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[2026] NSWSC 1033
Supreme Court of NSW
2026-08-28
Schmidt AJ
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: THN Capital Funding Pty Ltd v Leffler [2026] NSWSC 1033
Hearing dates: 20 – 22 July 2026
Date of orders: 28 August 2026
Decision date: 28 August 2026
Jurisdiction: Common Law
Before: Schmidt AJ
Decision: The parties should confer and file proposed final orders, including as to costs, within 14 days. In the event of any dispute, together with short written submissions.
Catchwords: GUARANTEE AND INDEMNITY — action to enforce guarantee — guarantor’s liability — whether defendants bound by an irrevocable authority — whether claimed term can be implied into the authority — what must be paid
CIVIL PROCEDURE — hearing — procedural fairness — where defendants are self-represented — adjournment refused — where defendants given fair opportunity to be heard
EVIDENCE — motion — application to re-open case — defendant seeking to replead and lead further evidence after hearing concluded — motion dismissed
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 59, 60, 100
Uniform Civil Procedure Rules 2005 (NSW), rr 7.3(1)(a), 29.7, 42.1
Cases Cited: Baltic Shipping v Dillon (1991) 22 NSWLR 1
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37
Provident Capital Ltd v Naumovski [2013] NSWSC 40
THN Capital Funding Pty Ltd v Leffler [2025] NSWSC 1529
Category: Principal judgment
Parties: THN Capital Funding Pty Ltd (First Plaintiff)
THN Capital Solutions Pty Ltd (Second Plaintiff)
Jonathan Pargan Leffler (First Defendant)
Goran Lovrinov (Second Defendant)
Representation: Counsel:
AL Oakes (Plaintiffs)
Self-represented (Defendants)
Solicitors:
Swaab (Plaintiffs)
File Number(s): 2023/333694
Publication restriction: Nil
THN Capital Funding Pty Ltd and THN Capital Solutions Pty Ltd pursue a money order for $16 million plus interest from Mr Leffler and Mr Lovrinov, who they claim are in breach of a guarantee which they both gave by way of a 2023 Deed of Irrevocable Authority in respect of payments due under a separate facility agreement, which have not been made. Payment under the guarantee was unsuccessfully pursued by a 2023 letter of demand, with the result, the commencement of these proceedings.
The claim was defended by both Mr Lovrinov and Mr Leffler, who by their defences denied knowledge of, or involvement in, various pleaded matters and did not admit others. Their defences raised:
in Mr Leffler’s case that:
(a) he is not and has never been the owner of the gold doré bars referred to in the Authority and was, at all relevant times, acting under limited representative authority on behalf of Mr Lovrinov, who possessed proprietary and other rights to the gold bars; (b) there was a term implied in the Authority that “the payment of the Guaranteed Moneys by the defendants is contingent upon the completion of the sale of gold doré bars referred to in Recital E of the Irrevocable Authority”; (c) any liability under the Authority being dependent on the fulfilment of the implied term and otherwise unenforceable, his obligations not having been triggered, the implied term not yet being fulfilled, because the sale of the doré bars has not yet occurred; and (d) the result was that the proceedings were premature.
in Mr Lovrinov’s case, that he had never signed the Authority, which was always “intended to be conditional on knowing if the gold was real, which was to be found in Melbourne warfs [sic]. Matter of missing gold was reported to Victorian Police by Lovrinov in July 2023”: amended defence at [2].
Mr Lovrinov, who has not been represented, did not appear at the hearing. Mr Leffler, who had previously been represented by Mr Sarai, the solicitor who had acted for him and Mr Lovrinov in relation to the disputed Authority, to which he was also a party, appeared unrepresented by AVL, as the result of a late made application.
Mr Sarai is not a party to the proceedings and no evidence was called from him, despite what was raised by the defences and affidavits Mr Leffler and Mr Lovrinov had sworn. The proper inference is that his evidence would not have assisted the defence case: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. Although, by his motion it emerged that Mr Leffler considers he has various causes of action against Mr Sarai, which must also be taken into account.
In the week before and on the morning of the July 2026 hearing, by emails sent to my Associate, Mr Leffler communicated his desire that the hearing not proceed. The advice he was given was that any adjournment application had to be made in the usual way, by motion supported by affidavit.
There was no such application, with the result that the hearing proceeded despite the difficulty that undoubtedly posed for Mr Leffler, to which he referred more than once during the course of the hearing. Complaining, for example, that he and Mr Lovrinov had been denied an opportunity to be represented, pursue a cross-claim and mediation, and to put on other evidence on which they wished to rely. The procedural history did not support those complaints.
I was thus satisfied that they could not be accepted. Orders having been made in the ordinary way in December 2025, at a time when Mr Leffler was represented, for the preparation of the matter for hearing. Orders which the companies had complied with by filing their evidence, submissions and a court book, while Mr Leffler and Mr Lovrinov had only filed affidavits.
