Sutherland v Ghougassian & Ors

Secured debt owed to Mr Michael Ghougassian 29The opening entries in the case of Mr Michael Ghougassian are monthly debits for interest on an unspecified amount of principal. The spreadsheet Mr Michael Ghougassian produced was in part the business record prepared at the School. Part of the document (being the last two columns) was added later. I infer it was added for the purposes of this case. The last column added by Mr Michael Ghougassian commenced with an opening balance of $174,336.14 and then provided calculations of compound interest. This was not part of the business record and is not evidence of the debt due to Mr Michael Ghougassian. 30Mr Michael Ghougassian said that the opening balance of $174,336.14 was interest incurred on a capital loan of $500,000 that had accrued up to 1 January 2004. Mr Michael Ghougassian's statement of account showing the amount claimed to be owed under the mortgage did not include this advance of capital. Mr Michael Ghougassian said that he and his wife borrowed $500,000 from the Iden Group on 2 July 2003 at 12 per cent interest (affidavit 14 June 2011 at para 10(iii)(5)). The statement for the account (issued by Home Loan Services Pty Ltd) shows that two cheques, one for $403,737.01 was draw in favour of Permanent Custodians Limited. Another cheque for $91,636.70 was drawn in favour of Nareg Internet Pty Limited. The latter company is Mr Ghougassian's own company. Mr Ghougassian said that the payment to Permanent Custodians was made for the purposes of the School (T38). There was no material to show how the moneys drawn down on the loan account with Home Loan Services Pty Ltd to Permanent Custodians Limited and Nareg Internet Pty Ltd were applied for the benefit of the School. Nor was there any explanation as to how the opening interest of $174,336.14 was calculated on any payments made for the benefit of the School. 31Mr Ghougassian said that interest was calculated at the rate of 12 per cent per annum or .0329 per cent per day. On that basis it can be inferred from the credits to his loan account entered during 2004 and 2005 for interest, that the amount of the advances made by him to the School to that point was $303,750. There is nothing to show when such advances were made. The School's bank account statements do not show the receipt of deposits consistently with Mr Michael Ghougassian making loans of the order described in his evidence by deposit to the bank account. That does not necessarily mean that payments were not made for the benefit of the School. Mr Michael Ghougassian said that the spreadsheet commencing from the beginning of 2004 to the end of June 2010 was the only record available to him. He said the School used to use a software program called "Attache". He did not have a printout of relevant information before 2004. 32The minutes of the meeting of 22 June 2003 record the intention of Mr Michael Ghougassian and the School that he would provide the School with funds of $500,000. It is clear from the minutes that the School was in need of funds and it is probable that substantial funds were provided by Mr Ghougassian. However, it is uncertain how much was provided. Pursuant to the agreement with the members of the board noted in the minutes of the meeting of 22 June 2003, interest would be payable by the School. I think the best evidence is the recording of interest accruing on an unstated amount of the loan advance as shown in the Excel spreadsheet. The entries made in 2004 were contemporaneous and indicate an outstanding advance of $303,750. 33Although this debt and the interest accruing on it was not secured, in order to determine the secured debt, payments credited to Michael Ghougassian's loan account after 6 May 2005 should be applied against the earlier advances, unless they were appropriated to advances made after 6 May 2005. 34The interest secured by the mortgage is only the interest on borrowings made after 6 May 2005. Interest on the prior debt is not secured. In his statement of account Mr Michael Ghougassian claimed as moneys secured by the mortgage amounts of interest recorded on the Excel spreadsheet (both before and after 6 May 2005). The amounts of interest recorded in respect of each month from May 2005 do not reflect the interest on advances made after that date. That interest will have to be recalculated. 35The question is, what advances were made after 6 May 2005? 