedied during the period stipulated in the notice of default.

75 The subject notice of default is also stated to be issued pursuant to s 57(2) of the Real Property Act 1900. Accordingly, it is appropriate to consider the relevant sections of that Act.

76 Sections 57, 58 and 60 in their relevant parts provide:-

57(2) A registered mortgagee, . . . may, subject to this Act, exercise the powers conferred by section 58 if:

(a) in the case of a mortgage or charge, default has been made in the observance of any covenant, agreement or condition expressed or implied in the mortgage or charge or in the payment, in accordance with the terms of the mortgage or charge, of the principal, interest, annuity, rent-charge or other money the payment of which is secured by the mortgage or charge or of any part of that principal, interest, annuity, rent-charge or other money,

(b) where:
(i) the default relates to that payment, or
(ii) in the case of a mortgage, the default does not relate to that payment and notice or lapse of time has not been dispensed with under section 58A, a written notice that complies with subsection (3) has been served on the mortgagor, . . .in the manner authorised by section 170 of the Conveyancing Act 1919 .

(b1) where a notice is required to be served under paragraph (b), a copy of that notice has been served (in the manner authorised by section 170 of the Conveyancing Act (1919 ) on:
(i) each mortgagee, . . . of the land mortgaged or charged under a registered mortgage. . . which has less priority than that of the person intending to exercise the power of sale, and
(ii) each caveator (if any) who claims as an unregistered mortgagee or chargee to be entitled to an estate or interest in the land mortgaged or charged, and

(c) where such a notice is so served, the requirements of the notice are not complied with within the time notified pursuant to subsection (3) (d).

(3) A notice referred to in subsection (2) complies with this subsection if:
(a) it specifies that it is a notice pursuant to section 57 (2) (b) of the Real Property Act 1900 ,

(b) it requires the mortgagor, charger or covenant charger on whom it is served:
(i) to observe, except in relation to any time expressed in the covenant, agreement or condition for its observance, the covenant, agreement or condition in respect of the observance of which the mortgagor, charger or covenant charger made default, or
(ii) as the case may be, to pay the principal, interest, annuity, rent-charge or other money in respect of the payment of which the mortgagor, charger or covenant charger made default,

(c) if the costs and expenses of preparing and serving the notice are to be demanded, it requires payment of a reasonable amount for those costs and expenses and specifies the amount, and

(d) it notifies the mortgagor, charger or covenant charger that, unless the requirements of the notice are complied with within one month after service of the notice (or, where some other period exceeding one month is limited by the mortgage, charge or judgment for remedying the default referred to in the notice, within that other period after service of the notice), it is proposed to exercise a power of sale in respect of the land mortgaged or charged.

(4) Where a notice is served under subsection (2) (b) and the requirements of the notice are complied with within the time applicable to the notice under subsection (3) (d), the default to which the notice relates shall be deemed not to have occurred.

(5) Without prejudice to any other manner in which it may be deprived of force or effect, a covenant, agreement or condition whereby upon a default referred to in subsection (2) (a):
(a) the whole of the principal or other money of which the payment is secured by a mortgage or charge becomes payable, or
(b) a part of that principal or other money (not being a part to which that default relates) becomes payable, has no force or effect until the powers conferred by section 58 become exercisable by reason of that default.

S, 58 Power to sell
(1) Where a mortgagee . . . is authorised by section 57 (2) to exercise the powers conferred by this section, the mortgagee . . . may sell the land mortgaged or charged, or any part thereof, and all the estate and interest therein of the mortgagor . . . and either altogether or in lots by public auction or by private contract, or both such modes of sale, and subject to such conditions as the mortgagee. . . may think fit, and to buy in and resell the same without being liable for any loss occasioned thereby, and to make and execute all such instruments as shall be necessary for effecting the sale thereof, all which sales, contracts, matters, and things hereby authorised shall be as valid and effectual as if the mortgagor . . . had made, done, or executed the same, and the receipt or receipts in writing of the mortgagee . . . shall be a sufficient discharge to the purchaser of such land, estate, or interest, or of any portion thereof, for so much of the purchaser’s purchase money as may be thereby expressed to be received

S, 60 In case of default, entry and possession, ejectment
The mortgagee. . . upon default in payment of the principal sum or any part thereof, or of any interest . . . secured by any mortgage. . . may:
(a) enter into possession of the mortgaged . . .land by receiving the rents and profits therefor, or
……………
(c) bring proceedings in the Supreme Court or the District Court for possession of the said land, either before or after entering into the receipt of the rents and profits thereof, and either before or after any sale of such land effected under the power of sale given or implied in the mortgage . . . in the same manner in which the mortgagee . . . might have made such entry or brought such proceedings if the principal sum, interest, annuity, or rent-charge were secured to the mortgagee . . . by a conveyance of the legal estate in the land so mortgaged or charged.”

