Faced with eviction from their Otara home, South Auckland couple Vainiua Faasavalu and Fia Tuiaana had the court reopen earlier litigation, belatedly arguing a thirty year rent to buy agreement for their home is an oppressive credit contract.
As a general rule, contracts for purchase of land are not covered by consumer credit protection legislation. They are not credit contracts. They are purchase of an asset, typically with agreement that payment in full settlement is delayed by a few weeks.
Longer delays before full payment, with a requirement to pay interest in the interim, sees rent-to-buy deals for land potentially treated as consumer credit contracts.
The High Court was told the couple signed up in March 2005 to buy their Clayton Avenue property with weekly instalments towards the purchase price plus interest spread over three decades.
The vendor was a company associated with Mr Faasavalu’s then employer.
Members of the Wells family, shareholders of this company, later took over the thirty year contract to sell.
They sued to recover possession of the land in late 2025 after Mr Faasavalu and Ms Tuiaana fell behind on weekly payments.
The Wells claim $963,500 is owed: $213,500 unpaid balance of the purchase price and $750,000 for outstanding and ongoing interest, plus charges.
The two ignored court papers served on them, resulting in an unopposed Property Law Act order requiring them to leave Clayton Avenue.
They later got High Court approval to reopen their case, saying they did not understand the significance of court documents served on them earlier.
Justice Gault said they have an arguable case that the rent-to-buy contract is a consumer credit contract that should be reviewed.
They allege the contract is oppressive in that Mr Faasavalu was dissuaded from getting independent advice when signing up and that it was obvious he would struggle to pay weekly instalments of $460 on a then take-home pay of $600.
While arrears still remain unpaid, the court was told the two are currently meeting a requirement they pay $650 weekly.
Whether their rent-to-buy contract should be amended as an oppressive credit contract is yet to be decided.
The disputed contract was signed in early 2005. Rules in the subsequently repealed Credit Contracts Act still apply.
Current rules in the Credit Contracts and Consumer Finance Act came into effect several weeks after their rent-to-buy agreement was signed.
Wells v. Faasavalu – High Court (19.08.26)
26.238