25 September 2008


Subjects: Brokerage

Yes Home loans & a related company have been receiving approx $80,000 a month in trailer commission from GE Money. On 9 July 2008 GE withheld 75% of the trail “as per legal advice”. This came about because some of the originated loans had gone bad and Genworth had refused to make up the shortfall. GE claimed the money pursuant to an indemnity in the correspondent deed.

Our readers may recall a similar situation occurred in Integral Home Loans v Interstar Wholesale Financed [2007] NSWSC 406 and the court found the forfeiture of trail clause was a penalty and ordered Interstar to keep paying trail. This matter was complicated by the fact that GE holds a fixed & floating charge that includes a set-off clause. Thus they were claiming the trail was being applied against the damages rather than having been forfeited. Nevertheless the court granted an mandatory injunction ordering GE to keep paying trail subject to undertakings given by the originator.

Click here to read the full judgment

LesawebLesa Bransgrove holds a Bachelor of Laws and Bachelor of Commerce from the University of Queensland and a Master of Laws from the University of London. Lesa was admitted as a solicitor of the Queensland Supreme Court in 1996 and the UK Supreme Court in 2002 and as a barrister of the NSW Bar in 2009. After working on the Lehman's litigation Lesa left the bar and joined Bransgroves.

Read more about Lesa Bransgrove