77 I am satisfied that a written notice complying with subsection 3 of s 57 has been served on the mortgagor in the manner authorised by s 170 of the Conveyancing Act 1919.

78 It is submitted on behalf of the plaintiff that the service of a valid Default Notice has the effect of accelerating the balance of the load and creates rights in rem in favour of the plaintiff. Because the acceleration clause has come into effect the land has been affected and, consequently, the Court no longer has power to entertain a hardship application under s 68 of the Code.

79 The submission, as I understand it, continues that the Default Notice has enlivened the provisions of the Real Property Act referred to earlier. So enlivened, the Consumer Credit Code cannot properly be construed to be a brake or fetter upon the plaintiff’s rights to the land under the Real Property Act. The plaintiff’s submission relies also on sub-section 3 of s 85 which is in these terms:

“(3) This section is in addition to any provision of any other law relating to the enforcement of Real Property mortgages and does not prevent the issue of notices to the defaulting mortgagees under that legislation.”

80 The plaintiff’s submission continues that on the construction of the provisions of the Real Property Act already referred to taken together with ss 84, 85, 86, 87 and 88 of the Code, it must be the case that there comes a point in time where the rights of the debtor cease. Those rights ceased upon the expiry of the time stipulated in a validly served Default Notice in proper form.

81 To resolve the issues raised by these submissions it is convenient to consider the consequences of valid service of a Notice complying with s 57(2) of the Real Property Act provided in that Act.

82 The first is that the mortgagee has the power to sell the land and pass on a good title to the purchaser (s 58). In this case, the defendant (mortgagee) has not sold the land. If it had done so then rights would have been created in the purchaser which would preclude the defendant in this case (the mortgagor) from applying under s 68 of the Code because that would be contrary to the vesting of title in the purchaser which is provided for by s 58 of the Real Property Act 1900. This is also because the effect of orders under s 68 of the Code is to keep the mortgage alive. The continued existence of the mortgage would derogate from the title of the purchaser.

83 The second is that the mortgagee has the right to enter into possession and receive the rents and profits (s 60(a)). In this case, the defendant (mortgagee) has not exercised this right.

84 The third is that the mortgagee may bring proceedings in this Court for possession of the land (s 60(c)). This is the action which the present plaintiff has taken. As I read it, s. 60(c) gives the mortgagee a personal right to bring the proceedings. This is a right in personam. It is the judgment of the Court which creates rights in rem.

85 A consideration of these sections of the Real Property Act satisfies me that the plaintiff’s submissions misconceive the nature of the consequences of failure to comply with a valid Default Notice and involve a confuision as to the nature of rights in rem and rights in personam. But there are further reasons for rejecting the plaintiff’s submission.

86 It is to be noted that s 85(3) of the Code states that the rights under s 85 are “in addition to” to any provision of any other law relating to the enforcement of Real Property mortgages. It does not use the words “subject to”.

87 The plaintiff’s claim for relief is based upon Division 2 of Part 4 of the Consumer Credit Code which is headed “Changes on grounds of hardship and unjust transactions”.

88 Section 66 provides:

“A debtor who is unable reasonably, because of illness, unemployment or other reasonable cause, to meet the debtor’s obligation under a credit contract and who reasonably expects to be able to discharge the debtor’s obligation if the terms of the contract were changed in the manner set out in subsection 2 may apply to the credit provider for such a change.”

89 Subsection 2 provides that an application by a debtor must seek to change the terms of the contract in one of the following ways:

“a) extending the period of the contract and reducing the amount of each payment due under the contract accordingly (without a change being made to the annual percentage rate or rates);

b) postponing during the specified period the dates on which payments are due under the contract (without a change being made to the annual percentage rate or rates);

c) extending the period of the contract and postponing during a specified period the dates on which payments are due under the contract (without a change being made to the annual percentage rate or rates)”

90 Section 68 provides:

“(1) If the credit provider does not change the credit contract in accordance with the application, the debtor may apply to the Court to change the terms of the credit contract.

