Kingsway Group Ltd v Gee Ha Pty Ltd

[2011] NSWSC 1355

Supreme Court

New South Wales

Medium Neutral Citation:

Kingsway Group Ltd v Gee Ha Pty Ltd [2011] NSWSC 1355

Hearing dates:

12/10/2011

Decision date:

12 October 2011

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1) Judgment for the plaintiff against the second defendant in the sum of $4,657,675.51.

(2) Second defendant to pay the plaintiff's costs in the proceedings.

(3) Cross-claim filed by the first defendant dismissed.

Catchwords:

CIVIL - contract - loans secured by deeds of guarantee - Debtor deregistered company - Plaintiff seeks to obtain judgment against one defendant guarantor - Other defendants bankrupt or subject of default judgment - No defence filed or appearance by remaining defendant - Satisfactory evidence of present debt of defendant - Judgment against defendant

PRACTICE AND PROCEDURE - Defendant filed cross-claim against plaintiff - Defendant subsequently deregistered company - Plaintiff disputes cross-claim - No appearance or evidence in support of cross-claim at hearing - Cross-claim dismissed

Legislation Cited:

Bankruptcy Act 1966 (Cth)

Category:

Principal judgment

Parties:

Kingsway Group Ltd (P)
Gee Ha Pty Ltd (D1)
Mark Paul Marando (D2)
Antony Baroni (D3)
Michael Herrera (D4)

Representation:

Counsel:
H Altan (P)
J J Hold (D2)
M Herrera (D4)
Solicitors:
Willis & Bowring (P, XD)
Verekers Lawyers (D1-2, XC)
Self (D4)

File Number(s):

2010/00243528

Publication restriction:

Nil

EX TEMPORE JUDGMENT

1. By a statement of claim filed on 22 July 2010 the plaintiff, Kingsway Group Limited, sought to recover from four defendants moneys outstanding as a consequence of a number of loans made by the plaintiff to the first defendant, Gee Ha Pty Ltd. The advances were secured in part by a deed of guarantee signed by the second defendant, Mr Mark Paul Marando, the third defendant, Mr Antony Baroni, and the fourth defendant, Mr Michael Herrera.

The Defendants

1. I should say something about the present status of the four defendants.

1. The first defendant, Gee Ha Pty Ltd, has been wound up and has been dissolved and removed from the register. As a consequence, it is no longer in existence.

1. The third defendant, Anthony Baroni, is the subject of a default judgment which was entered by this Court on 18 August 2011. No further proceedings are to be taken today against the third defendant.

1. The fourth defendant, Mr Michael Herrera, appeared this morning in Court. He informed the Court that he had, on 5 October 2011, completed and filed a statement of assets and liabilities pursuant to the Bankruptcy Act 1966 (Cth); that the statement of assets and liabilities had been accepted and he had been allocated a bankruptcy number. He informed me, and I accept, that as a consequence he is now an undischarged bankrupt. In those circumstances the plaintiff does not seek to proceed with its claim against him.

1. Consequently, the plaintiff seeks only to obtain judgment with respect to its claim against the second defendant, Mr Mark Paul Marando.

The Claim against the Second Defendant

1. The evidence in support of the claim consists of an affidavit of Mr Mark Hearnden, sworn 20 December 2010, which attached a bundle of documents which I have marked exhibit A.

1. Mr Marando, the second defendant, did not appear when called and has previously indicated to the Court that he does not propose to take any part in the proceedings, nor to propound any defence in opposition to the plaintiff's claim.

1. I have taken account of all of the facts and matters set out in Mr Hearnden's affidavit and in the documents. Accordingly, I am satisfied that on 5 September 2006 the plaintiff, by a loan agreement, agreed to loan to the first defendant, Gee Ha Pty Limited, the then sum of $2,331,000 on the terms and conditions set out in that loan agreement.

1. One of the terms and conditions was that that loan be guaranteed by the second, third and fourth defendants and that their guarantee be contained in a Deed.

1. On 5 September 2006, I am satisfied that Mr Marando executed a Deed of Guarantee and Indemnity in which he agreed to guarantee to the plaintiff the performance of all of the obligations of the first defendant borrower under the loan agreement and the payment of all damages suffered by the plaintiff, including interest, costs and expenses arising from any breach of the loan agreement by the principal borrower, the first defendant. As well, I am satisfied that under the Deed of Guarantee, the second defendant agreed to pay to the plaintiff any sum which was owed to it by the first defendant and unpaid at any point in time.

1. There were three occasions in 2007 - the first on 13 March, the second on 30 July and the third on 9 October - in which the plaintiff and first defendant and each of the guarantors, including the second defendant, agreed to vary the original agreement by increasing the sum of money advanced and extending the loan period. I am satisfied that each of these subsequent agreements came into being and, pursuant to those agreements, that moneys were advanced by the plaintiff to the first defendant and that the Deeds of Guarantee entered into by the second, third and fourth defendants were understood between the parties to be varied so as to include these further advances.

1. Each of the further agreements are signified by the execution by the second, third and fourth defendants of the letter of offer which was made on the dates to which I have referred, which included the following term:

" 8. Guarantor(s) Acknowledgement

By signing this Offer to Extend the Guarantors acknowledge that the term of the loan has been extended by the period referred to in clause 3 and that the amount of the loan is now the amount referred to in clause 2. We confirm that the Guarantee covers both the extended term and, where applicable, the increased Loan amount."

1. It was, on the evidence before me, consequent upon that offer being made and agreed to, that the additional amounts were extended and provided to the first defendant and the period of the original loan agreement extended in the way contemplated by each letter of the offer.

1. I am confirmed in my view that these facts are established by the terms of a Deed of Variation signed by all parties on 11 December 2009. Even if that were not sufficient, I am satisfied by a reading of the pleadings that there are sufficient admissions made by the second defendant to provide a basis for the judgment which is sought.

1. At one stage in the course of the proceedings the first defendant propounded a cross-claim against the plaintiff. That cross-claim is disputed. The first defendant has not filed any evidence in support of that cross-claim. When called, the first defendant did not appear to propound the cross-claim and there is no basis upon which I can do anything but, as I will in due course, dismiss that cross-claim.

Amount of Indebtedness

1. I am satisfied then that the first defendant is indebted to the plaintiff.

1. An affidavit of Mr Dale Graham sworn 12 October 2011 satisfies me that the present debt of each of the defendants, including the second defendant, is $4,657,675.51 and that is the sum in which I will pronounce judgment.

Orders

1. I make the following orders:

(1)   Judgment for the plaintiff against the second defendant in the sum of $4,657,675.51.

(2)   I order the second defendant to pay the plaintiff's costs in the proceedings.

(3)   I dismiss the cross-claim filed by the first defendant.

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Decision last updated: 10 November 2011