Australian Capital Territory Repealed Acts

This legislation has been repealed.

CREDIT ACT 1985 (REPEALED) - SECT 24

    (1)     If a buyer who has entered into a tied loan contract or tied continuing credit contract with a linked credit provider of a supplier for the provision of credit in relation to the payment by the buyer for goods and services supplied by the supplier under a contract of sale is entitled to claim damages against or recover a sum of money from the supplier for misrepresentation, breach of contract or failure of consideration in relation to the contract of sale, the supplier and linked credit provider are, subject to this section, jointly and severally liable to the buyer for the damages or sum of money.

    (2)     It is a defence to proceedings arising under subsection (1) against a linked credit provider of a supplier if the linked credit provider proves—

        (a)     that the credit provided by him or her to the buyer was provided as a result of an approach by the buyer to the credit provider that was not induced by the supplier; or

        (b)     if the proceedings relate to a contract of sale in relation to which a tied loan contract applies, that—

              (i)     after due inquiry before he or she became such a linked credit provider, he or she was satisfied that the supplier was of good reputation in relation to his or her financial standing and ethical standards of trading; and

              (ii)     since becoming such a linked credit provider, but before the tied loan contract was entered into, he or she had not had cause to suspect, and had not suspected, that the buyer might be entitled to claim damages against, or to recover a sum of money from, the supplier for a misrepresentation, breach of contract or failure of consideration referred to in subsection (1); and

              (iii)     since becoming such a linked credit provider, but before the tied loan contract was entered into, he or she had not had cause to suspect, and had not suspected, that the supplier might be unable to meet his or her liabilities as and when they fell due; or

        (c)     if the proceedings relate to a contract of sale in relation to which a tied continuing credit contract entered into by the linked credit provider under an agreement of the kind referred to in section 48 (2) (a) (ii) applies, that, having regard to—

              (i)     the nature and volume of business carried on by the linked credit provider; and

              (ii)     any other matters that appear to be relevant in the circumstances of the case;

the linked credit provider, before becoming aware of the contract of sale or of proposals for the making of the contract of sale (whichever the linked credit provider first became aware of), did not suspect, and could not reasonably have been expected to suspect, that a person entering into such a contract with the supplier might be entitled to claim damages against, or recover a sum of money from, the supplier for misrepresentation, breach of contract or failure of consideration as referred to in subsection (1).

    (3)     Subject to subsection (4), a buyer may in any proceedings set up the liability of a linked credit provider for damages or a sum of money under subsection (1) in reduction or extinction of the buyer's liability on any claim for damages or a sum of money made by the linked credit provider against the buyer in the proceedings.

    (4)     Subject to subsection (5), a buyer may not—

        (a)     bring proceedings for damages or to recover a sum of money from a linked credit provider; or

        (b)     if proceedings are brought against the buyer by a linked credit provider—make a cross-claim or exercise a right referred to in subsection (3) against the linked credit provider;

in relation to a liability for which, because of this section, a supplier and a linked credit provider are jointly and severally liable unless—

        (c)     the buyer brings the proceedings against the supplier and linked credit provider jointly; or

        (d)     for a cross-claim or right referred to in subsection (3)—the buyer claims in the proceedings against the supplier in relation to the liability.

    (5)     Subsections (4), (8) (a) and (9) do not apply if—

        (a)     the supplier—

              (i)     is a bankrupt or a person whose affairs are being dealt with under the Bankruptcy Act 1966 (Cwlth), part 10; or

              (ii)     being a body corporate, has been dissolved or has begun to be wound up; or

              (iii)     being an individual, has died; or

        (b)     the court—

              (i)     believes on reasonable grounds that it is not reasonably likely that any part of a judgment obtained against the supplier would be satisfied; and

              (ii)     declares on the application of the buyer that subsections (4) and (8) (a) do not apply in that case; or

        (c)     the buyer satisfies the court that he or she has made reasonable efforts to locate the supplier but has been unable to do so and the court declares that subsections (4) and (8) (a) do not apply in that case.

    (6)     A reference in subsection (5) to the beginning of winding-up is a reference to beginning of winding-up as determined under the law relating to companies in the place if the body corporate is being wound up.

    (7)     The liability of a linked credit provider to a buyer for damages or a sum of money in relation to a contract of sale referred to in subsection (1) does not exceed the sum of—

        (a)     the amount financed under the tied loan contract or tied continuing credit contract in relation to the contract of sale; and

        (b)     any amount of interest or damages in the nature of interest allowed or awarded against the linked credit provider by the court; and

        (c)     any amount of costs awarded by the court against the linked credit provider or supplier or both.

    (8)     If, in proceedings in relation to the liability arising under subsection (1), judgment is given against a supplier and a linked credit provider, the judgment—

        (a)     shall not be enforced against the linked credit provider unless a written demand made on the supplier for satisfaction of the judgment remains unsatisfied for not less than 30 days; and

        (b)     may be enforced against the linked credit provider only to the extent of—

              (i)     the amount calculated in accordance with subsection (7); or

              (ii)     so much of the judgment debt as has not been satisfied by the supplier;

whichever is the lesser.

    (9)     If in proceedings in relation to the liability arising under subsection (1) a right referred to in subsection (3) is established against a linked credit provider, the buyer—

        (a)     shall not receive the benefit of the right unless judgment is given against the supplier and linked credit provider, a written demand has been made on the supplier for satisfaction of the judgment and the demand has remained unsatisfied for not less than 30 days; and

        (b)     may receive the benefit only to the extent of—

              (i)     the amount calculated in accordance with subsection (7); or

              (ii)     so much of the judgment debt as has not been satisfied by the supplier;

whichever is the lesser.

    (10)     Unless the linked credit provider and supplier otherwise agree, the supplier is liable to the linked credit provider for—

        (a)     the amount of a loss suffered by the linked credit provider, being an amount not exceeding the maximum amount of his or her liability under subsection (7); and

        (b)     unless the court otherwise determines, the amount of any costs reasonably incurred by the linked credit provider in defending the proceedings because of which the liability was incurred.

    (11)     Notwithstanding the provisions of any other Territory law, if in proceedings in relation to a liability arising under subsection (1) judgment is given against a supplier and a linked credit provider, or against a linked credit provider, for damages or a sum of money, the court shall on application by the buyer, unless cause is shown to the contrary, allow or award interest to the buyer against the supplier and linked credit provider or against the linked credit provider, as the case may be, on the whole or part of the damages or sum of money—

        (a)     at the percentage rate that is the annual percentage rate under the tied loan contract or tied continuing credit contract; or

        (b)     at 8% per annum, or, if some other percentage rate per annum is prescribed, that other rate;

whichever is the greater, from the time when the buyer became entitled to recover the damages or sum of money until the day the judgment is given.

    (12)     In determining whether cause is shown against allowing or awarding interest under subsection (11), the court shall take into account any payment made into court by the supplier or linked credit provider.

    (13)     If a judgment in relation to a liability arising under subsection (1) in relation to a contract of sale is enforced against a linked credit provider, the linked credit provider is subrogated to the extent of the judgment so enforced to any rights that the buyer would, apart from the judgment, have had against any person in relation to the loss or damage suffered by him or her as a result of the misrepresentation, breach of contract or failure of consideration in relation to the contract of sale from which the liability arose.

    (14)     In this section:

"court" does not include the ACAT.