Hillam v Iacullo

Case [2015] NSWCA 196

Court of Appeal


Supreme Court


New South Wales

  • Summary available
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Medium Neutral Citation: Hillam v Iacullo [2015] NSWCA 196
Hearing dates:10 June 2015
Decision date: 16 July 2015
Before: Basten JA at [1];
Ward JA at [2];
Leeming JA at [3]
Decision:

1. Appeal allowed.

 

2. Set aside the orders made on 30 July 2014, and in lieu thereof, dismiss the proceedings.

 3. Respondents to pay the appellant’s costs at first instance and on appeal.
Catchwords:

CONTRACT - novation - successive written loan agreements between same parties - whether later agreement discharged parties’ obligations under earlier agreement - no express rescission of earlier agreements - later agreements dealt with same subject matter and in different terms - context confirmatory - later agreement impliedly discharged earlier agreement

  CONTRACT - breach - dependent and independent obligations - lenders promised to advance funds at particular date - borrower promised to provide security within a reasonable time - borrower promised to repay amounts lent plus interest plus uplift - contract not executed until after the time specified for the funds to be advanced - lenders refused to advance entirety of funds until security provided - relevance of oral stipulation that final amounts would not be advanced without security being provided - lenders in breach - whether borrower’s obligation to pay uplift independent of lenders’ obligation to advance entirety of funds - obligations dependent, not independent
Legislation Cited: Contracts Review Act 1980 (NSW)
Cases Cited: Aalders v PA Putney Finance Australia Pty Ltd [2011] NSWSC 756
ALH Group v Commissioner of State Revenue [2012] HCA 6; 245 CLR 338
Ample Source International Limited v Bonython Metals Group Pty Limited; In the Matter of Bonython Metals Group Pty Limited (No 6) [2011] FCA 1484; 285 ALR 488
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424
Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432
Burton v Palmer [1980] 2 NSWLR 878
Campbell v Jones (1796) 6 TR 570; 101 ER 708
Chief Commissioner of State Revenue v ALH Group Property Holdings Pty Ltd [2011] NSWCA 32; 15 BPR 29,297
Concut Pty Ltd v Worrell [2000] HCA 64; 75 ALJR 312
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; 201 CLR 520
FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45; [2015] AC 250
Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; 47 NSWLR 473
Gray t/as Clarence Valley Plumbing Services v Ware Building Pty Ltd [2013] NSWCA 271
Hillam v Ample Source International Limited (No 2) [2012] FCAFC 73; 202 FCR 336
Hillam v Leduva Pty Limited (No 3) [2011] NSWSC 345
Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133
Lloyd v Lloyd (1837) 2 My & Cr 192; 40 ER 613
Masterton Homes Pty Ltd v…

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AGLC
Hillam v Iacullo [2015] NSWCA 196
Case
[2015] NSWCA 196
Decision Date

CaseChat Overview and Summary

The dispute in *Hillam v Iacullo* concerned two successive written loan agreements between the same parties. The appellant, Mr Hillam, argued that the later agreement had discharged the parties' obligations under the earlier agreement. The primary issue was whether the later agreement, which dealt with the same subject matter but contained different terms, implicitly discharged the earlier agreement in the absence of express rescission.

The court was also required to determine whether the lenders were in breach of contract. The lenders had promised to advance funds by a particular date, while the borrower had promised to provide security within a reasonable time and to repay the amounts lent plus interest and an uplift. The contract was not executed until after the specified date for the fund advance, and the lenders refused to advance the entirety of the funds until security was provided, despite an oral stipulation that final amounts would not be advanced without security. Furthermore, the court had to consider whether the borrower's obligation to pay the uplift was independent of the lenders' obligation to advance the entirety of the funds.

The Court of Appeal held that the later loan agreement impliedly discharged the earlier agreement because it dealt with the same subject matter and contained different terms, indicating an intention to substitute the new agreement for the old. Regarding the breach, the court found that the lenders were in breach of contract by failing to advance the funds by the agreed date. The court determined that the borrower's obligation to pay the uplift was dependent on, not independent of, the lenders' obligation to advance the entirety of the funds.

Consequently, the appeal was allowed, the orders made at first instance were set aside, and the proceedings were dismissed. The respondents were ordered to pay the appellant's costs at first instance and on appeal.

Orders

Orders of the court

1. Appeal allowed.

2. Set aside the orders made on 30 July 2014, and in lieu thereof, dismiss the proceedings.

3. Respondents to pay the appellant’s costs at first instance and on appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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