New South Wales Supreme Court CITATION : RICHARD DAVID GODFREY v NATIONAL AUSTRALIA BANK (2001) NSWSC [2001] NSWSC 977 FILE NUMBER(S) : SC 012244/01 HEARING DATE(S) : 22 October 2001 JUDGMENT DATE : 30 October 2001 PARTIES : P. Batley (Solicitor) - Plaintiff J. B. Conomy (Council) - Defendant JUDGMENT OF : Cooper AJ LOWER COURT Local Court JURISDICTION : LOWER COURT 314/01 FILE NUMBER(S) : LOWER COURT Mr. S M Reimer JUDICIAL OFFICER : COUNSEL : J.B. Conomy - Defendant SOLICITORS : P. Batley - Plaintiff CATCHWORDS : Summary Judgment LEGISLATION CITED : Local Court's (Civil Claim's) Act, Consumer Credit Code 1995 Ramton v Cassin 38NSWLR88 Pace v Read 2000 NSWSC 823 CASES CITED : NRMA Insurance Ltd v AW Edwardson Pty Ltd (BC9403282) Commercial Banking Co. of Sydney Ltd v Pollard 1983 1NSWLR 74 Permanent Trustee Australia Ltd v Biviano (BC9600253) DECISION : 1. Leave to appeal is granted (if required); 2. The appeal is dismissed; 3. The plaintiff is to pay the defendant's costs THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COOPER A J Tuesday, 30 October, 2001 012244/01 RICHARD DAVID GODFREY V NATIONAL AUSTRALIA BANK LIMITED. JUDGMENT HIS HONOUR The Nature of these Proceedings 1 By summons filed on 19 July 2001 the plaintiff seeks leave to appeal against orders striking out his Grounds of Defence and for summary judgment made in the Local Court at Coffs Harbour on 19 June 2001 in proceedings under the Local Courts (Civil Claims) Act. 2 The grounds of appeal essentially are that the Magistrate erred in law in finding that the plaintiff's grounds of defence were not bona fide and lacked substance also erred in law in failing to consider the merits of the defences filed. The Pleadings Before the Local Court 3 Before going to the precise arguments and submissions it is necessary to consider the course of events before the Local Court. 4 To avoid confusion, the plaintiff will be referred to as Godfrey and the defendant as the Bank. 5 The Bank filed a statement of liquidated claim against Godfrey claiming $ 12077.26 for moneys paid by it on behalf of Godfrey at his request between 1 August 1985 and 5 December 2000 together with credit charges in respect of MasterCard account number 5313 5520 0022 4221. The statement of claim further alleges that the Bank served on Godfrey a notice of default on 24 October 2000 and that Godfrey failed neglected and/or refused to pay the amount outstanding. 6 By his amended defence Godfrey admitted that he had MasterCard accounts and alleged that at all material times from 1 November 1996 MasterCard account number 5313 5820 2731 5033 was a continuing credit contract within the meaning of the Consumer Credit Code 1995. He further alleges that the credit contract relating to that MasterCard account was unjust within the meaning of sections 70 of the Code in that: 1. From time to time the Bank increased the credit limit on the MasterCard account. 2. The Bank could have ascertained by reasonable inquiry of him that he could not pay in accordance with its terms or not without substantial hardship. 3. The Bank made no inquiry of him as to his ability to pay in accordance with the increased credit limit. 7 He further claimed that on or about 21 November 1996 the Bank changed the credit card contract relating to that MasterCard account by increasing his credit limit to $9000 and the change to the credit contract was unjust within the meaning of sections 70 of the code in that: 1. The Bank could have ascertained by reasonable inquiry of him that he could not pay in accordance with its terms or not without substantial hardship. 2. The Bank made no inquiry of the plaintiff as to his ability to pay in accordance with the increased credit limit. 8 A further ground of defence alleged that on or about 26 March 1999 the Bank changed the credit contract relating to the MasterCard account by increasing the credit limit to $12,000 and changing the account to a Gold MasterCard account number 5513 5520 0022 4221 and the change was unjust within the meaning of section 70 of the Code. The grounds upon which it is alleged that the credit contract was unjust are:- 1. The Bank could have ascertained by reasonable inquiry of him that he could not pay in accordance with its terms or not without substantial hardship. 2. The Bank made no inquiry of the plaintiff as to his ability to pay in accordance with the increased credit limit. 9 The Grounds of Defence further alleged that on or about 10 April 1999 the defendant's obligations to the plaintiff under the credit contract relating to the earlier MasterCard were discharged and that on or about 11 April 1999 the plaintiff entered into a new credit contract with the Bank relating to the Gold MasterCard account. 