Bhundia v Sommers (No 4) [2021] NSWSC 455

Bhundia v Sommers (No 4) [2021] NSWSC 455

The first defendant failed to discharge the onus of proving that either the US$189,000 fixed amount payable for the loan or the 30% per annum compounded monthly default interest rate was a penalty. The US$189,000 was consideration for the plaintiff's advance and there was no evidence of the first defendant's position without the term or of comparable short-term unsecured finance rates. The default interest rate, although high, was not shown on the evidence to be out of all proportion to a genuine pre-estimate of the plaintiff's damages. However, the relief claimed section of the statement of claim prevailed over inconsistent pleading allegations, so the plaintiff was confined to the...

Jurisdiction
Australia
Judgment Date
30 April 2021
Procedural Posture
Contract Claim on Loan Guarantees / Principal Judgment After Hearing Against the First Defendant; Default Judgment Had Been Entered Against the Second Defendant
Outcome
Judgment for the plaintiff against the first defendant.
Legal Topics
['penalty Doctrine' 'default Interest' 'short Term Unsecured Bridging Loan' 'statement of Claim Relief' 'costs Follow the Event']
['contracts' 'practice and Procedure' 'costs'] ['penalty Doctrine' 'default Interest' 'short Term Unsecured Bridging Loan' 'statement of Claim Relief' 'costs Follow the Event']

Case Brief

Summary, issues, holding and outcome

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Procedural Posture

Contract Claim on Loan Guarantees / Principal Judgment After Hearing Against the First Defendant; Default Judgment Had Been Entered Against the Second Defendant

Legal Issues

  1. 1 ['Whether the fixed amount of US$189,000 payable for the loan was a penalty.' 'Whether the contractual default interest rate of 30% per annum compounded monthly was a penalty.' 'Whether the plaintiff was confined to the interest claimed in the relief claimed section of the statement of claim after 30 June 2019.' 'Whether costs should follow the event.']

Ratio Decidendi

The first defendant failed to discharge the onus of proving that either the US$189,000 fixed amount payable for the loan or the 30% per annum compounded monthly default interest rate was a penalty. The US$189,000 was consideration for the plaintiff's advance and there was no evidence of the first defendant's position without the term or of comparable short-term unsecured finance rates. The default interest rate, although high, was not shown on the evidence to be out of all proportion to a genuine pre-estimate of the plaintiff's damages. However, the relief claimed section of the statement of claim prevailed over inconsistent pleading allegations, so the plaintiff was confined to the...

Court Disposition

Judgment for the plaintiff against the first defendant.

Orders

  • ['Judgment for the plaintiff against the first defendant.' 'Direct the parties to calculate the judgment sum in accordance with the reasons and provide an agreed figure to the Associate within seven days to permit the judgment sum to be entered.' "Subject to order (4), order the first defendant to pay the...