Loan can be regulated consumer credit even with business declaration
Australian Regulatory Compliance Review:
In Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150 the NSW Court of Appeal disregarded a borrower’s declaration that a loan was wholly or predominantly for business or investment purposes because the credit contract was entered into before the declaration was provided, contrary to section 11 of the Consumer Credit Code.
The effect was that the credit contracts were regulated by the Consumer Credit Code.
In considering whether the lenders had reason to believe at the time that the declarations under s 11(2) were made that the subject loans were in fact to be applied wholly or predominantly for personal, domestic or household purposes the Court referred to the borrower’s loan application. It showed that “the employment history and the statement of assets and liabilities of the appellants do not indicate that they were in receipt of any income other than wages from their employer and, in particular,…