36The first amount in issue is for a sum of $250,000 appearing on the Excel spreadsheet said to have been made on 7 July 2005. The School's bank account records the receipt. Mr Michael Ghougassian has not provided any documents to show from where the payment came (apart from the Excel spreadsheet itself). In a table he prepared Michael Ghougassian described the deposit as being " capital deposit from asset sale ". He deposed that this was part of the proceeds of sale of a unit he owned. I accept that evidence. There is no evidence that the funds were provided by anyone else. The contemporaneous recording of the deposit as a loan made by Mr Michael Ghougassian should be accepted. 37The same reasoning applies to the credits and debit to the loan account as shown on the Excel spreadsheet on 19 December 2005 (deposit $19,205), and 6 and 27 January 2006 (deposit and repayment of $40,000). It is clear that the payment of $40,000 on 27 January 2006 was a repayment of the particular advance of $40,000 made earlier in the month. One was a cash deposit from Mr Ghougassian's credit card and the repayment was a repayment made to the credit card. That repayment of $40,000 is not to be appropriated against pre-6 May 2005 debt. 38The spreadsheet shows a repayment to Michael Ghougassian of $20,093.78 on 22 February 2006. Although this is not an amount " accepted " by the liquidator in the sense that there is no record of Michael Ghougassian's receipt of the moneys in the documents provided by him. The money was nonetheless paid out of the School's bank account. It was debited to Michael Ghougassian's loan account in a contemporaneous business record. It is in the same category as the earlier entries and should be accepted. However, this repayment of $20,093.78 should be applied to the pre-6 May 2005 indebtedness. The payment does not reduce the amount of the secured debt. 39There was a further deposit to the School's bank account on 23 May 2006 of which $15,000 was credited to Mr Ghougassian's loan account. Mr Ghougassian's table 1 to his affidavit of 14 June 2011 records that this was a deposit " from Jayasooriah for 1 month ". He records that it was repaid on 27 June 2006. Although the deposit and repayment were accounted for through Mr Michael Ghougassian's loan account, I am not satisfied that the payments were loans made to the School by Mr Michael Ghougassian. I exclude both the deposit and the repayment from the calculation of the moneys secured. 40The next entries in issue are two deposits of $14,950 and $500 made to the School's bank account on 9 and 27 June 2006. Whilst the bank statements record the receipt of these moneys, they do not show the identity of the payer. Again, the contemporaneous spreadsheet is a business record from which it can be concluded that the moneys were paid by Mr Michael Ghougassian. They are advances secured by the mortgage. 41The next entry in dispute is a deposit of $5,000 on 21 July 2006, being part of a deposit of $6,500 made on that day. The spreadsheet described the amount as " Vahik loan ". Mr Michael Ghougassian argued that these were moneys that were lent to him to be advanced by him to the School under security of the mortgage and that on repayment of the loan by the School, he would be required to account for the moneys to Mrs Vahik. I am not satisfied that that was the arrangement. As appears below, Mr Michael Ghougassian organised the provision of funds to the School by a number of third parties. For the most part this was by way of loan. Mr Michael Ghougassian claimed that the funds provided were secured by the mortgage. However, in many cases the evidence given by the third parties was that they had intended to make loans to the School, not to Michael Ghougassian. It seems that the accounting in respect of these loans was inadequate. Rather than separate loan accounts being kept, the transactions were processed through Mr Michael Ghougassian's loan account. However, in these respects the spreadsheets were not accurate. I am not satisfied that the $15,000 advance made on 21 July 2006 and described as " Vahik loan " is secured by the mortgage. 42The next disputed entries consist of five deposits made between 3 August 2006 and 18 August 2006 totalling $55,000. The spreadsheet records the last of the deposits (of $30,000) as being from Nick Conomos. In table 1 to his affidavit of 14 June 2011, Mr Ghougassian records that all five deposits were from Mr Conomos. He says that the payments were made under the security of his mortgage. 43Mr Conomos made later payments for the benefit of the School. The total of the sums paid by him was $843,000. The bank statements recording the deposits show the deposits as having been made by Mr Conomos. That was consistent with his evidence that he physically attended the bank to make the deposit directly to the School's account. 