In Mr Lovrinov’s case, an affidavit which did not annex documents it referred to and foreshadowed an application to have the matter heard in Adelaide, which was never made. Nor did either he or Mr Leffler make any application to vary the Court’s orders, or to adjourn the hearing. At which Mr Lovrinov did not appear. Despite various communications on behalf of Mr Lovrinov, he has never filed any motion for the Court to consider.
In those circumstances, that Mr Leffler and Mr Lovrinov had been given a fair opportunity to prepare for and be heard, had to be accepted. That they chose not to take advantage of it, was not within the Court’s control. In the circumstances I was satisfied that the hearing had to proceed to ensure that justice was done between the parties, the companies being entitled to have their cases heard at the regularly fixed hearing.
That according with the overriding purpose of the Civil Procedure Act 2005 (NSW) specified in s 56 to be the just, quick and cheap resolution of the real issues in the proceedings. They were revealed by the pleadings, submissions and other documents the companies had served, to which neither Mr Lovrinov nor Mr Leffler had responded, other than by their affidavits. They not being confined to evidence, but also advancing submissions.
Sections 57-60 of the Act specify how the Court’s various discretions must be exercised. They requiring it, amongst other things, to eliminate delay: s 59. It having to manage proceedings, having regard to the matters specified in s 57(1):
(a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
(a) must have regard to the provisions of sections 56 and 57, and
(b) may have regard to the following matters to the extent to which it considers them relevant—
(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,
(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,
(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,
(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),
(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,
(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,
(vii) such other matters as the court considers relevant in the circumstances of the case.
That was why the hearing proceeded as it did.
Rule 29.7 of the Uniform Civil Procedure Rules 2005 (NSW) also being relevant. Envisaging as it does that when a party does not appear to be heard, the matter will proceed in their absence. It then remaining for the plaintiff to prove its case on the evidence.
This was why I explained to Mr Leffler that he could not proceed on the basis that he was entitled to advance Mr Lovrinov’s case, as well as his own. There being no suggestion that Mr Lovrinov had authorised Mr Leffler to appear for him, or that Mr Leffler was himself a legal practitioner who could have been instructed to enter an appearance.
Mr Leffler’s appearance at the hearing by AVL resulted in various difficulties. At times he became agitated, at other times he disconnected or left the room from which he was accessing the Court by AVL, while remaining connected. Even while I was attempting to inform him that part of what he had said could not be heard, or to explain to him matters of which it seemed likely he was not aware, unrepresented as he was.
At other times Mr Leffler turned off his camera and did not respond when he was addressed.
Eventually the hearing proceeded without continued further enquiry as to whether Mr Leffler was listening to the submissions being advanced by Mr Oakes.
Still, I took into account that Mr Leffler was in the undoubtedly difficult position of appearing at the hearing unrepresented. To deal with this, once the evidence had been received and the companies made their oral submissions, I proposed that he be given an opportunity to put on his submissions in writing, having heard those which had been advanced for the companies. I asked the parties to confer about this, but Mr Leffler did not cooperate.
During the lunch adjournment, Mr Leffler emailed what purported to be a copy of an email, motion, and supporting affidavit which Mr Lovrinov had sought to file the previous week, seeking an adjournment of the hearing. Those documents had not been filed, although a copy of the affidavit, but not the motion, had been sent to the companies’ solicitors.
The result was that I imposed a timetable which the parties finally agreed, which permitted Mr Leffler to make his submissions in writing and for the companies to respond. Despite an extension of time, he did not file his submissions within time, although he emailed a document to which I will later refer.
I finally heard a motion which Mr Leffler later filed, by which he sought to re-open his evidence, amend his defence and bring a cross-claim, which was resisted and, I am satisfied, cannot justly be allowed, for reasons explained below.
For the reasons which follow, I am also satisfied that the orders the companies sought must be made. It not being possible to imply the term on which Mr Leffler’s defence depended into the Authority, which I find both Mr Leffler and Mr Lovrinov signed, at a time when they were both legally advised by Mr Sarai. With the result that they are both bound by the guarantees which they thereby gave, improvident as that seemingly transpired to be.
The evidence establishing, I am satisfied, that what was guaranteed has not been paid. Despite which, for the purposes of the proceedings, the companies finally only pursued judgment of $16 million plus interest at the Court rate, from 6 October 2023.
I am satisfied that they are entitled to that judgment, the motion Mr Leffler belatedly filed having to be refused.
“a. First, whether Mr Lovrinov was bound by the Irrevocable Authority…
b. Secondly, whether the guarantees given by each defendant in the Irrevocable Authority were subject to an implied term that they were contingent on the completion of the sale of gold doré bars referred to elsewhere in the Irrevocable Authority…
c. Thirdly, if the guarantee has been triggered, the quantum payable by the defendants to the plaintiffs...”
The companies noted that in his amended defence, Mr Lovrinov had denied that he had signed the Authority. But they contended that either:
Mr Lovrinov is to be taken as having admitted that he had entered into the Irrevocable Authority, because of his failure to traverse that allegation in their statement of claim in his defence; or
in any event, as a matter of fact, Mr Lovrinov was bound by the Irrevocable Authority (whether as a deed or as an agreement), because the evidence established that it had not only been executed on his behalf, but that he had also himself later signed the Authority.
