Golden Roc Investment Pty Ltd v Cui [2022] NSWSC 173 | Case summary

Supreme Court of NSW|2022-03-08|Before: Slattery J, Fullagar J

Judgment

The plaintiff, Golden Roc Investment Pty Ltd ACN 154 272 143 ('Golden Roc'), applies for default judgment under Uniform Civil Procedure Rules 2005 ('UCPR'), r 16.10. The plaintiff claims the primary relief sought in its Statement of Claim filed on 27 July 2021, seeking default judgment against the defendant, Mr. Shaoyuan Cui, in the amount of AUD$392,992.85 plus costs.
The Court is satisfied that the defendant was served with the Statement of Claim, the Notice of Motion dated 18 February 2022 and a notice of this hearing, and the Court heard the plaintiff's evidence in the defendant's absence. The Court is satisfied that Golden Roc has made out its claim on the guarantee and this judgment gives the Court's reasons for entering judgment with interest and costs against the defendant.
The plaintiff's claim may be shortly summarised. In the Statement of Claim the plaintiff claims that the defendant, having entered into a loan agreement with the plaintiff, failed to repay the principal and interest owing on expiration of the loan term on 9 February 2020; and that consequently AUD$278,745.64 (equivalent to USD$200,000.00 using the Reserve Bank of Australia's AUD-USD exchange rate as at 10 February 2022) for the principal and $83,623.69 for interest is due to the plaintiff under the terms of the loan agreement.
The plaintiff claims costs for the proceedings of AUD$6,498, comprising $3,200 in filing fees for the statement of claim, $979 in filing fees for this application, $99 in service fees, $624 for costs for seeking orders for substituted service and $1,596 in professional fees for seeking default judgment.
And the plaintiff claims interest under Civil Procedure Act 2005, s 100 in the sum of AUD$24,055.52 together with costs.