10 The Grounds of Defence then alleges that the circumstances relating to the gold MasterCard credit contract at the time it was entered into was unjust within the meaning of sections 70 of the Code in that: 1. The Bank made available to Godfrey a continuing credit facility with the credit limit of $12,000. 2. The Bank could have ascertained by reasonable inquiry of him that he could not pay in accordance with its terms or not without substantial hardship. 3. The Bank made no inquiry of him as to his ability to pay in accordance with the terms of the credit contract. 4. At the time the contract was entered into its provisions were not the subject of negotiations. 5. It was not reasonably practicable for the defendant to negotiate for the alteration of or to reject any of the provisions of the contract. 6. The provisions of the contract and their effect were not accurately or at all explained to him before he entered into the contract. 7. Failure on the part of the defendant pursuant to section 14 of the code to disclose: a. a pre contractual statement as required by section 14 (1) (a) of the Code, b. an Information Statement in the form prescribed by section 11 (1) of the Consumer Credit Regulation, c. relevant financial information as required by section 14 (4). d. Information required by section 15 of the code to be contained in the contract document were not so contained. The Proceedings in the Local Court 11 By Notice of Motion the Bank sought orders that the grounds of defence be struck out and for summary judgment to be entered for the plaintiff plus costs. 12 This motion was supported by affidavits of Mr D. J. Kemp sworn 9 May 2001 and 1 June 2001. The defendant filed an affidavit sworn 8 June 2001 and the plaintiff filed a further affidavit of Ms K J Mackay sworn 8 June 2001. 13 The Bank's Notice of Motion came on for hearing before the Magistrate on 19 June 2001. A copy of the transcript of those proceedings is annexed to the affidavit of Mr Batley sworn 17 August 2001. This transcript sets out submissions made on behalf of the parties and the Judgment of the Magistrate commences on page 4. 14 Unfortunately the Judgment commences with a note that the recording equipment was not switched on and so only part of the Magistrate's reasons for judgment are set out. The relevant part is: "The defence seeks to rely upon consumer credit laws and unfair contract legislation, in effect to protect the defendant from himself. It seems to me from the submissions I have heard and the matters that have been put to me by Counsel for the plaintiff and the solicitor for the defendant, that there is absolutely no bone fides or substance in the defence, none whatever." "In the final analysis I am prepared to grant the motion. I make orders as per paragraphs 1 and 2 of the motion." 15 Counsel for the Bank then sought an order for judgment and the magistrate ordered "judgment is entered accordingly". Preliminary Objection - The Record is Incomplete 16 On behalf of the Bank it is submitted, as a preliminary issue, that neither the application for leave to appeal nor the appeal proper can succeed as the appellant has failed adequately to prove the record and so the court is not placed in a position from which it can properly be satisfied of the grounds of appeal alleged by the Appellant. The submission continues that the lack of a full transcript of the arguments put and the reasons for decision of the Magistrate in these circumstances is a bar to the granting of the leave to appeal as the court cannot be satisfied that it has before it the relevant transcript and there is no evidence that it is likely ever to receive it. The Bank relies upon what was said by Kirby P in Ramton v Cassin 38 NSWLR 88 at 91. "The experience of the court in matters of this kind is that the court examines the primary judges reasons, as given, to see whether it is shown that the judge has taken into account some consideration that he is irrelevant to the discretion, has failed to take into account some consideration which is relevant and necessary, has otherwise erred in principle or has for a reason which is not precisely identified, reached a conclusion that is manifestly wrong or unjust. It is not possible for the court to judge the merits of any of these arguments without the transcript of her Honours reasons and the transcript of the relevant oral testimony that was given before Her Honour in support of the application" 17 In my view, the facts of the present case are quite different from those in Ramton's case. That was a case involving and appeal from a superior court of record. This is a case involving the exercise of jurisdiction by a Local Court under the Local Courts (Civil Claims) Act. No oral evidence was placed before the Magistrate. The totality of the material that was before him is comprised in the documents in Exhibit A before this Court. Accordingly, there is sufficient evidence in exhibit A, plus the extract from the Judgment of the Magistrate set out above from which one can determine the merits of his decision. Should Leave to Appeal be Granted ? 