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[2026] NSWSC 853
Supreme Court of NSW
2026-07-20
Parker J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Thera Agri Capital No 1 Pty Ltd v O’Donohue [2026] NSWSC 853
Hearing dates: 23 February; 17 July 2026
Date of orders: 20 July 2026
Decision date: 20 July 2026
Jurisdiction: Equity
Before: Parker J
Decision: See [30].
Catchwords: CONTRACTS — debt recovery under guarantee —murabaha financing agreement — default under deferred payment sale agreement — whether indebtedness established — calculation of outstanding debt — judgment for plaintiff
Category: Principal judgment
Parties: Principal Proceedings
Thera Agri Capital No 1 Pty Limited (Plaintiff)
Patrick Henry O’Donohue (Defendant)
Notice of Motion filed 3 October 2025
Thera Agri Capital No 1 Pty Limited (Applicant)
Patrick Henry O’Donohue (Respondent)
Representation: Counsel:
F Tao (Plaintiff/Applicant)
Solicitors:
Norton Rose Fulbright Australia (Plaintiff/Applicant)
Self-Represented
Patrick Henry O’Donohue
File Number(s): 2025/188551
Publication restriction: Nil
This is a debt recovery action under a guarantee.
The plaintiff company, Thera Agri Capital No 1 Pty Limited (“Thera 1”) is a company in a corporate group which provides finance to businesses operating in the food and agricultural industries. The original financier was another company in the Thera group of companies, Thera Agri Capital No 3 Pty Limited (“Thera 3”). Thera 1 sues as assignee of Thera 3. For convenience, I will refer to the Thera companies collectively as “Thera” and will not distinguish between Thera 1 and Thera 3 unless it is necessary to do so.
The finance in question was provided for the purpose of purchasing a rural property by the principal debtor, O’Donohue Ag Pty Limited (“ODA”). The defendant, Patrick Henry O’Donohue, is the sole shareholder and director of ODA. He is sued as guarantor of ODA’s liabilities. I was told from the Bar Table that ODA itself is in receivership.
The proceedings were commenced in May last year. A defence was filed on behalf of Mr O’Donohue by his solicitor in July.
Despite an extension of time, Mr O’Donohue’s solicitor did not file any affidavits in support of his defence. On 11 February this year the proceedings were fixed for final hearing. The allocated hearing date was 23 February.
When the action came on for hearing on that day Mr O’Donohue appeared in person. He told me that he had dispensed with the services of his solicitor and asked for an adjournment to enable him to consider his position.
I declined the adjournment, for two main reasons. First, there was no evidence to explain why the application was being made at the last minute. Second, bearing in mind that a defence had already been filed and a full opportunity had been given to present evidence in support of that defence, I was not satisfied that an adjournment would actually result in any viable further defence coming forward.
I therefore proceeded with the hearing of the action. But in the course of final submissions an issue arose about the quantum of repayments made on behalf of ODA. Eventually, at the request of both parties, I adjourned the hearing to allow them to engage in an accounting-style process for the purpose of resolving the quantum issue.
The finance which has given rise to the present proceedings was provided by Thera to ODA pursuant to a written agreement styled “Master Murabaha Agreement” made in April 2022. Murabaha is an Islamic form of finance which in its economic effect is equivalent to a loan, but which is designed to avoid the prohibition in sharia law on the charging of interest. The transaction takes the form of a sale of goods on deferred payment terms, being economically equivalent to an interest-bearing loan.
Specifically, the Master Agreement in the present case established a facility whereby ODA could draw upon finance from Thera in accordance with the following steps:
Thera would, at the request of ODA, purchase specified commodities for a specified amount.
Thera would sell the commodities to ODA with immediate effect, but with payment deferred until a nominated maturity date (defined as the “Deferred Payment Date”).
Thera would immediately arrange for the commodities to be sold, and the proceeds remitted to ODA.
On the Deferred Payment Date, ODA would pay Thera a sum representing the costs incurred by Thera in purchasing the commodities (defined in the Agreement as “Cost Price”) together with a margin (defined in the Agreement as the “Profit Amount”). The Profit Amount was to be calculated by reference to the Cost Price at 10% per annum.
In practice, the purchase of the commodities by Thera, the sale of them to ODA, and the disposal of them by an agent on behalf of ODA were intended to, and did, take place simultaneously. From the point of view of ODA as borrower, the effect was indistinguishable from issuing a drawdown notice under a conventional loan agreement and then being obliged to repay the drawdown amount plus 10% interest.
Following entry into the Master Agreement in April 2022, a number of drawdowns took place, as a result of which the amount “borrowed” ($8.7 million) was rolled over and increased. For immediate purposes it is only necessary to refer to the final roll-over, which took place in November 2023.
The transaction was documented in the form of a letter of offer and acceptance executed on behalf of Thera 3 as offeror and (by Mr O’Donohue) on behalf of ODA as acceptor. The letter was dated 29 November 2023. It specified the relevant commodities as a shipment of 4,200 tonnes of crude oil. The maturity date was 22 April 2024, with a total deferred sale price of $11,218,130 payable on that date. This sum was made up of a Cost Price of $10,783,783, together with a Profit Amount of $434,347.