44Mr Michael Ghougassian did not give evidence of conversations with Mr Conomos from which it could be concluded that an agreement had been made between them that Mr Conomos would lend money to Mr Ghougassian for him to onlend to the School. In his oral evidence, Mr Conomos was firm in his view that that was the arrangement. But the primary facts to show that the borrower from Mr Conomos was Mr Ghougassian and not the School are lacking. I do not think that Mr Conomos addressed his mind to the question. He said that: " When I had conversations with Michael, it was around the whole issue that ... they had an arrangement with the bank where the bank was going to come through with funding for a school project and when that funding came through I would be repaid. That was my understanding of how it would be repaid. ... ". 45Many of the deposits made by Mr Conomos to the School's bank account record the payment as being a donation. Mr Ghougassian said that that was a note written by the bank, not by the School. But it is likely that it was Mr Conomos, not a bank teller, who wrote that word on the transfer. The evidence of both Mr Ghougassian and Mr Conomos was to the effect that payments made by Mr Conomos were made by way of loan, but that at the end of a financial year, Mr Conomos might make a donation by forgiving part of the loan. Mr Conomos said that that happened once, he thought in 2005 (but it would appear to be at a later time). Mr Conomos' evidence that he made a donation to the School by forgiving part of the loan is only consistent with his having made loans to the School. In endeavouring to explain that matter Mr Conomos said that he " wasn't really contemplating the nature of the transactions ". I agree with the submission of counsel for the liquidator that this tends against a firm agreement having been reached between Mr Conomos and Mr Ghougassian whereby it was agreed that Mr Ghougassian, and not the School, was the party liable to repay the moneys. Such objective evidence as there is (namely the facts that for the most part moneys were deposited directly to the School's bank account, that Mr Conomos described many of the deposits as a donation, and that he made a donation to the School by forgiving part of the debt, indicate that his loan was to the School, and not to Mr Michael Ghougassian. I do not accept that the deposits made by Mr Conomos form part of a debt secured to Mr Ghougassian. 46The next item in question is a repayment shown on the spreadsheet of $14,950 made on 17 October 2006. The liquidator observes that there is no record in the documentation provided by Mr Michael Ghougassian of the repayment. Nonetheless, he accepts that the repayment was made. It is recorded in the spreadsheet. It is described as being a " return to credit card ". I accept that the repayment was made. It was a repayment of the cash deposit made from the credit card of $14,950 on 9 June 2006. It was appropriated to the earlier advance and thus reduces the amount of the secured debt. 47The next item is an amount of $5,000 shown to have been credited by way of repayment to the account on 10 November 2006. This was described as the return of the $5,000 loan made on 21 July 2006 by Vahik Yoonan. For the reasons previously given it does not affect the determination of the secured indebtedness. 48The next items are four deposits made to the School's bank account between 8 December and 29 December 2006 in the sums of $5,000, $50,000, $10,000 and $50,000. The liquidator accepts that Mr Michael Ghougassian made the last deposit of $50,000. He disputes the earlier deposits on the basis that although the moneys were paid into the School's bank account, there was no record of the payment having been made by Mr Michael Ghougassian from the documents he provided. These are further instances in which the contemporaneous spreadsheets crediting the deposits to Michael Ghougassian's loan account are evidence that the moneys were advanced by way of loan by him. I accept that he made those advances. They are secured by the mortgage. 49On 19 February 2007 the sum of $50,000 which had been advanced by Mr Ghougassian by drawing on his Mastercard account was repaid. The repayment was appropriated to the $50,000 deposit. 50A further deposit to the School's bank account was made on 22 March 2007 in the sum of $1,000. It was credited to Mr Michael Ghougassian's loan account. His comment on that deposit in table 1 states that it was " from Nareg " and included in a total deposit of $2,120. The contemporaneously prepared spreadsheet also recorded the deposit as being " from Nareg ". 