Mr Maharaj owned a building company. Ms Nandani, his wife, owns a residential property. Mr Maharaj needed funding, which he could not obtain. However, the necessary funds were loaned to Ms Nandani and secured over her property. Ms Nandani subsequently contended that:

  • The loans were taken under undue influence
  • The loans were unconscionable
  • The loans were oppressive (per Part 5 of the Consumer Credit Contracts and Consumer Finance Act 2003 (CCCFA).

Ms Nandani's claim failed on the first and third issue. In particular, the circumstances were such that the loan was not a consumer credit contract under the CCCFA.

However, Ms Nandani succeeded in part on the second issue. The initial loans themselves did not amount to an unconscionable bargain, but allowing the loans to roll over several times when it was clear that the couple could not service the loans, did amount to unconscionable conduct. In particular, the initial loan of $90,000 had become a $648,787 debt.

See Court decision here.