Communication is key

Noah took out a business loan with the lender in July 2022, with his house as security. Noah runs a small business with one employee. In November 2022, Noah injured himself and was unable to work. Noah was receiving income support from ACC but this was less than his usual income. As a result, Noah began to miss his loan repayments.   

Noah emailed the lender in November 2022 to discuss a repayment plan. The lender preferred to communicate over the phone and told Noah to call their customer support team. Noah preferred to communicate over email. He did not call the lender’s customer support until January 2023.

By January 2023, Noah had missed several repayments. The lender told Noah that they would take legal action if he did not clear his arrears. Noah asked the lender for financial hardship assistance because he had been unable to work since November, and his business had been closed for the previous week while his employee was on leave. The lender agreed to lower Noah’s repayments for three weeks.

Noah did not miss any more payments. However, he did not clear his arrears. The lender made Noah a discounted settlement offer to help clear the arrears. In March 2023, the lender told Noah that they would lodge a caveat on his home within a week if he did not clear the arrears. Noah was planning to refinance his home loan to settle his business loan, but he did not tell the lender. The lender lodged a caveat on Noah’s home at the end of March 2023.  

When Noah and his lawyer tried to refinance Noah’s mortgage in April 2023, they found the caveat, which prevented Noah from proceeding with the refinance. Noah’s lawyer spent three days trying to process Noah’s settlement payment and get the lender to remove the caveat.

Noah complained to FSCL in May 2023.


Noah complained that the lender lodged a caveat on his home despite being aware that Noah planned to refinance his home loan. Noah also complained that the lender’s delay in removing the caveat caused him unnecessary legal fees. To resolve his complaint, Noah wanted the lender to compensate him for his legal fees.  

The lender said they had already compensated Noah. The lender had agreed to waive $6,000 from Noah’s loan balance as part of their settlement offer, which Noah accepted.

The lender said that Noah’s loan agreement allowed them to lodge the caveat because Noah’s account had been in arrears for 30 days. The lender said that they had removed the caveat the day Noah’s settlement payment had arrived in their account.


We reviewed Noah’s loan agreement and his emails and phone calls with the lender.  

We found that the lender’s offer to waive $6,000 from Noah’s loan was fair and reasonable compensation in the circumstances.

There had been a communication breakdown between the parties. Noah only wanted to discuss his loan over email, and the lender only wanted to speak to Noah over the phone. We considered that the parties’ failure to communicate effectively was the root cause of Noah’s complaint. It was our view that both parties had contributed equally to the communication breakdown.

There was not enough evidence to determine whether the lender knew that Noah planned to refinance his home loan when they lodged the caveat. Noah had not told the lender directly that he was refinancing his home loan to pay off his business loan.

We did not think it was fair and reasonable to say that Noah’s legal fees were caused by the lender’s delay in removing the caveat. It was our view that the parties’ failure to communicate effectively was the primary cause of Noah incurring extra legal fees.


We recommended Noah discontinue his complaint. Noah urged us to reconsider. We considered Noah’s response and issued a final decision confirming that Noah should discontinue his complaint. This meant that we would not take any further action on Noah’s complaint.

Insights for consumers

It is important to maintain a good relationship with your lender. You should take care to communicate early and often, and ensure your lender understands your situation, particularly if you are struggling to keep up with payments or have missed a payment. The earlier you contact your lender, the more likely it is that the lender will be able to give you some temporary relief to help you cover your period of financial hardship.