Nandani v South Pacific Loans Limited - [2016] NZHC 2270

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-3277 [2016] NZHC 2270

BETWEEN
VINDIYA SHILPA NANDANI

Plaintiff

AND

SOUTH PACIFIC LOANS LIMITED Defendant

Hearing: 15-17 August 2016

Counsel:

P M Webb for Plaintiff
P Craighead for Defendant

Judgment:

26 September 2016

JUDGMENT OF WHATA J

This judgment was delivered by me on Monday 26 September 2016 at 3.00 pm
Pursuant to Rule 11.5 of the High court Rules.
Registrar/Deputy Registrar
Date:…………………………

Solicitors: Denham Bramwell, Manukau
Alistaire Hall, Manukau

NANDANI v SOUTH PACIFIC LOANS LIMITED [2016] NZHC 2270 [26 September 2016]

[1] Ashok Maharaj owned a building company, the 3 Maharajs, now in liquidation. Vindiya Nandani, his wife, owns a residential property. Mr Maharaj needed $50,000 to pay his company’s debts. He could not obtain a loan from South Pacific Loans Limited (SPL), but SPL was happy to lend the money to Ms Nandani even though she had no income. Unlike Mr Maharaj, she could provide her property as mortgage security. When Mr Maharaj needed another $40,000 for his business, SPL was again happy to lend it to Ms Nandani. Both loans were initially short-term with an interest rate of 29.5% and a penalty interest rate of 39.5%. When Ms Nandani could not repay the loans, they were combined and fresh loans were made. In that time the 3 Maharajs went into liquidation. With no income, Ms Nandani defaulted on the loans. SPL wants to sell the house. A sum in the order of $650,000 is now due and owing.

[2] Ms Nandani wants to set the loans aside. She says that: (a) The loans were taken under undue influence;
(b) The loans were unconscionable; and

(c) The loans were oppressive in terms of Part Five of the Consumer

Credit Contracts and Finance Act 2003. [3] SPL denies these claims.

Facts

Pre-loan history

[4] Ms Nandani and Mr Maharaj have lived together since July 2003 and were married on 14 March 2008. When Ms Nandani met Mr Maharaj she was working as a salesperson and later became an assistant manager. She also owned a unit at Rangitoto Street. Mr Maharaj was working as a supervisor at a manufacturing company. In 2006 Mr Maharaj became involved in property investment and he formed a building company called the 3 Maharajs Limited. Over the course of the next few years Mr Maharaj would acquire and sell a number of properties.

[5] In May 2007 Ms Nandani sold the Rangitoto Street property and purchased a property at Sunnyside Crescent. A mortgage with Property Finance Limited was required to complete the purchase. It was her intention to develop the site and, after subdivision, construct a new house on the rear site. She hoped to accumulate enough capital to purchase a house with a more affordable mortgage so she could stop work and raise a family. She then obtained a loan from Sovereign for the purpose of the subdivision and building a house on the rear site. The previous mortgage was discharged.

The first SPL loan

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.

Continue reading Nandani v South Pacific Loans Limited

Details

AGLC: Nandani v South Pacific Loans Limited [2016] NZHC 2270
Case: [2016] NZHC 2270
Decision Date: 26 September 2016

CaseChat Overview and Summary

Nandani v South Pacific Loans Limited [2016] NZHC 2270 was a case concerning claims by Vindya Shilpa Nandani against South Pacific Loans Limited (SPL). Ms Nandani claimed that the loans taken out by her in favour of SPL were obtained by undue influence, were unconscionable, or were oppressive in terms of Part Five of the Consumer Credit Contracts and Finance Act 2003. SPL denied these claims. The court found that Ms Nandani's claims based on undue influence and oppressive behaviour failed. However, the court found that the loan contracts from the third onwards were unconscionable. The court ordered that there should be relief in the form of rescission insofar as concerns the monies owing in relation to contracts (6) to (9). However, SPL should be repaid the sums owing on contract (5) together with interest at a rate to be fixed from that date, less any interest payments already made in relation to that contract. The court reserved costs pending resolution of the remaining matters.

Orders