TA Private Capital Security Agent Ltd as the Security Agent of TransAsia Private Capital Limited (Company NO. 1973961) v Kamath - [2023] WASC 315

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   TA PRIVATE CAPITAL SECURITY AGENT LTD AS THE SECURITY AGENT OF TRANSASIA PRIVATE CAPITAL LIMITED (COMPANY NO. 1973961) -v- KAMATH [2023] WASC 315
CORAM:   WHITBY J
HEARD:   16 AUGUST 2023
DELIVERED          :   24 AUGUST 2023
FILE NO/S:   CIV 2268 of 2021
BETWEEN:   TA PRIVATE CAPITAL SECURITY AGENT LTD AS THE SECURITY AGENT OF TRANSASIA PRIVATE CAPITAL LIMITED (COMPANY NO. 1973961)
Plaintiff
AND
RAJESH KAMATH
Defendant

Catchwords:

Summary judgment - Facility Agreement - Guarantee - No arguable defence - Waiver of conferral pursuant to O 59 r 9 of the Rules of the Supreme Court

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth)
National Consumer Credit Protection Act 2009 (Cth)
Rules of the Supreme Court 1971 (WA)

Result:

Order permitting waiver of conferral pursuant to O 59 r 9 of the Rules of the Supreme Court
Leave to apply for summary judgment out of time granted
Summary judgment granted

Category: B

Representation:

Counsel:

Plaintiff	:	Mr J E Scovell
Defendant	:	In person

Solicitors:

Plaintiff	:	Mills Oakley
Defendant	:	In person

Case(s) referred to in decision(s):

Agar v Hyde (2000) 201 CLR 552
Codelfa Construction Pty ltd v State Rail Authority of NSW (1982) 149 CLR 337
Edenham Pty Ltd v Meares [2016] WASC 301
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27
Hausman v Abigroup Contractors Pty Ltd [2009] 29 VR 213
Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
Westpac Banking Corporation v Anderson [2017] WASC 106

WHITBY J:

TransAsia Private Capital Limited, acting as a manager on behalf of the Asian Trade Finance Fund 2 is a lender of funds (the Lender). TA Private Capital Security Agent Ltd (TA Private), a British Virgin Islands company, is the security agent for the Lender.
The defendant is a manager of Mados Global FZE.
On 12 March 2019, TA Private, as agent for the Lender, (collectively the plaintiff) entered into a loan agreement with Mados Trading Company LLC and Mados Global FZE (together the Borrowers) pursuant to which the Lender loaned the Borrowers US$11 million (Loan). The loan agreement is referred to as the Facility Agreement. Pursuant to the Facility Agreement, the Loan was to be repaid in tranches over an 18‑month term.
The Borrowers secured the Loan to operate a coal mining joint venture project in India. Clause 3.1 of the Facility Agreement provided that the Borrowers must apply the Loan towards the purchase of equipment in India and direct and indirect capital expenditure and incidental expenses for the joint venture project.
On 12 March 2019, the plaintiff and the defendant entered into a written deed by which the defendant guaranteed the Borrowers' obligations under the Facility Agreement (Guarantee).
The Lender paid the full amount of the Loan to the Borrowers by 15 March 2019.
The Lender and the Borrowers agreed to extend the repayment date for the Loan from 4 September 2020 to 4 December 2020.
As of 4 December 2020, the Borrowers had not made any repayments towards the Loan.
On 9 December 2020, the plaintiff's solicitors issued a written notice of default to the Borrowers pursuant to the Facility Agreement and a written notice of default to the defendant pursuant to the Guarantee.
On 25 November 2021, the plaintiff commenced these proceedings against the defendant to recover the amounts outstanding under the Loan pursuant to the Guarantee.
The plaintiff filed a statement of claim on 23 September 2022 (SOC) and the defendant filed a defence on 13 February 2023 (Defence).
By chamber summons dated 9 May 2023, the plaintiff applied for summary judgment against the defendant pursuant to O 14 of the Rules of the Supreme Court 1971 (WA) (RSC) (application). The plaintiff requires leave to make the application.
The plaintiff relies upon the affidavit of Jiffriy Chandra sworn 28 April 2023 (Chandra Affidavit), the affidavit of Lucy Elizabeth Pye affirmed on 25 July 2023 (Pye Affidavit) and its outline of submissions filed on 27 July 2023 in support of the application.
The defendant opposes the application and relies upon his affidavit sworn on 15 June 2023 (Kamath Affidavit) and his outline of submissions filed on 7 August 2023 in opposition to the application.
For the reasons that follow, I find that the defendant has no arguable defence to the action and that summary judgment should be granted to the plaintiff.
Before outlining the relevant legal principles, identifying the issues and making my determination, I will deal with the preliminary issues of waiver of conferral between the parties pursuant to O 59 r 9 of the RSC and the grant of leave for the application to be made out of time.