This issue did not arise with respect to Mr Leffler, who had admitted that both he and Mr Lovrinov had entered into the Irrevocable Authority: Leffler Defence [24].
The claimed implied term was only pleaded by Mr Leffler. But the companies accepted that this raised a matter of construction which affected both defendants. They denied, however, that the claimed term could be implied, given the applicable principles.
Mr Lovrinov and Mr Leffler both advanced submissions in their affidavits, on which Mr Leffler relied.
It appeared that Mr Lovrinov had left the country to deal with a family member’s ill health. Despite various communications his foreshadowed motion has never been filed, an application for fee waiver having failed and despite advice that he would appear by AVL, he did not do so. But I have taken into account the submissions contained in his affidavit.
That was because despite Mr Leffler’s complaints about what the court book contained, it included not only the pleadings; affidavits sworn by Mr Fernandez, the sole director, which exhibited relevant documents; but also those sworn by Mr Leffler and Mr Lovrinov and the documents attached to Mr Leffler’s affidavit. As well as the companies’ written submissions and their memorandum of issues and facts, a chronology, and a schedule of objections to the affidavits of Mr Leffler and Mr Lovrinov. They not having been confined to evidence, but including submissions.
Mr Leffler relied on those affidavits at the hearing, which were received on that basis. As I have explained he provided no further submissions in accordance with the timetable agreed.
“1. Orders joining Mr Gerald Carides, Mr Jovan Sarai, Mr Andrew Morrison and Mr Brian Lincez as new defendants to the case.
- Orders for witnesses to be put on notice by Subpoenas; Brian Clarke, Amy Munro, Sean McAllister, Derrick Butler.
- In the event that Order 1 is granted, we seek that Gerald Carides is removed from representing the First and Second Plaintiff.
- Orders allowing First defendant to prepare his submissions by 31 December 2026 and that they be included into the current court book.
- Any other orders as the Court sees fit.”
It was supported by an affidavit, but Mr Leffler did not provide any proposed amended defence or cross-claim. Even though at the July hearing Mr Leffler had referred to a desire to advance a cross-claim, as he had in December 2025, when Cavanagh J ordered that any further motion be filed by 5 February 2026: THN Capital Funding Pty Ltd v Leffler [2025] NSWSC 1529. The motion then filed did seek leave to pursue a cross-claim, but none has ever been produced.
Nor did the August 2026 motion refer to a mediation, which Mr Leffler said at the July hearing he also wished to pursue.
Mr Leffler did not appear to press the motion when it was listed for hearing. Before I adjourned, he sent an email to chambers advising that he was sick and wanted an adjournment, which I refused. A hearing before the Court cannot be adjourned in this way. It not being like cancelling a restaurant booking or a hairdressing appointment.
I decided instead that the motion would be dealt with on the papers. Mr Leffler having sworn his supporting affidavit, the companies relying on an affidavit sworn by their solicitor Mr Carides, which explained the relevant procedural history, and the parties also having filed their written submissions.
After being advised of this decision Mr Leffler sent another email which contradicted the first. Then he said that the power went out rendering all devices to be flat in the morning; that the electrician would provide correspondence to validate the outage; and that the power only came on at 11:47am. This advice did not alter my decision.
In his supporting affidavit, Mr Leffler deposed that he had become aware of “many facts” which he did not explain, but which he contended supported his motion. What he sought being that the hearing be vacated, a new timetable set, an updated and inclusive court book prepared, that proposed further parties be joined as defendants and that witnesses be put on notice that he and Mr Lovrinov would subpoena them.
What was sought was opposed by the companies, who relied on the procedural history which included the earlier motion by which leave to file an amended defence, orders for disclosure and a stay was pursued in February 2026. The hearing of the motion having been fixed by Cavanagh J, who also listed the matter for hearing in July 2026. The motion was refused by Harrison AsJ, other than in respect of the leave given to file an amended defence, which Mr Leffler has never exercised.
Mr Leffler’s affidavit did not establish that there had been any relevant change.
The difficulty with what Mr Leffler belatedly proposed, I having reserved judgment about what had been advanced at the July hearing, was that the companies still pursue no claims against the proposed further defendants. The position thus remains that if Mr Leffler or Mr Lovrinov have claims which they wish to pursue against others, that cannot be done by joining them as defendants in these proceedings.
Mr Leffler also claimed that he had not had sufficient time or resources to adequately comply with the tight timetables which the Court had set. That cannot be accepted, given that the proceedings were commenced in 2023 and that Mr Leffler and Mr Lovrinov have been given repeated opportunities to advance their cases. A lack of resources was also not established by his evidence. Nor was the claim that Mr Leffler did not have adequate cash flow to divert to support engaging a legal representative.
That may well be his situation, but that cannot justly preclude the companies’ claims from being heard in a timely and orderly fashion. The matter having been fixed for hearing in the ordinary way in December 2025, the parties having been ordered to file and serve the evidence on which they relied and to prepare a court book for the hearing and no application to have the orders varied or the hearing vacated having been made.
