FNC Follow-on Fund, LP v Pearl Management Pty Ltd

Cases Cited: Arnold v Forsythe [2012] NSWCA 18
Charles v Shepherd [1892] 2 QB 622
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Rothenberger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288
Sinopec International (Australia) Pty Ltd v Su [2019] NSWSC 269
Stamford Capital Funds Management Pty Ltd v Tsihlis [2025] NSWSC 974
Wily v King [2010] NSWSC 352

Texts Cited: AV Ritchie, Ritchie’s Uniform Civil Procedure NSW (LexisNexis)
H Beale, Chitty on Contracts (36th ed, 2026, Sweet & Maxwell)

Category: Procedural rulings

Parties: FNC Follow-on Fund, LP (First Plaintiff)
Future Now Capital Management Pty Ltd (Second Plaintiff)
Pearl Management Pty Ltd (Defendant)

Representation: Counsel:
C Ernst (First and Second Plaintiffs)
Solicitors:
Hamilton Locke (First and Second Plaintiffs)

File Number(s): 2025/00150245

Publication restriction: Nil

JUDGMENT

1. FNC Follow-on Fund, LP (FNC) and Future Now Capital Management Pty Ltd (Future Now) seek default judgment on their claim against the defendant, Pearl Management Pty Ltd, in relation to a 2023 subscription deed poll in favour of each party to an existing partnership deed. FNC is the relevant partnership, and Future Now is one of the partners.

2. On 20 December 2023, Pearl Management, having agreed to contribute to the partnership capital of $750,000 plus a closing premium, was entered into the partnership registry and became a limited partner within the meaning of the partnership deed and bound by that deed.

3. Clause 6.1(c) of the partnership deed provides that each limited partner required to make a capital contribution must pay the amount specified in the call notice to the partnership on or before the payment date.

4. Clause 7.1(a)(1) of the partnership deed provides that if any limited partner does not pay any amount in accordance with the partnership deed, the limited partner must, if requested by the general partner, pay interest at the specified default rate.

5. In late 2023 and early 2024, the FNC general partner issued to Pearl Management a first and second call notice pursuant to cl 6.1(a) of the partnership deed, which required Pearl Management to pay $498,826.03 and $262,500.00 (being portions of its capital contribution) to the partnership by 11 January 2024 and 11 March 2024, respectively. Pearl Management did not pay any amount.

6. Between April and September 2024, the FNC general partner issued to Pearl Management:

7. a first default notice requiring Pearl Management to pay the total balance under the call notices (totalling $761,326.03);

8. a second default notice requiring Pearl Management to pay the total balance plus default interest (totalling $781,402.08); and

9. a final default notice requiring Pearl Management to pay the total balance plus default interest and recovery expenses (totalling $821,693.51).

10. Pearl Management has not paid the amounts required under any of the default notices, nor pursuant to a later demand letter or email correspondence.

11. In April 2025, the plaintiffs commenced these proceedings. Pearl Management entered an appearance in the proceedings on 30 May 2025, however, on 27 June 2025, its solicitors filed a notice of ceasing to act. Pearl Management has not been legally represented since this date, nor taken any active step.

Is Pearl Management “in default”?

9. Under r 16.6 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), the Court may enter default judgment on a debt or liquidated claim.

10. I accept that Pearl Management is relevantly “in default” for the purposes of r 16.6 for failing to file a List Response (despite orders to do so): see eg Sinopec International (Australia) Pty Ltd v Su [2019] NSWSC 269 at [37]-[40] (Hammerschlag J, as the CJ in Eq then was).

Should default judgment be entered against Pearl Management?

11. Whether the plaintiffs are entitled to default judgment under r 16.6 in part turns on the proper construction of the phrase “debt or liquidated claim”. The “specification of a precise amount does not convert what is otherwise a claim for unliquidated damages into a liquidated claim”: see eg Arnold v Forsythe [2012] NSWCA 18 at [48] (Sackville AJA, McColl and Young JJA agreeing). Rather, the plaintiffs must plead material facts demonstrating that liability to pay a sum had accrued: Arnold at [56].

12. I accept that the plaintiffs’ claim is for a “debt or liquidated claim” under r 16.6 for the following reasons.

13. The plaintiffs plead the sums payable according to terms and amounts fixed by the partnership deed and the subscription deed poll. Both deeds were under seal. Because the plaintiffs’ right to recover the amount claimed is derived from the partnership deed, and does not require the Court to evaluate any loss, it can be seen as a claim for a liquidated sum: see eg Rothenberger Australia Pty Ltd v Poulsen (2003) 58 NSWLR 288 at 297-8 [27] (Barrett J); see also McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476 (Dixon J); H Beale, Chitty on Contracts (36th ed, 2026, Sweet & Maxwell) at [1-131].

14. Further, r 16.6(2)(a)-(e) have been satisfied by the affidavit of Christopher Lee, affirmed on 21 January 2026, which:

15. identifies the principal amount due to the plaintiffs as being $761,326.03 (being the amount due under the first default notice);

16. deposes that Pearl Management has not paid to the plaintiffs any part of the amount claimed as due under the partnership deed;

17. deposes that Mr Lee’s knowledge of Pearl Management’s indebtedness to the plaintiffs arises from his own knowledge and review of the records. Although Mr Lee does not specify the “records” that were the subject of his review, I am satisfied that his affidavit “rises above a mere intimation of familiarity with the matter”: Stamford Capital Funds Management Pty Ltd v Tsihlis [2025] NSWSC 974 at [17], citing Arnold at [88];

18. states the interest due on the amount calculated at 8% (as specified in cl 4 of sch 1 to the partnership deed) from 16 April 2024 to the date of judgment. The notice of motion mistakenly references the interest being payable from 16 April 2024 instead of 8 April 2024 (being the date of the first default notice). In these circumstances, the plaintiffs only press for interest from 16 April 2024; and

19. claims the following for costs:

(a) $1,596.00 for professional costs, consistently with the amount allowed under s 5(a) of sch 1 to the Legal Profession Uniform Law Application Regulation 2025 (NSW); (b) $3,699.00 for filing fees; and (c) $64.00 for the costs of serving the originating process.

15. I am also satisfied from the affidavit of Lynne Scully, a process server, that Pearl Management was appropriately served.

16. A court will not order default judgment if there is any perceived injustice in doing so: see eg Wily v King [2010] NSWSC 352 at [17] (Barrett J), citing Charles v Shepherd [1892] 2 QB 622 at 624 (Lord Esher MR). I am unaware of any injustice here and consider that default judgment is appropriate.

Orders

17. It is appropriate to make the following orders:

18. Pursuant to r 16.6 of the UCPR, judgment against Pearl Management comprising:

(a) $761,326.03 as the principal amount owing; and (b) interest on the amount of $761,326.03 calculated at 8% per annum from 16 April 2024 to the date of judgment, being $115,691.52; and

2. Costs awarded in the amount of $5,359.00.

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