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ARTICLE · 22 JULY 2010

Full and Final Settlement: Not Always Full and Not Always Final

Norton Rose Fulbright Australia
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This article considers the implications of a recent decision of the Supreme Court of NSW, which dealt with the interpretation of the fee provisions in advisory mandate letters and indicated the need for careful drafting of mandate letters

AustraliaReal Estate and Construction
Rob Buchanan
Rob Buchanan
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JP Morgan Australia Ltd v Consolidated Minerals Ltd [2010] NSWSC 100

In March this year the Supreme Court of NSW endorsed the refusal of Consolidated Minerals Limited (CML) to pay fees to JP Morgan and as a result JP Morgan earned fees of approximately $30 million less than was claimed. This decision demonstrates the court's interpretation of the fee provisions in mandate letters and shows that mandate letters must be carefully prepared.

In September 2006 JP Morgan were engaged by CML to advise on its response to any takeover or merger offers. The terms of the engagement provided for fees to be paid to JP Morgan in the event that an offer was completed or, if the offer was rejected by a majority of the board, successfully defended. At the close of bidding in January 2008 JP Morgan invoiced CML for fees under the mandate letter of approximately $50 million.

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