PKS Admin Pty Limited (ACN 137 100 577) v Greenup

These proceedings commenced in 2 May 2019 seeking possession of land at 47 Hammers Rd, Northmead and seeking judgment against the defendant in the sum of $665,000 together with interest thereon. The basis of the claim was that a loan had been made to a company called Pope Storage Batteries Pty Ltd pursuant to an agreement contained in a mortgage dated 1 August 2018. The sum of $665,000 was advanced pursuant to that mortgage.

The company was described as the borrower, and the defendant, who was a director of the company, was described as the guarantor and mortgagor. The mortgage somewhat inconsistently stipulated that the term of the loan was for a six-month period, but that the expiry date was 1 August 2019 which was twelve months after the advance was made. That inconsistency in the security document must be determined in favour of the defendant. The loan was therefore due for repayment on 1 August 2019.

The plaintiff initially thought that the loan was obliged to be repaid by 1 February 2019. When that did not occur the present proceedings were instituted. The plaintiff subsequently became aware of the inconsistency in the mortgage document and filed and served an amended statement of claim on 21 February 2020. In the meantime, the defendant had filed a defence on 8 November 2019 acting for himself. The section headed "Pleadings and Particulars" said this:

The plaintiff subsequently filed a notice of motion on 10 December 2019 seeking summary judgment for possession and, in the alternative, an order that the defence be struck out and that the plaintiff have liberty to file for default judgment.

The proceedings have been before the court on two occasions prior to today. They were before the registrar and Fagan J on 25 November 2019, and before me on 12 February 2020. On no occasion has the defendant appeared.

The affidavit of Rhonda Galayini sworn 21 February 2020 demonstrates that a mortgage was entered into with the company and the defendant, that the advance was made to the company and that there has been a failure to repay the principal sum to the plaintiff at any time, and certainly a failure since 1 August 2019. The affidavit also demonstrates that there has been a failure on the defendant's part to pay interest from and after 14 March 2019.

The mortgage expressly incorporates the terms of memorandum number AE458219L filed at the Land Titles Office. Clause 26 of that memorandum provides that if the mortgagor is the guarantor the mortgage secures the obligations of the guarantor under the guarantee. Clause 105 of the memorandum provides that the guarantor:

Clause 73 requires the borrower to pay the lender on the expiry date of the loan such of the principal that has not been repaid by the borrower as at that expiry date.

I am satisfied under the mortgage that the defendant has the liability as the guarantor to repay the principal which was not repaid on 1 August 2019 being the whole amount advanced. I am further satisfied that the defendant has the obligation to pay interest as is required under cl 1 of the mortgage. A breach of the guarantor's obligations under cl 6 of the mortgage is deemed an event of default under the terms of the mortgage and such an event of default entitles the plaintiff to obtain possession of the property (cl 69 of the Memorandum).

Nothing contained in the defence file dated December 2019 identifies any defence to the plaintiff's claim for possession of the property or provides any answer to the failure on the part of the borrower to repay the loan, or on the part of the guarantor to repay the loan on the failure of the borrower to do so. In those circumstances, the plaintiff is entitled to summary judgment for possession.

The orders I make are: