VA Holdings Pty Ltd t/as Granton Homes v Global Capital Corporation Pty Ltd [2023] NSWSC 1522

Supreme Court New South Wales

Medium Neutral Citation: VA Holdings Pty Ltd t/as Granton Homes v Global Capital Corporation Pty Ltd [2023] NSWSC 1522 Hearing dates: 15 November 2023 Date of orders: 7 December 2023 Decision date: 07 December 2023 Jurisdiction: Equity Before: McGrath J Decision: Plaintiff and Second Cross-Defendant are jointly and severally liable to pay the Cancellation Fee of $116,050 to Defendant Catchwords: CONTRACTS — construction — where the plaintiff is a property developer borrower and the defendant is a finance broker — where the parties entered into a contract titled 'Mandate to Act' which provides for the payment of a facilitation fee by the plaintiff in exchange for the defendant procuring the approval of a finance facility — where the defendant procured a satisfactory finance facility from a third-party lender but, prior to the drawing-down of the loan, the plaintiff caused the reduction in the amount of security available under the loan resulting in the alteration of the terms of the facility by the lender which the plaintiff did not proceed with — whether the facilitation fee remains payable — HELD — the facilitation fee remains payable — whether the cancellation fee which provides for 100% of the facilitation fee to be payable after the lender issues security documents is void as a penalty — HELD — the cancellation fee is not a penalty — whether the services provided by the defendant to the plaintiff are "financial services" and, if not, is the cancellation fee unenforceable as an unfair contract term CONTRACTS — construction — whether the second cross-defendant is jointly and severally liable as guarantor of the plaintiff's obligations under the Mandate to Act — HELD — second cross-defendant is jointly and severally liable Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth) Competition and Consumer Act 2010 (Cth) Cases Cited: Australia Capital Financial Management Pty Ltd v Linfield Developments Pty Ltd; Guan v Linfield Developments Pty Ltd [2017] NSWCA 99; (2017) 18 BPR 36,683 Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377 Bellas v Powers [2023] NSWSC 1198 Clark Equipment Credit of Aust Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160 Commonwealth v McLean (1996) 41 NSWLR 389 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 Harris v Burrell & Family Pty Ltd [2010] SASCFC 12 HP Mercantile Pty Ltd v Hartnett [2016] NSWCA 342 Jones v Dunkel (1959) 101 CLR 298 at 321; [1959] HCA 8 Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd [2023] HCA 6 Manly Council v Byrne [2004] NSWCA 123 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 NEC Information Systems Australia Pty Ltd v Linton (1985) NSW ConvR 55-240 Owners v Strata Plan No 66375 v King [2018] NSWCA 170 Pannozzo v Fowler [2013] NSWCA 269 Private Mortgages Australia Pty Limited ACN 600 628 813 as trustee for the PMA Trust v Stever [2019] NSWSC 462 Scottish Amicable Life Assurance Society v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 Singh v De Castro; Dhaliwal v De Castro; Brar v De Castro [2017] NSWCA 241 Ta Lee Investment Pty Ltd v Antonios [2019] NSWCA 24 TW Timber Treatment Pty Ltd v Giddings [2022] VSCA 147 Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 Category: Principal judgment Parties: VA Holdings Pty Ltd t/as Granton Homes (Plaintiff/First Cross-Defendant) Global Capital Corporation Pty Ltd (Defendant/Cross-Claimant) Hong Long Vu (Second Cross-Defendant) Representation: Counsel: S Reuben (Plaintiff/First Cross-Defendant and Second Cross-Defendant) A Djurdjevic (First Defendant/Cross-Claimant)