The Loan between Golden Roc and Mr Cui

On 12 February the plaintiff and the defendant entered into a loan agreement.
The loan agreement contained the following key terms: "1. Definitions and Interpretation 1.1 … "Advance Date" means the date the Lender advances Loan Amount to the Borrower, which shall not be later than 12 February 2018 … 3. Interest 3.1 Rate of interest payable Interest is payable by the Borrower to the Lender on the Loan Amount Sum at the Interest Rate of 30% per annum calculated from the Advance Date to the expiry date of the Term, if the Term is extended, to the expiry date of the extended Term. 3.2 When interest is payable Interest on the Loan Amount is to be paid by the Borrower to the Lender on the expiry date of the Term, if the Term is extended, on the expiry date of the extended Term. 4. Repayment 4.1 Repayment of Loan Amount Unless the Lender and the Borrow (sic) have otherwise agreed in writing to an extended loan term prior to the expiry of the Term the Borrower must repay the Loan amount in full, on or before the expiry date of the Term, subject to clause 4.2 of this Agreement. 4.2 Extended Loan Term This Agreement may be extended to a further term as agreed by the parties and such agreement shall be in the form of variation in accordance with clause 7 of this Agreement. If the Term of the Agreement is extended, the parties acknowledge and agree that the Repayment Amount will be due and payable on the expiry date of the extended term and that the Borrower has not otherwise committed an Event of Default under this Agreement. … 6. Events of Default 6.1 What constitutes an Event of Default Each of the following is an Event of Default, regardless of whether it is within the Borrower's control or not: (a) the Borrower defaults in the due and punctual payment of any amount due under this Agreement; … 6.2 Effects of an Event of Default If an Event of Default occurs then, a notice in writing may be given by the Lender to the Borrower, specifying the default and allowing the Borrower a period of fourteen (14) days for rectification of the default. After the fourteen (14) days period in this clause and if the default is not rectified, without prejudice to any other remedies available to the Lender, the Lender is entitled to: (a) demand immediate repayment of Outstanding Balance; (b) make any other arrangements in relation to the advances as agreed by both parties. 7. Variation of Schedule Any term of this Agreement or Schedule to this Agreement may be altered, amended, varied or added to in any way only by agreement in writing and signed between the parties. … Schedule Term Item 4: From the Advance Date to 11 February 2019."
On 12 February 2018, Mr Min Zhou, the sole director of Golden Roc, transferred on behalf of Golden Roc USD$200,000.00 from his bank account to the defendant's bank account.
On or about 11 February 2019 the plaintiff and the defendant agreed to extend the term of the loan agreement until 9 February 2020. A 'Deed of Amendments Loan Agreement' ('Amended Agreement') was prepared for the defendant by Tahota Law Firm, Sydney. The Amended Agreement was sent by the defendant to the plaintiff on 13 February 2019 via the social media platform 'WeChat'. The Amended Agreement extended the loan term until 9 February 2020. The parties conversed via WeChat on 13 February, agreeing to the terms of the Amended Agreement and expressing an intention to sign it.
In February 2019 the defendant paid the plaintiff interest owing under the original loan agreement for the period from 12 February 2018 to 19 February 2019 in the amount of AUD$60,346, in accordance with the terms of the Amended Loan Agreement.
The parties were not able to meet to sign the Amended Agreement until 9 June 2019. When they did meet, they resigned their original agreement by mistake. But their intention is clear from their pre-contractual communications, the drafting of the Amended Agreement, and through the signing of the loan agreement on 7 June 2019, which contains the parties' signatures, backdated to 12 February 2019. They are bound, as they intended, by the terms of the Amended Agreement.
The defendant failed to repay the principal and interest by 9 February 2020, as required by Clause 4.2 of the Amended Agreement, causing the defendant to default under Clause 6.1(a) of the Agreement.
Between February 2020 and 23 June 2021, the plaintiff and the defendant engaged in multiple phone and WeChat communications. In these conversations the plaintiff made repeated demands for payment of the monies owed. And the defendant made repeated promises to pay the principal and interest accrued, admitting in the process that the principal and interest were due and owing. This included the following email chain between the plaintiff and the defendant: "From: Amy Zhou Sent: Tuesday, 1 September 2020 6:16 PM To: Shaoyuan Cui Subject: Fwd: US 200K loan repayment Dear Henry, How are you? Please refer to below email, the lender is asking the repayment plan of USD200K loan between you and Golden Roc Investment Pty Ltd It would be much appreciated if you could advise the repayment schedule of the loan Best Regards Amy On Tue, Sep 1, 2020 at 8:03 PM [the defendant's email address] wrote: Dear Amy, Your message got with thanks. Please accept my sincere apologies for the late payment of loan as indicated due to COVID-19 pandemic. Currently I am planning my trip back to China. In the first place, my mother is not well with her health; In the second place, I need to go back to Xi'an to sign some legal documents for financial transaction. I will keep you updated my flight information. All the best, Henry"
The following message was sent by the defendant to the plaintiff on 27 April 2021 via WeChat in Chinese characters but here translated into English: "Mr Zhou, I met the company accountant today, straightened out the accounts and had a video call with the boss(es) from Guangdong; it was decided that the company be winded up by the end of May, and I will be paid of my principal and 10% dividend, which is enough to pay your friend's principal and interest. No need to worry. I am talking to the boss so the accountant could advance me some money first, and he said he would reconsider about it. Owing to the pandemic, your reputation and that of your friend was affected. Sincere apologies. I will find a few more friends to raise money for your friend to make a repayment by 15 May, or at least a partial repayment."
On 11 June 2021 Ms Li sent a letter by post to the Thornleigh home address and to the defendant's email address, demanding the principal of the loan plus USD$139,726.03 of accrued interest be paid to the plaintiff by 5.00pm on 25 June 2021. The letter of demand put the defendant on notice that unless the monies were paid, proceedings would be brought against them.
At the time of these proceedings, the principal and interest owing under the loan agreement remains outstanding, and the defendant has made no effort to repay any monies owing or amend the terms of the agreement with the plaintiff. The plaintiff seeks judgment for the sum outstanding, which is expressed to be payable in United States Dollars (USD) under the loan agreement. The Court is satisfied that the judgment should be entered for the plaintiff. This raises the question of the form of the judgment to be entered for the plaintiff.

