WRIGHT -v- CECILIA HOLDINGS PTY LTD [2026] WASC 185

[2026] WASC 185 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : WRIGHT -v- CECILIA HOLDINGS PTY LTD [2026] WASC 185 CORAM : MASTER RUSSELL HEARD : 28 OCTOBER 2025 DELIVERED : 12 MAY 2026 FILE NO/S : CIV 1595 of 2025 BETWEEN : GARRY MERVYN WRIGHT First Plaintiff PROPRIDE PTY LTD as trustee for the WRIGHT SUPERANNUATION FUND Second Plaintiff ORIGINAL PROPERTY BROKERS PTY LTD Third Plaintiff CDI GROUP PTY LTD Fourth Plaintiff AND CECILIA HOLDINGS PTY LTD First Defendant HUNG YEE CHAN Second Defendant -- 1 of 22 -- [2026] WASC 185 Page 2 Catchwords: Practice and procedure - Summary judgment - Application for summary judgment pursuant to O 14 Rules of the Supreme Court 1971 (WA) - Turns on own facts Debt - Appropriation - Where debt includes principal and interest - How payments to be applied - Whether payments to be applied to interest or principle Legislation: Rules of the Supreme Court 1971 (WA) O 14, O 14 r 1, O 14 r 1(1), O 14 r 2(1) Result: Plaintiffs' application for summary judgment dismissed Defendants to have unconditional leave to defend Category: B Representation: Counsel: First Plaintiff : G J Douglas Second Plaintiff : G J Douglas Third Plaintiff : G J Douglas Fourth Plaintiff : N/A First Defendant : C S Williams Second Defendant : C S Williams Solicitors: First Plaintiff : Douglas Lawyers Second Plaintiff : Douglas Lawyers Third Plaintiff : Douglas Lawyers Fourth Plaintiff : N/A First Defendant : Solomon Brothers Second Defendant : Solomon Brothers -- 2 of 22 -- [2026] WASC 185 Page 3 Cases referred to in decision(s): Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168 Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 Caltabiano v Electoral Commission of Queensland (No 1) [2009] QCA 182 Cory Brothers & Co v The Owners of the Turkish Steamship 'Mecca' [1897] AC 286 Deputy Commissioner of Taxation v Lafferty [2017] WASC 257 Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95 Fahey v MSD Speirs Ltd [1975] 1 NZLR 240 Falk v Haugh [1935] HCA 35; (1935) 53 CLR 163 Fels v Rural Bank [2020] WASCA 151 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 Lachlan v HP Mercantile Pty Ltd [2015] NSWCA 130; (2015) 89 NSWLR 198 Leeson v Leeson [1936] 2 KB 156 Moree Plains Shire Council v Goater [2016] FCAFC 135 Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (1982) 60 FLR 355 Schwartz v Hadid [2013] NSWCA 89 Smith v Leveraged Equities [2020] WASCA 122 Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 Stein v Torella Holdings Pty Ltd [2010] NSWSC 1445 Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 Visbord v Federal Commissioner of Taxation (1943) 68 CLR 354 Volonakis v Erceg [2019] NSWSC 1875 Westpac Banking Corporation v Anderson [2017] WASC 106 WorkPac Pty Ltd v Rossato [2020] FCAFC 84; (2020) 378 ALR 585 Wright v Lemon [2024] WASCA 19 -- 3 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 4 MASTER RUSSELL: Introduction 1 The plaintiffs commenced this proceeding against the defendants on 9 June 2025 claiming amounts alleged to be owed to them by the defendants. 2 The first plaintiff, Gary Mervyn Wright, is the sole director and shareholder of the second plaintiff, Propride Pty Ltd, which sues in its capacity as trustee for the Wright Superannuation Fund (Propride). The third plaintiff is Original Property Brokers Pty Ltd (OPB). They each claim repayment of amounts alleged to be owed in respect of loans made by them to the first defendant, Cecilia Holdings Pty Ltd (Cecilia Holdings) pursuant to separate agreements between each of them and Cecilia Holdings, performance of which was guaranteed by the second defendant, Ms Hung Yee Chan. 3 The fourth plaintiff, CDI Group Pty Ltd, filed a notice of discontinuance on 7 July 2025 in respect of its claim for payment of debts alleged to be due and owing to it by Ms Chan. On the same date, a statement of claim was filed in respect of Mr Wright's, Propride's and OPB's claims against Cecilia Holdings and Ms Chan. 4 The plaintiffs apply for summary judgment against the defendants, pursuant to O 14 of the Rules of the Supreme Court 1971 (WA) (RSC) (Application). 