CAIRNS LOCKIE LTD AND ANOR V AUSTRALIAN MORTGAGE SECURITIES (NZ) AND ORS HC AK CIV-2009-404-005246

CAIRNS LOCKIE LTD AND ANOR V AUSTRALIAN MORTGAGE SECURITIES (NZ) AND ORS HC AK CIV-2009-404-005246

The deed and commercial allocation of risk show no express or implied right for AMS to set off an unliquidated claim against commission payments; clause 20.5 bars set off by the correspondent and, absent fraud, it would be unjust to permit equitable set off because it would disrupt the parties' agreed risk allocation and unfairly deprive the correspondent of commissioned income; accordingly equitable set off did not bar summary judgment for unpaid commissions.

Citation
openlaw-b8eb6531_1924_4367_948c_354bcc097a53.pdf
Parties
Plaintiff and First Counterclaim Defendant: CAIRNS LOCKIE LTD; Second Plaintiff and Second Counterclaim Defendant: MORTGAGE ADMINISTRATION SERVICES LTD; Defendant and Counterclaim Plaintiff: AUSTRALIAN MORTGAGE SECURITIES (NZ); Third Counterclaim Defendant: WILLIAM ALEXANDER ADAMS CAIRNS; Fourth Counterclaim Defendant: JAMES RODERICK LOCKIE
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 February 2010
Procedural Posture
Civil (contract; Equity; Commercial) / Summary Judgment Hearing (high Court)
Outcome
Summary judgment granted for second plaintiff on its claim for unpaid commissions; defendant's equitable set off defence dismissed for purposes of the summary judgment application; reserved leave on injunction matters; costs awarded on the application.
Legal Topics
Equitable Set Off, Summary Judgment, Contractual Interpretation, Indemnity, Commission Payments, Declaration and Injunction, Operations Manual, Novation
Contract Equity Civil Procedure Mortgage Law Commercial Law Professional Negligence Equitable Set Off Summary Judgment +6 more

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Parties

CAIRNS LOCKIE LTD

Plaintiff and First Counterclaim Defendant

MORTGAGE ADMINISTRATION SERVICES LTD

Second Plaintiff and Second Counterclaim Defendant

AUSTRALIAN MORTGAGE SECURITIES (NZ)

Defendant and Counterclaim Plaintiff

WILLIAM ALEXANDER ADAMS CAIRNS

Third Counterclaim Defendant

JAMES RODERICK LOCKIE

Fourth Counterclaim Defendant

Procedural Posture

Civil (contract; Equity; Commercial) / Summary Judgment Hearing (high Court)

Legal Issues

  1. 1 Whether defendant may withhold commission by equitable set off against an unliquidated claim for damages
  2. 2 Whether the Correspondent Deed or an implied term permits set off by the defendant
  3. 3 Whether counterclaim can be relied on to defeat a summary judgment application

Ratio Decidendi

The deed and commercial allocation of risk show no express or implied right for AMS to set off an unliquidated claim against commission payments; clause 20.5 bars set off by the correspondent and, absent fraud, it would be unjust to permit equitable set off because it would disrupt the parties' agreed risk allocation and unfairly deprive the correspondent of commissioned income; accordingly equitable set off did not bar summary judgment for unpaid commissions.

Court Disposition

Summary judgment granted for second plaintiff on its claim for unpaid commissions; defendant's equitable set off defence dismissed for purposes of the summary judgment application; reserved leave on injunction matters; costs awarded on the application.

Orders

  • Second plaintiff (Mortgage Administration Services Ltd) recovers judgment against the defendant (Australian Mortgage Securities (NZ)) for $168,665.06 on its first cause of action
  • Second plaintiff recovers interest at 5% per annum as follows: on $26,605.74 from 31 March 2009 to 22 February 2010 $1,195.44; on $25,767.52 from 30 April 2009 to 22 February 2010 $1,051.88; on $34,867.59 from 31 May 2009 to 22 February 2010 $1,275.29; on $41,298.78 from 30 June 2009 to 22 February 2010 $1,340.79;...