Mr O’Donohue’s defence put Thera to proof of the underlying transaction, but in evidence before me was a contract note recording the purchase of the relevant quantity of crude oil by a broker on behalf of Thera 3 for the sum of $10,783,783. Although not a necessary element of Thera’s cause of action, there was also evidence of the sale of the crude oil shipment by a broker retained by Thera to act on behalf of ODA. Mr O’Donohue did not dispute that the monies had been received by ODA.
In accordance with the terms of the Agreement, the determination of the Profit Amount was merely a matter of calculation. No evidence was presented to verify the calculation of the $434,347 figure (although it appears approximately correct). Counsel for Thera, however, argued that there was no need for such evidence.
Counsel pointed out that the figure was specified in the offer letter which had been accepted on behalf of ODA. Thus, in counsel’s submission, the parties had agreed, by a separate contract, on the quantum of the Profit Allowance. Whether it had been calculated in accordance with the terms laid down in the Master Agreement did not matter (although there was no reason to think that it had not). Mr O’Donohue had no answer to this submission and I accept it.
Mr O’Donohue said that he had only intended to borrow money to buy a property and knew nothing of having purchased a shipment of crude oil. Even if that is so (and the crude oil purchase is expressly referred to in the letter of offer) it is not relevant for present purposes. Although in economic form the transaction may appear to be a loan, and may have been understood by Mr O’Donohue as such, in legal form it is an agreement by Thera for the sale of goods to ODA with a deferred payment of a specified sum by way of consideration for the sale. That is a perfectly orthodox contract. There is no reason why the Court should refuse to give effect to it in accordance with its terms.
It follows that Thera has done all that is necessary to establish that ODA was obliged to pay the specified sum upon the specified maturity date. Mr O’Donohue admitted that payment had not been made on that date. Default on the part of ODA is therefore established.
Mr O’Donohue also admits that he signed the guarantee in favour of Thera. The guarantee is in evidence. It is in conventional form. It provides, among other things, for an indemnity against any “loss” suffered by Thera, which would include any shortfall in payment by ODA.
A formal demand was issued, but counsel for the plaintiff was unable to justify the amount specified in the demand (it was approximately $800,000 more than the amount specified in the letter of offer and was issued only two days after default). Counsel, however, submitted that liability arose under the guarantee without the need for a formal demand. Again, there was no response to this argument from Mr O’Donohue and I accept it.
The deed of assignment was also in evidence. It is in conventional form and provided for the assignment of the whole of Thera 3’s interest in the loan to Thera 1. It is dated September 2025. A formal notice of assignment is also in evidence. Again, in the absence of any submission to the contrary from Mr O’Donohue, I find that his liability to Thera 3 has passed to Thera 1 under the assignment (as has ODA’s).
The Master Agreement provided that, upon default, Thera was entitled to receive a Late Payment Amount (economically equivalent to penalty interest) calculated at 12% of the unpaid balance until final payment was made. It is common ground that some repayments were made, in particular a sum of more than $6.8 million that was paid from the sale of the property. Accordingly, the only remaining issue is the calculation of the quantum of the Late Payment Amount.
As already noted, it was not possible at the hearing on 23 February to determine the quantum of the debt due. Counsel for Thera did not have a full set of updated calculations. Mr O’Donohue also raised questions as to whether all of the payments made by him had been taken into account.
By agreement between the parties, the proceedings were adjourned to allow a full set of calculations to be presented on behalf of Thera. This was done in the form of a further affidavit from Mr Razvan Mondoca. Mr Mondoca is a director of Thera 1 and holds the position of Chief Capital & Investment Officer of Thera 3. He had already made several affidavits in support of Thera’s case in these proceedings.
Mr Mondoca provided a further affidavit which was made on 30 March. Attached to the affidavit was a series of spreadsheets which contained details of the interest calculations and expenses (including legal expenses) forming part of the Late Payment Amount; and the application of funds received from the sale of the subject farming property, another security property, and other payments made by Mr O’Donohue.
Directions agreed by the parties provided for Mr O’Donohue to respond to Mr Mondoca’s affidavit with any contrary evidence of his own. He did not do so.
The resumed hearing was fixed for 17 July. This date had been fixed to suit Mr O’Donohue’s convenience. He did not however attend. In an email to Thera’s solicitors he explained that he is currently interstate and had mistakenly thought that the hearing was scheduled for next week. He asked for this information to be put before the Court, but did not seek any adjournment.
In the absence of any further evidence from Mr O’Donohue, or any argument concerning the calculation of the amount claimed by Thera, there would have been no point in granting an adjournment even if Mr O’Donohue had asked for one. I proceeded with the hearing. Counsel for Thera took me through Mr Mondoca’s calculations, which appear to be sound and to have been carried out in accordance with the Master Murabaha Agreement, and the rollover documentation.
A further supplementary affidavit from Thera was delivered today, updating the calculation of the amount due to today’s date. This affidavit was made by Mr Mark Allen, who is a director of both Thera 1 and Thera 3, and is the Chief Executive Officer of Thera 3. The amount so calculated is $6,536,066. There will be judgment accordingly.
The orders of the Court are:
Direct entry of judgment in favour of the plaintiff against the defendant in the sum of $6,536,066.
Order that the defendant pay the plaintiff’s costs of the proceedings.
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Thera Agri Capital No 1 Pty Ltd
O’Donohue