5 For the reasons that follow, I am not satisfied that the plaintiffs have made out a prima facie case or that this is a clear case in which summary judgment should be entered, and have determined that the Application should be dismissed. The defendants should have unconditional leave to defend the proceeding, if it is not otherwise resolved. Materials relied upon and objections to evidence 6 In support of the Application, the plaintiffs rely on an outline of submissions filed on 9 September 2025 and sought to rely on affidavits of: (a) Garry Mervyn Wright sworn on 9 July 2025 (Wright Affidavit) and 9 October 2025 (Supplementary Wright Affidavit); -- 4 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 5 (b) Samantha Jane Payne sworn on 9 July 2025 (Payne Affidavit) and 9 October 2025 (Supplementary Payne Affidavit); and (c) Hugh Geoffrey McGowan affirmed on 2 September 2025 (McGowan Affidavit). 7 The defendants oppose the Application and rely on an outline of submissions filed on 6 October 2025 and sought to rely on an affidavit of Hung Yee Chan sworn on 29 August 2025 (Chan Affidavit). 8 For the oral reasons given at the hearing of the Application, I upheld the defendants' objection to the admission of the whole of the Supplementary Wright Affidavit and the Supplementary Payne Affidavit, which were filed without leave after the parties had filed affidavits and outlines of submissions, largely in accordance with the programming orders made on 1 August 2025. 9 There were also objections to the admissibility of certain parts of each of the other affidavits sought to be relied upon by the parties, in respect of which I ruled that the following parts would not be admitted into evidence and were struck out: (a) the first sentence of paragraphs 2 and 3 and the whole of paragraphs 8.1, 8.2 and 10 of the Wright Affidavit; (b) the first sentence of paragraph 2 and the whole of paragraphs 7.1 and 9 of the Payne Affidavit; (c) the words 'requesting that the Second Defendant pay the interest owing on the Second Plaintiff's Loan, totalling around $28,000' in paragraph 7 of the McGowan Affidavit; (d) the words 'towards the interest on the Second Plaintiff's Loan' and 'acknowledges this payment in' in paragraph 8 of the McGowan Affidavit; (e) the words 'towards the interest on the Second Plaintiff's Loan' at the end of paragraph 9 of the McGowan Affidavit; (f) the whole of paragraphs 10 and 13 of the McGowan Affidavit; and (g) the whole of paragraphs 14 and 15 of the Chan Affidavit. -- 5 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 6 Procedural requirements and applicable legal principles 10 An application for summary judgment must be brought within 21 days after an appearance has been filed, or at a later time with leave of the court.1 In this case, the defendants entered an appearance on 25 June 2025. As the Application was filed within 21 days, on 16 July 2025, leave is not required. 11 An application pursuant to O 14 RSC must be supported by an affidavit verifying the facts upon which the claim is based and stating that, in the deponent's belief, there is no defence to the claim.2 12 The legal principles relating to an application for summary judgment are well established and were not in dispute. The key principles were summarised in Sutton Investments Pty Ltd v Realistic Investments Pty Ltd, as follows:3 Summary judgment will be granted only when there is no real question to be tried. The power to order summary judgment is one that should be exercised with great care: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24], [53] - [55]. 13 The plaintiff bears the legal burden of persuading the court that its claim is a good one and that there is no defence to it. If the plaintiff's affidavit or affidavits in support of the Application make out a prima facie case on these two matters, the evidentiary burden ordinarily passes to the defendant to show there is an arguable defence or some other reason there ought to be a trial of the action.4 14 A defendant does not have to show a defence on the balance of probabilities. However, a defendant seeking to demonstrate an arguable defence or some other reason why there ought to be a trial must, in their affidavit, provide sufficient particulars and details of their defence.5 1 RSC O 14 r 1(1). 2 RSC O 14 r 2(1). 3 Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24]. 