NJ Capital Pty Ltd v AMKI Property Holdings Pty Ltd

Judgment

1. This is an action to recover principal and interest owing under of a loan agreement. By a written agreement entered into on 4 February 2020 the plaintiff agreed to lend to the first defendant $250,000 for a term of three months to be repaid on 3 May 2020. The agreement provided that interest would be prepaid on the date of the advance for the full term at the rate of 3% per month. When the loan funds were advanced, the plaintiff held back $22,500 on account of interest being 9% of the principal or 3% for each of the three months of the term. Establishment, expedition and legal fees were also held back from the advance.
2. Clause 9(b) of the schedule to the agreement had the effect that, in the event of default of repayment, interest would be payable on the outstanding balance monthly in advance from 4 May 2020 until repayment at 4% per month.
3. The second, third and fourth defendants executed the loan agreement as guarantors, promising by clause 8.1.2 "to pay on demand any amount which the Lender is entitled to recover from the Borrower under this Loan Agreement". The Loan Agreement was subsequently varied in respects that will be described shortly.
4. The plaintiff filed a statement of claim in September 2020 when the outstanding principal and accrued interest stood at $378,560. An amended statement of claim was filed on 12 April 2021. The first, second and fourth defendants filed appearances and a defence but on 25 October 2021, after the proceedings had been listed for final hearing today, their solicitor gave notice of having ceased to act. The third defendant has not filed an appearance or taken any part in the proceedings. All defendants were notified of the listing of the case for final disposition today. The defendants were called outside the courtroom at the commencement of the hearing but did not appear. The hearing of the action has proceeded in their absence.
5. In early May 2020, the first defendant sought from the plaintiff an extension of the term of the loan by three months to 3 August 2020. The plaintiff agreed to this, and also to a reduced interest rate for the further term, namely, 2.5% per month to be prepaid for the extra three months on 4 May 2020. It was further agreed that establishment and legal fees totalling $6,500 would be paid.