(2) The Court may, after allowing the applicant, the credit provider and any guarantor a reasonable opportunity to be heard, by order change the credit contract in a manner set out in section 66, and make such other orders as it thinks fit, or refuse to change the credit contract.

91 The terms of subsection 3 envisage that enforcement proceedings under the credit contract have already been commenced. However such proceedings cannot be commenced until after the expiry of a valid notice of default given pursuant to s 80 the terms of which are set out above.

92 Accordingly, this subsection provides support for the construction contended for by the defendant that an application under s 68 of the Code may be made notwithstanding the expiry of the period in the Notice of Default and notwithstanding the acceleration of the balance due under the credit contract as contained in that Notice of Default.

93 Nowhere in the Code does the limit contended for by the plaintiff appear in relation to an application under s 68. This is in stark contrast with s 86 of the Code which relates to the postponement of enforcement proceedings. It provides that a debtor, mortgagor or guarantor who has been given a Default Notice may at any time before the end of the period specified in the notice negotiate with the credit provider a postponement of the enforcement proceedings or any action taken under such proceedings or of the operation of any applicable acceleration clause.

94 Section 88 provides that if the debtor, mortgagor or guarantor is unable to negotiate a postponement he or she may apply to the court for a postponement.

95 In s 86 there is an express time limit for negotiating with the credit provider a postponement of the enforcement of proceedings namely at any time before the end of the period specified in the notice. Sections 66 and 68 contain no such time limit.

96 On the clear wording of these sections, I am of the view that these are provisions which allow the debtor to make application for relief provided he or she can establish the necessary grounds, even though the period of the notice under s 80 has expired.

97 The plaintiff submits that such a construction would mean that at any time the debtor could seek relief under s 68 and lenders would never know whether they could be subject to such an application. The short answer to this is that once there is a judgment by the Court, the time for application under Division 3 of Part 4 comes to an end.

98 I note in passing that the Fair Trading Tribunal in the case of McNally v Australia and New Zealand Banking Group (2001) ASC 155-047 held that it retained the power under s 68 of the Code to make orders in relation to a hardship claim even though the loan obligations had been accelerated and the time stipulated in the Default Notice had expired.

The Application under s 68 of the Code

99 I now pass to the facts relied upon by the plaintiff in support of her application under s 68 of the Code.

100 The Transaction History in respect of loan account 8002346/1, a copy of which is annexed to the plaintiff’s affidavit, Exhibit 1, shows that she drew down on the loan on 22 August 2005. She made the payments under loan number 8002346/1 (the advance of $180,000) in respect of the months of September, October and November 2005. She defaulted in respect of the payments due in December 2005, January 2006 and February 2006. She resumed payments due on 22 March 2006 and has made all monthly payments due ever since.

101 The payments due under this loan in December was $1578.30; for January 2006 was $1578.30 and for February 2006 was $1578.30.

102 These defaults have also added to the plaintiff’s liability under this account legal costs of $110, default fee $75, a further default fee of $75, legal costs $62.50, a further default fee of $75, a reversal fee of $50, further legal fees of $77, a reversal fee of $50, enforcement costs $330, legal costs $33 and a reversal fee of $50.

103 The Transaction History in respect of loan account 8002346/2 (the loan of $84,000) shows payments during the same months and default in payments in December 2005, January 2006 and February 2006. Payments have been made on the due dates from and including 22 March 2006.

104 The payments due under this loan for December 2005 was $699.30; for January 2006 was $699.30 and for February 2006 was $699.30.

105 The defaults under this loan have resulted in debits for payment reversal fees totalling $150.

106 By letter dated 21 July 2006 addressed to the plaintiff’s solicitors, the defendant’s solicitors relevantly said:

“We are looking into a number of commercial options in light of the defendant’s recently improved and improving financial position. We understand the following points of mutual interest:

Reliable income since the closure of the café business venture has resulted in your monthly mortgage payments being paid in full and reliably on 22 March, 22 April, 22 May, 22 June and we are instructed that this is reliably set to continue on 22 July and continuing.

We have this week received the CGU Certificate of currency for 22 Buckingham Road that is valid from 19/4/06 until 19/7/07. That this is current is of obvious mutual interest.