18 There is a further preliminary issue which needs to be considered and that he is whether leave to appeal should be granted. 19 The plaintiff's summons seeks leave to appeal pursuant to section 104 (4) of the Justices Act. 20 In this regard it is important to note that in the case of Pace v Read (2000-NSWSC 823) O'Keefe J held that section 104 was not intended to and does not apply to or regulate appeals from a Local Court exercising jurisdiction under the Local Courts (Civil Claims) Act, of which this case is one. His Honour considered that the matter must be decided under section 69 of that Act which, after providing that all judgments and orders of the court shall be final and conclusive, goes on to provide: "(2) A party to proceedings under this Act who is dissatisfied with the judgment or order of the court as being erroneous in point of law, may appeal to the Supreme Court therefrom." 21 This is an appeal on the grounds that the Magistrate made an order or orders which were erroneous in point of law. Consequently in the light of the judgment in Pace's case I would hold that no leave to appeal is necessary. 22 I would also note that although the Magistrate struck out the grounds of defence (which is an interlocutory order) he went on to enter judgment in favour of the Bank as a consequence of his former order. The entering of the judgment is a final order. For this reason as well I am of the view that no leave is required. 23 However even if I be wrong in coming to this conclusion and that the correct position is that leave to appeal is required, I would nonetheless grant such leave 24 Whilst the striking out of the grounds of defence may be an interlocutory order it had the inevitable effect in the circumstances of this case of the entry of final judgment in favour of the Bank. Because of this effect I consider it just and proper and reasonable that leave to appeal should be granted. The Powers of the Court on this Appeal 25 The next matter to be considered is the powers of this court in this appeal. 26 The decision of the Magistrate was a discretionary one involving a matter of practice and procedure. Upon appellate reconsideration it attracts the well known inhibitions and proper deference to the decision maker's determination which control intervention in such matters. See per Kirby P in NRMA Insurance Ltd v A W Edwardson Pty Ltd (BC9403282 at page 6). In short this court will not intervene unless there was an error on the part of the Magistrate. 27 The extract from the Magistrate's judgment set out earlier is quite short and curse. It gives no reasons for coming to the view that - "There is absolutely no bone fides or substance in the defence, none whatever". 28 Whilst this extract is short and devoid of detail it nonetheless indicates that His Worship found there was no substance in the defence. I interpret this as meaning that on the evidence before him there was no arguable case on the merits in support of the defence raised by Godfrey. Principles to be applied on an Application for Summary Judgment 29 At this stage it is necessary to consider the principles which have to be applied upon an application for summary judgment. They may be summarised as follows:- 1. Summary judgment is not appropriate if the defence raises an issue which is triable. 2. It is not appropriate if the evidence discloses that there is a real issue of fact to be decided which issue could result in the defendant defeating the plaintiff's claim at least as to part. 3. Triable issues are not confined to issues of fact and can include issues of law. 4. Courts have emphasised that the circumstances in which an order for summary judgment or an order striking out pleadings with the result that there is summary judgment are restricted. A case must be clear indeed to justify the summary intervention of the court. The power must be exercised with exceptional caution. Care must be exercised to ensure that under the guise of achieving expeditious finality a party is not improperly deprived of its opportunity for the trial of its case by the court. The claim which is attacked must be so clearly untenable that it cannot possibly succeed. 