Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328 Hearing dates: 09/11/2016 Date of orders: 28 November 2016 Decision date: 28 November 2016 Before: Gleeson JA at [1]; Sackville AJA at [2]; McDougall J at [13] Decision: (1) Appeal allowed with costs. (2) Set aside orders below. (3) Order judgment for the defendant (appellant) with costs. Catchwords: CONTRACTS – penalties – contract for commercial loan facility – whether default interest payable when monthly payments were not made within time constituted a penalty – where question should be considered on a forward-looking basis at the date each contract was made - whether default interest is presumed to be a penalty – whether default interest was wholly extravagant or unconscionable compared to the greatest amount of loss that could possibly be foreseen to flow from a breach – whether purpose of default interest was to punish non-compliance Cases Cited: AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170 Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30 Cavendish Square Holding BV v El Makdessi [2015] UKSC 67; [2016] 2 All ER 519 Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 Imperial Tobacco Co (of Great Britain and Ireland) Ltd v Parslay [1936] 2 All ER 515 Lordsvale Finance PLC v Bank of Zambia [1996] QB 752 Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35; 309 ALR 249 Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199; [2015] FCAFC 50 Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28; (2016) 90 ALJR 835 Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462 Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656; [2005] HCA 71 Wallis v Smith (1882) 21 Ch D 243 Category: Principal judgment Parties: Arab Bank Australia Ltd (Appellant) Sayde Developments Pty Ltd (Respondent) Representation: Counsel: NC Hutley SC / TD Castle (Appellant) DR Pritchard SC / AJ Macauley (Respondent)