Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150

Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150

The Tribunal erred in declining jurisdiction: a 'credit contract' was entered before the borrowers made their s 11(2) declarations, rendering those declarations ineffective to exclude application of the Consumer Credit Code. Alternatively, the lenders or their agents had reason to believe the loans were for personal/domestic purposes, so even if otherwise effective, the declarations could not exclude the Code. The Code applied to these contracts and the Tribunal had jurisdiction to hear the borrowers' applications. Accordingly, the Court quashed the Tribunal's decision, ordered the Tribunal to hear the applications, and otherwise dismissed the appeal relating to the s 67 summons.

Parties
Appellant: Navid Bahadori; Appellant: Khosrow Bahadori; Appellant: Monir Bahadori; First Respondent: Permanent Mortgages Pty Ltd; Second Respondent: 10 Conway Avenue Rose Bay Pty Ltd; Third Respondent: Super City Finance Pty Ltd; Fourth Respondent: Consumer Trader & Tenancy Tribunal
Jurisdiction
Australia
Judgment Date
26 June 2008
Procedural Posture
Appeal and Application for Prerogative Relief / Court of Appeal Judgment
Outcome
Appeal dismissed; Tribunal's decision quashed and remitted; declarations as to Tribunal's jurisdiction made; specific costs orders as set out below.
Legal Topics
Jurisdiction of Consumer, Trader & Tenancy Tribunal, Interpretation of Consumer Credit Code, Credit Contracts—business Purpose Declarations, Prerogative Relief, Effectiveness of Borrower Declarations, Credit Contracts as Series of Arrangements
Consumer Credit Contract Law Tribunal Procedure Jurisdiction of Consumer, Trader & Tenancy Tribunal Interpretation of Consumer Credit Code Credit Contracts—business Purpose Declarations Prerogative Relief Effectiveness of Borrower Declarations +1 more

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Parties

Navid Bahadori

Appellant

Khosrow Bahadori

Appellant

Monir Bahadori

Appellant

Permanent Mortgages Pty Ltd

First Respondent

10 Conway Avenue Rose Bay Pty Ltd

Second Respondent

Super City Finance Pty Ltd

Third Respondent

Consumer Trader & Tenancy Tribunal

Fourth Respondent

Procedural Posture

Appeal and Application for Prerogative Relief / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the Tribunal had jurisdiction to hear specific applications under the Consumer Credit Code
  2. 2 Whether a 'credit contract' was entered into prior to the making of declarations under s 11(2) of the Code
  3. 3 Whether the borrowers' declarations were effective to exclude application of the Code

Ratio Decidendi

The Tribunal erred in declining jurisdiction: a 'credit contract' was entered before the borrowers made their s 11(2) declarations, rendering those declarations ineffective to exclude application of the Consumer Credit Code. Alternatively, the lenders or their agents had reason to believe the loans were for personal/domestic purposes, so even if otherwise effective, the declarations could not exclude the Code. The Code applied to these contracts and the Tribunal had jurisdiction to hear the borrowers' applications. Accordingly, the Court quashed the Tribunal's decision, ordered the Tribunal to hear the applications, and otherwise dismissed the appeal relating to the s 67 summons.

Court Disposition

Appeal dismissed; Tribunal's decision quashed and remitted; declarations as to Tribunal's jurisdiction made; specific costs orders as set out below.

Orders

  • In CA No. 40140/07: (a) Appeal dismissed; (b) Subject to orders in CA No. 30023/08, each party to pay own costs of appeal; (c) Appellants to pay first and second respondents' costs of Notice of Motion filed 18 February 2008.
  • In CA No. 30023/08: (a) Declare Tribunal has jurisdiction to hear applications COM04/52375, COM04/55473, COM04/55476 and COM05/32128; (b) Tribunal's decision of 2 May 2006 denying jurisdiction is quashed; (c) Order Tribunal to hear said applications; (d) First and second defendants to pay plaintiffs' costs of...