The undoubted result of not being legally represented, that Mr Leffler is at a disadvantage, also cannot preclude judgment being given about what the parties joined issue about, on the evidence received at the regularly fixed hearing. In order that Mr Leffler can now pursue a course he has long foreshadowed but has never pursued. The regrettable result of such an approach sometimes being the difficult position parties who are unable to fund such representation can find themselves in.
Mr Leffler also relied on his need to conduct his business and the adverse impact of the birth of his son, who required intensive neonatal care when he was born in October 2025.
That was no doubt Mr Leffler’s position when directions and orders were made for the preparation of the matter for hearing in December 2025, given what Cavanagh J then explained, at a time when Mr Leffler was legally represented. With the result that he did file the affidavit on which he relied at the hearing, as did Mr Lovrinov, on whose affidavit he also relied.
If there was other relevant evidence on which Mr Leffler wished to rely, that is when he had to lead it. No timely application having been made to amend the Court’s orders as to the filing and service of evidence before the fixed hearing. That did not occur and so properly, the companies included in the court book the affidavits which Mr Leffler and Mr Lovrinov had served. It was up to them to take the necessary steps to put before the Court any other evidence on which they wished to rely.
Nothing put before the Court adequately explains Mr Leffler’s failure to do so.
Mr Leffler having failed to take advantage of the fair opportunity I am satisfied he was given, to advance his evidentiary case, was thus not a proper basis for making the orders which he belatedly sought by his motion. Despite the written submissions which he advanced, which referred to authorities which he claimed supported his case. They did not.
The orders the companies sought having no impact on the rights or liabilities of the further defendants Mr Leffler sought to have joined. And Mr Leffler having not advanced any cross-claim by which he sought himself to pursue orders against them, despite the serious allegations he advanced in his submissions, all of which it is not appropriate to repeat.
Contrary to Mr Leffler’s submissions, I am satisfied that the requirement imposed by s 58 of the Civil P**rocedure Act, to act in accordance with the dictates of justice, does not in the circumstances which arise to be considered, permit the orders he sought to be made. Despite Mr Leffler also belatedly seeking to restrain Mr Carides from continuing to act for the companies.
It is also relevant that unrepresented litigants are not entitled to subpoena witnesses, without the Court’s leave: Uniform Civil Procedure Rules, r 7.3(1)(a). That requires the relevance of their evidence to be established. Mr Leffler has never sought nor obtained such leave. That it could be granted was not established by submissions that proposed witnesses could give evidence about the provenance and authenticity of the gold shipment, and the circumstances of Mr Lovrinov’s execution and attestation of the Irrevocable Authority.
In his affidavit, Mr Leffler did refer to some evidence he expected such witnesses to give. But he did not explain why affidavits had not been obtained from them before the July hearing, in accordance with the Court’s orders or leave to subpoena them had been sought, the orders having given him ample time to pursue the leave he required.
Given that Mr Leffler’s pleadings and the evidence established that Mr Lovrinov had executed the Authority, as I will explain, the relevance of such evidence was in any event not apparent. That may explain why it was not earlier led, when Mr Leffler did have legal advice.
That leave to issue subpoenas could now justly be given, judgment having been reserved as it has, was thus not apparent.
Mr Leffler also foreshadowed reporting Mr Carides and Mr Sarai to the Federal Police, ASIC, and the NSW Legal Servies Commissioner. This is a matter for him and irrelevant to the proper construction of the Authority.
Mr Leffler also explained that he had become aware of fraud and unjust enrichment by the proposed defendants, which he considered needs to be reported to police. It appears that he has not done so. But if he has claims against them, they cannot be pursued by having them joined as defendants in these proceedings. That would require him to bring claims himself, at risk of an adverse costs order, if he does not establish his claims.
Mr Leffler also referred to other alleged wrongdoing, including conspiracy to commit fraud, obtaining financial advantage by deception, perverting the course of justice, documents having been forged or falsified, and attempted insurance fraud. It is not appropriate to repeat all that Mr Leffler deposed to, satisfied as I am that justice cannot permit the course which he belatedly sought to pursue by his motion, to be allowed.
That not according with the requirements of s 56 of the Civil Procedure Act or the other provisions which I have explained.
It should also be noted that despite orders as to the deadline for the filing of his submissions in reply, after it had passed Mr Leffler emailed to my associate extensive submissions which addressed a proposed motion, and his defence and a range of other matters. It is unnecessary to explain them, but it should be noted that they include not only his background, but how he claimed to have been scammed, with a resulting $100 million loss.
This document appears to have been prepared with the assistance of AI. It includes statements which are simply untenable, given the clear terms of the Authority and the pleaded defences. Such as, for example, that Mr Leffler and Mr Lovrinov were not aware that the Authority provided for a guarantee.
Parts of the document take the form of advice about the prospects of arguments which might be advanced. It also contains various analyses of the Authority, as well as recommendations and suggestions about arguments which might be advanced about it, various evidence, and Mr Lovrinov’s defence, which is also extensively analysed and discussed.