4 Westpac Banking Corporation v Anderson [2017] WASC 106 [53] - [54], [103]. See also Deputy Commissioner of Taxation v Lafferty [2017] WASC 257 [54] (Tottle J) and the authorities referred to. 5 See Lafferty [54]. -- 6 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 7 15 Where an issue or question is raised, summary judgment should only be granted in favour of the applicant where they can demonstrate that the question will certainly be resolved in their favour.6 The plaintiffs' claims 16 Each of Mr Wright, Propride and OPB claim payment of amounts alleged to be owing to them under the terms of separate written loan agreements executed as a deed between them and the first defendant on 1 September 2023, as follows: (a) Mr Wright claims repayment of the principal sum and interest claimed to be outstanding in respect of a loan of $600,000 that he made to Cecilia Holdings (Wright Loan);7 (b) Propride claims repayment of the principal sum and interest claimed to be outstanding in respect of a loan of $200,000 that it made to Cecilia Holdings (Propride Loan);8 and (c) OPB claims repayment of the principal sum and interest claimed to be outstanding in respect of a loan of $200,000 that it made to Cecilia Holdings (OPB Loan).9 17 It is not in dispute that the terms of each of the alleged loan agreements are the same except for the name of the lender and the amount of the loan. Each of the plaintiffs claim that the terms of the loan agreement provided in the deed, in each case, are: 1. The relevant plaintiff (as the lender) loaned to Cecilia Holdings (as the borrower) the amount referred to and described in the deed as the 'Principal Sum'.10 2. The Principal Sum was to be repaid by the 'Repayment Date', being the date 12 calendar months after the date of the deed (cl 4 and item 2 of the schedule).11 3. Interest is payable by the borrower on the Principal Sum at the rate of 12% per annum, with such interest to be paid on the Repayment Date (cl 6 and cl 7).12 6 Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [54] - [55]; Fels v Rural Bank [2020] WASCA 151 [27]. 7 Statement of Claim filed on 7 July 2025 (SOC) [6], [9.1]; Wright Affidavit [2], 'GMW-2'. 8 SOC [7], [9.2]; Wright Affidavit [3], 'GMW-3'. 9 SOC [8], [9.3]; Payne Affidavit [2], 'SJP-2'. 10 SOC [9.1] - [9.3]. 11 SOC [9.4], [9.5]. -- 7 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 8 4. The interest payable by the borrower is to be calculated from the date the Principal Sum is paid to the borrower, to the date of repayment of the Principal Sum in full, at the rate of 12% per annum (cl 8 and item 3 of the schedule).13 5. Ms Chan, as guarantor, guaranteed repayment of the Principal Sum and all other monies due to the relevant plaintiff (as lender) by Cecilia Holdings (as borrower) and the performance of the terms of each of the deeds (cl 9).14 6. If Cecilia Holdings defaulted in its performance of the loan agreements, Ms Chan agreed to pay the relevant plaintiff all losses, damages, expenses and costs which that plaintiff is entitled to recover by reason of the default (cl 10).15 18 The plaintiffs claim that each of the loan agreements were executed on 1 September 2023 and that the Repayment Date was 1 September 2024. In each case, the plaintiff claims that no payments were made by Cecilia Holdings by the Repayment Date of 1 September 2024.16 19 By letter dated 15 November 2024 from the plaintiffs' solicitors to Cecilia Holdings and Ms Chan, the plaintiffs demanded payment of the total amount claimed to be owed in relation to the Principal Sum and interest in respect of each loan. The amount claimed in respect of each of the loans was set out in a schedule to the letter and the total amount of $1,144,986.30 was demanded to be paid within seven days being 22 November 2024.17 20 The plaintiffs plead and Mr Wright deposes that the defendants did not make any payments in respect of the amounts claimed to be owed under the Wright Loan and the Propride Loan by 22 November 2024.18 The plaintiffs plead and Ms Payne deposes that the defendants did not make any payments in respect of the amounts claimed to be owed under the OPB Loan by that date.19 Mr Wright and Ms Payne depose that Cecilia Holdings made payments on 9 December 2024, as follows: 12 SOC [9.6], [9.7]. 13 SOC [9.8], [9.9]. 14 SOC [9.10]. 15 SOC [9.11]. 16 SOC [10], [12], [14]; Wright Affidavit [5]; Payne Affidavit [4]. 17 SOC [16]; Wright Affidavit [6], 'GMW-4'; Payne Affidavit [5]. 18 SOC [17] - [18]; Wright Affidavit [7]. 