FORTY-THREE PER CENT.

New Zealand Herald, Volume XLV, Issue 13846, 4 September 1908, Page 6

FORTY-THREE PER CENT.

a Money-lending case. [BY TJEXIiGR.VI'JH. —PRESS ASSOCIATION.] Wellington, Thursday. Judgment in a claim under the Moneylenders Act, 1907, was delivered by Dr. McArthur, S.M., this morning. T. V. Venablee claimed from George Lambert the sum of £109 14s, amount paid in alleged ■excess of the sum legally payable concerning a mortgage transaction between the two parties. The parties entered into an arrangement, whereby the defendant was to lend the plaintiff the sum of £500 on certain terms. The period of repayment extended over 15 years, and the terms of repayment worked out at interest at 13£ per cent, per annum. After paying nine instalments regularly, the plaintiff desired to repay the loan and close the transaction. This the defendant objected to, unless the plaintiff paid him a premium, or penalty, of £100, which the latter did under protest. Calculating the penalty and the instalments paid, the amount ot" interest on the sum advanced up to the time of payment was at the rate of 43 per cent. Though nothing appeared in the contract as to a i release on payment of the sum, the plaintiff positively, asserts that .defendant agreed orally that ho would release him -at any time" he was ready to repay. The defendant asserted to the contrary. In the opinior of His Worship, the defendant had ample security ."and more for the advance made. The defence had relied on a certain case, Oarrington v. Smith, where it was held that 75 per cent, was a reasonable; rate of interest, and not excessive within'the meaning of tho Act,"and, therefore, the plaintiff was not entitled to relief. His Worship pointed out that in the case quoted, there was practically no security given for the loan, whereas in tho present case the margin of security was ample. In conclusion, His Worship stated that he did not rest his judgment on that mainlv. The default clause had not been explained to the plaintiff, and this apE eared to render the terms of tho contract arslr and unconscionable. Plaintiffs calculation of interest at 10 per cent, seemed liberal. Judgment was given for the amount claimed, £109 14s, less one quarter's interest, as a premium for release, viz., £12 10s. Costs amounting to £9 16s were granted.