5. Where, as is the case here, the defence involves a claim under legislation which gives discretionary relief such as the Contracts Review Act or the Consumer Credit Code, a motion for summary judgment would ordinarily not be appropriate (see Commercial Banking Co of Sydney Ltd v Pollard 1983 1NSWLR 74 and Permanent Trustee Australia Lyd. V Biviano BC 9600253). 6. However it may be ordered if there is no prime face evidence to support the order for relief under the legislation. There mere fact that a party to a contract can point to circumstances which fall within one or more of the paragraphs of the section in the Act giving rise to relief does not mean necessarily that there is an arguable case for such relief. Did the Magistrate Err in Law? 30 Godfrey did not dispute his indebtedness in the amount claimed. His defence was limited to a claim for relief under the Consumer Credit Code. Such a defence, if successful, could result in his being relieved of the obligation to pay some of the total amount claimed to the Bank. The amount he would have to pay, if successful is at the discretion of the court. Accordingly it is now necessary to examine the material that was before the Magistrate and to determine whether that material gave rise to an arguable case for relief under that Code. 31 The evidence before the Magistrate on behalf of the Bank were affidavits of Dale James Kemp sworn 9 May, 2001 which annexes documents as to the history of the credit cards issued by the Bank to Godfrey over the years and also the correspondence. There is a further affidavit from Mr Kemp of 1 June, 2001. On behalf of Godfrey there is an affidavit sworn by him on 8 June, 2001 which annexes copies of his taxation returns showing that he had losses over the years together with correspondence. In reply, the Bank filed an affidavit of K. J. Mackay, sworn 18 June, 2001. 32 A summary of the evidence in the affidavits follows. From 1985 to 1996 Godfrey had a MasterCard account with the Bank with a credit limit of $6000. In November 1996 he was offered a pre approved increase of his credit limit to $9000. Godfrey accepted this on 21 November, 1996. The annexures to the affidavits show that in January 1998 the credit limit was exceeded with a debit of $9064.30. However by February, it was reduced to $8840.71 and in March it was further reduced to $23.80. In August, 1998 the credit limit was exceeded and reached $9011.64 but was reduced by the following month. In December, 1998 the debit balance was $8129.03 and in January, 1999 it rose to $8441.89. The statement of account annexed to the affidavit of Mr Kemp, sworn 9 May, 2001 (p.38) shows a debit balance at 11 February, 1999 of $11,658.69. By 12 March, 1999 it had reduced to $9210.14. Accordingly at that stage, the credit limit had been exceeded by $210.14. 33 Annexure J to that affidavit is a pre approved acceptance certificate from the Bank to Godfrey offering him a pre approved change in his current National MasterCard to a pre approved Gold National MasterCard with a $12,000 credit limit. This certificate was signed by Godfrey on 26 March, 1999. 34 On 7 April, 1999 he deposited $9334.44 into the account which reduced the debit to one cent. On 21 April, 1999 he signed an authority to link his card to a rewards program. (see annexure K to that affidavit) 35 By December, 1999 the debit on the account had risen to $12,020.87. Thereafter, notwithstanding some payments, the credit charges and interest have kept the balance due above the $12,000 limit. Between June and November of 2000 there was correspondence between the parties in which Godfrey made promises to reduce the indebtedness. 36 In his affidavit sworn 8 June, 2001 Godfrey says that as at November, 1996, he was self employed in a business. He had a low income and supports that contention by annexing copies of his taxation returns. He says that he made a payment of $8997.33 on 28 January, 1999 from money he had borrowed from his mother and that on 17 July, 1998 he paid $5000 by withdrawing on his superannuation. He also says that he paid $5000 in August, 1998, $1000 in October, 1998, $700 in November, 1998, $350 on 2 December, 1998 and $1000 on 17 December, 1998 with funds that came partly by loan from his mother and partly by drawing down on his superannuation. He does not state the source of the payment on 7 April of $9334.44. 37 In his affidavit he says:- 11. In about March, 1999 I received a letter from the plaintiff advising me that it had approved the change of my MasterCard to a pre approved National Gold MasterCard and an increase of my credit limit to $12,000. The letter asked me to return a signed form of Pre Approved Acceptance Certificate. 