Judgment in Foreign Currency

The established rule for judgment in foreign currency is that 'the creditor of a foreign currency debt is both entitled and obliged to seek judgment in the currency concerned': C Proctor, Mann on the Legal Aspect of Money (6th ed, 2005, Oxford University Press) at 210 ('Mann'), citing Miliangos v George Frank (Textiles) Ltd [1975] 3 All ER 801 ('Miliangos'). The rule was applied in this Court by Rogers J in Maschinenfabrik Augsburg-Nurenburg Aktiengesellschaft v Altikar Pty Ltd [1984] 3 NSWLR 152, where his Honour stated at 153: "It was only in 1976 in Miliangos v George Frank (Textiles) Ltd [1976] AC 443 that it was at last established that courts in England had power to enter a judgment expressed in terms of a foreign currency. Notwithstanding some initial difficulty, the judges of this Court, sitting in the Commercial List, have taken the view that the decision has equal application in New South Wales and have regularly entered judgments for plaintiffs in foreign currency."
The rule is of a procedural character, 'entitling the creditor to judgment by reference to which the contract was made' and does not affect questions of substance such as allowances for the effects of currency fluctuations on the calculation of the quantum: Mann at 212. This secondary question does not require attention in this case, as the plaintiff seeks judgment in Australian dollars, using the Reserve Bank of Australia's AUD-USD exchange rate on the date of judgment, 8 March 2022.
The plaintiff seeks judgment in Australian dollars. It is open to the Court, if elected by the plaintiff, to enter judgment in Australian currency: ITC Distribution Ltd v Filmpac Holdings Ltd (SC (Vic), Fullagar J, 6 March 1990) and followed in Vlasons Shipping Inc v Neuchatel Swiss General Insurance Co Ltd (No 2) [1998] VSC 135. The date to be used when converting a foreign currency to Australian dollars is the date which the court authorises enforcement of the judgment, using the rate of exchange on that date: Miliangos, at 841-2.
Therefore, I will order that the money calculated as due in accordance with the loan agreement, be converted from United States dollars to Australian dollars on the date of judgment, using the Reserve Bank of Australia exchange rate for 8 March 2022. The exchange rate varies within a single day but the Court is satisfied that 1 Australian Dollar = 0.7419 United States dollars is an appropriate rate to use within the range of values on 8 March 2022.

Calculation of interest

The plaintiff seeks interest on principal owed in accordance with Civil Procedure Act 2005, s 100. The plaintiff has provided a table of the claim for interest on the principal sum of USD$200,000.00 that is calculated in accordance with the following schedule: Start Date End Date Days Rate Amount Per Day Total 10/02/2020 30/06/2020 142 4.75% $25.9563 $3685.79 01/07/2020 31/12/2020 184 4.25% $23.2240 $4273.22 01/01/2021 30/06/2021 181 4.1% $22.4658 $4066.30 01/07/2021 31/12/2021 184 4.1% $22.4658 $4133.70 01/01/2022 08/03/2022 67 4.1% 22.4658 $1505.21 Total 758 $17664.22

The Court is satisfied that these interest calculations are correct. It may seem anomalous to apply an interest rate derived from the Reserve Bank of Australia for AUD to a sum expressed in USD. But where a plaintiff, such as this one, carries on business in Australia and where at least some o their borrowings and outgoings are in Australia and in AUD the appropriate rate of interest may readily be inferred to be that applicable in Australia: Gujarat NRE Coke Ltd v Wollongong Coal Ltd [2017] NSWSC 384 per McDougall J.

Calculation of Damages and Interest

The calculation of damages is set out in the table below: Principal USD200,000.00 Interest @ 30% per annum under the contract for the period 12 February 2019 to 9 February (362 days) ((200,000 / 365) x 362) x 0.3 = USD59,506.85 Total owing under Loan USD259,506.85 Conversion of monies owed to AUD 259,506.85 x (1 / 0.7419) = $349,786.83 Conversion of interest owed to AUD USD17,664.22 x (1 / 0.7419) = $23,809.44 Total $349,786.83 + $23,809.44 = $373,596.27

The Court is satisfied that these calculations are correct. The plaintiff's claim for costs totalling AUD$6,498.00 is established on the evidence and the Court will include that amount in the judgment sum.

Conclusion and Orders

For these reasons the Court makes the following judgment and orders: 1. Order that the defendant pay to the plaintiff the amount of AUD$380,094.27 comprising: 1. AUD$349,786.83 being the principal amount outstanding plus interest under the loan agreement for the period 12 February 2018 to 9 February 2020; 2. AUD$23,809.44 in interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period 10 February 2020 to 8 March 2022 (calculated on the outstanding principal amount only and not interest). 3. AUD$6,498 for the plaintiff's costs and disbursements. 1. Direct the plaintiff to serve on the defendant, by means of the substituted service orders made on 24 November 2021 (except for Order 2(b) and 2(d) of those orders), a copy of the judgment or order delivered by the Court within 2 working days after the date of this order. 2. Direct the plaintiff to file an affidavit of service in relation to Order 2 above within 7 working days.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 March 2022

Golden Roc Investment Pty Ltd v Cui

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Judgment (10 paragraphs)

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