Order 59 rule 9 - waiver of conferral

O 59 r 9 of the RSC requires the parties to confer prior to filing the application. However, O 59 r 9 (2) of the RSC provides that the court may waive the requirement for conferral in a case of urgency or for other good reason.
If the history of the matter means that it is highly unlikely that any agreement would have been reached if conferral had occurred, then this is a 'good reason' for the court to waive the requirement for conferral.[1]
[1] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 [40], [46].
On 9 May 2023, the plaintiff filed a memorandum in support of waiver of conferral in which it set out the history of the application. In summary, the application was discussed at a case management conference before a registrar of this court on 23 February 2023, at which time the defendant indicated that he would oppose the application.
I am satisfied that given the history of the matter, in particular the defendant's opposition to a similar application by the plaintiff made in proceedings commenced in Dubai and that the defendant was indicating in February 2023 that he would oppose the application in conjunction with the nature of the application itself, I am satisfied that agreement could not have been reached through conferral. I am satisfied that there is good reason to waive compliance with O 59 r 9 of the RSC.

Summary judgment - leave to make application out of time

The plaintiff must make any application for summary judgment within 21 days after the defendant has entered an appearance or such later time by leave of the Court.[2]
[2] O 14 r 1 (1) of the RSC.
As the defendant entered an appearance on 20 December 2021, the plaintiff requires leave to make the application for summary judgment out of time. The onus is on the plaintiff to justify any delay in making the application.
In deciding whether the delay was justified, the court will have regard to the merits of the application, the history of the proceedings, the conduct of the parties and the consequences for the parties if an extension of time is granted or refused.[3]
[3] Lashansky v Legal Practice Board of Western Australia[No 3] [2013] WASCA 260.
There is clearly a significant delay by the plaintiff in making the application - the 21 day period expired in late January 2022 and the application was filed on 9 May 2023 - over 15 months later.
By way of explanation for the delay in making the application, Mr Chandra deposes that:
(1)on 29 December 2021, the plaintiff commenced proceedings in the Dubai International Financial Centre (DFIC Action);[4]
[4] Chandra Affidavit [21].
(2)in the DIFC Action, the plaintiff applied for immediate judgment against the Borrowers and the defendant for the amounts outstanding under the Facility Agreement and the Guarantee;[5]
(3)on 17 January 2022, representatives of the plaintiff started discussions with the defendant in relation to payment of the Loan;[6]
(4)these discussions resulted in the plaintiff, the Borrowers and the defendant entering into a payment deed on 1 March 2022 (Payment Deed);[7]
(5)pursuant to the Payment Deed, the defendant agreed to make payments towards the amount outstanding under the Loan commencing with a payment of US$300,000 by 30 June 2022;
(6)the defendant failed to make payments of US$300,000 by 30 June 2022 in accordance with the Payment Deed;[8]
(7)on 20 December 2022, the court in the DIFC Action made orders for immediate judgment for the plaintiff against the Borrowers and the defendant in the amount of US$10,940,025 for the unpaid balance of the Loan and US$7,759,119.66 for accrued interest up to 14 December 2022 (DIFC Judgment);[9]
(8)on 10 January 2023, the Borrowers and the defendant applied for permission to appeal the DIFC Judgment;[10]
(9)on 1 February 2023, Justice Michael Black of the DIFC refused the application for permission to appeal;[11]
(10)on 21 February 2023, the Borrowers and the defendant applied for the second time for permission to appeal the DIFC Judgment;[12] and
(11)on 17 March 2023, Chief Justice Zaki Azmi of the DIFC refused the second application for permission to appeal.[13]
[5] Chandra Affidavit [21].
[6] Chandra Affidavit [34].
[7] Chandra Affidavit [35] Annexure 'JC-15'.
[8] Chandra Affidavit [37].
[9] Chandra Affidavit [23].
[10] Chandra Affidavit [24].
[11] Chandra Affidavit [25].
[12] Chandra Affidavit [26].
[13] Chandra Affidavit [27] Annexure 'JC-12'.
The plaintiff submits that leave to apply for summary judgment ought be granted because:
(1)the defendant has admitted liability for the Loan under the Facility Agreement and the Guarantee in his defence and in the Payment Deed and therefore, he has no defence to these proceedings;
(2)there is no prejudice to the defendant if leave is granted as the defendant only filed his defence on 13 February 2023 and has not incurred any legal fees;
(3)the plaintiff has attempted to confer with the defendant to resolve the dispute, resulting in the entering into of the Payment Deed;
(4)the plaintiff waited for a final outcome in the DIFC Action before applying for summary judgment in these proceedings; and
(5)if leave to apply for summary judgment is refused, it would result in an unnecessary waste of the court's resources where the defendant has no arguable defence to the plaintiff's claim.
I am satisfied that the plaintiff had justifiable reasons for its delay in making the application, those being that it was attempting to resolve the matter with the defendant and failing such resolution, waiting for the final outcome in the DIFC Action.
Ultimately, it is the merits of the application that provide the most compelling justification for the grant of leave to make the application out of time. As is evident from my reasons which follow, I consider the merits of the application to be very strong and therefore, it is appropriate that I grant leave to the plaintiff to make the application out of time.