12. To the best of my recollection the letter did not inform me about the terms and conditions of the pre approved Gold MasterCard and did not include a copy of form 2 under the Consumer Credit Regulation 1995. 13. The defendant did not ask me to provide any information about my financial circumstances. Had the defendant asked me about my financial position, I would have informed it that my expenses substantially exceeded my income. 14. At that time I was still in serious financial difficulty. On or about 28 May, 1998 I applied for and was granted Newstart allowance because I was earning no income from my business. My income for the 1998/1999 financial year was $8413. 38 It will be noted that in paragraph 12 of his affidavit Godfrey does not deny being informed about the terms and conditions of the Gold MasterCard nor does he deny that he received a copy of Form 2 under the Consumer Credit Regulation. He merely says that "to the best of my recollection" he did not receive them. 39 On this point, annexure D to his affidavit is the letter from the Bank to him of 21 April, 1999 which sets out the Financial Information Table as prescribed in the Regulation and at the foot of the table is the following:- "This document does not contain all of the information the Consumer Credit Code requires you to receive regarding your credit card contract. Further information is contained in the enclosed Terms And Conditions For Credit Cards." This annexure to Godfrey's own affidavit shows that his recollection is faulty in this regard. 40 The affidavit of Ms Mackay of 18 June, 2001 annexes a copy of the Terms And Conditions of the credit card account which the letter of 21 April, 1999 said was enclosed. 41 It is common ground that the credit card account with the Bank was subject to the Consumer Credit Code 1995 which commenced on 1 November, 1996. It is also common ground that the Code is part of consumer protection legislation. Clause 7(1) of Schedule 2 to the Code provides - "In the interpretation of a provision of this code, the interpretation that will best achieve the object or purpose of this code is to be preferred to any other interpretation." 42 It is submitted on behalf of Godfrey that the Bank made no inquiry about his financial circumstances when it made the offers of pre approved increases in credit. At the relevant times Godfrey's business was showing losses and he was relying on Social Security income at the time the Bank offered him a pre approved increase of credit to $12,000. The object of section 70(2)(l) is to require credit providers to guard against borrower over commitment. The existence of the provision suggests that Parliament was concerned to protect borrowers from borrowing beyond their means. The evidence is that Mr Godfrey was borrowing beyond his means and the Bank took no steps to guard against that possibility when it encouraged him to accept an increase in credit limit. 43 Section 70 (2)(l) of the Code provides that one of the criteria to which a court may have regard to when determining whether a contract or a change is unjust is: "Whether at the time the contract…..was entered into or changed, the credit provider knew or could have ascertained by reasonable inquiry of the debtor at the time that the debtor could not pay in accordance with its terms or not without substantial hardship." 44 It is submitted on behalf of Godfrey that the Bank permitted him to borrow beyond his means by increasing the limit of his credit at a time when it could have ascertained by reasonable inquiry of him that he could not pay in accordance with its terms or not without substantial hardship. 45 On behalf of the Bank, it is submitted that under the terms of the code there is no duty upon it to ascertain specifically from a debtor whether he/she can pay in accordance with the terms of the contract or without substantial hardship. 46 I would interpolate here that there is no evidence that the Bank knew of the Godfrey's financial difficulties. Indeed the Bank did have knowledge of his ability to comply with the terms of the contract by reason of his history as a credit card holder since 1986. This history which is set out above shows that, in general, Godfrey kept the debt within the credit limit. 47 The evidence of Godfrey that he would have told the Bank that his expenses substantially exceeded his income had the Bank asked him about his financial position involves only one of the criteria to be taken into account by the Court in determining whether the change to the contract was unjust. Furthermore, he does not say that he would have revealed the extent of his assets and liabilities. In deed there is no evidence from Grodfrey as to his assets and liabilities. There is evidence that he in fact reduced his indebtedness from time to time including a payment of over $9000 on 7 April, 1999. 