The document also contains advice about relief which could be sought and interlocutory applications which could be made. As well as about evidence which could be called, including from Mr Sarai. It also provides a summary table of alleged practitioner misconduct by Mr Sarai and Mr Carides.
As well as an extensive analysis of agreements, investments and authorities, the relevance of which, if they exist, is not apparent.
The result was that the evidence and submissions Mr Leffler advanced were incapable of establishing a basis for the orders he sought to be justly made and so the motion must be dismissed.
I am satisfied that the evidence does establish that Mr Lovrinov did sign the Authority, with the result that it binds him. That not only being pleaded by his defence at [33], but established by contemporaneous documents. Despite at [44] of his defence, Mr Lovrinov having also pleaded that he did not sign the Authority, it follows that this cannot be accepted.
The pleadings and the evidence address the circumstances which preceded the Authority being negotiated and entered. Mr Leffler and Mr Lovrinov denied knowledge of them by their pleadings and affidavits. But nothing turns on this, given the express terms of the Authority which they both executed, at a time when they were legally advised by Mr Sarai, about which there was also no issue. Mr Leffler’s dissatisfaction with his work does not alter the relevant facts.
Mr Leffler’s evidence included that despite his execution of the Authority, his involvement had been limited to acting as an authorised representative of Mr Lovrinov, who had the proprietary rights to a gold consignment, or had acted as the consignee of the gold. Mr Leffler also claimed in his January 2025 affidavit that “[w]ithout receiving and selling the Gold, I did not assume personal liability for any obligations under the FFA, the DOVs, the purported Guarantee, or the Irrevocable Authority”: at [11].
That may have been Mr Leffler’s belief, but it is not what the Authority which he signed provided.
By his short February 2025 affidavit, Mr Lovrinov swore that he agreed with paragraphs [5]-[49] of Mr Leffler’s 2025 affidavit. That was obviously an unsatisfactory way for Mr Lovrinov to have given his evidence, but still Mr Leffler relied on it at the hearing. It is thus pertinent that Mr Lovrinov did not there deny signing the Authority. Nor did Mr Leffler deny this in his affidavit.
At the identified paragraphs Mr Leffler dealt with various matters, including what he claimed email communications established and reflected. Including that the claimed “spirit” of the parties’ arrangement, referred to in communications, was based on trust, commercial logic, and equity “aligning the parties’ interest around the successful sale of 500 kilograms of gold”. This being reflected in “the implicit understanding that payment obligations and guarantees are contingent upon the realisation of proceeds from this sale”: [40](ii).
This resulting in the need to interpret the parties’ agreement with fairness and reasonableness. So that no party was unjustly enriched or unfairly burdened due to delays or unforeseen circumstances: [40](v).
The Authority which the parties executed could have contained terms which reflected what Mr Leffler described and claimed he understood, but it did not. The express terms which were negotiated with the assistance of the parties’ legal representatives did not reflect such an understanding. And the principles which the Court has to apply when construing the terms of the written commercial arrangement which they entered, do not turn on the considerations which Mr Leffler advanced.
In his affidavit, Mr Lovrinov said that he sought orders to have the proceedings transferred to the Supreme Court of South Australia. But that requires a motion supported by an affidavit, which has never been filed. Mr Lovrinov also foreshadowed applying for orders for various subpoenas to be issued. That has also never been pursued.
Mr Lovrinov also deposed to never having received an 8,000kg shipment of gold he had paid for, which was to be sent to him from Syria under diplomatic seal, with Mr Leffler’s assistance. He outlined steps he claimed he had taken to pursue that shipment and how he had become “suspicious of the entire situation”. He also referred to reports already made to Federal police. But his affidavit did not attach any documents to support his various claims.
Neither of the affidavits Mr Leffler and Mr Lovrinov swore responded to Mr Fernandez’s affidavit. He there explained the finance business which the companies pursue, providing both invoice finance and fixed term loan facilities. As well as how Mr Leffler and Mr Lovrinov had come to give the disputed guarantees by the Authority they executed, which was evidenced by contemporaneous documents.
They reflect that a factoring facility agreement had first been entered in 2017, by which certain debts were assigned. And that further factoring facility and other agreements were later entered and varied.
The result of which was that in August 2022, the facility limit under the agreement then in force was increased to $18.5 million. When repayments later due under it were not made, the companies pursued repayment. This resulting in the entry, later variation and extension of the forbearance deeds in evidence, despite which the required repayments were never made.
The eventual result was that in June 2025 the companies pursued demands for repayment of over $20 million. It was then that the possibility of Mr Leffler and Mr Lovrinov providing a guarantee for the outstanding debts was first raised with Mr Fernandez. There was no challenge to his evidence that he was told that they were involved in a precious metal transaction and prepared to provide a guarantee for what the companies were then owed.
This resulted in the companies engaging a solicitor, Mr Carides, to act and Mr Sarai acting for Mr Leffler and Mr Lovrinov.
Their communications establish that it was Mr Sarai who drafted a proposed security deed in July 2023 for $16 million. And Mr Carides who requested that Mr Leffler and Mr Lovrinov authorise the companies to communicate with the entity which held the gold, which was then proposed to be used to provide collateral. They refused to give that authority.
