Commonwealth Bank of Australia Limited v Thompson [2016] NSWSC 172

Supreme Court New South Wales

Medium Neutral Citation: Commonwealth Bank of Australia Limited v Thompson [2016] NSWSC 172 Hearing dates: 01/03/2016 Date of orders: 01 March 2016 Decision date: 01 March 2016 Jurisdiction: Equity - Commercial List Before: McDougall J Decision: Judgment for the plaintiff for $3,630,231.67 with costs. Catchwords: GUARANTEE AND INDEMNITY – enforcement of guarantees – default on loan facility – claim made out by plaintiff – no appearance by defendant Category: Principal judgment Parties: Commonwealth Bank of Australia Limited trading as Bankwest (Plaintiff) Charles Henry Thompson (Defendant) Representation: Counsel: A C McManus (Solicitor) (Plaintiff) (No appearance) (Defendant)

Solicitors: Norton Rose Fulbright Australia (Plaintiff) Charles Henry Thompson (In person) File Number(s): 2015/278433

Judgment (EX TEMPORE – REVISED 1 MARCH 2016) 1. HIS HONOUR: The plaintiff ("the Bank") sues the defendant ("Mr Thompson") for an amount in excess of $3.6 million said to be due under a guarantee. 2. The background facts are relatively simple. 3. On 25 July 2008, Bankwest made an offer of a loan facility to a company known as The Avenue Collaroy Pty Limited ("the Company"). Mr Thompson was the sole director, shareholder and secretary of the company. On its behalf he accepted the offer, on 30 July 2008. The offer included a requirement of guarantees from, amongst others, Mr Thompson. He acknowledged that he would stand as guarantor to the company's obligations. 4. In due course a loan agreement was made and Mr Thompson executed a guarantee of the company's obligations under it. 5. On 21 December 2010, presumably following some form of negotiation, Bankwest offered to vary the facilities, in effect by increasing the facility limit by about $2 million. Mr Thompson accepted that on behalf of the company. Again, Bankwest required a guarantee. Again, Mr Thompson agreed to provide that guarantee. It may be noted that the form of guarantee and indemnity that he had already provided was sufficient to cover the extended liability. 6. The company did not repay the loan. The Bank made demand. The company did not satisfy that demand. The Bank took enforcement action. In the result, it says that about $3.6 million is due but unpaid. 7. Bankwest has now in effect been subsumed into the Bank. I am satisfied that the Bank is legally able to enforce obligations that had been owed to Bankwest. That is a consequence of the legislative scheme effecting the assumption by the Bank of Bankwest's rights and obligations. 8. The matter has been before the Court on a number of occasions. On two of those occasions (including when the matter was listed before me for hearing on 17 December 2015), Mr Thompson appeared. On 17 December 2015, he indicated that he wished to defend the claim. Although the time within which he was to serve his list response and cross-claim had expired, I extended that time up until 19 February 2016 and listed the matter for directions the following week. 9. Mr Thompson did not file any list response or cross-claim. Nor did he appear when the matter was listed on 26 February 2016. On that date, the List Judge listed the matter again for hearing before me. 10. I am satisfied that, in accordance with the orders of the List Judge, the Bank gave Mr Thompson notice of today's hearing. He was called three times outside court. He did not appear. 11. The Bank has provided both detailed affidavit evidence (including an exhibit which sets out all relevant documents) and a certificate which, by the terms of cl 18.2 of the general terms and conditions, is in effect prima facie evidence of any amount or matter certified in it. I should note that cl 16 of the terms and conditions of the guarantee likewise provided for certification. 12. In the result, I am satisfied that the Bank has made good every factual element needed to substantiate its claim against Mr Thompson. Its evidence shows the agreement for loan and variation thereof, the advance of the facilities, the company's breach in not repaying them, and the default action taken. 13. I am therefore satisfied that the Bank is entitled to judgment in the amount certified on its behalf as at yesterday's date. I am also satisfied, although in view of the terms of the certificate I am not sure that I need to be independently satisfied, of the calculation of that amount. 14. I direct entry of judgment for the plaintiff against the defendant in the amount of $3,630,231.67. 15. I order the defendant to pay the plaintiff's costs in accordance with the terms of his guarantee. 16. I order that the exhibits be handed out.