National Consumer Credit Protection Act 2009

SCHEDULE 1 - NATIONAL CREDIT CODE  

Note:

See section 3 of the National Credit Act.

PART 7 - RELATED SALE CONTRACTS  

Division 3 - Liability of credit providers in relation to goods  

130   Limits on debtor ' s right of action against linked credit provider  

Debtor may raise credit provider ' s liability

130(1)    
Subject to subsection (2), in relation to a contract referred to in paragraph 129(1)(a) or (b), in which a credit provider claims damages or an amount of money from a debtor, the debtor may set up the liability of the credit provider under section 129 in diminution or extinction of the debtor ' s liability.

Proceedings to be brought against both supplier and linked credit provider

130(2)    
Subject to subsection (3), a debtor may not, in respect of a liability for which, by reason of section 129, a supplier and a linked credit provider are jointly and severally liable:

(a) bring proceedings to recover an amount of loss or damage from the credit provider; or

(b) where proceedings are brought against the debtor by the linked credit provider, make a counterclaim or exercise the right conferred by subsection (1) against the credit provider;

unless the debtor brings the action against the supplier and the credit provider jointly or, in the case of a counterclaim or right conferred by subsection (1), claims in the proceedings against the supplier in respect of the liability by third-party proceedings or otherwise.

When joint proceedings not required

130(3)    
Subsection (2) and paragraphs (5)(a) and (6)(a) do not apply in relation to proceedings where:

(a) the supplier is insolvent, cannot be located after reasonable inquiry, or has died or been dissolved; or

(b) in the opinion of the court in which the proceedings are taken, it is not reasonably likely that a judgment obtained against the supplier would be satisfied and the court has, on the application of the debtor, declared that subsection (2) and paragraphs (5)(a) and (6)(a) do not apply in relation to the proceedings.

Limit of credit provider ' s liability

130(4)    
The liability of a linked credit provider to a debtor for damages or a sum of money in respect of a contract referred to in subsection 129(1) is not to exceed the sum of:

(a) the amount of credit under the tied loan contract or tied continuing credit contract; and

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

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

Enforcement of judgment against linked credit provider

130(5)    
Where in proceedings arising under section 129, judgment is given against a supplier and a linked credit provider, the judgment:

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

(b) may be enforced against the linked credit provider only to the extent of the amount calculated in accordance with this section, or so much of the judgment debt as has not been satisfied by the supplier, whichever is the lesser.

Enforcement of right against linked credit provider

130(6)    
Where in proceedings in respect of the liability arising under section 129, a right conferred by subsection (1) is established against a linked credit provider, the debtor:

(a) may not receive the benefit of the right unless judgment has been 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 the amount calculated in accordance with this section or so much of the judgment debt as has not been satisfied by the supplier, whichever is the lesser.