Perpetual Trustees Victoria Ltd v Knezevic

In Perpetual Trustees Victoria Ltd v Knezevic, the court dealt with a claim under the Contracts Review Act in relation to a self-certifying loan. The dispute involved whether the loan was unjust under the circumstances, specifically due to the borrower's age at the time of the loan and the lender's lack of substantiation of the borrower's income. The Federal Court was tasked with determining whether the loan contract was unjust and whether the lender had engaged in misleading and deceptive conduct.

The legal issues before the court encompassed the criteria for an unjust contract as outlined in the Contracts Review Act and whether the lender's conduct constituted misleading or deceptive conduct under the Australian Consumer Law. Central to the discussion was whether the borrower's age at the time of the loan and the lender's failure to verify the borrower's income were sufficient to render the contract unjust. Additionally, the court had to consider whether there was a sufficient and direct link between the lender's agent's representations at settlement and the resulting consequences experienced by the borrower.

The court found that the loan contract was indeed unjust due to the borrower's age and the lender's failure to verify the borrower's income, rendering the self-certifying nature of the loan ineffective. The lender's agent's representations at settlement were deemed misleading and deceptive, contributing directly to the borrower's adverse consequences. Consequently, the court ruled in favour of the borrower, finding the loan contract unjust and the lender liable for misleading and deceptive conduct. The final orders included the annulment of the loan agreement and the imposition of penalties on the lender for their conduct.