Victorian Consolidated Legislation

Credit Act 1984 - SECT 26

Discharge of tied continuing credit contract on discharge or rescission of contract of sale

26. Discharge of tied continuing credit contract on discharge or rescission of
contract of sale



(1) Subject to section 27, where a contract of sale is rescinded or discharged
(whether under this Act or any other Act or law) and there is a tied
continuing credit contract made with the buyer by a linked credit provider of
the supplier under the contract of sale, any mortgage relating to the tied
continuing credit contract is discharged to the extent that it secures payment
of the amount entered in relation to the contract of sale in an account of the
debtor kept by the credit provider under the tied continuing credit contract
and the amount (if any) of the credit charge so entered and attributable to
the contract of sale and-

   (a)  the credit provider shall enter in that account an amount by way of
        refund to the debtor equal to the first-mentioned amount; and

   (b)  the supplier is liable to the credit provider for an amount equal to
        the first-mentioned amount-

and, where the contract of sale is a contract of sale of goods or services-

   (c)  if the goods are in the possession of the buyer-

   (i)  where, before the rescission or discharge of the contract of sale, the
        goods were not subject to a mortgage relating to the tied continuing
        credit contract, the buyer shall deliver the goods to the supplier; or



   (ii) where, before the rescission or discharge of the contract of sale, the
        goods were subject to a mortgage relating to the tied continuing
        credit contract, the buyer shall deliver the goods to the credit
        provider; and

   (d)  if the goods are in the possession of the credit provider and no
        amounts are owed to the credit provider under paragraph (b), the
        credit provider shall deliver the goods to the supplier.

(2) Where, under paragraph (c) of subsection (1), goods are delivered to the
credit provider, the credit provider is entitled to possession of the goods as
against the supplier until the credit provider has been paid the amount for
which the supplier is liable to the credit provider under paragraph (b) of
subsection (1).

(3) Subsection (1) does not apply where the credit is provided by a linked
credit provider of a supplier to a buyer as a result of an approach by the
buyer to the credit provider which was not induced by the supplier.