The result was that Mr Carides and Mr Sarai corresponded further about the gold; when it was expected to be released by customs; its intended sale; and Mr Leffler and Mr Lovrinov’s proposal that they give Mr Sarai’s firm an irrevocable authority to pay the $16 million from its trust account.
It was Mr Sarai who then provided the draft Authority in August 2023, together with a redacted copy of the contract of sale. He then kept Mr Carides informed about the expected handover of the gold once sold and the anticipated receipt of funds from its sale, in his trust account.
Negotiations about the terms of the Authority continued until Mr Sarai advised on 30 August that he had forwarded it to Mr Leffler and Mr Lovrinov for signature. Mr Leffler’s signature was not witnessed and Mr Lovrinov did not sign it. Whether a witness was necessary was then discussed by Mr Carides and Mr Sarai, as were further proposed amendments to the Authority.
On 31 August, Mr Sarai advised:
“We confirm that all signatories except for Goran Lovrinov have signed and duly witnessed the irrevocable authority. Mr Lovrinov was uncontactable for the past 24hrs and notwithstanding both our and our client's efforts we were unable to get him to sign the authority as yet.
Nevertheless, we are instructed to inform you that our second client Mr Jonathan Leffler has been authorised by Mr Lovrinov to deal with the shipment on his behest. Consequently, Mr Leffler has signed the authority both in personal capacity and on behalf of Goran Lovrinov pursuant to authorisation.
We are unsure if your client would accept the above outlined approach or would rather remove Mr Lovrinov as a party/signatory to the irrevocable authority.
On a relevant note, our client agreed to remove wording 'on or about' which was introduced in the Recital and propagated throughout the document for consistency reasons.
We await your response.”
Despite this advice, in his affidavit Mr Leffler claimed that he had acted “under limited representative authority on behalf of” Mr Lovrinov. That was not suggested by Mr Sarai’s communications, reflected in the Authority, nor established by other evidence.
Mr Carides did ask for a copy of the instrument under which Mr Lovrinov had authorised Mr Leffler to enter the guarantee on his behalf. What was provided was a document Mr Lovrinov had executed, before entry into the guarantee had been envisaged, which Mr Carides was asked to keep confidential. In accordance with that agreement, this document is not in evidence, it not having been relied on by either Mr Lovrinov or Mr Leffler. It must also be inferred that this document would not have assisted their case: Jones v Dunkel.
On 1 September, Mr Carides confirmed that the companies would accept a counterpart of the Authority signed by Mr Leffler on behalf of Mr Lovrinov, so long as no later than 5pm on 5 September, Mr Lovrinov signed a counterpart version in his own capacity.
This document was not provided until 11 September. Mr Sarai then advising that it had been signed by Mr Lovrinov by both Docusign and wet ink. But the document did not reflect that his signature had been witnessed. As to which Mr Sarai advised:
“Dear Gerald,
Goran Lovrinov has signed the document in my presence when I had 1-on-1 in-person conference with him last weekend. Nobody else was present during that meeting due to a highly sensitive nature of the conversation held. However, since I was now made a party to the document, I could not witness his signature either.
I am unsure how far your client will go with their requirements but I tend to think that this is as good as it gets. I may not meet with Goran in-person for another week or two. Chasing him is already costing my clients time and money as he is not easily located at a drop of the hat. Whether he will accept to meet Amy Munro or another witness is just a possibility but not certainty.
I note that Goran, like all other parties have now signed the irrevocable authority both electronically (by DocuSign) and also in wet ink which is usually over and above standard requirements and practice
Would you have any suggestions as I am slightly running out of them?”
“We are instructed that on the basis of the representation and assurance contained in your email that you witnessed Mr Lovrinov’s execution on the document, THN does not require an additional witness.”
On all of that evidence, it must be found that Mr Lovrinov, as well as Mr Leffler is bound by the Authority which he, too, himself finally executed in Mr Sarai’s presence.
That conclusion also being supported by the valuable consideration on which the companies relied. They having agreed to forbear from pursuing the enforcement action they had deferred, because of the guarantees Mr Leffler and Mr Lovrinov gave by the Authority.
With the result, it must also be accepted, that Mr Lovrinov’s execution of the Authority in Mr Sarai’s presence, as well as its execution by Mr Leffler with his authority, had the result that it is enforceable against Mr Lovrinov as an agreement, even if it be accepted that its execution did not make it effective as a deed.
“A. The Debtor owes the Creditor the sum of $16,000,000 being the agreed settlement sum pursuant to a Deed of Forbearance between the Debtor, the Creditor and others dated 23 March 2023 (Forbearance Deed) and each of the facilities and securities (both as defined in the Forbearance Deed) which amount, is called ‘the Debt’.
B. The Forbearance Deed and each of the facilities and securities as defined in it are called the Transaction Documents in this deed.
C. The Debtor is presently unable to pay the Debt to the Creditor but accepts a present liability to do so.
D. Each Guarantor jointly and severally agrees to guarantee payment of the Debt to the Creditor. The Guarantor has appointed Mr Sarai as the solicitor for the Guarantor.