48 The submissions on behalf of Godfrey continue that Sections 14 and 15 of the code prescribe minimum information which must be provided to potential borrowers before a credit contract is entered or changed and minimum information which must be contained in a contract document or documents. 49 The evidence before the Magistrate was that the pre-approved acceptance certificate, signed by Godfrey on 26 March, 1999 in its relevant parts says - "Yes, please change my National card MasterCard to a pre-approved National Gold MasterCard with a $12,000 credit limit in terms of your letter dated 17 March, 1999." 50 This document, on its clear words, is merely a request by Godfrey to the Bank to change his Credit contract in response to the Bank's invitation to him to make such a request should he wish to do so. 51 By letter dated 21 April, 1999 the Bank replied as follows:- "Thank you for your application to change to a National Gold MasterCard account for your existing National standard MasterCard account. I am pleased to advise that your application has been approved and the Bank will open your new account today. Your new account will be governed by the conditions set out in the Financial Information Table below and in the enclosed Terms And Conditions For Credit Cards. The Bank agrees, that at your request, it will treat any transactions on your old account by the Bank after your new account is opened as though they were transactions under the Gold MasterCard account." 52 This document, on its clear words is an acceptance by the Bank of Godfrey's request of 26 March, 1999. Accordingly, the new contract was made on 21 April, 1999. 53 An examination of the Financial Information Table set out in that letter, plus the Terms And Conditions enclosed with that letter and appearing as an annexure to the affidavit of Ms Mackay of 18 June, 2001 show that the requirements of S.14 & 15 of the Code were in fact complied with. 54 The terms of the document dated 26 March, 1999 signed by the Godfrey and the Bank's letter of 21 April, 1999 indicate that the contract to change the credit card nature and conditions was made on 21 April, 1999 and it was on that date that all information was given. It is also worthy of note that prior to 21 April, 1999 Godfrey had reduced the debit balance down to one cent. 55 Before Godfrey can succeed he must first of all establish to the satisfaction of the court that the contract, in the circumstances when it was made, was unjust. In determining whether it is unjust, in the circumstances relating to it at the time it was entered into or changed, the court is to have regard to the public interest and to all the circumstances of the case and may have regard to the following:- 56 a. The consequences of non compliance with all or any of the provisions of the contract. 57 In relation to this, the evidence establishes that this was not a contract under which a lump sum is advanced to a debtor. Rather it is a contract under which the debtor from time to time draws down on credit and is allowed at his or her own will to draw down as much as he or she likes up to the given limit. There is no compulsion upon the debtor to draw up to the maximum. There is merely a prohibition against drawing above the maximum. 58 b. The relative bargaining powers of the parties. 59 The customer here did not have to accept a variation of the credit terms. He did not have to draw down on credit up to the limit of $12000 let alone exceed that limit. Consequently his bargaining powers in relation to the amount of any credit given was within his own capacity. 60 c. Whether or not at the time the contract was entered into or changed, its provisions were subject of negotiation. 61 The debtor was under no compulsion to agree to an increase in his credit limit. There is no compulsion upon him under the contract to draw down the maximum amount of the credit limit. It was entirely up to him as to how much he drew down. Furthermore, the letter from the Bank of 21 April, 1999 refers to the Bank acceding to a request of Godfrey. 62 d. Whether or not it was reasonably practicable for the applicant to negotiate for the alteration of or to reject any of the provisions of the contract or the change. 63 It was reasonably practicable for the debtor to reject the change. If he had not accepted the offer he would have had his pre existing credit limit of $9000 still available to him. 64 e. Whether or not any of the provisions of the contract impose conditions that are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of a party to the contract. 