Question 3: Credit contracts

a) What information must be disclosed to satisfy the requirements of initial disclosure under the Credit Contracts and Consumer Finance Act 2003? Refer to a section in the Act to support your answer. (2 marks)

b) To who do the oppression parts of the Credit Contracts and Consumer Finance Act 2003 apply? Refer to a section in the Act to support your answer. (2 marks)

c) Hamish is a lawyer who owns a home with expansive sea views in an exclusive Auckland suburb. His neighbours house is for sale. Hamish wants to buy the house so that he can protect the sea views of his own property and build a couple of town houses. Although he has no experience with property development Hamish believes that the he will make a tidy profit by selling the townhouses.

Hamish has no difficulty initially borrowing money for the project. All goes well until Hamish is advised that additional drainage will be required before the necessary retaining wall can be built. Hamish needs to find another $100,000 quickly to keep the project on track.

Hamishs usual bank wont lend Hamish any more money given the large amount of money he already owes. Hamish approaches a finance company for the $100,000. They agree to lend him the money by way of an unsecured loan with interest of 32% to be repaid within three months, with penalty interest payable on any amount outstanding thereafter.

Hamish subsequently fails to repay the $100,000.

Advise Hamish whether he might have a claim against the finance company for oppression under the Credit Contracts and Consumer Finance Act 2003.

Refer to any relevant provisions of the Act in support of your answer and refer to a case. In your answer make sure that you refer to three possible grounds of oppression and whether or not they apply