Discovery order for loan acquisition price set aside in dispute over mortgage interest rate increases

The Court of Appeal has set aside a High Court order compelling a finance company to disclose the price it paid to acquire borrowers' home loans as part of discovery in ongoing litigation about alleged unlawful increases in mortgage interest rates. The original High Court decision required production of documents showing the acquisition price, based on the borrowers' argument that this was necessary to assess whether the increased interest rates were excessive or unconscionable. On appeal, the Court of Appeal found that the price paid for the loan was not clearly relevant to the issues as pleaded in the proceedings, and criticised the trial judge for failing to undertake a detailed analysis of the pleadings before making the discovery order. The discovery sought was considered to concern confidential and commercially sensitive information, and the court emphasised that such discovery should only be directed where clearly necessary for the fair disposal of the case. The appeal was allowed, the discovery order set aside, and costs awarded to the finance company, subject to a stay.