R J & M Bezzina Pty Ltd & Ors v Saxby Bridge Mortgages Pty Ltd [2004] NSWCA 211

R J & M Bezzina Pty Ltd & Ors v Saxby Bridge Mortgages Pty Ltd [2004] NSWCA 211

Clause 1(d) was properly construed as making the amount of the Brokerage Fee due and payable when the appellants breached the exclusivity obligation and obtained finance through another party. It was not merely an acceleration of payment otherwise due under clause 3. Although the clause was triggered by breach supplemented by obtaining finance elsewhere, it was not a penalty because the respondent thereby lost its opportunity to earn the Brokerage Fee, the parties were willing commercial parties, the clause did not apply to minor breaches, and the amount was not extravagant, unconscionable or disproportionate to the loss likely to be suffered.

Jurisdiction
Australia
Judgment Date
23 June 2004
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From District Court Judgment
Outcome
Appeal dismissed. Cross-appeal allowed.
Legal Topics
['finance Brokerage Agreement' 'contractual Construction' 'exclusivity Clause' 'liquidated Damages' 'penalty Clause' 'loss of Chance']
['contract Law' 'civil Procedure'] ['finance Brokerage Agreement' 'contractual Construction' 'exclusivity Clause' 'liquidated Damages' 'penalty Clause' 'loss of Chance']

Case Brief

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Procedural Posture

Civil Appeal / Appeal and Cross Appeal From District Court Judgment

Legal Issues

  1. 1 ['Whether clause 1(d) on its proper construction provided for payment of the amount of the Brokerage Fee upon breach and finance being obtained through another party, or only for acceleration of actual payment of any Brokerage Fee which had otherwise become payable.' 'If clause 1(d) operated to require payment of the Brokerage Fee upon breach and finance being obtained through another party, whether it was unenforceable as a penalty.' 'If clause 1(d) was unenforceable as a penalty, whether the evidence entitled the District Court judge to find an 80 per cent lost chance.']

Ratio Decidendi

Clause 1(d) was properly construed as making the amount of the Brokerage Fee due and payable when the appellants breached the exclusivity obligation and obtained finance through another party. It was not merely an acceleration of payment otherwise due under clause 3. Although the clause was triggered by breach supplemented by obtaining finance elsewhere, it was not a penalty because the respondent thereby lost its opportunity to earn the Brokerage Fee, the parties were willing commercial parties, the clause did not apply to minor breaches, and the amount was not extravagant, unconscionable or disproportionate to the loss likely to be suffered.

Court Disposition

Appeal dismissed. Cross-appeal allowed.

Orders

  • ["The respondent's judgment should be increased to $155,000 plus interest." 'The order for costs below should stand.' "The appellants should pay the respondent's costs of the appeal and cross-appeal." 'The parties are directed to bring in within seven days short minutes of orders in accordance with these reasons.']