Magnin v Creevey [2017] NSWSC 375

Supreme Court New South Wales

Medium Neutral Citation: Magnin v Creevey [2017] NSWSC 375 Hearing dates: 7 April 2017 Date of orders: 07 April 2017 Decision date: 07 April 2017 Jurisdiction: Common Law Before: Harrison J Decision: (1) Judgment for the plaintiff for USD665,000. (2) Order the defendant to pay the plaintiff's costs of and incidental to these proceedings on an indemnity basis. Catchwords: LOAN – loan of USD350,000 – default – whether loan agreement contained a penalty Legislation Cited: Evidence Act 1995 Cases Cited: Arab Bank Australia Ltd v Sayde Developments Pty Ltd [2016] NSWCA 328 Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331; [2005] HCA 54 Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28 Category: Principal judgment Parties: Ann Magnin (Plaintiff) Ronald Creevey (Defendant) Representation: Counsel: J R Willis (Plaintiff)

Solicitors: Piper Alderman (Plaintiff) File Number(s): 2016/130291 Publication restriction: Nil

Judgment 1. HIS HONOUR: By her statement of claim filed on 28 April 2016, Ann Magnin claims the sum of USD350,000 pursuant to the terms of a loan agreement with Ronald Creevey dated 22 January 2014. 2. Although Mr Creevey formerly retained solicitors to act on his behalf in defence of Ms Magnin's claim, those solicitors ceased to act for him on or about 14 March 2017. A notice of intention to file a notice of ceasing to act for Mr Creevey was filed by his solicitor on 7 March 2017. Mr Creevey was subsequently advised in correspondence from Ms Magnin's solicitors that she intended to proceed at the hearing of the matter on 7 April 2017. Mr Creevey did not reply to that correspondence. There was no appearance by or on behalf of Mr Creevey when the matter was called before me on that day. 3. Ms Magnin relies upon her affidavit sworn on 15 November 2016. I am satisfied that she advanced USD350,000 to Mr Creevey on or about 22 January 2014. I am also satisfied that Mr Creevey has failed to make any payment of interest on the loan and has failed to repay the principal sum in accordance with the terms of the loan agreement. The basis for that satisfaction is not limited to the evidence upon which Ms Magnin relies. 4. In his defence filed on 17 August 2016, Mr Creevey admitted that he entered into the loan agreement with Ms Magnin and that he received the sum of USD350,000 on or about 23 January 2014. He also admits that he has not made any payment to Ms Magnin of any monies under the loan agreement. The defence contains no paragraph explaining why, at the very least, Mr Creevey is not liable to repay the principal sum having regard to the fact that the term of the loan has expired. 5. However, in answer to the whole of the statement of claim Mr Creevey contends that clauses 1 and 3 of the loan agreement constitute a penalty. Clauses 1 to 3 inclusive are in the following terms: "Loan Amount & Interest 1.The Lender promises to loan [sic] Three Hundred Fifty Thousand ($350,000) USD to the Borrower and the Borrower promises to repay this principal amount to the Lender, at such address as may be provided in writing, with interest payable on the unpaid principal at the rate of 18 percent, calculated semi-annually not in advance. Payment 2. The Loan will be repaid in full no more than 6 months from the execution of this Agreement. Default 3. Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and the interest due under this Agreement at that time to be immediately due and payable." 1. Mr Creevey filed no evidence in support of his defence.