VA Holdings Pty Ltd t/as Granton Homes v Global Capital Corporation Pty Ltd

The case involved a dispute between VA Holdings Pty Ltd, trading as Granton Homes, and Global Capital Corporation Pty Ltd. VA Holdings sought to enforce a contract titled 'Mandate to Act', which obligated them to pay a facilitation fee to Global Capital in return for the latter's services in securing a finance facility. After Global Capital procured a satisfactory finance facility, VA Holdings reduced the amount of security available under the loan, resulting in the lender altering the terms of the facility. VA Holdings did not proceed with the loan. The primary issues were whether the facilitation fee remained payable, whether the cancellation fee was a penalty, and if the services provided by Global Capital constituted "financial services".

The court found that the facilitation fee remained payable as it was a fixed fee for services rendered in securing the finance facility, irrespective of whether VA Holdings proceeded with the loan. The cancellation fee, which stipulated that 100% of the facilitation fee would be payable upon the lender issuing security documents, was not deemed a penalty. The court considered the fee to be a legitimate prepayment for the services to be rendered. Additionally, the services provided by Global Capital did not constitute "financial services" as defined by the relevant legislation, but this did not render the cancellation fee unenforceable as an unfair contract term.

Global Capital was held to be jointly and severally liable as guarantor of VA Holdings' obligations under the Mandate to Act, with the second cross-defendant also sharing this liability. The court ruled that the second cross-defendant, being a guarantor, was jointly and severally liable for the obligations of the plaintiff under the contract. The final orders of the court enforced the payment of the facilitation fee and the cancellation fee, and confirmed the liability of the second cross-defendant.