Motor Trade Finances Prestige Leasing Pty Ltd v Elderslie Finance Group Corporation Ltd

The case between Motor Trade Finances Prestige Leasing Pty Ltd and Elderslie Finance Group Corporation Ltd was heard in the Federal Court of Australia. The dispute arose from an agreement for the assignment of receivables under finance leases of luxury motor vehicles. The plaintiff alleged that the first defendant agreed to provide funding of up to $50 million per annum, and the parties signed a letter containing some terms intending the performance to be conditional on the execution of a formal agreement. The plaintiff argued that the parties intended a contract prior to the execution of the formal agreement and sought damages for loss of profits and misleading conduct.

The court considered whether the parties intended any contract prior to the execution of the formal agreement and whether the agreements were consistent. The court held that the agreements were complementary, and there was no intention to create a binding contract before the execution of the formal agreement. The court further held that the plaintiff terminated the contract by accepting the first defendant's repudiation. The court also held that the plaintiff was entitled to recover expenditure on the program in reliance on the representations, less income derived and contractual damages claim, minus what loss was proved.

The court found that the first defendant had engaged in misleading and deceptive conduct in relation to the supply of financial services by making misrepresentations as to the availability of funding. The court found that the first defendant failed to disclose tax features of the leasing product to the securitiser, which was entitled to reject any particular proposal. The court held that the plaintiff had been advised of the first defendant's non-disclosure of tax features to the securitiser and that the representations were misleading and were relied on by the plaintiff in entering agreements with the first defendant.

The court found that the directors of the first defendant were not liable as primary contravenors of s 12DA of the ASIC Act for the misrepresentations in the letter signed by one of them. The court held that the director was not liable as an accessory. The court held that the plaintiff was entitled to recover expenditure on the program in reliance on the representations, less income derived and contractual damages claim, minus what loss was proved.