Summary judgment - legal principles

Order 14 r 1(1) of the RSC provides that where a statement of claim has been served on a defendant and the defendant has entered an appearance, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the court for judgment against that defendant.
Order 14 r 3(1) of the RSC provides that on the hearing of a summary judgment application, unless the court dismisses the application, or the defendant satisfies the court with respect to the claim, or the part of the claim to which the application relates, that there is an issue or question in dispute which ought to be tried, or that there ought for some other reason to be a trial of that claim or part, the court may give such judgment for the plaintiff against the defendant on that claim or part thereof as may be just, having regard to the nature of the remedy or relief claimed.
The legal principles governing the power to order summary judgment are uncontroversial. Summary judgment should be exercised with great care and will not be exercised unless it is clear that there is no real question to be tried.[14]
[14] Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 [99].
Summary judgment must only be granted where the court has a high degree of certainty of the outcome of the proceedings if they went to a trial.[15] If the determination of an application for summary judgment depends upon contested questions of fact, the court should not dispose of the action summarily. However, where the issues raised depend upon questions of law, the court may answer those questions in deciding whether summary judgment should be granted.[16]
[15] Agar v Hyde (2000) 201 CLR 552 [57].
[16] Edenham Pty Ltd v Meares [2016] WASC 301 [17].
Once the plaintiff has established a prima facie right to judgment, the onus is on the defendant to satisfy the court why judgment should not be given. The defendant does not have to show a defence on the balance of probabilities, only to show cause as to why there is an arguable defence.[17]
[17] Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27; Westpac Banking Corporation v Anderson [2017] WASC 106.
In order for the defendant to satisfy the court that there is a serious question to be tried, the defendant is usually required to file an affidavit which contains sufficient particulars to enable the defence case to be properly understood. It is not sufficient for the defendant to merely deny that he is indebted to the plaintiff.[18]
[18] Hausman v Abigroup Contractors Pty Ltd [2009] 29 VR 213 [63] ‑ [65] cited with approval in Edenham v Meares [19].

Issues

The following issues arise for determination:
(1)has the plaintiff established a prima facie right to judgment; and
(2)does the defendant have an arguable defence?

Has the plaintiff established a prima facie right to judgment?

