Company sold house to tenant for £3500.
He paid £600 cash and balance of £2900 by charging
house to company for £4500, to be repaid over 6 years.
house to company for £4500, to be repaid over 6 years.
Fell into arrears.
Goff J held that although a lender could stipulate a
collateral advantage if it was fair and reasonable, in present case the agreement
imposed an extremely high premium which was unreasonable and destroyed the
whole equity.
collateral advantage if it was fair and reasonable, in present case the agreement
imposed an extremely high premium which was unreasonable and destroyed the
whole equity.
Court re-wrote agreement.
[Goff J appeared to be uncertain whether test is
unfair and unconscionable conduct or unreasonable conduct]
unfair and unconscionable conduct or unreasonable conduct]