19 SOC [19]; Payne Affidavit [6]. -- 8 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 9 (a) $300,000 towards the Wright Loan;20 (b) $200,000 towards the Propride Loan;21 and (c) $200,000 towards the OPB Loan.22 21 The dates upon which each of the above payments were made were subsequently corrected in the McGowan Affidavit, as follows: (a) the payment of $300,000 towards the Wright Loan was made on 10 January 2025;23 (b) the payment of $200,000 towards the Propride Loan was made on 12 December 2024;24 and (c) the payment of $200,000 towards the OPB Loan was made on 13 December 2024.25 22 Mr Wright and Ms Payne each deposed that the defendants had made no further payments towards the loans.26 However, Mr McGowan subsequently deposed that he was informed by Ms Payne and believed that, on 28 October 2024, Cecilia Holdings made payments of $10,000 and $18,000 in relation to the Propride loan.27 23 Mr Wright deposes to his belief and on behalf of Propride, and Ms Payne deposes to her belief on behalf of OPB, that the defendants have no defence to the respective plaintiff's claims.28 24 The plaintiffs seek orders that judgment be entered in their favour against the defendants and that the defendants pay the Principal Sum alleged to be outstanding under each of the loans, as follows: (a) $398,038.36 to Mr Wright, together with interest at the rate of 12% per annum from 10 January 2025 to judgment; (b) $2,772.60 to Propride, together with interest at the rate of 12% per annum from 12 December 2024 to judgment; and 20 Wright Affidavit [8]. 21 Wright Affidavit [8]. 22 Payne Affidavit [7]. 23 McGowan Affidavit [14.1]. 24 McGowan Affidavit [14.2]. 25 McGowan Affidavit [14.3]. 26 Wright Affidavit [9]; Payne Affidavit [8]. 27 McGowan Affidavit [8] - [9], [11] - [12], 'HMG-1', 'HGM-2'. 28 Wright Affidavit [12]; Payne Affidavit [11]. -- 9 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 10 (c) $30,838.56 to OPB, together with interest at the rate of 12% per annum from 13 December 2024 to judgment. The defendants' position in relation to the Application 25 The defendants have neither admitted nor denied that they entered into the loan agreements and associated guarantees with the plaintiffs, that each of the loans were made to Cecilia Holdings by the relevant plaintiff, or that the amount referred to in each deed was advanced to Cecilia Holdings. 26 Cecilia Holdings' and Ms Chan's primary position in opposition to the Application is that the plaintiffs have failed to disclose a prima facie case and, as such, have not demonstrated an entitlement to summary judgment. This is on the basis that the plaintiffs each rely on a loan agreement said to have been executed as a deed on 1 September 2023. However, the copies of the deeds attached to the Wright Affidavit29 and the Payne Affidavit30 are each dated 18 August 2023 and are not signed by Mr Wright, or on behalf of Propride or OPB. They are signed only by Ms Chan, and it is unclear in what capacity. 27 The defendants say that even though the court may infer there was a loan, that is not sufficient to entitle the plaintiffs to summary judgment on the plaintiffs' claim, which is based on an agreement pleaded as having been executed as a deed. The defendants also submit that there is no plea or evidence that the Principal Sum, in each case, was advanced to Cecilia Holdings by the relevant plaintiff. 28 It was also submitted on behalf of the defendants that, assuming the loan agreements were entered into, and each of the plaintiffs advanced funds to Cecilia Holdings, the plaintiffs have not demonstrated how much was advanced and when, which in turn affects how the interest claimed is to be calculated. 29 Further, the defendants say that, if it is established that the loans were advanced as alleged, payments made were to be applied to the principal and not to the interest claimed to have accrued. As such, the amount claimed is incorrect and there is an issue as to the proper calculation of the amounts of the principal and interest claimed to be owed to each plaintiff. 29 Wright Affidavit, 'GMW-2', 'GMW-3'. 30 Payne Affidavit, 'SJP-2'. -- 10 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 11 The issues 30 The overarching issues that arise for determination in respect of the Application may be summarised as follows: 1. Have the plaintiffs made out a prima facie case? 2. If so, is there an arguable defence, an issue to be tried or some other reason why there ought to be a trial of the action? 