51Nareg Internet Pty Ltd is a company owned and controlled by Michael Ghougassian. I accept that he made a further loan to the School by directing payment to the School by that company. Again, the liquidator's comment is that there is no record of the payment in documentation provided by Mr Michael Ghougassian. However, there is the contemporaneous spreadsheet and the $1,000 was included in the deposit which is recorded in the School bank statement. I accept this item. 52The next item is a deposit of $50,000 on 30 March 2007. The liquidator accepts that this was a loan advance made to the School by Michael Ghougassian. 53The next items are recorded as either loans or donations made by Mr Nick Conomos on 9 May, 24 May, 6 June, 13 June, 25 June, 18 July, 19 July and 3 September 2007. For the reasons above, I do not accept that such advances by Mr Conomos, whether considered as loans or donations, were secured by the mortgage to Mr Michael Ghougassian. I would be prepared to accept that they were advances by way of loan, but the loans were made by Mr Conomos to the School, not to Mr Michael Ghougassian to be onlent by him to the School. 54The next item is an advance of $50,000 deposited to the School's account and drawn on Michael Ghougassian's Mastercard account. The deposit was made on 5 September 2007. The liquidator accepts this as a secured advance. I agree. 55The next disputed item is a deposit of $20,000 made to the School on 14 September 2007. The deposit was made by Mr Badelian. He swore an affidavit in which he deposed that he lent $35,000 in three tranches of $20,000 on 14 September 2007, $10,000 on 28 July 2008, and $5,000 from 2002 to Mr Michael Ghougassian for the purpose of onlending to the School. I rejected the affidavit in that form, but gave leave to Mr Michael and Dr Daniel Ghougassian to adduce oral evidence in relation to the terms of the loan and the identity of the borrower. Mr Badelian's evidence (elicited in examination-in-chief) was that he made advances to the School by direct transfer to the School account. He gave no evidence of making a loan to Mr Michael Ghougassian. Nor did Mr Michael Ghougassian give evidence that he personally borrowed money from Mr Badelian to be onlent to the School. I reject this claim. 56The next item in dispute is a further deposit made by Mr Conomos on 17 September 2007. For the same reasons as above, I do not accept that that deposit was secured by the mortgage. 57The next item in question was a payment of $30,000 described as a deposit by Jayasooriah on 12 November 2007. It was repaid on 22 November 2007. I do not accept that this was part of a loan made by Mr Michael Ghougassian to the School. 58The next item was a further deposit made by Mr Conomos, which is also not shown to have been secured by the mortgage. 59The next item in question was a deposit to the School's bank account of $30,000 from " ICP Electric " made on 23 November 2007. This was repaid on 18 December 2007. Again, the only evidence that this was secured by the mortgage was the spreadsheet by which this deposit was treated as part of Mr Michael Ghougassian's loan account. However, there was no evidence that a loan was made to Mr Michael Ghougassian by ICP Electric, for him to onlend to the School. I infer that the loan was made directly to the School. 60There were further deposits to the School's bank account made by Mr Conomos on 26 November, 7 December and 12 December 2007, and on 3 January and 18 January 2008. For the same reasons, I do not consider that those advances were secured by the mortgage to Mr Michael Ghougassian. 61On 21 January 2008 the School repaid $50,000 to Mr Michael Ghougassian described as " return to Visa " or " Visa repay ". Mr Michael Ghougassian had made four payments, each of $50,000, from his Mastercard account to the School on 19 December 2006, 29 December 2006, 30 March 2007 and 5 September 2007. The first of those deposits had been repaid on 19 February 2007. The question is whether the repayment of $50,000 on 21 January 2008 was appropriated either by the School or by Mr Michael Ghougassian to one of the further advances, or whether it is to be debited against advances made before 6 May 2005. There was no evidence in respect of this payment except the bare fact that it was repaid to Mr Michael Ghougassian's Visa card account. This was not evidence of appropriation of the payment to an earlier particular advance made after 6 May 2005. I am satisfied that there was a prior debt owed by the School to Mr Michael Ghougassian before 6 May 2005, that was still outstanding as at 21 January 2008 in excess of $50,000. Accordingly I conclude that the repayment is not to be deducted from the calculation of the secured debt. 62The next relevant item is an advance by Mr Michael Ghougassian from his Mastercard account of $50,000 to the School on 20 February 2008. The liquidator accepts that this advance is secured. 