The client is proactively managing the current situation by having the property listed for sale with a local real estate agent and the agency period is from 7/6/06 to 7/8/06. The prospect of electing to place a tenant is also a medium term option for improving cash flow. An agency agreement has been made available to us. The real estate agent has confirmed to our client this week that there is good interest in the property.

Could you please consider and reply to the following:

Would the plaintiff consent to a court ordered mediation by a Registrar to determine whether a suitable repayment schedule could be agreed?

What repayment schedule, including dates and amounts would be acceptable to the plaintiff?

What total amount is presently outstanding (including principal, interest and any necessary costs)?

Please provide detailed and itemised account so we can check the maths and determine whether a refinance is possible.

What can the plaintiff offer in relation to extending the loan by 3 to 5 months in order to by that or similar means resolve the 3 months lacuna?

107 The response to this letter was an email from the plaintiff's solicitors in the following terms:

“Our client has instructed us that they require evidence of financial hardship before they can consider your client’s hardship application.

Accordingly, please provide us sworn statement of financial affairs together with supporting documentation.

108 By email dated 11 August 2006, the defendant’s solicitors sent a draft affidavit and a formal affidavit was sent under cover of a letter of the same date.

109 I now pass to the facts upon which the defendant relies in support of her claim of extreme financial hardship during the period from November 2005 to the end of February 2006, which led to her being unable to meet the mortgage instalments for December 2005 and January and February 2006.

110 She took over Bimbo’s Takeaway shop and commenced trading on 12 September 2005. At that stage she had been offered a position in Brewarrina, which she accepted, because it provided her with funds for living whilst the business was in the starting stages and she employed a manager to run the business in her absence. The manager was a person whom she had known and trusted and considered capable of doing the job.

111 Trading figures provided by the manager revealed that the turnover of $4000 to $5000 per week as represented by the vendors of the business, was not being reached. In fact the turnover was only $1,500 to $1,8000 per week.

112 She then put in place a system involving stock checks and strict reporting which revealed that some $2,000 to $3,000 each week was unaccounted for.

113 Initially, she thought it may have been a temporary slump due to new ownership, but after 4 to 6 weeks of checking, it appeared that money was just disappearing. Accordingly, she gave up the contract work in Brewarrina and returned to manage and monitor the business herself.

114 At this point, she commenced to lose her ability to pay the mortgage instalments because the turnover of the business was between $3,000 and $3,500 per week. After payment of expenses, there was insufficient left to pay herself anything. In addition she had lost the income from her contract work.

115 The business serviced an industrial area. The turnover declined from just before Christmas 2005 until towards the end of January 2006 because a number of businesses in that industrial area closed down during that period.

116 The defendant thought that she had prepared for eventualities and fluctuations in the takings of the business by borrowing extra funds to provide working capital to carry her through the first twelve months. However, the disappearance of money (which she considered to be due to theft which could not be proved) caused a quick exhaustion of that working capital.

117 She summarised matters which she claims contributed to her financial difficulties, namely:-

“a. The theft of a considerable amount of money in the early operations and consequent expenditure of the allowed working capital.

b. Under estimating the required working capital.

c. Exaggerated turnover provided in pre purchase figures.

d. Her failure to take into account the fact that a couple had previously owned the business and were able to draw a wage, whereas as a single person she needed to pay wages for the extra person thereby preventing her from having any personal income from the business.

e. Lack of savings and personal financial resources to fall back on.”

118 She advertised the business for sale, first in late November and continued to advertise it until late February.

119 During January and February, she fell into arrears with the rent of the premises at which the business was conducted. She negotiated with the real estate agent acting on behalf of the landlord. However, she was locked out of the premises on 1 March 2006 before a sale had been effected. Once she was locked out, she was unable to trade, so there was no income and the business immediately lost all value.

120 During February she was offered and accepted a position at Armidale to commence 5 March 2006.

121 She eventually sold the business in April 2006 for $15,000, most of which went to the real estate agent. The balance went to other sundry business creditors and in meeting her obligations to her employees. She still owes two friends a total of $7,000 but they are not pressing for payment, at the moment.

122 The defendant has produced her bank statements, which support her claims that she ran out of money during the subject three months. In addition, she has produced pay slips which show that from 2 to 8 October 2005 she earned $1,386; from 9 to 15 October $1,435.50; and from 16 to 22 October 2005, $1,870.85. Income tax has not been deducted from these figures.

