A seven-year-old wrangle over whether National Australia Bank was correct to charge a default rate of interest on a loan to a Sydney property developer has resulted in a rare court win for the bank's customer. NAB must pay  $280,000, plus interest, a Supreme Court of New South Wales' judge ruled last week.Mehmet Ali Kay, Mehmet Canli and Ozden Inak borrowed $1.15 million from NAB, in 2003, under a one-year, fixed-rate loan, at an interest rate of 5.85 per cent. NAB, the court found, was in breach "from day one of the contract" and "continued in breach for the duration of the contract".The borrowers always paid the agreed rate of interest during the first year of the loan, the court found.NAB took the view that the contract terms applicable to the loan were different to those in the facility agreement provided to the bank's customers, and that an alternative set of terms applied at the time the borrower drew down the loan.The judge, Stephen Rothman, took the view that the borrowers, who refused to pay interest at the default rate of more than 19 per cent charged by NAB, were entitled to refuse to do so, and that this refusal did not amount to a breach that, in turn, justified charging interest at default rates.The judge also found that the applicable default rate under the contract was four percentage points more than the agreed rate of interest, rather than 19 per cent.