63The next item is an advance by Mr Conomos on 28 February 2008. For the same reasons, it is not secured by the mortgage to Mr Michael and Dr Daniel Ghougassian. 64The next advance is of $10,000 by a Mr Andrew Tuft on 17 April 2008. There was no evidence that Mr Tuft made his advance to Mr Michael Ghougassian in order for him to lend it to the School. I reject the claim that this was a sum secured by the mortgage. 65The next deposit was a further deposit by Mr Conomos. For the same reasons I conclude that that was not secured. 66The next two deposits were in the sums of $15,000 and $11,000 made on 16 and 20 June 2008. The School's bank records record the receipt of the moneys. The deposit of $11,000 was made by Mr Conomos (according to the spreadsheet). The deposit of $15,000 is recorded as a deposit by Mr Michael Ghougassian. Whilst the only evidence of Mr Michael Ghougassian having made the deposit was the spreadsheet, for the reasons previously given, I think that is a sufficient basis for accepting that the amount is secured. 67The next item is a debit to the loan account of $100,000 described as " building ". This is recorded on 30 June 2008. This was a return to Mr Conomos or a forgiveness of debt by him. It does not affect the amount secured owed to Mr Michael Ghougassian. 68The spreadsheet records a deposit of $60,000 on 28 July 2008 by " Jaya ", a reference to a Dr Jayasooria. There is no evidence that this was an advance made to Mr Michael Ghougassian for him to onlend to the School. The advance was later repaid from moneys advanced by a Mr and Mrs Prazak. Their oral evidence was that the moneys they advanced was a loan to the School. The deposit of $60,000 on 28 July 2008 does not form part of the debt secured by the mortgage. 69A further deposit of $15,000 was made on 28 July 2008 by Mr Conomos. For the same reasons as previously given, that advance is not secured by the mortgage. 70A further advance of $10,000 was made on 28 July 2008. The spreadsheet describes this as having been made by " Peter Baku " (apparently a Mr Peter Bakunowicz). There was no evidence that this was a sum advanced by Mr Bakunowicz to Mr Ghougassian for him to onlend to the School. I do not accept that it forms part of the secured debt. 71A further deposit of $10,000 was made by Mr Badelian on 28 July 2008. It was also not secured by the mortgage. 72The next item in dispute is a sum of $50,000 said to have been paid on 1 December 2009 " for George El-Haddad Redundancy through NSW Supreme Court and legal ". 73As the description suggests, the sum in question was not deposited to the School's bank account. Mr Michael Ghougassian deposed that the entry in the spreadsheet was a journal entry recognising a payment he made directly from his own funds to Mr El-Haddad in settlement against a sum required to be paid to Mr El-Haddad as a result of a judgment given by Bergin J (as her Honour then was) in 2009. I accept that evidence. This sum can be treated as a further borrowing by the School secured by the mortgage. 74The next entry in dispute is a credit to the loan account of $10,000 on 19 January 2010 for " legal fees ". The money was not deposited to the School's bank account. There was no other evidence in relation to this payment other than the spreadsheet. In his affidavit of 14 June 2011 Michael Ghougassian noted (at para 10(F)(4)) that Mr Samarasinghe of the liquidator's office had referred to this alleged expense. Mr Ghougassian gave no evidence about it. 75Notwithstanding this, I think that the record of the payment in the spreadsheet should be accepted as sufficient evidence that Michael Ghougassian paid this sum for legal expenses on behalf of the School. This advance is also secured by the mortgage. 76There are no further relevant entries (except for the accrual of interest) in the spreadsheet prior to the making of the winding-up order on 21 June 2010. Mr Michael Ghougassian claimed further payments made allegedly on behalf of the School after the appointment of the liquidator. No such payment is secured by the mortgage. No such payment was made " to, or at the direction of, the Borrower ". (See the definition of " Loan " at clause 1 of the Deed of Loan.) 77For these reasons I conclude that the following advances made by Michael Ghougassian after 6 May 2005, less the following repayments, are secured by the mortgage. Interest on the balance as shown below is payable on the outstanding balances at the rate provided for at the " Interest Rate " provided for in clause 3.1 of the Deed of Loan. No argument was advanced that any interest was payable at the " Default Interest Rate ". There was no evidence that the Lender had demanded repayment of the loan in accordance with clauses 4.2 and 4.3. Simple interest is payable on the outstanding balances. Under the Deed of Loan only Default Interest is to be compounded. 