H P Mercantile Pty Limited v Thomas; H P Mercantile Pty Limited v Chandelle Nominees Pty Limited; H P Mercantile Pty Limited v Hobson [2006] NSWDC 109

H P Mercantile Pty Limited v Thomas; H P Mercantile Pty Limited v Chandelle Nominees Pty Limited; H P Mercantile Pty Limited v Hobson [2006] NSWDC 109

The assignments from TROM to TPL, as well as subsequent assignments, were ineffective against Chandelle and Hobson due to the existence and breach of a contractual prohibition on assignment to which no consent was given for these assignments. The prohibition resulted from a collateral contract, which was a promissory assurance inducing their participation. As to Thomas, there was no such contractual prohibition, and the assignments were effective in equity, such that H P Mercantile was entitled to judgment against Thomas for the debt and interest (subject to limitation on interest recovery).

Parties
Plaintiff: H P Mercantile Pty Limited; Defendant: Peter Thomas; Defendant: Chandelle Nominees Pty Limited; Defendant: Adrian Hobson
Jurisdiction
Australia
Judgment Date
30 November 2006
Procedural Posture
Civil / Judgment After Trial
Outcome
Judgment for the plaintiff against Thomas; judgment for Chandelle and Hobson.
Legal Topics
Assignment of Debts, Loan Agreements, Prohibition on Assignment, Equitable Assignment, Collateral Contract, Stamp Duty, Limitation of Actions
Contract Law Equity Assignment of Debts Loan Agreements Prohibition on Assignment Equitable Assignment Collateral Contract Stamp Duty +1 more

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Parties

H P Mercantile Pty Limited

Plaintiff

Peter Thomas

Defendant

Chandelle Nominees Pty Limited

Defendant

Adrian Hobson

Defendant

Procedural Posture

Civil / Judgment After Trial

Legal Issues

  1. 1 Whether loans were actually advanced to the defendants
  2. 2 Whether the assignments of debts were absolute assignments within the meaning of s 12 of the Conveyancing Act 1919
  3. 3 Whether a contractual or collateral restriction on assignment was created

Ratio Decidendi

The assignments from TROM to TPL, as well as subsequent assignments, were ineffective against Chandelle and Hobson due to the existence and breach of a contractual prohibition on assignment to which no consent was given for these assignments. The prohibition resulted from a collateral contract, which was a promissory assurance inducing their participation. As to Thomas, there was no such contractual prohibition, and the assignments were effective in equity, such that H P Mercantile was entitled to judgment against Thomas for the debt and interest (subject to limitation on interest recovery).

Court Disposition

Judgment for the plaintiff against Thomas; judgment for Chandelle and Hobson.

Orders

  • Judgment for H P Mercantile Pty Limited against Peter Thomas in an amount to be confirmed ($68,306.18 subject to confirmation of correct calculations and application of statute-barred interest).
  • Judgment for Chandelle Nominees Pty Limited and Adrian Hobson; the plaintiff's claims against these defendants are dismissed.