EMCL Pty Ltd & Anor v Esanda Finance Corp Ltd [1998] FCA 1175

EMCL Pty Ltd & Anor v Esanda Finance Corp Ltd [1998] FCA 1175

Clause 4(c) was not a condition precedent to Esanda's authority to dispose of vehicles; breach of the notice requirement sounded in damages. On the evidence, cl 4(c) was orally varied on 27 February 1990 to require notice on the day of disposal. If that were wrong, variation was inferred from the parties' conduct to permit notice no later than one day after disposal, and EMCL was in any event estopped from relying on the original three-day notice requirement. For predetermined leases, the excess under cl 4(b) must be calculated according to that clause, without any allowance for Esanda's predetermination fee. EMCL had no substantive answer to Esanda's cross-claim for $856,819.40 retained...

Jurisdiction
Australia
Judgment Date
17 September 1998
Procedural Posture
Contracts Proceeding Concerning Construction, Variation, Waiver/estoppel and Calculation Under a Vehicle Lease Financing Agreement, With Cross Claim / Reasons for Judgment After Hearing; Minutes of Proposed Orders and Costs Submissions Directed; Further Hearing Adjourned
Outcome
EMCL failed on its primary claim to recover all disposal proceeds, but some amount was due to it under cl 4(b) for predetermined leases and required assessment. Esanda was entitled on its cross-claim for retained sale proceeds. Costs were reserved for further argument.
Legal Topics
['contract Construction and Interpretation' 'condition Precedent' 'breach Sounding in Damages' 'oral Variation' 'variation by Conduct' 'waiver and Estoppel' 'vehicle Lease Financing' 'calculation of Excess Proceeds' 'cross Claim for Retained Sale Proceeds']
['contracts' 'agency' 'estoppel' 'commercial Law'] ['contract Construction and Interpretation' 'condition Precedent' 'breach Sounding in Damages' 'oral Variation' 'variation by Conduct' 'waiver and Estoppel' 'vehicle Lease Financing' 'calculation of Excess Proceeds' 'cross Claim for Retained Sale Proceeds']

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Procedural Posture

Contracts Proceeding Concerning Construction, Variation, Waiver/estoppel and Calculation Under a Vehicle Lease Financing Agreement, With Cross Claim / Reasons for Judgment After Hearing; Minutes of Proposed Orders and Costs Submissions Directed; Further Hearing Adjourned

Legal Issues

  1. 1 ["Whether cl 4(c) of the Master Discount Agreement was a condition precedent to Esanda's entitlement to dispose of vehicles or a term the breach of which sounded in damages" 'Whether cl 4(c) was orally varied on 27 February 1990 to require notice on the day of disposal' "Whether, alternatively, a variation to cl 4(c) should be inferred from the parties' conduct so that notice was required no later than one day after disposal" 'Whether EMCL was estopped from relying on cl 4(c) because the parties dealt on the conventional basis that notice could be given after disposal' 'How the excess payable under cl 4(b) should be calculated for predetermined leases' 'How much was due to Esanda on its cross-claim']

Ratio Decidendi

Clause 4(c) was not a condition precedent to Esanda's authority to dispose of vehicles; breach of the notice requirement sounded in damages. On the evidence, cl 4(c) was orally varied on 27 February 1990 to require notice on the day of disposal. If that were wrong, variation was inferred from the parties' conduct to permit notice no later than one day after disposal, and EMCL was in any event estopped from relying on the original three-day notice requirement. For predetermined leases, the excess under cl 4(b) must be calculated according to that clause, without any allowance for Esanda's predetermination fee. EMCL had no substantive answer to Esanda's cross-claim for $856,819.40 retained...

Court Disposition

EMCL failed on its primary claim to recover all disposal proceeds, but some amount was due to it under cl 4(b) for predetermined leases and required assessment. Esanda was entitled on its cross-claim for retained sale proceeds. Costs were reserved for further argument.

Orders

  • ['The respondent within seven days file minutes of proposed orders and submissions as to costs.' 'The applicants file submissions in response within seven days thereafter.' 'Further hearing be adjourned to a date to be fixed.']