Supreme Court New South Wales Medium Neutral Citation: Gemono Pty Ltd v Sarah Alexandra Dougan [2012] NSWSC 152 Hearing dates: 28 February 2012 Decision date: 28 February 2012 Jurisdiction: Common Law Before: Grove AJ Decision: Judgment for the plaintiff against the second defendant Varney Lee Magill in the sum of $2,708,921.69. I declare that the second defendant is liable to the plaintiff for the costs and interest on those costs pursuant to contractual arrangements manifest in the deeds and to into which she entered. Category: Procedural and other rulings Parties: Gemono Pty Ltd ACN 104 956 336 - Plaintiff Sarah Alexandra Dougan - First Defendant Varney Lee Magill - Second Defendant Representation: J O'Sullivan - Plaintiff Leon M Ratner & Associates - Plaintiff File Number(s): 2011/160090 Judgment 1HIS HONOUR : The plaintiff seeks judgment against the guarantor of loans made by the plaintiff to the first defendant. The evidence shows that the first defendant and the third defendant are bankrupt and in administration, respectively, and judgment is sought against a personal guarantor of the loans. 2The second defendant guarantor has not appeared today, although a defence was filed on her behalf. Exhibit 1 shows an email from solicitors who filed the defence on her behalf, advising that their client seeks to rely on the defence but intends not to appear today. 3As I have indicated, she has not appeared. 4In the circumstances, leave is granted to the plaintiff to proceed ex parte. 5The evidence is manifest in the affidavit of David Rothwell, sworn 11 October at 2011. In the circumstances, there is no need to be extremely detailed in describing the events that have led to the hearing today. 6Originally, a loan was made to the borrower of some 2.2 million dollars. Over a period of time the sum of 2 million dollars was paid but nothing towards the interest which was payable on the loan. 7Subsequently, obviously following negotiations between the parties, two deeds were entered. The first deed was entered between the plaintiff and the, now bankrupt, first defendant. But, significantly, the second deed entered on the 31st of October 2009 was executed by the guarantor, in addition to the other parties. That deed in its title describes the guarantor as trustee for the Patterson Street unit trust. There is reference to that trust in other documentation, but it is plain from the terms of the various documents that the second defendant guarantor signed and became liable in her personal capacity. 8Significantly, a paragraph of the statement of claim pleads that the lender and the borrower, that is to say the plaintiff and the first defendant and the first guarantor, the second defendant against whom judgment is now sought, executed a further deed. There is no reference in the pleading to her execution in her capacity of a trustee. 9In the defence filed, to which reference was made in the solicitor's email, there is an admission of the pleading in the paragraph that I have just mentioned. 10The situation, briefly, is that the entirety of the original principal loan has never been repaid and interest has been accruing at a very rapid rate in the years that have passed since. 11Although there is no evidence before me, it is apparent, and I infer that the loan was taken as a likely bridging loan and expected to be required only for a limited time. 12As can, therefore, happen when payments are not made in respect of such loans, the ultimate indebtedness can become considerable. Calculations have been made in relation to the cumulating outstanding debt. 13In addition, pursuant to the agreement, the guarantor is liable to indemnify the costs payable in respect of the solicitor's acting for the plaintiff, together with interest on those costs. 14Although the indebtedness, as at today, has crystallised, those costs have not crystallised and application is made to me to make a declaration of the plaintiff's entitlement. 15In the absence of any contest I do not see why such declaration should not be made. 16Accordingly, having regard to the schedule of interest exhibited to the affidavit of Mr Rothwell, and the various agreements therein, I direct judgment for the plaintiff against the second defendant Varney Lee Magill in the sum of $2,708,921.69. I declare that the second defendant is liable to the plaintiff for the costs and interest on those costs pursuant to contractual arrangements manifest in the deeds and to into which she entered. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 March 2012