Case note: National Credit Code transitional issues

Two different judgments in the case of Perpetual Trustees Victoria Limited v Monas have addressed the National Credit Code transition provisions as well as issues in respect of hardship relief and default notices relating to an action for possession by a mortgagee.

The first decision Perpetual Trustees Victoria Limited v Monas [2010] NSWSC 1156 deals with transitional issues and hardship relief. What is the relevant date for determining the threshold for hardship application? The date of the application or the date of the credit contract? Judge Davies decided that the National Credit Code had not changed the position from the NSW Code: the application date is the relevant date. The result was that neither before nor after the enactment of the National Credit Code was the debtor entitled to apply for hardship relief as the amount of the loan was over the threshold at the application date.

The second decision in Perpetual Trustees Victoria Limited v Monas [2011] NSWSC 57 dealt with the validity of the default notice despite it not containing exactly the words in section 80 of the Credit Code (now section 88(3)(h)).

Judge Hoeben said: “I am of the opinion that in order to comply with the requirements of s80, a default notice needs to provide the information set out in s80(3) but does not have to use the exact words of the section. It may have been prudent to use the exact words of the section, but a failure to do so is not determinative of whether a default notice complies with its requirements.”

The default notice was held valid despite not strictly complying with section 80.

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