Hunter Business Finance Pty Ltd v Australian Commercial & Equipment Finance Pty Ltd [2009] NSWSC 1032

Hunter Business Finance Pty Ltd v Australian Commercial & Equipment Finance Pty Ltd [2009] NSWSC 1032

The contractual obligations of the brokers with HBF were extinguished by novation when their companies became the service providers; the companies are thus liable for damages arising post-novation. The offer of compromise remains effective despite partial settlement, and the Uniform Civil Procedure Rules, Pt 42 r 42.15(2) applies to costs: HBF is entitled to its costs on the ordinary basis up to the date of the offer, while the brokers and their companies are entitled to indemnity costs thereafter.

Parties
Plaintiff: Hunter Business Finance Pty Ltd; First Defendant: Australian Commercial & Equipment Finance Pty Ltd; Second Defendant: Australian Property Finance Pty Ltd; Third Defendant: Garry Francis Ennis; Fourth Defendant: David John Flanagan; Fifth Defendant: Errol Sky; Sixth Defendant: Belfolex Pty Ltd; Seventh Defendant: Optimal Finance Pty Ltd; Eighth Defendant: Egras Pty Ltd; Ninth Defendant: Gregory Raymond John Sterland; Tenth Defendant: Australian Property Finance; Eleventh Defendant: Finance Analysis Services of Australia; Twelfth Defendant: Finance Analysis Services of Australia Pty Ltd; Thirteenth Defendant: Hunter Access Finance
Jurisdiction
Australia
Judgment Date
30 September 2009
Procedural Posture
Civil / Post Damages Assessment and Costs Determination
Outcome
Companies substituted for brokers by novation are liable for assessed damages. Plaintiff entitled to ordinary costs up to the offer of compromise; brokers and their companies entitled to indemnity costs thereafter. Orders to be finalized after hearing parties.
Legal Topics
Novation, Breach of Contract, Costs, Offers of Compromise
Contracts Civil Procedure Novation Breach of Contract Costs Offers of Compromise

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Parties

Hunter Business Finance Pty Ltd

Plaintiff

Australian Commercial & Equipment Finance Pty Ltd

First Defendant

Australian Property Finance Pty Ltd

Second Defendant

Garry Francis Ennis

Third Defendant

David John Flanagan

Fourth Defendant

Errol Sky

Fifth Defendant

Belfolex Pty Ltd

Sixth Defendant

Optimal Finance Pty Ltd

Seventh Defendant

Egras Pty Ltd

Eighth Defendant

Gregory Raymond John Sterland

Ninth Defendant

Australian Property Finance

Tenth Defendant

Finance Analysis Services of Australia

Eleventh Defendant

Finance Analysis Services of Australia Pty Ltd

Twelfth Defendant

Hunter Access Finance

Thirteenth Defendant

Procedural Posture

Civil / Post Damages Assessment and Costs Determination

Legal Issues

  1. 1 Whether companies were substituted for brokers by novation and are thus liable for damages
  2. 2 Whether obligations existed concurrently for both brokers and their companies or only for one after substitution
  3. 3 Whether offer of compromise remains effective after partial settlement with certain defendants

Ratio Decidendi

The contractual obligations of the brokers with HBF were extinguished by novation when their companies became the service providers; the companies are thus liable for damages arising post-novation. The offer of compromise remains effective despite partial settlement, and the Uniform Civil Procedure Rules, Pt 42 r 42.15(2) applies to costs: HBF is entitled to its costs on the ordinary basis up to the date of the offer, while the brokers and their companies are entitled to indemnity costs thereafter.

Court Disposition

Companies substituted for brokers by novation are liable for assessed damages. Plaintiff entitled to ordinary costs up to the offer of compromise; brokers and their companies entitled to indemnity costs thereafter. Orders to be finalized after hearing parties.