Phan v McGuire

[2024] NZHC 3739

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2024-419-000131

[2024] NZHC 3739

UNDER

High Court Rules 2016

BETWEEN

THINH DUC PHAN

Plaintiff

AND

PATRICK LOUGHLIN MCGUIRE

Defendant

Judgment:

(On the papers)

10 December 2024

JUDGMENT OF BREWER J

This judgment was delivered by me on 10 December 2024 at 3 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Grayson Clements (Hamilton) for Plaintiff

PHAN v MCGUIRE [2024] NZHC 3739 [10 December 2024]

Introduction

[1]    The plaintiff sues the defendant for breach of contract, namely a failure to repay the whole of a loan recorded in a written term loan agreement.

[2]    The defendant has taken no steps to repay or respond and the plaintiff has applied for judgment by way of formal proof.1

[3]    The application was scheduled for an oral hearing on 10 December 2024. However, I am satisfied that the cause of action, and the relief sought, are established on the papers, so I cancelled the hearing.

[4]I now give brief reasons for my decision.

Background

[5]I take the facts from the plaintiff’s affidavit affirmed on 3 December 2024.

[6]    Pursuant to a term loan agreement dated 5 April 2023, the plaintiff loaned the defendant $1 million.2 The term of the loan was one year and no interest was chargeable during that year. The defendant, as borrower, had the right to make repayments during the course of the term of the loan in amounts of no less than

$100,000.

[7]    Interest at the rate of 19.95 per cent per annum, compounded monthly, would accrue on the principal sum, or such part as remained unpaid, in the event of the plaintiff defaulting on repayment.

[8]Over the course of the term of the loan, the defendant repaid $250,000. Thus,

$750,000 was to be repaid on 5 April 2024. This did not occur. Demand was made but was not satisfied.

1      High Court Rules 2016, r 15.9.

2      The loan was, in effect, vendor finance in a related transaction involving the defendant’s partner. There is no legal significance in that.

[9]    There is proof of service of the proceeding and, as noted, no steps have been taken by the defendant.

Discussion

[10]   I am satisfied that pursuant to the term loan agreement the plaintiff is entitled to judgment for the balance of the principal sum, namely $750,000, plus accrued interest from 5 April 2024 to 10 December 2024.

[11]   The defendant is also liable to pay further interest from the date of judgment at 19.95 per cent, compounded monthly.

[12]   The term loan agreement also provides that the defendant is liable to pay the plaintiff’s actual costs incurred in the exercise of his rights and powers following the defendant’s default. I have read counsel’s memorandum as to costs and disbursements dated 4 December 2024. I am satisfied that the total claimed, namely $22,912.52, is reasonable in the circumstances and I will award them.

Decision

[13]Judgment is entered for the plaintiff in the sum of $858,089.92 comprising:

(a)the outstanding principal sum of $750,000; and

(b)accrued  interest  of  $108,089.92  from   the   date   of   default   to  10 December 2024.

[14]   The defendant is ordered to pay further interest on the judgment sum at the rate of 19.95 per cent per annum, compounded monthly, from the date of judgment until payment in full, pursuant to sub-cls 3(d)(ii) and (iii) of the loan agreement and ss 22 and 23 of the Interest on Money Claims Act 2016.

[15]The defendant is ordered to pay the plaintiff’s legal costs and disbursements of

$22,912.52 (inclusive of GST) on a solicitor-client basis, as provided under cls 7(f) and 12(a)(ii) of the loan agreement and as per the memorandum of counsel for costs and disbursements dated 4 December 2024.

[16]Judgment may be sealed accordingly.

Brewer J