The High Court has upheld a ruling that former 1980s highflyer Allan Hawkins' Budget Loans and Evolution Finance misled 21 borrowers while enforcing loan contracts and sided with the Commerce Commission that 19 charges that were tossed out should be revisited.
In the Auckland District Court last year, the finance companies were found guilty of 106 charges of breaching the Fair Trading Act by misleading customers in the way they represented their rights to charge interest and costs on contracts after repossessing and selling a customer's property, while another 19 were dismissed.
In the High Court in Auckland last week, Justice Rebecca Edwards upheld a Commerce Commission appeal that those 19 charges should be reconsidered by the lower court, ruling that once an item was repossessed a lender could no longer charge interest or costs.
Budget and Evolution's appeal against the 106 guilty findings was rejected by the judge, who said "the key distinguishing feature of this case is that the enforcement of the loan contracts, and the representations made for that purpose, formed the very backbone of Budget's trade."
"Budget's business involved the recovery of monies due and owing under a loan contract," Justice Edwards said in her April 11 judgment. "Recovery was to be effected by enforcing the terms of the loan, writing to debtors demanding increased payments, and taking enforcement action under security agreements in the event of default."