31 In relation to the first of those, the defendants' starting point is that the plaintiffs have failed to adduce evidence of the executed deeds relied upon. As noted, the defendants also contend that the plaintiffs have failed to plead and demonstrate that the Principal Sum, in each case, was advanced to Cecilia Holdings by the relevant plaintiff. 32 The other issues the defendants have identified, which they say make this case unsuitable for summary determination, may be summarised as follows: If, in each case, the parties entered into the loan agreements and the alleged loans were advanced to Cecilia Holdings by the relevant plaintiff: (a) when was the advance made and in what amount? (b) when did interest become payable or start to accrue? (c) are payments made to be applied to the principal or interest? (d) what is the principal amount that is owed to each of the plaintiffs and the amount of interest that is payable? Have the plaintiffs made out a prima facie case? 33 The plaintiffs' pleaded case upon which it seeks summary judgment is that, in each case, on 1 September 2023, the relevant plaintiff and the defendants entered into a written loan agreement executed by them as a deed. 34 In their written submissions, the plaintiffs state that the defendants owe money pursuant to 'duly executed deeds', referring to the deeds deposed to and attached to the Wright Affidavit and Payne Affidavit. 35 The affidavits relied upon in support of the Application, as read, do not verify execution of the deeds on 1 September 2023. -- 11 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 12 As submitted by the defendants, the copies of the deeds attached to the Wright Affidavit and the Payne Affidavit are not signed by or on behalf of the plaintiffs. They are executed by Ms Chan, although it does not expressly state that she has signed in her capacity as a director of the relevant defendant or as guarantor, or both. 36 The plaintiffs referred to Alonso v SRS Investments (WA) Pty Ltd31 in support of submissions to the effect that the court could find that Ms Chan signed the deed, in each case, in her capacity as a director of the relevant defendant company and as guarantor. 37 In Alonso, the defendant pleaded that a guarantee under a lease agreement between the company she was the sole director of and the plaintiff landlord, was not enforceable against her personally. The defendant said that although she had signed the guarantee she had done so only as a director of the principal debtor; she said she had not signed in her personal capacity. The defendant also pleaded that she had no intention to create any personal legal liability under the guarantee.32 38 Edelman J observed that the question of whether a party had the intention to be legally bound is not answered by reference to their subjective thoughts or intentions. Such an intention is manifested in light of 'the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances'.33 39 His Honour stated that the presence of a signature is a relevant circumstance in ascertaining whether there is an objective or manifest intention to be legally bound, being an act which ordinarily conveys a representation that the person is willing to be bound by the contents of the document signed by them.34 However, the presence or absence of a signature is only one circumstance to be considered in determining whether there is an objective intention to be legally bound.35 40 Edelman J stated that, in that case, the omission of a signature was not conclusive. Nor was the signature of the defendant, with the 31 Alonso v SRS Investments (WA) Pty Ltd [2012] WASC 168 (Alonso) [46] ff (Edelman J). 32 Alonso [2]. 33 Alonso [46] - [47], referring to Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95, 105 - 106 [25] (Gaudron, McHugh, Hayne & Callinan JJ). 34 Alonso [49], citing Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; (2004) 219 CLR 165, 180 - 181 [45]. 