The recent High Court decision in AXA New Zealand Nominees Ltd v 10 Gilmer Ltd (in rec) (HC, 6/12/2011) explained the issue of oppressive conduct in the context of a lender under a credit contract (including, but not limited to, consumer credit contracts). Section 118 of the CCCFA defines “oppressive” as “oppressive, harsh, unjustly burdensome, unconscionable, or in breach of reasonable standards of commercial practice“.
The first deponent had entered into a loan agreement with LVR covenant and sought to rely on the fact that the purported enforcement of rights in response to a breach of that covenant was somehow oppressive. The agreement was considered to be clear, both in terms of the substance of the covenant and its status within the loan agreement. It was, significantly, observed also that even if it suited the lender to rely on its remedy, that in itself did not make such exercise oppressive in CCCFA terms. Lenders should view this as providing a level of comfort in the fact that it was held that in this instance the lender was held not to be required to agree to (or for that matter even reply to) any particular proposal to remedy a default under a loan.