FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors (No 1) [2017] NSWDC 139

FJ & SM Monaghan Pty Ltd v S & W Slade Pty Ltd & Ors (No 1) [2017] NSWDC 139

The court found that the First Defendant, by continuing to take supply after being notified of the interest charge and without protest, accepted the revised trading terms imposing 2.5% per month interest. The interest clause was not a penalty as the Defendants failed to prove unconscionability or excess. The guarantee applied only to past indebtedness and not to future debt or interest. The account constituted a running account, so payments avoided the operation of limitation periods. The cross-claim failed as there was no overpayment.

Jurisdiction
Australia
Judgment Date
09 June 2017
Procedural Posture
Civil / Principal Judgment
Outcome
Partly in favour of Plaintiff; partly in favour of Defendants
Legal Topics
['formation of Contract' 'implied Acceptance by Conduct' 'penalty Doctrine' 'interest on Overdue Accounts' 'quantum Meruit' 'guarantee Enforceability' 'limitation Periods' 'running Accounts']
['contract Law'] ['formation of Contract' 'implied Acceptance by Conduct' 'penalty Doctrine' 'interest on Overdue Accounts' 'quantum Meruit' 'guarantee Enforceability' 'limitation Periods' 'running Accounts']

Case Brief

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Procedural Posture

Civil / Principal Judgment

Legal Issues

  1. 1 ['Whether a contract term imposing interest was accepted by conduct' 'Whether the interest rate imposed is a penalty' 'Whether a quantum meruit claim for interest arises' 'Whether the guarantee by the Second and Third Defendants is enforceable' "Whether the Plaintiff's claim is statute barred" 'Whether there was an overpayment by the First Defendant entitling it to a cross-claim']

Ratio Decidendi

The court found that the First Defendant, by continuing to take supply after being notified of the interest charge and without protest, accepted the revised trading terms imposing 2.5% per month interest. The interest clause was not a penalty as the Defendants failed to prove unconscionability or excess. The guarantee applied only to past indebtedness and not to future debt or interest. The account constituted a running account, so payments avoided the operation of limitation periods. The cross-claim failed as there was no overpayment.

Court Disposition

Partly in favour of Plaintiff; partly in favour of Defendants

Orders

  • ['Verdict and judgment for the Plaintiff against the First Defendant in the sum of $750,000;' "Verdict for the Second and Third Defendants on the Plaintiff's claim;" "Verdict for the Cross-Defendant on the Cross-Claimant's cross claim;" 'Costs to be determined.']