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Question 3: Credit contracts

a) What information must be disclosed to satisfy therequirements of initial disclosure under the Credit Contracts andConsumer Finance Act 2003? Refer to a section in the Act to supportyour answer.

b) To who do the oppression parts of the Credit Contracts andConsumer Finance Act 2003 apply? Refer to a section in the Act tosupport your answer.

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

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

Hamish’s usual bank won’t lend Hamish any more money given thelarge amount of money he already owes. Hamish approaches a financecompany for the $100,000. They agree to lend him the money by wayof an unsecured loan with interest of 32% to be repaid within threemonths, with penalty interest payable on any amount outstandingthereafter.

Hamish subsequently fails to repay the $100,000.

Advise Hamish whether he might have a claim against the financecompany for oppression under the Credit Contracts and ConsumerFinance Act 2003.

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