123 The pay slips also show that she resumed work on 5 March 2006 and that her total earnings from contract work for the financial year ending 30 June 2006 was $33,255.31. This was, in fact, for only about 34 weeks of contract work because she had been out of work whilst trying to resuscitate Bimbo’s Takeaway from 23 October 2005 to 5 March 2006, a period of 18 weeks.

124 Annexed to the defendat's affidavit is the Profit and Loss account for Bimbo’s Takeaway for the period 12 September 2005 to 13 January 2006. This shows income from sales $63,336.40. The cost of sales was $36,036.05. In addition the total expenses came to $50,873.60. Thus there was an overall loss during this period of about 18 weeks of $14,837,55.

125 Once her contract for work at Armidale was confirmed, she made a verbal offer in February 2006 to Mr John Gharibian to pay off the arrears by instalments of $50 per week, to be increased as other debts from the failed business were cleared. Mr Gharibian responded with words to the effect, “No we wouldn’t be bothered taking such small amounts, we want you to pay the full amount you have missed”.

126 It is now convenient to consider the defendant’s prospects of making good the arrears. She operates as an independent contractor and has had an Australian Business Number 53171782217 since 7 May 2002. She obtains contract work with Local Government bodies through Neptune Corporation Pty Ltd.

127 From February to December 2006, she was engaged by Armidale Dumaresq Council as Acting Manager, Administration Services during the absence on long service leave of the incumbent of that position.

128 From July to October 2005, she was engaged on a temporary contract as the Human Resources Officer at Brewarrina Shire Council.

129 Between 2001 and 2005 she ceased work to be a full time carer for her elderly mother, who died in January 2005. However, during this time she was a volunteer business mentor with the Central Coast Business Mentoring Service and also commenced studies for a Graduate Certificate in business administration.

130 From 1999 to 2001, she was employed by Gloucester Shire Council as Director of Corporate Services and Acting General Manager. From 1998 to 1999, she was the Customer Services Manager for the city of Cockburn.

131 There are further employments prior to 1998 but all of a similar nature. In addition, she has done courses to improve her skills in the sphere of local government administration and practice.

132 Annexed to her affidavit is a document called “Details of Assignment” showing an assignment to Tumbarumba Shire Council as Senior Governance Officer, commencing 2 January 2007 for a period of 6 to 8 weeks. Her rate of pay was $50 per hour, flat contract rate. Workers compensation, public liability, and professional indemnity insurance cover were her responsibility. In addition, the Council was to reimburse her travel expenses for the first trip to Council and the last trip home and to provide comfortable self-contained accommodation.

133 This is equivalent to gross earnings of $1,750 per week.

134 As from 12 March 2007, she is engaged by Warringah Council for a term of 3 months at the hourly rate of $50 per hour for working ordinary hours between Monday and Friday, not including public holidays. She anticipates that she will be working a minimum of 35 hours per week and at times 38 hours per week. She holds the position of Business Survey Officer.

135 The Council contributes an amount, equivalent to 9% of her pay, for ordinary working hours as superannuation. Workers compensation, public liability and professional indemnity insurance are the defendant’s responsibility.

136 The defendant’s work history, supported as it is by documentary evidence, satisfies me, on the probabilities, that since returning to the workforce in July 2005 after the death of her mother, the defendant has been in substantially regular employment, earning a gross sum of about $1,750 per week. The exception is the period when she left the work force in an attempt to salvage Bimbo’s Takeaway between October 2005 and 5 March 2006.

137 All of this evidence comfortably satisfies me that the defendant can be reasonably expected to earn from her contract work $1,750 per week for 48 weeks of the year, making a total earnings of $84,000 per annum or $7,000 per month.

138 The defendant estimates monthly expenses at $4,180 made up as follows:-

Rates - $150; home insurance - $60; food - $600; motor vehicle expenses - $450; telephone - $80; electricity - $30; provision for income tax - $1,500; entertainment - $60; superannuation - $750 and personal loan repayment - $500.

139 I have carefully considered each of these items of expense and conclude that they are very realistic. The provision for income tax, which can be checked against taxation schedules, if anything, overstates the potential liability by a few dollars. Furthermore, during the time that she works at Warringah Council, she will not incur the cost of superannuation because the Council will pay that for her.