E. The Guarantor expects to be entitled to receive the sum in excess of $34,000,000 from sale of 375kgs of gold dore bars which amount is called ‘the Proceeds’ and this amount will be paid to the trust account of Mr Sarai on or about the 15 September 2023.
F. The Guarantor has instructed Mr Sarai to pay the Debt and any interest due thereon payable pursuant to this authority and any costs incurred by the Creditor in relation to this authority to the Creditor from the proceeds including a forbearance fee of $200,000.00.”
Total is the Debtor, THN the Creditor and Mr Leffler and Mr Lovrinov the Guarantors: preamble to the Authority.
The terms of the Authority itself make no reference to the gold referred to in the recitals. On Mr Leffler’s case, it was never received nor sold, with the result not only that no funds were ever paid into Mr Sarai’s account, as the Authority contemplated, but that there were no funds to make the payment for which the guarantees given by the Authority provided, when the demands for payment were served on he and Mr Lovrinov.
Despite this there can be no doubt that the express terms of the Authority bind Mr Leffler and Mr Lovrinov. They being the guarantors who jointly and severally thereby guaranteed the payments which there is no issue were not made by Total, despite THN’s demands. Its terms include:
cl 1, which specifies what is guaranteed, collectively defined to be the “Guaranteed Moneys”. Namely, “Each Guarantor jointly and severally guarantees the due and punctual payment of:
(a) all money that the Debtor (whether alone or with any other person) is or at any time may become actually or contingently liable to pay to or for the account of the Creditor (whether alone or with another person) for any reason under or in connection with the Transaction Documents, including principal up to a limit of $16,000,000 plus interest, fees, costs, and expenses; and
(b) a forbearance fee of $200,000.”
cl 2:
entitles the Creditor to immediately demand repayment of the Guaranteed Moneys, if they are not paid by the Debtor by 15 September 2023; and
requires the Guarantors then to immediately pay and Mr Sarai to ensure payment of the Guaranteed Moneys to the Creditor without delay.
cl 3 contains the agreement that in consideration of the Creditor agreeing to defer legal proceedings against the Debtor for recovery of the Debt, defined in Recital A by reference to the Forbearance Deed under which the $16,000,00 was owed, the Guarantor granted the guarantee and irrevocable authority and the direction in cl 4. Thereby the Guarantor also acknowledged the valuable consideration which had been received.
cl 4 deals with security, including by the Guarantor:
representing and warranting the legal and beneficial ownership of the Proceeds, defined in Recital E to be the $34,000,000 expected from the sale of the gold bars: cl 4(a);
irrevocably authorising and directing Mr Sarai to pay to the Creditor so much of the Proceeds necessary to discharge the Guaranteed Moneys in full: cl 4(b);
acknowledging that “a certificate signed by a director of the Creditor in the absence of manifest error, will be conclusive evidence of the amount of the Guaranteed Moneys and the fact that the Creditor has not paid by the Debt by on or about 15 September 2023”:cl 4(c); and
agreeing that if the Creditor made a demand on Mr Sarai in accordance with cl 4(b) accompanied by a certificate in accordance with 4(c), no objection to Mr Sarai’s immediate release of the Proceeds would be made: cl 4(d).
cl 5 deals with Mr Sarai’s obligations and cl 7 with new solicitors being instructed, which are unnecessary to explain, no funds ever having been paid into his trust account or new solicitors appointed.
by cl 6 the Debtor acknowledged that the Authority did not prejudice the Creditor’s right to continue recovery of the Debt if payment was not received under the Authority.
There was thus no issue that the maximum principal Mr Leffler and Mr Lovrinov guaranteed under the Authority was $16 million. What was guaranteed being what had been dealt with in the forbearance deed referred to in the Recitals. Nor that it had not been repaid, with the eventual result the pursuit of these proceedings.
In oral submissions the companies explained the documentary evidence relied on to establish that the $16 million had not been repaid, by reference to an aide memoire provided in electronic form. That explanation was not challenged, despite the hearing having been adjourned so that it and the aide memoire could be considered and responded to in Mr Leffler’s written submissions, if he wished.
He did not do so and so I am satisfied that this unchallenged evidence must be accepted.
The result is that it must be accepted that this evidence establishes that the $16 million guaranteed by the Authority which both Mr Leffler and Mr Lovrinov entered, has not been repaid. As does the certificate the companies are entitled to rely on.
There is no issue that on 6 October 2023, when payment under the guarantees was pursued, Mr Carides served on Mr Sarai a certificate issued under cl 4(c) of the Deed. Thereby notifying Mr Leffler and Mr Lovrinov that the guaranteed moneys owing on 6 October 2023 totalled $17,325,030. That reflecting interest also payable under the Authority.
While Mr Leffler, by his affidavit, did not accept the certificate established what was owed, given the terms of cl 4(c) of the Authority, I am satisfied that it must be accepted that it did. The parties having agreed that would be the mechanism by which what was owed under the guarantees given would be established, the certificate provided having complied with its terms.
