Leveraged Equities Limited v Goodridge [2011] FCAFC 3

Leveraged Equities Limited v Goodridge [2011] FCAFC 3

The LSA permitted the lender to reduce the compliance period for a margin call to less than three business days by notice under cl 5.2, and the 23 February 2009 margin calls were validly made. Clause 5.7 provided an independent power of sale upon objective conditions being met, without need for notice or actual margin call. The LSA was validly novated or assigned to Leveraged Equities per cll 21.2 and 21.4, with borrower's prospective consent. Notice of assignment was properly effected; the evidence established the letter was sent, and statutory presumption of receipt applied. Leveraged Equities' conduct was not unconscionable under s 12CB ASIC Act as the facility was for investment, not...

Jurisdiction
Australia
Judgment Date
18 January 2011
Procedural Posture
Appeal / Final Judgment on Appeal
Outcome
Appeals allowed; original orders set aside; cross-claim by Leveraged Equities succeeds.
Legal Topics
['margin Lending Agreements' 'novation and Assignment of Contract' 'interpretation of Margin Calls' 'unconscionable Conduct' 'service of Notice Under Conveyancing Act 1919 (nsw)' 'presumption of Service Under Evidence Act']
['contract Law' 'banking and Finance' 'evidence'] ['margin Lending Agreements' 'novation and Assignment of Contract' 'interpretation of Margin Calls' 'unconscionable Conduct' 'service of Notice Under Conveyancing Act 1919 (nsw)' 'presumption of Service Under Evidence Act']

Case Brief

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Procedural Posture

Appeal / Final Judgment on Appeal

Legal Issues

  1. 1 ['Whether margin calls were validly made under the Loan and Security Agreement (LSA)' 'Whether lender could specify less than three business days for compliance with a margin call under cl 5.2 LSA' 'Whether the lender had an independent power to sell securities under cl 5.7 LSA without given notice or making a margin call' 'Whether the LSA was validly novated or assigned to Leveraged Equities without further consent from the borrower' 'Whether written notice of assignment under s 12 Conveyancing Act 1919 (NSW) was validly given' 'Whether Leveraged Equities engaged in unconscionable conduct under s 12CB ASIC Act']

Ratio Decidendi

The LSA permitted the lender to reduce the compliance period for a margin call to less than three business days by notice under cl 5.2, and the 23 February 2009 margin calls were validly made. Clause 5.7 provided an independent power of sale upon objective conditions being met, without need for notice or actual margin call. The LSA was validly novated or assigned to Leveraged Equities per cll 21.2 and 21.4, with borrower's prospective consent. Notice of assignment was properly effected; the evidence established the letter was sent, and statutory presumption of receipt applied. Leveraged Equities' conduct was not unconscionable under s 12CB ASIC Act as the facility was for investment, not...

Court Disposition

Appeals allowed; original orders set aside; cross-claim by Leveraged Equities succeeds.

Orders

  • ['The appeals are allowed.' 'The orders made by Rares J on 24 February 2010 are set aside.' 'The Amended Application dated 5 June 2009 is dismissed.' 'At the election of Leveraged Equities to be communicated in writing to Goodridge within five business days of these orders: (i) Goodridge repay Leveraged Equities the...