140 However, I propose to leave this in the calculations because it does provide an extra buffer.

141 This means that the defendant has available funds each month of $2,820 dollars.

142 Over the life of the loans the interest rate has risen from 8.99% to 10.74%. The payment debited and reversed on 22 December 2006 on loan account 8002346/2 was $751.80. The payment debited and reversed on the same day in respect of loan account 8002346/1 was $1,675.56, making a total of $2,427.36 for that month.

143 This still leaves a further amount of $392 per month available for other expenses.

144 To obtain relief under s68 of the Consumer Credit Code, the applicant/defendant must establish the threshold matters set out in subsection 1 of s66 of that code.

145 She must establish, first, that she was unable reasonably, because of illness, unemployment or other reasonable cause, to meet her obligations under the credit contract.

146 The defendant claims that she meets these criteria because at the relevant time she was unemployed. She says that she had to give up her employment in order to attempt to salvage her Bimbo’s Takeaway business.

147 As against this, the plaintiff submits that she was not unemployed because she was never in a contract of employment. She was always an independent contractor. The plaintiff submits that the code is designed to protect persons who are in employment and does not cover people who operate a business as an independent contractors and that the whole purpose of the Code is to protect individuals in respect of a personal loan and not to protect people who are in business on their own account.

148 Alternatively, the defendant submits that she was unable reasonably to meet her obligation because of “other reasonable cause”. Her “reasonable cause” was the necessity to terminate her engagement at Brewarrina in order to manage and try to rescue the business of Bimbo’s Takeaway.

149 The plaintiff submits that this cause was not “other reasonable cause” within the meaning of s 68. The argument is that “other reasonable cause” must be read ejusdem generis with the words “illness” and “unemployment”. The genus is said to be causes which are forced upon the debtor for reasons outside of his or her control. In the present case, the defendant gave up her employment. She had gone into the business voluntarily and with her eyes open. The reason propounded by the Defendant would, according to the plaintiff’s submission, mean that the plaintiff would be underwriting the defendant’s business venture and that such a result is completely contrary to the spirit and terms of the Code.

150 The plaintiff submitted that the true explanation of what occurred is that, having engaged in a business operation, the defendant ran out of cash and had extra expenses while the business failed and that is not a reason for the court to exercise its discretion. The scheme of the Code is to allow for restructuring the loan for the purpose of someone’s domestic or household purposes. Here, the court is being asked to underwrite a business failure.

151 It is further submitted that, as a matter of public policy, the court should shy away from exercising discretion in favour of the defendant which would achieve such a goal.

152 On behalf of the defendant it is submitted that there is no genus in the preceding words “illness” and “unemployment”. The submission continues that the intention of the legislature when it inserted the words, “other reasonable cause”, was not to limit it in such a way as to exclude the deterioration of someone’s financial position as a result of the failure of an owner operated business.

153 In the case of Mattinson v Multiplo Incubators Pty Ltd 1977 1NSWLR 368 at 373, Mahoney JA said: -

ejusdem generis

154 My understanding of the cases where the ejusdem generis rule has been held to apply are those where numerous words describing specific instances are set out followed by words of general application. In those circumstances, having regard for the totality of the statute in which such those words appear, it can be said that the specific words create a genus by which the subsequent general words must be limited.

155 In the present section there are only two words describing specific instances used, namely “illness” and “unemployment”. In my view, these do not create a genus.

156 In my view the words “other reasonable cause” are to be read with a wide application in accordance with their ordinary meaning. Their effect is that the court looks at what was the cause for the debtor being unable reasonably to meet his or her obligations and then determines on the facts of the particular case, whether that cause was reasonable.

157 The defendant has comfortably satisfied me that the cause of her being unable reasonably to meet her obligations to the plaintiff was the realisation that her business Bimbo’s Takeaway was losing money quickly, and that if she was to save the situation she had to leave her place of work at Brewarrina and come back to Berkley Vale to supervise the business herself and determine what was going wrong.

158 I am satisfied that this cause was reasonable.

159 The period of her attempts and resulting lack of money to meet her obligations to the plaintiff lasted 3 months. This was a reasonable period of time.

160 Once she had done her best to salvage the business, she obtained a further engagement and income and then resumed the payments to the plaintiff. In short, the defendant has comfortably satisfied the court that she was unable reasonably, because of reasonable cause, to meet her obligations in December 2005 and January and February 2006 under the credit contract with the plaintiff.