At the hearing the Companies finally only pursued interest on the $16 million guaranteed at the prejudgment rate under s 100 of the Civil Procedure Act. There is no issue that this is to the advantage of Mr Leffler and Mr Lovrinov, given the terms of the Authority.
What must thus be resolved is whether the guarantees given by the Authority permitted the recovery of the $16 million which Mr Leffler and Mr Lovrinov have also not paid, despite the guarantees they gave by the Authority, given the claimed implied term.
The claimed term I note again, is “the payment of the Guaranteed Moneys by the defendants is contingent upon the completion of the sale of gold doré bars referred to in Recital E of the Irrevocable Authority”.
As the companies submitted, the proposed term would itself introduce ambiguity, given the terms of Recital E, which precludes its acceptance. But the principles which bind the Court’s consideration of Mr Leffler’s claim, also have that result.
No issue was taken with the well settled principles which must be applied. They include that parties should be held to the bargains which they freely enter, the general policy of the law being that people should honour their contracts, that forming “part of our idea of what is just”: Baltic Shipping v Dillon (1991) 22 NSWLR 1 at 9 per Gleeson CJ, applied in Provident Capital Ltd v Naumovski [2013] NSWSC 40 at [297]-[299];
When resolving whether a term may be implied in a written agreement, what must be born in mind includes, in short:
the onus falls on Mr Leffler to establish the claimed implied term. An onus which it must be accepted he finally did not attempt to meet, having failed to press his pleaded case by advancing any submissions, other than those contained in the affidavits he relied on;
in the event of dispute, the meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean, in context: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]. That does not support the case Mr Leffler advanced;
the parties’ rights and liabilities under such a contract must also be determined objectively, by reference to its “text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose”: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104; [2015] HCA 37 at [46];
in determining the meaning of its terms, “it is necessary to ask what a reasonable businessperson would have understood those terms to mean”. That enquiry requiring consideration of the language used, the circumstances addressed by the contract and the commercial purpose or objects it secures: Mount Bruce Mining at [47]. That also does not support Mr Leffler’s case;
ordinarily, this process of construction must be undertaken by reference to the contract alone. If an expression is “unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning”: at [48];
where there is a constructional choice, it may be necessary to consider “the genesis of the transaction, the background, the context and the market in which the parties are operating”: Mount Bruce Mining at [49], quoting Woodside at [35];
they all being objective, what may be referred to being limited to “events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating”: Mount Bruce Mining at [50];
what is inadmissible being evidence of the parties’ statements and actions reflecting their actual intentions and expectations: Mount Bruce Mining at [50];
unless the contract evinces a contrary intention, the Court is entitled to approach its construction on the assumption that the parties intended to produce a commercial result: Mount Bruce Mining at [51]. That also does not support Mr Leffler’s case;
implication of the claimed term depends on the five conditions specified in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-283, being satisfied:
(a) the term must be reasonable and equitable; (b) the term must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (c) the term must be so obvious that “it goes without saying”; (d) the term must be capable of clear expression; and (e) the term must not contradict any express term of the contract.
Mr Leffler finally did not advance any further submissions to meet the case the companies pressed at the hearing, despite the opportunities he was given to put on his submissions in writing.
He thus established no basis for accepting that the claimed term can be implied, given the express terms of the Authority, the consideration which the binding authorities drive, including as to the circumstances in which they were agreed.
Despite what was known about the gold not yet having been received or sold, the Authority was entered on terms which contemplated the sale and the proceeds being deposited into Mr Sarai’s trust account, but it did not depend on either occurring. It imposed no condition that the gold be sold, before the guarantees took effect, as it could have, if that was what had been agreed.
The terms the parties negotiated with the assistance of their solicitors are thus not ambiguous. The claimed term, it must be accepted, contradicts the express terms agreed before Mr Leffler and Mr Lovrinov executed the Authority.
It must thus be concluded that the claimed term is not reasonable or equitable, not necessary to give business efficacy to what was expressly agreed and that the Authority is effective without it. The claimed term is also not so obvious that “it goes without saying”. To the contrary, it would entirely undermine what was agreed, in order in order to stave off the enforcement of the facility agreement and recovery of what was then owed under it. Which the Authority expressly dealt with by the guarantee Mr Leffler and Mr Lovrinov gave, if what was owed under the facility agreement was not paid.
It follows that the claimed term cannot be implied, as Mr Leffler sought.
The companies’ claim rests on the 6 October 2023 certificate issued under cl 4(c) of the Authority, which Mr Leffler does not accept.
Given the express terms of the Authority which I have explained, I am satisfied that it must be accepted that this certificate provides conclusive evidence of the amount owing under the Authority.
There being no issue that what was guaranteed has not been paid, despite the demands made in accordance with the terms which the parties to the Authority agreed, the result is that the orders which the companies pressed must be made.
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THN Capital Funding Pty Ltd
Leffler
(1991) 22 NSWLR 1
(1977) 180 CLR 266
(2014) 251 CLR 640
(1959) 101 CLR 298
(2015) 256 CLR 104