Cook and Anor v Permanent Mortgages Pty Ltd [2007] NSWCA 219

New South Wales Court of Appeal

CITATION: Cook and Anor v Permanent Mortgages Pty Ltd [2007] NSWCA 219

HEARING DATE(S): 9 August 2007 JUDGMENT OF: Beazley JA at 26; Giles JA at 1; Hoeben J at 27

EX TEMPORE JUDGMENT DATE: 9 August 2007

DECISION: Appeal allowed in part. Costs order made by the judge set aside and in lieu thereof ordered that the plaintiff pay ninety per cent of the defendant's costs of proceedings 13381/04. The respondent pay fifty per cent of the appellants' costs of the appeal.

CATCHWORDS: Contract of loan - refinanced existing loan - took out "Ponzi" loan - could only be repaid by taking out larger loan or selling mortgaged property - held unjust in circumstances at time loan made - relieved from paying loan fees, default interest and expenses following default - whether should have been relieved from paying any interest at all - no error in giving little weight to public interest in discouraging "Ponzi" loans - relief from all interest would have done more than restore pre-loan position - evidence did not enable comparison with position if mortgaged property sold rather than took out loan - appealable error in exercise of discretion as to relief not established - judge made no order as to costs - whether error in exercise of discretion as to costs - borrowers in substance successful - appealable error in misapprehension of extent of success.

Consumer Credit (New South Wales) Act 1995 LEGISLATION CITED: Consumer Credit (New South Wales) Code Contracts Review Act 1980

Elders Rural Finance Ltd v Smith (1996) NSWLR 296; CASES CITED: House v The King (1936) 55 CLR 499; Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 4; Smith v Elders Rural Finance Ltd (Bryson J, 25 November 1994, unreported).