161 The next matter which the defendant must prove is that she reasonably expects to be able to discharge her obligations if the terms of the contract are changed in one of the manners set out in subsection 2 of s66 of the Code. Support for the proposition that the defendant reasonably expects to be able to discharge her obligations if the terms of the contract are changed appears from the fact that apart from the three months from December 2005 to February 2006 she has met all payments as they have fallen due.

162 For the reasons set out earlier, I am comfortably satisfied that she has reasonable prospects of earning an amount which will cover her expenses including her liability to the plaintiff and leave her with a residue of some $390 per month.

163 However, in the background is a judgment obtained by Marina Bertolino against the plaintiff on 1 May 2006 in the Local Court at Wyong for $64,725. 42. Ms Bertolino has lodged a writ with the Registrar General on the plaintiff’s title of the subject land.

164 It appears that the judgment was obtained by default of filing grounds of defence and that the cause of action was for money lent.

165 The plaintiff denies that she ever received the Statement of Claim and this was the reason for her not filing a defence. She claims that once she learned of the judgment, she attended at Wyong Court and lodged a Notice of Motion to set the judgment aside. In a defence which she drew up herself, she relies on the following facts and assertions:-

“1 That I was not served with a Statement of Claim. Whilst I still have an interest in the property at 22 Buckingham Road, Berkley Vale 2261, I no longer permanently reside there.

2. I did not borrow the money claimed by the Plaintiff.

3. The Plaintiff sought to be involved with the business, Queens of Gloucester, which I conducted.

4. The Plaintiff may or may not have deposited the funds, as claimed in her statement, into accounts to which I was a signatory.

5. If deposits were made, they were made voluntarily, and not as any form of loan, in fact I informed the Plaintiff that they were definitely not to be considered loans because I was not in a position to repay her.

6. The business, Queens of Gloucester, was voluntarily transferred from my name into the name of the Plaintiff to protect her investment.”

166 On behalf of the plaintiff in this case, it is submitted that these so-called particulars of defence clearly concede that she received money and it was by way of a loan. I do not agree. Whilst the wording is far from clear, it seems to allege that whatever money was paid by Ms Bertolino into the defendant’s account, was by way of investment in a business and not by way of a loan. Accordingly, there seems to be a defence on the merits.

167 Although this Notice of Motion was filed as long ago as late June 2006, it has not yet come on for hearing and the defendant was unable to inform the court as to why there was such a long delay and when the matter would be heard.

168 At the same time, there is nothing to suggest that Ms Bertolino is doing anything to bring the case on for hearing quickly.

169 I am comfortably satisfied that the defendant expects to be able to discharge her obligations to the plaintiff if the terms of the contract are changed and that her expectation is based upon reasonable grounds. Accordingly, she has satisfied the court that she reasonably expects to be able to discharge the debtor’s obligations if the terms of the contract are changed.

170 Even if the defendant is found liable to pay the debt to Ms Bertolino she still had the means to apply to the court for leave to pay the debt by instalments and to pay such instalments.

The Form of Order

171 The question, then, is what form of order should I make.

172 The initial default was failure to pay 3 monthly instalments. Having found that the defendant is entitled to relief, the question now arises as to the form that relief should take. Section 68 of the Code provides that the Court may, by order, change the credit contract in the manner set out in s66 and make such orders as it thinks fit, or refuse to change the credit contract.

173 Subsection 2 of s66 sets out three ways in which the terms of the contract may be changed. The first is:-

“Extending the period of the contract and reducing the amount of each payment due under the contract, accordingly (without a change being made to the annual percentage rate or rates).”

174 The defendant here is not seeking a reduction of the amount of each payment due. Hence this paragraph has no application.

175 The second form of order stipulated in subsection 2 of s66 is:-

“Postponing during a specified period the dates on which payments are due under the contract (without a change being made to the annual percentage rate or rates).”

176 It would be tempting to apply this paragraph and order that the dates on which payments were due in December 2005 and January and February 2006 be postponed until the end of the term. However, as I read this paragraph, it anticipates postponing future payments during the specified period rather than postponing the dates on which past payments were due.

177 The third form of order specified in s66 is: -

“Extending the period of the contract and postponing during the specified period the dates on which payments are due under the contract (without a change being made to the annual percentage rate or rates).”

178 I am of the view that the requirements of this form of order can be met by an extension of the current contract for a term of 30 years from now, without a change being made to the annual percentage rate or rates.

