WESTPAC BANKING CORPORATION v VAMOTI PTY LTD and ANOR [1996] NSWCA 557

WESTPAC BANKING CORPORATION v VAMOTI PTY LTD and ANOR [1996] NSWCA 557

Westpac had warranted that the assigned debts entitled the holder to interest at 2.5% above the indicator lending rate; this warranty was breached when it was held only 1.125% was applicable. Damages for loss of the opportunity to collect higher interest at the warranted rate were not too remote and were recoverable. The correct measure of damages is the loss directly flowing from this breach, being the missed additional interest that would have been earned had the warranty been fulfilled.

Parties
Appellant: Westpac Banking Corporation; First Respondent: Vamoti Pty Ltd; Second Respondent: CA and L Bell Commodities Corporation Pty Ltd
Jurisdiction
Australia
Judgment Date
15 August 1996
Procedural Posture
Appeal / Judgment on Appeal
Outcome
Appeal dismissed.
Legal Topics
Damages for Breach of Contract, Assignment of Debts, Contract Interpretation, Remoteness of Damages, Warranties in Assignment
Contract Law Banking and Finance Law Damages for Breach of Contract Assignment of Debts Contract Interpretation Remoteness of Damages Warranties in Assignment

Case Brief

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Parties

Westpac Banking Corporation

Appellant

Vamoti Pty Ltd

First Respondent

CA and L Bell Commodities Corporation Pty Ltd

Second Respondent

Procedural Posture

Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether Westpac, in assigning its rights in the debts and securities, gave a warranty as to entitlement to future interest at a penalty rate of 2.5% above its indicator lending rate.
  2. 2 Whether such future interest entitlement warranted was to simple interest.
  3. 3 Whether, if the warranty was not as to simple interest, Vamoti suffered any recoverable loss or damage.

Ratio Decidendi

Westpac had warranted that the assigned debts entitled the holder to interest at 2.5% above the indicator lending rate; this warranty was breached when it was held only 1.125% was applicable. Damages for loss of the opportunity to collect higher interest at the warranted rate were not too remote and were recoverable. The correct measure of damages is the loss directly flowing from this breach, being the missed additional interest that would have been earned had the warranty been fulfilled.

Court Disposition

Appeal dismissed.

Orders

  • The appeal is dismissed.
  • Costs of the appeal to be reserved.