78The amounts advanced by Michael Ghougassian that are secured by the mortgage and the principal on which interest is payable are as follows: Date Advance Repayment Balance 7 July 2005 $250,000 $250,000 19 December 2005 $19,205 $269,205 6 January 2006 $40,000 $309,205 27 January 2006 ($40,000) $269,205 9 June 2006 $14,950 $284,155 27 June 2006 $500 $284,655 17 October 2006 ($14,950) $269,705 8 December 2006 $5,000 $274,705 19 December 2006 $50,000 $324,705 21 December 2006 $10,000 $334,705 29 December 2006 $50,000 $384,705 19 February 2007 ($50,000) $334,705 22 March 2007 $1,000 $335,705 30 March 2007 $50,000 $385,705 5 September 2007 $50,000 $435,705 20 February 2008 $50,000 $485,705 16 June 2008 $15,000 $500,705 1 December 2009 $50,000 $550,705 19 January 2010 $10,000 $560,705

Advances by Dr Daniel Ghougassian Secured by the Mortgage 79Only advances made by Dr Daniel Ghougassian after 6 May 2005 are secured by the mortgage. The liquidator accepts that as at that date Dr Ghougassian had made advances to the School of $97,946.50. A spreadsheet for Dr Ghougassian's loan account records the outstanding balance then owed by the School to him as being $167,522.94. This includes the accrual of interest. It is not necessary to determine what was the balance owed to Dr Ghougassian as at 6 May 2005. Whatever the balance was, it was more than the amount of repayments made to Dr Ghougassian after 6 May 2005. Hence the same question will arise as to whether such repayments were appropriated either by the School or by Dr Ghougassian to advances made after 6 May 2005. If not, such repayments are to be applied against the earlier debts. 80There is no dispute that Dr Ghougassian made advances of $9,990 on 30 May 2005 and $20,000 on 21 December 2005. 81The first advance after 3 May 2005 in dispute is $55,499.29 claimed to have been deposited to the School by Dr Ghougassian on 28 February 2006. The School's bank records for that day show a deposit of $74,588.64. This deposit is said to have included the advance from Dr Ghougassian of $55,499.29. No bank statements from Dr Ghougassian were produced to show the withdrawal. However, the contemporaneous spreadsheet kept by the School recorded the deposit of $55,499.29 as having come from Dr Ghougassian. As with other similar entries, I consider that the contemporaneous spreadsheet kept by the School should be accepted as sufficient evidence that Dr Ghougassian made that deposit. 82The next item in dispute was recorded in the spreadsheet as a deposit of $50,000 made on 17 March 2006 described as " Michael on behalf of Daniel ". In a table annexed to his affidavit of 8 June 2011, Dr Ghougassian described this payment as being " money drawn from Nareg Internet as repayment to DFG cheque 2189 ". 83The School's bank account shows a deposit on 17 March 2006 of $57,725, which I accept included a deposit of $50,000 from Nareg Internet. Dr Ghougassian said that Nareg Internet was holding moneys on his behalf at the time. I take it that he directed payment to the School and that Nareg Internet reduced its liability to Dr Ghougassian by making that payment on his direction. I accept that this is also an advance secured by the mortgage. 84The next item in dispute is a deposit of $2,250 made to the School's bank account on 28 April 2006. There is no record on Dr Ghougassian's bank statements showing a withdrawal of that sum. It was claimed to be a cash deposit. I accept that claim. Again, in my view the spreadsheet is sufficient evidence that the moneys were an advance from Dr Ghougassian. 85The spreadsheet records a repayment to Dr Ghougassian of $11,572.84 on 9 June 2006. It is common ground that the repayment was made. There is no evidence that the repayment was appropriated either by the School or by Dr Ghougassian to advances made after 6 May 2005. The repayment is to be taken to have been made against prior advances and therefore does not reduce the secured debt. (The spreadsheet describes it as having been " part of super October 2004 less $14,000 " suggesting that it was in part repayment of an advance made by Dr Ghougassian in October 2004. This confirms that the repayment does not reduce the secured debt.) 86The next disputed item is recorded as a deposit of 20 October 2006 of $100,000 described in the spreadsheet as being " from DFG ". There was a deposit of $100,000 made to the School's bank account on that day. The cheque was drawn from an account of Mr Michael Ghougassian. The deposit stub recorded the payment to the School as being " loan from DFG to school mortgage ". Whatever the accounting between Mr Michael and Dr Daniel Ghougassian might be in respect of the payment, it is clear that both Mr Michael and Dr Daniel Ghougassian treated the payment as being a loan to the School not by Mr Michael, but by Dr Daniel Ghougassian. It is secured by the mortgage. 