65 The contract, the terms of which are in evidence, are not suggested to contain provisions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of a party to the contract. 66 f. Whether or not the debtor was reasonably able to protect his interests because of his age, physical or mental condition. 67 There is no evidence to support any inference that by reason of age, physical or mental condition the debtor was not reasonably able to protect his interests. 68 g. The form of the contract and the intelligibility of the language in which it is expressed. 69 There is no suggestion that the debtor was in any way misled or unable to follow the language of the form of the contract. 70 h. Whether or not independent or other expert advice was obtained by the debtor. 71 In this case, there is no suggestion that Mr Godfrey sought legal advice. He had, however, had a credit card account since about 1986 and was well aware in general of the effects of his obligations under such an arrangement. 72 i. This paragraph is not set out but in relation to this the answers to para. H would apply. 73 j. Whether the credit provider or any other person exerted or used any unfair pressure, undue influence or unfair tactics on the debtor, and if so the nature and extent of that unfair pressure, undue influence or unfair tactics. 74 There is no evidence here which would support or even suggest the presence of unfair pressure, undue influence or unfair tactics. 75 k. Whether the credit provider took measures to ensure that the debtor understood the nature and implications of the transaction and if so the adequacy of those measures. 76 The uncontradicted evidence is that the nature and implications of the changes were revealed to the debtor by the documents of 21 April, 1999. Furthermore the debtor had operated a credit card account since about 1986. 77 l. Whether at the time of the contract the credit provider knew or could have ascertained by reasonable inquiry of the debtor at the time that the debtor could not pay in accordance with its terms or not without substantial hardship. 78 As set out earlier the Bank did have knowledge of the debtor's ability to meet the terms of the contract by reason of its knowledge of the history of his conduct on the credit card accounts dating back to 1986. These showed that, in general, the debtor had kept within the credit limits and indeed, shortly before 21 April, namely on 7 April, 1999, he had reduced the debit balance down to one cent. Thus, on the material available to the bank it knew that the debtor could pay in accordance with the terms of the contract. It had no knowledge of any hardship in meeting the payments. Furthermore, in looking at the obligations of the bank under this paragraph one must have regard to sub-sections 4 and 5 of Section 70 of the Consumer Credit Code. Section 70(4) provides:- "In determining whether a credit contract is unjust the court is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the contract was entered into or changed" 79 Sub-section 5 says: "In determining whether to grant relief in respect of a credit contract that it finds to be unjust, the court may have regard to the conduct of the parties to the proceedings in relation to the contract since it was entered into or changed." 80 Sub-section 5 applies only when and if the court has found the contract to be unjust. 81 'Unjust' is defined in sub-section 7 as including unconscionable harsh or oppressive. 82 Paragraphs 'm' and 'n' are not relevant to the facts of this case in the light of all of the evidence. 83 In short Mr Godfrey's case boils down to this. Unbeknown to the Bank at the time the credit card contract was changed, he had financial problems. Notwithstanding those financial problems he had reduced the debit balance down to one cent. From the view point of the Bank the history showed that he was able to pay in accordance with the terms of the contract and without substantial hardship. The timing and amounts of the payments were capable of showing the possibility of some difficulty from time to time. But they fall far short of demonstrating substantial hardship. 84 When one looks at all of the evidence, it is quite clear that there is not even a prime face case of entitlement on the part of Mr Godfrey to relief under the Credit Contracts Code. 85 Accordingly I make the following orders: 1. Leave to appeal is granted (if required) 2. The appeal is dismissed 3. The plaintiff is to pay the defendant's costs. I certify that this and the preceding 19 pages is a true copy of reasons for Judgment herein of the Honourable Acting Justice Cooper Associate to Acting Justice Cooper……………………………………… ********** Last Modified: 12/05/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.