Mr Haddon told the company that registration of the mortgage had been delayed, but that they had agreed to extend the loan to a 12-month term.

[2] At trial it was held that the amendments to the mortgage instrument rendered it void under the rule in Pigot's Case (1614) 11 Co Rep 26b, and there was no appeal against that.

The court also considered whether Mr and Mrs Goss must repay the loan (without the punitive interest) as money had and received, but held that there had been no total failure of consideration.

The New Zealand Court of Appeal overturned the judgement in part, accepting that the loan was void, but ordering that Mr and Mrs Goss must repay the capital sums as money had and received.

[2] The New Zealand Court of Appeal also rejected an argument that Mr and Mrs Goss were acting under the undue influence of the company.

There was no appeal against the holding of the judge that the arrangement was not a sham, nor against his finding that the loan contract was void under the rule in Pigot's Case.

Lord Goff referred to the "much-quoted" speech of Viscount Simon LC in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32: ... when one is considering the law of failure of consideration and of the quasi-contractual right to recover money on that ground, it is, generally speaking, not the promise which is referred to as the consideration, but the performance of the promise ...

[4]Lord Goff noted that normally a failure to repay a loan results in a claim in contract, but on the facts of this case that remedy was not available because of the fraudulent changes to the documentation.

However Lord Goff was unequivocal: "even if part of the capital sum had been repaid, the law would not hesitate to hold that the balance of the loan outstanding would be recoverable on the ground of failure of consideration; for at least in those cases in which apportionment can be carried out without difficulty, the law will allow partial recovery on this ground (see David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, 383).

The Board felt unable to accept that, on the facts of the case, there was a change of position on the part of the appellants such as to render it inequitable to require them to make restitution.