87The spreadsheet records a credit against the loan account of Dr Ghougassian of $30 on 6 September 2007 with no explanation as to the nature of the credit. The liquidator's evidence is that the entry cannot be reconciled to the bank statements of either the School or Dr Ghougassian. It can be ignored. 88An advance of $8,000 was made by Dr Ghougassian on 11 April 2008. This is accepted by the liquidator. 89The spreadsheet records a further advance by Dr Ghougassian on 24 April 2008 in the sum of $17,000. The School's bank statement records a deposit on that day as having come from Dr Ghougassian. I accept that that is also an advance secured by the mortgage. 90The spreadsheet records a repayment of the loan account on 13 June 2008 in the sum of $40,726.88. There is no evidence of an appropriation of that repayment to any particular advance made after 6 May 2005. The repayment should be credited to prior advances and does not reduce the amount of the secured debt. 91The spreadsheet records a credit to the loan account of $10,000 as moneys paid for legal fees. In the table to his affidavit of 8 June 2011 Dr Ghougassian said that this was a payment for legal fees made directly from his practice, Norwest Neurology. Dr Ghougassian deposed that he made payments directly from his practice account to Fraser Clancy Lawyers for work done by that firm in connection with proceedings against the Commonwealth Bank of Australia on 15 February 2010 ($10,000), 26 February 2010 (two payments of $5,000), 5 March 2010 ($7,500), 25 March 2010 ($2,000), 6 April 2010 ($2,000), 2 April 2010 ($395), and 20 May 2010 ($1,000). 92I do not accept that the sum of $395 was paid in this way. That amount was described in Dr Ghougassian's bank statement as being an annual package fee. However, I otherwise accept that evidence. 93The spreadsheet also records a payment of $1,000 made by Dr Ghougassian on 25 February 2010 described as " cash $1,000 was short ". This was not recorded on the School's bank statements. I accept the evidence from the spreadsheet that the payment was provided by Dr Ghougassian. 94Dr Ghougassian also claimed credit for payments made after the winding-up order of 21 June 2010. However, those payments were not made to or at the direction of the School. They are not secured by the mortgage. 95Accordingly, I conclude that the mortgage secures a debt of $296,239.29 owed by the School to Dr Daniel Ghougassian as set out in the table below. Date Advance Repayment Balance 30 May 2005 $9,990.00 $9,990.00 21 December 2005 $20,000.00 $29,990.00 28 February 2006 $55,499.29 $85,489.29 17 March 2006 $50,000.00 $135,489.29 28 April 2006 $2,250.00 $137,739,29 20 October 2006 $100,000.00 $237,739.29 11 April 2008 $8,000.00 $245,739.29 24 April 2008 $17,000.00 $262,739.29 15 February 2010 $10,000.00 $272,739.29 25 February 2010 $1,000.00 $273,739.29 26 February 2010 $5,000.00 $278,739.29 26 February 2010 $5,000.00 $283,739.29 5 March 2010 $7,500.00 $291,239.29 25 March 2010 $2,000.00 $293,239.29 6 April 2010 $2,000.00 $295,239.29 20 May 2010 $1,000.00 $296,239.29

96The mortgage also secures simple interest at the " Interest Rate " as defined in the Deed of Loan. 97I will stand over the proceeding for the liquidator to bring in a calculation of the amount of interest that is payable on the amount of the secured debt as I have found it to be as set out in these reasons. 98If, as appears to be the case, the funds available to the liquidator are well in excess of all of the debts owed by the School, the question of how much of the debts payable to Mr Michael and to Dr Daniel Ghougassian are secured by the mortgage should be academic. My determination of how much of the debt is secured by the mortgage has been made on limited evidence. It does not create any issue estoppel on the question of what is the total amount that may be owed to them by the School. No doubt they and other parties who have advanced moneys to the School by way of loan will lodge proofs of debt. Proofs of debt to be lodged by Mr Michael and Dr Daniel Ghougassian will have to give credit for the recovery made by them pursuant to the mortgage. 99I will stand over the proceedings to a convenient date for the purpose of making final orders as to the disposition of the balance of the moneys held in court. At that time I will hear argument on questions of costs. 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: 01 March 2012