The plaintiff claims against the defendant US$18,444,594.64 being the total amount owing by the defendant to the plaintiff pursuant to the Facility Agreement and Guarantee as at 16 September 2022, plus interest and costs.
I set out below the essential elements of the action which are deposed to in the Chandra Affidavit.
The plaintiff and the Borrowers entered into the Facility Agreement pursuant to which the Lenders loaned the Borrowers U$11,000,000.[19]
[19] Chandra Affidavit [8] Annexure 'JC-02'; SOC [3] ‑ [4]; Defence [4].
The plaintiff and the defendant entered into the Guarantee which is governed by Australian law and by which the defendant guaranteed the obligations of the Borrowers under the Facility Agreement, including payment of the Loan.[20]
[20] Chandra Affidavit [14] Annexure 'JC-05'; Kamath Affidavit [28].
The Loan was repayable in full by 4 December 2020.[21] By 4 December 2020, none of the Loan had been repaid.[22]
[21] SOC [6]; Defence [8(c)].
[22] Chandra Affidavit [12] ‑ [13]; Defence [7].
The plaintiff says that the failure to pay the Loan by 4 December 2020 is an Event of Default. An Event of Default is defined in the Facility Agreement as:
17EVENTS OF DEFAULT
…NON-PAYMENT
17.1An Obligor does not pay on the due date any amount payable pursuant to a Transaction Document at the place at and in the currency in which it is expressed to be payable unless:
17.1.1Its failure to pay is caused by:
17.1.1.1Administrative or technical error; or
17.1.1.2A Disruption Event; and
17.1.2Payment is made within three Business Days of its due date.[23]
[23] Chandra Affidavit Annexure 'JC-02' page 53.
Further, the plaintiff says as a result of the Event of Default under the Facility Agreement the defendant is liable to pay the outstanding amount of the Loan pursuant to the Guarantee. Clause 8 of the Guarantee provides:
8.DEFAULT OF THE BORROWERS
In the event the Lender or the [plaintiff] declares the obligations of the Borrowers to be due and payable because of the occurrence of any event of default as defined in any of the instruments covering the Guaranteed Obligations, the [defendant], upon written notice from the Lender or the [plaintiff], shall forthwith pay to the Lender or to the [plaintiff] the full amount of the said obligations as he was the principal obligor.[24]
[24] Chandra Affidavit Annexure 'JC-05' page 91.
On 9 December 2020, the plaintiff issued a written notice to the Borrowers under the Facility Agreement, demanding payment of the Loan plus interest, fees and costs.[25]
[25] Chandra Affidavit Annexure 'JC-06' page 100.
Also on 9 December 2020, the plaintiff issued a written notice to the defendant under the Guarantee, demanding payment of the Loan plus interest, fees and costs[26]
[26] Chandra Affidavit Annexure 'JC-07' page 109.
As of 28 April 2023, payments totalling US$59,975 had been made towards the outstanding balance of the Loan. As of 28 March 2023, the outstanding balance of the Loan, including interest, was US$19,716,061.10.[27]
[27] Chandra Affidavit Annexure 'JC-09'.
Mr Chandra, on behalf of the plaintiff, deposes that there is no defence to the claim and no other reason why the claim should not be resolved summarily.[28]
[28] Chandra Affidavit [47].
I am satisfied that the plaintiff, by the Chandra Affidavit, has adduced sufficient evidence to verify the essential elements of the cause of action to which the SOC gives rise and therefore, that it has established a prima facie right to judgment.

Does the defendant have an arguable defence?

The defendant, by his defence and/or the Kamath Affidavit, submits that he has an arguable defence to the action on the following grounds:
(1)prior to 2019, the Borrowers repaid all loans to the Lenders, together with interest, in full. However, from December 2019 to March 2019, the Lenders delayed in releasing funds which adversely impacted the business of the Borrowers;

(2)the plaintiff obtained a freezing order against the Borrowers' bank account which hampered the Borrowers' ability to repay the Loan;
(3)the Facility Agreement and the Guarantee make reference to the 'Framework Agreement' (FrA). The FrA has not been disclosed to the defendant which renders the Guarantee unenforceable;
(4)the Guarantee is unenforceable pursuant to the National Consumer Credit Protection Act 2009 (Cth) (NCCPA), the ASIC Approved Banking Code of Practice (Banking Code) and the Australian Securities and Investments Commission Act 2021 (Cth) (ASIC Act) in that:
(a)non-disclosure of credit contracts at the time of signing the Guarantee, in this case the FrA, renders the Guarantee unenforceable;
(b)the defendant had a net-worth of just over US$1million at the time of signing the Guarantee and therefore, the plaintiff knew, or could have ascertained by reasonable inquiry at the time, that the defendant could not pay the Loan;
(c)the Lender must exhaust all avenues to recover the Loan from the Borrower before calling on the defendant under the Guarantee, which the Lender has not done;

(5)the defendant was at a disadvantage in terms of bargaining power compared to the Lenders and the defendant and was under duress to sign the Guarantee as the joint venture project of the Borrowers was on the verge of collapse; and
(6)COVID-19 is an event that frustrated the Facility Agreement.

At the hearing of the application, the defendant raised an additional defence that TransAsia Private Capital Limited is not the 'lender' of the Loan as it is not licensed to do so pursuant to the laws of Hong Kong. The defendant submitted that the Guarantee is void ab initio as the Guarantee which he has signed is in favour of an entity that is not the 'lender' of the Loan.
I turn to consider whether each one of these alleged defences is arguable.
In relation to the alleged arguable defences raised in (1) to (3) above, the defendant asserted the same defences in the DIFC Action. Each was found to have no merit.[29] I have independently considered the defences but have come to the same conclusion for the following reasons.
[29] Chandra Affidavit Annexure 'JC-10' pars 60 ‑ 74.

