Zeng v Property and Development Pty Ltd

[2012] VCC 1525

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
EXPEDITED CASES DIVISION

Case No. CI-11-06196

PEIJIAN ZENG and ROBERT PADANYI	Plaintiffs
v.
PROPERTY & DEVELOPMENT PTY LTD and GARRY RAYMOND HEMMING	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	9 October 2012
DATE OF JUDGMENT:	9 October 2012 (revised 10 October 2012)
CASE MAY BE CITED AS:	Zeng & Anor v. Property & Development Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2012] VCC 1525

REASONS FOR JUDGMENT

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Catchwords:            Loan agreements – Default in payment of interest and principal – Calculation of amounts due – Interest owing pursuant to each agreement and by statute.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A. Phillips	Jessop & Komesaroff
For the Defendants	(No appearance)

HIS HONOUR:

1The two plaintiffs are husband and wife. They are in general practice together in Werribee. In about 2008, the second defendant, through a company, Metro & Pty Ltd, was engaged to redevelop a medical centre for them. This led to the plaintiffs loaning money to the first defendant and also to the second defendant.

2The first transaction involved a loan by the plaintiffs to the first defendant of the total sum of $250,000; $50,000 on 6 January 2009 and $200,000 on 11 February 2009. A loan written agreement was executed by those parties. It provided for interest at the rate of 15 percent, half of which was to be paid monthly, and the balance of interest capitalised and paid at the end of the loan period. The first defendant made a number of the monthly payments of interest, totalling the sum of $15,994.86, but failed to pay the monthly interest payments due after 11 January 2010.

3The parties, after discussion, agreed to enter into further agreements. A deed was executed by the plaintiffs of the one part and both defendants of the other part, whereby both defendants jointly and severally agreed to be responsible for the amounts due pursuant to the earlier loan agreement. The second defendant also executed a deed of guarantee and indemnity at the same time. Both documents were apparently executed on 30 May 2011, and pursuant to the agreements reached, a sum of $100,000 was paid off the principal owing on 1 June 2011. The 30 May 2011 deeds provided that repayment would be made by the defendants 120 days from the date of execution.

4The second transaction involved the plaintiffs and the second defendant. It was an oral agreement reached between them in about July 2009 and involved a principal sum of $50,000 to be repaid after two months with interest at 6 percent per annum. The loan was to assist the second defendant’s partner in a business venture. No interest was paid in respect of that loan and the principal has not been repaid.

5I consider that, in respect of the first transaction, the plaintiffs are entitled to judgment against both defendants for payment of the total sum of $266,892.46. That sum is calculated as follows:

$250,000	Original sum advanced
-$100,000	Payment made on 1 June 2011
$150,000
+$45,937.50	Capitalised interest from the date of the agreement until 11 September 2011
$195,937.50
+$29,942.64	Total monthly interest payments at 15 percent per annum, pursuant to the agreement ($45,937.50 less total monthly interest payments made of $15,994.86)
$225,880.14
+$2,990.36	Penalty interest, calculated on the unpaid monthly interest payments from the date each monthly payment was due until 27 September 2011, when the whole of the loan monies became due
$228,870.50
+$24,511.90	Statutory interest on the sum of $225,880.14 from 28 September 2011 to today
$253,382.40

6In relation to the second transaction, there should be judgment for the plaintiffs against the second defendant  for the total sum of $66,612.27, calculated as follows:

$50,000	Amount advanced
+$534.24	Interest at 6 percent from date principal advanced on 21 July 2009 to 22 September 2009
$50,534.24
+$16,078.03	Statutory interest on $50,534.24 from 23 September 2009 to today
$66,612.27

7The order of the court will be as follows:

a.Judgment for the plaintiffs against the defendants that the defendants pay to the plaintiffs the sum of $253,382.40.

b.Judgment for the plaintiffs against the second defendant that the second defendant pay to the plaintiffs the sum of $66,612.27.

c.The defendants must pay the plaintiffs’ costs of the proceeding, including any reserved costs to be taxed in default of agreement.

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Certificate

I certify that these 2 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 9 October 2012 and revised on 10 October 2012.

Dated: 11 October 2012

Caroline Dawes

Associate to His Honour Judge Anderson