179 In support of her application, the defendant has furnished as an annexure to her affidavit, an Advanced Repayment Calculator obtained on the Internet from Allowing for an initial loan of $295,000 (as at 28 February 2007, the amount claimed by the plaintiff was $291,432.91), a term of 30 years and an interest rate of 10.74% the monthly repayments would be $2,752. The calculations set out a loan amortisation table showing how this is arrived at.

180 I have checked through the figures and they appear to be substantially correct. A monthly payment of $2,752 is well within the reasonable expectation of the defendant to meet.

181 The difficulty is that the calculations are based upon an interest rate of 10.74%, which is the current rate, whereas the mortgage provides for variable rates. Even if the rates are varied, the difference in the repayments would be, in my view, within the reasonable capacity of the plaintiff to pay.

182 I therefore propose make orders which will have the effect of postponing the three defaulted payments (22 December 2005, 22 January 2006 and 22 February 2006) until 22 March 2007. The total sum due under the credit contract is to be capitalised as at 22 March 2007. The evidence is that such capitalised sum was $291,432.91 as at 28 February 2007 and interest accrues at the rate of $85.77 per day. Accordingly the capitalised sum as at 22 March 2007 will be $293,318.85. The period of the contract is to be extended for a term of thirty (30) years commencing on 22 March 2007 during which the defendant is to pay the said capitalised sum together with interest thereon by monthly instalments without a change being made to the annual percentage rate or rates provided in the contract.

183 I have nominated 22 March 2007 because instalments under the contract are due on 22nd of each month and also to give the parties time to make the necessary administrative arrangements to give effect to my orders.

ORDERS

1. Pursuant to s 68(2) of the Consumer Credit Code it is ordered that the credit contract between the plaintiff and the defendant be changed in the manner following:-

(a) By postponing until 22 March 2007 the dates on which the payments due under the contract on 22 December 2005 and 22 January 2006 and 22 February 2006 fall due.

(b) The total amount of those three payments plus interest and charges caused by the failure to make those three payments as they fell due are to be included within the total amount of moneys due by the defendant to the plaintiff under the contract as at 22 March 2007. Such total is referred to as the capitalised sum and as at 22 March 2007 is $293,318.85.

(c) The period of the contract is extended for a term of thirty (30) years commencing on 22 March 2007 during which the defendant is to pay the said capitalised sum of $293,318.85 together with interest thereon by monthly instalments without a change being made to the annual percentage rate or rates provided in the contract.

2. Liberty to either party to apply to the Court on 48 hours notice for such further orders as may be required to give effect to or to implement these orders.

3. I invite submissions as to costs.

FURTHER ORDERS:

1. The plaintiff's action is dismissed.
2. On the cross-claim I make the orders set out in paragraph 183 of my written judgment.
3. I make no orders as to the costs of the action.
4. I order the plaintiff/cross-defendant to pay the defendant's/cross-claimant's costs of the cross-claim.

I direct that the exhibits remain in court for 14 days or further order.

CITATION:	Permanent Custodians Limited v Carolyn Joy Upston [2007] NSWSC 223
HEARING DATE(S):	5, 6, 7 of March 2007
JUDGMENT DATE :	16 March 2007
JUDGMENT OF:	Cooper AJ at 1
DECISION:	See paragraph 183
CATCHWORDS:	"Predominantly for personnel, domestic or househod purposes" s 6 Consumer Credit Code. - Expiry of Notice of Default not a bar to application under s 68 of Consumer Credit Code. - "Other reasonable cause" s 66 (1) Consumer Credit Code.
LEGISLATION CITED:	Real Property Act 1900 ss 57 (2), 58, 60 Consumer Credit Code ss 6,11, 66, 68, 80,85,173 Conveyancing Act 1919
CASES CITED:	Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451 Linkenholt Pty Ltd v Quirk [2000] VSC 166 McNally v Australia and New Zealand Banking Group (2001) ASC 155-047 Mattinson v Multiplo Incubators Pty Ltd 1977 1NSWLR 368
PARTIES:	Permanent Custodians Limited - Plaintiff Carolyn Joy Upston - Defendant
FILE NUMBER(S):	SC 11782 of 2006
COUNSEL:	M J Cohen - Plaintiff T Maltz - Defendant
SOLICITORS:	Gadens Lawyers - Plaintiff Rice More & Gibson Solicitors - Defendant