Firstly, there is no evidence that the Lenders delayed in releasing funds pursuant to the Facility Agreement. Section 6 of the Facility Agreement provided for the 5^th and 6^th drawdown to be '[a]s decided by the Lender'.[30]
[30] Chandra Affidavit Annexure 'JC-02' page 34.
Secondly, the assertion that a freezing order prevented the Borrowers from repaying the Loan is without any merit. There is no evidence before this court that the Borrowers would have been able to repay the Loan but for the existence of the freezing order. Further, the freezing order was not obtained until October 2021, a date well after the Borrowers had defaulted under the Loan.
Thirdly, while there are multiple references to the FrA in the Facility Agreement and the Guarantee,[31] the absence of a FrA does not render the Facility Agreement unenforceable. The defendant submitted that the FrA was a critical document which was supposed the list the rights and obligations of all parties. I do not accept this submission as the Facility Agreement and the Guarantee are documents that do not depend upon the terms of a FrA to make either complete.
[31] Chandra Affidavit Annexure 'JC-02' for example Recitals B, D and J, cl 1.1, cl 3.1.4 and the signature clause and Annexure 'JC-05' for example Recital g, cl 1.1, cl 1.2.2, cl 1.2.3.
In his outline of submissions, the defendant seemed to suggest that the FrA would have made allowance for a force majeure event to relieve the Borrowers of the obligation to repay the Loan. The defendant submitted that force majeure provisions were contained in an earlier funding agreement between the Lender and the Borrowers for the Eastern Coalfields Limited. The defendant referred to this as the 'ECL Contract'.[32] The defendant did not develop this submission at the hearing however, there is no evidence to support the defendant's submission that a force majeure clause would have been included in the FrA such as to relieve the Borrowers of their obligation to repay the Loan. A force majeure clause is a matter for commercial agreement between the parties, it cannot be implied into the Facility Agreement.
[32] Kameth Affidavit [9] Annexure A-12.
I make this general observation - a force majeure clause is not one which is commonly included in loan agreements. That is for this reason - common sense and commercial considerations mean that if a borrower had a reason, albeit a legitimate one, for being unable to pay a loan and as a result, they were relieved of their obligation to do so, lenders would effectively assume many of the business risks of the borrower.
In any event, putting aside the FrA, there is evidence in the form of the Payment Deed by which the Borrowers and the defendant affirmed the Facility Agreement rather than attempting to avoid it. [33]
[33] Chandra Affidavit Annexure 'JC-15' cl 1.3 and cl 1.4.
Fourthly, the defendant relies upon the NCCPA, the Banking Code and the ASIC Act as giving rise to an arguable defence that the Guarantee is not enforceable and/or void ab initio.
The NCCPA does not apply to the Facility Agreement. The NCCPA applies to credit provided or intended to be provided wholly or predominantly for personal, domestic or household purposes, to purchase, renovate or improve residential property for investment purposes or to refinance credit that has been provided wholly or predominantly to purchase, renovate or improve residential property for investment purposes.[34] The Facility Agreement did not provide credit for this purpose.
[34] Section 5(1) of the National Credit Code (schedule 1 to the NCCPA).
The Banking Code sets out the standards of practice and service in the Australian banking industry for individual and small business customers, and their guarantors. It only applies to banking services provided by an Australian Bank that has signed up to the Code. The defendant accepts that the plaintiff is not a registered lender or financial adviser in Australia[35]. The Banking Code does not apply to Facility Agreement or the Guarantee.
[35] Defendant's outline of submissions [6].
In relation to the ASIC Act, the defendant referred me to the provisions therein that related to unconscionable conduct in connection with financial services.[36] Section 12 AC (1) of the ASIC Act provides that Division 2 of the ASIC Act (the division of the ASIC Act containing the unconscionable conduct sections referred to by the defendant) extends to some conduct outside Australia if that conduct is engaged in by either a body corporate incorporated in or carrying on business within Australia, Australian citizens or a person ordinarily resident within Australia. The Lender, that is the entity that is carrying on the conduct complained of by the defendant, is none of these things. Therefore, the ASIC Act does not apply to the Lender.
[36] Section 12 CB and s 12 CC of the ASIC Act.
Fifthly, the defendant submitted that he was at a disadvantage in terms of bargaining power compared to the Lenders and that he was under duress from the Lenders and/or the plaintiff to sign the Guarantee. The emails annexed to the Kamath Affidavit do not provide any evidence that is capable of establishing that the defendant was under duress to sign the Guarantee[37]. The defendant may well have been subject to commercial pressures as a manager of the joint venture project of the Borrowers, but this does not amount to duress against the defendant on the part of the Lenders or the plaintiff to sign either the Facility Agreement or the Guarantee.
[37] Kamath Affidavit pages 61 ‑ 82.
Sixthly, the defendant submits that he has an arguable defence because the COVID‑19 pandemic is an event that frustrated the Facility Agreement.
The doctrine of frustration provides that a contract is automatically terminated if events occur that result in a situation that is fundamentally different from that which was in the contemplation of the parties at the time they entered into the contract.[38]
[38] Codelfa Construction Pty ltd v State Rail Authority of NSW (1982) 149 CLR 337, 360.
In exchange for the Lender transferring money to the Borrowers, the obligation of the Borrowers was to make specified repayments on certain dates and the defendant's obligation under the Guarantee was to guarantee those repayments.
COVID‑19 did not render the Facility Agreement fundamentally different from the agreement that the parties executed. The parties' obligations under the Facility Agreement and the Guarantee are not contingent upon the operation of the joint venture project. Further, the repayments under the Facility Agreement do not specify how the Loan is to be repaid, or that it must be repaid from earnings from the operations of the joint venture project. The fundamental nature of the agreement between the parties was the lending of a sum of money upon certain terms, including a personal guarantee from the defendant, in return for which repayment was required. Even if the defendant had provided evidence of disruption of the joint venture as the result of COVID‑19 and that the difficulty in repayment was caused by such a disruption (which he did not), this would not change the nature of the Borrowers' and the defendant's obligations under the Facility Agreement and Guarantee respectively. This is sufficient to dispose of any frustration argument proffered by the defendant.
Finally, the defendant submitted that the Guarantee was void ab initio because the Guarantee was granted in favour of TA Private Capital Security Agent Ltd, as the security agent of TransAsia Private Capital Limited. The proper lender, the defendant submitted, was the Asian Trade Finance Fund 2 as it was the entity that was permitted, under the laws of Hong Kong, to loan funds.
There is no merit in these submissions. The defendant raised this issue for the first time at the hearing. There is no inconsistency between the named Lender in the Facility Agreement and the named Lender in the Guarantee.

