Herde v Oxford Aviation Academy (Australia) Pty Ltd

Herde (Plaintiff) sought to enforce a settlement agreement against Oxford Aviation Academy (Australia) Pty Ltd (Defendant). The dispute arose from a settlement reached between the Plaintiff and the Defendant's insurer, where the insurer agreed to pay a sum to the Plaintiff in exchange for a release of the Defendant. The Defendant argued that it was not bound by this settlement, as the insurer had acted outside its authority by releasing another party in addition to the Defendant. The matter came before the Court of Appeal of New South Wales.

The primary legal issue before the Court of Appeal was whether the Defendant had an arguable defence to the Plaintiff's claim for enforcement of the settlement. This involved determining whether the insurer's authority to settle the claim on behalf of the Defendant extended to releasing a third party, and if not, whether such an action rendered the settlement agreement unenforceable against the Defendant.

The Court of Appeal found that the Defendant did indeed have an arguable defence. It reasoned that the insurer's authority to settle was limited to releasing the Defendant, and the inclusion of a release for another party constituted a misuse of that authority. This misuse meant that the Defendant was not bound by the settlement as presented. Consequently, the Court allowed the appeal, setting aside the previous orders that had enforced the settlement and dismissing the Plaintiff's motion. The Plaintiff was ordered to pay the Defendant's costs of the motion and the appeal.