Ledinh Sovereign Super Pty Ltd v CT Stone Pty Ltd [2023] NSWSC 1079

Ledinh Sovereign Super Pty Ltd v CT Stone Pty Ltd [2023] NSWSC 1079

The combination of a high default interest rate (72% per annum) and monthly compounding made the contract unjust; therefore, clauses allowing compounding or capitalising of interest are to be deleted. Simple interest at the default rate remains enforceable, and the plaintiff's delay in commencing proceedings was not unconscionable given circumstances and conduct of the defendants.

Parties
Plaintiff/cross Defendant: Ledinh Sovereign Super Pty Ltd; First Defendant: CT Stone Pty Ltd; Second Defendant/cross Claimant: Thuc Tran Huynh; Third Defendant/cross Claimant: Chau Quach; Fourth Defendant: Westpac Banking Corporation
Jurisdiction
Australia
Judgment Date
15 September 2023
Procedural Posture
Principal Judgment / Judgment Following Hearing
Outcome
Plaintiff entitled to judgment for possession of the property, principal sum with simple interest (default rate) and costs. Contract varied to delete compounding/capitalising interest provisions. Defendants to pay plaintiff's costs.
Legal Topics
Unjust Contracts, Compounding Interest, Asset Based Lending, Unconscionable Conduct, Delay in Enforcement
Contracts Consumer Law Property Unjust Contracts Compounding Interest Asset Based Lending Unconscionable Conduct Delay in Enforcement

Case Brief

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Parties

Ledinh Sovereign Super Pty Ltd

Plaintiff/cross Defendant

CT Stone Pty Ltd

First Defendant

Thuc Tran Huynh

Second Defendant/cross Claimant

Chau Quach

Third Defendant/cross Claimant

Westpac Banking Corporation

Fourth Defendant

Procedural Posture

Principal Judgment / Judgment Following Hearing

Legal Issues

  1. 1 Whether the loan contract is unjust under Contracts Review Act 1980 (NSW) due to high interest and compounding
  2. 2 Whether conduct of plaintiff in delaying commencement of proceedings was unconscionable under Australian Consumer Law

Ratio Decidendi

The combination of a high default interest rate (72% per annum) and monthly compounding made the contract unjust; therefore, clauses allowing compounding or capitalising of interest are to be deleted. Simple interest at the default rate remains enforceable, and the plaintiff's delay in commencing proceedings was not unconscionable given circumstances and conduct of the defendants.

Court Disposition

Plaintiff entitled to judgment for possession of the property, principal sum with simple interest (default rate) and costs. Contract varied to delete compounding/capitalising interest provisions. Defendants to pay plaintiff's costs.

Orders

  • Plaintiff to bring in short minutes of order to reflect these reasons.
  • Clauses providing for compounding or capitalising of interest to be deleted.