Conclusion and Final Orders

The determination of the application did not depend upon contested questions of fact. It was the application of the law to facts, facts accepted on the view most favourable to the defendant, that was required to determine this application. The defendant does not dispute that the Borrowers received the Loan, that the Loan has not been repaid and that he signed the Guarantee.
I find that the plaintiff has established a prima facie right to judgment and that the defendant has not shown cause as to why he has an arguable defence. I have a high degree of certainty of the outcome of the proceedings if they went to a trial - the plaintiff would be entitled to judgment. There is no other reason why there should be a trial and none has been suggested.
As for the amount of quantum of the judgment, interest thereon and costs, the plaintiff claims the following:
(a)US$18,444,594.64, being the total amount owing by the defendant to the plaintiff pursuant to the Facility Agreement and the Guarantee as at 16 September 2022;
(b)Interest on that amount at the rate of:
a.20.5% per annum as calculated from 17 September 2022 until payment in full or judgment, pursuant to the Facility Agreement and Guarantee; alternatively
b.6% interest per annum as and from 17 September 2022 until payment in full or judgment pursuant to s 32 of the Supreme Court Act 1935 (WA) (SCA) as amended
(c)Costs:
a.On a full indemnity basis pursuant to cl 12 of the Facility Agreement and cl 2.3 and cl 2.4 of the Guarantee; and/or
b.Further or alternatively, on such basis as this Honourable court deems fit.
Clause 9.1 of the Facility Agreement provides for the calculation of interest, the effect of which is that, from 5 September 2020 (being the day after the original end date of the 18 month period of the Facility Agreement) until payment in full, the aggregate rate payable on the amount outstanding under the Loan is 20.5% accruing daily until payment of the outstanding amount. At the hearing I raised the fact that the effect of an order for interest at the rate of 20.5% on the outstanding amount would amount to an order for compound interest. Counsel for the plaintiff accepted this and conceded that interest at the rate of 6% was appropriate. I agree.
There is no reason why costs should not follow the event and therefore, the appropriate order is that the defendant should pay the costs of the action, including the application. I will hear the parties as to the form of that order.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to the Hon Justice Whitby
24 AUGUST 2023