Fayad v B & G Properties Pty Ltd [2022] NSWCA 129

Fayad v B & G Properties Pty Ltd [2022] NSWCA 129

Clause 4 of the loan agreement applies the default interest rate of 30% per annum to the total sum outstanding, both principal and fees/charges, and the increase from 25% to 30% is modest and not penal.

Parties
Appellant: Sam Fayad; Respondent: B & G Properties Pty Ltd
Jurisdiction
Australia
Judgment Date
22 July 2022
Procedural Posture
Appeal / Judgment on Appeal
Outcome
Appeal dismissed with costs, such costs to be assessed on an indemnity basis.
Legal Topics
Loan Agreements, Default Interest, Penalty Clauses, Contract Interpretation
Contract Law Loan Agreements Default Interest Penalty Clauses Contract Interpretation

Case Brief

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Parties

Sam Fayad

Appellant

B & G Properties Pty Ltd

Respondent

Procedural Posture

Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether the default rate of interest applied only to unpaid amounts of principal, or extended to unpaid amounts of interest
  2. 2 Whether the default rate of interest was unenforceable as a penalty

Ratio Decidendi

Clause 4 of the loan agreement applies the default interest rate of 30% per annum to the total sum outstanding, both principal and fees/charges, and the increase from 25% to 30% is modest and not penal.

Court Disposition

Appeal dismissed with costs, such costs to be assessed on an indemnity basis.

Orders

  • Appeal dismissed with costs, such costs to be assessed on an indemnity basis.