A retired Whangarei couple have won a test case over a Blue Chip loan agreement with implications for hundreds of other victims of the failed property company.

The Court of Appeal has found that an agreement signed by Bruce and Judy Bartle was "oppressive" under consumer finance law. The case centred on "fastdoc" lending where it was not known whether borrowers had the ability to repay.

The appeal followed a High Court case against finance company GE Custodians over $630,000 in loans made to the Bartles so they could invest in Blue Chip.

They had an annual income of under $22,000 and the amount of the loan was worth more than the value of their freehold home. They believed they were borrowing $137,000 and that Blue Chip would put up the rest under the joint venture agreement they signed.

The Bartles mortgaged their home and the apartment to engage in the scheme. Blue Chip failed and they faced the prospect of a mortgagee sale of their Whangarei home.

The Bartles argued that the loans were "unconscionable" and "oppressive", and that the company that arranged them - Tasman Mortgages, then owned by Blue Chip - altered the loan documents to describe them as "self-employed investors" so they would qualify.

Bruce Bartle yesterday said the outcome of the appeal was "brilliant" and although they had been confident they would eventually win, they had contemplated suicide because of the financial stress along the way.

"I was going to kill myself one night, Judy was going to kill herself one night [but] we're still alive."

The appeal is seen as a test case for up to 300 elderly investors who face losing their homes because of dealings with the failed Blue Chip group, whose largest shareholder was Mark Bryers.

More than 2000 investors were left out of pocket after 22 Blue Chip-related companies owing more than $80 million were put into liquidation in 2008.

A lawyer for the Bartles, Paul Dale, said it was very important to be able to establish that the mortgage was not enforceable.

"On the face of things the mortgage is not enforceable so the investors' position is that they're in the clear."

The High Court can now determine an "appropriate remedy".

Appeal Court president Justice William Young said this would be the most difficult part of the case.

The judgment described the Bartles as naive, but also very poorly served by their solicitor, Jonathan Mathias, who is bankrupt.

The ultimate lender GE was independent of Blue Chip and had outsourced its lending operations in New Zealand.

GE claimed to be an innocent lender in that it advanced money for secured loans which were arranged by other companies. Counsel for the Bartles argued that Tasman Mortgages Ltd and Blue Chip New Zealand Ltd were agents of GE.

"Very significantly for this case, GE now says that if it had known the relevant facts relating to this credit transaction it would not itself have advanced these monies," the judgment said.

It did not accept that a lender could avoid the application of the act by interposing an intermediary loan originator.

Bryers is due to be sentenced on 34 charges relating the Blue Chip collapse on Thursday, May 20 in the Auckland District Court.