35 Alonso [50]. -- 12 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 13 qualification 'Director' attached to it, conclusive of an intention to be legally bound only in that capacity.36 41 Each case will depend on its own facts and circumstances. In Alonso, Edelman J found, in the circumstances of that case, having heard oral evidence at trial and taking into account other evidence, including the defendant's initials in other parts of the lease, amongst other things, that the defendant had manifested an intention to be bound in her personal capacity as guarantor, as well as having signed the lease as a director of the lessee company.37 42 The only evidence before the court in this case about the execution of the deeds is that it has been signed by Ms Chan, who is named on the first page of the deed as the guarantor. There is no reference on the signature page to Cecilia Holdings and it is not clear, on the available evidence, whether Ms Chan signed the deeds on behalf of Cecilia Holdings or in her personal capacity as a guarantor, or in both capacities. 43 Whilst it may be arguable that, as sole director of Cecilia Holdings, she signed in both capacities, in my view, this is not conclusive and sufficiently clear to determine summarily on the available evidence. 44 The plaintiffs did not address the non-execution of the deeds relied upon by the plaintiffs. They focussed their argument on the acknowledgments of the loan made in each of the deeds signed by Ms Chan and by the part payments made by Cecilia Holdings against each of the loans. 45 Whilst it is not necessary for a loan agreement to be in writing or by deed, that is what is pleaded. There is no other plea or evidence to verify the loan agreement on the basis advanced and relied upon by the plaintiffs, nor that the Principal Sum, in each case, was advanced by the relevant plaintiff to Cecilia Holdings. Whilst that may be rectified by an amendment to the pleadings and the production of further evidence, it is not sufficiently clear on the evidence adduced for the purpose of the Application. 46 As to the defendants' contentions that the plaintiffs have failed to plead that the amounts claimed were advanced to Cecilia Holdings, the 36 See Alonso [50] - [53] and the authorities referred to. 37 Alonso [54] - [66]. -- 13 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 14 plaintiffs say it is not necessary to specifically plead that the funds were advanced. They say it is implicit from the pleas in paragraph 9 of the statement of claim that each of the loan amounts were 'loaned' to Cecilia Holdings and that the funds were advanced. Further, they refer to the terms of the deeds. 47 Each of the deeds defines the relevant plaintiff as the 'Lender' and Cecilia Holdings as the 'Borrower'. Clause 1 of each deed provides that the Lender lends the Principal Sum to the Borrower on the terms and conditions in the deed. Clause 2 of each deed provides that the Borrower borrows the Principal Sum from the Lender on the terms and conditions in the deed. Clause 3 provides that the Borrower acknowledges having received the Principal Sum from the Lender. 48 The defendants say that cl 1 to cl 3 are inconsistent with recitals A and B of each deed, which say that the Lender 'proposes' to lend and the Borrower 'proposes' to borrow the Principal Sum on the terms in the deed. Although recitals may be used as an aid to construction of the operative terms of an instrument, they do not form part of the agreement.38 49 If there was clarity as to whether Ms Chan had signed the deed, in each case, on behalf of Cecilia Holdings, I accept there would be some force in the plaintiffs' argument that Cecilia Holdings had acknowledged receipt of the Principal Sum in each case. Although I may infer on the available evidence that some money was loaned to Cecilia Holdings and that it has made some repayments to each of the plaintiffs, that is not sufficient to enter summary judgment. 50 As noted, there is no reference to Cecilia Holdings on the signature page of the deeds and no evidence to verify execution of the deeds or of any other surrounding circumstances from which I can conclude, on a summary basis, that those were the terms agreed by the defendants, and on which Cecilia Holdings or Ms Chan, as guarantor, intended to be legally bound. 51 In the circumstances, I am not satisfied that the plaintiffs have verified the facts upon which their claim is based and demonstrated that they have a prima facie case. As such, it is not necessary for the 38 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 (Franklins v Metcash) [380], [389] - [390]. See also Wright v Lemon [2024] WASCA 19 [536] - [538], citing Franklins v Metcash [379] - [390] (Campbell JA) and Schwartz v Hadid [2013] NSWCA 89 [80] - [81] (Meagher JA), Lachlan v HP Mercantile Pty Ltd [2015] NSWCA 130; (2015) 89 NSWLR 198 [52] - [53] (Bathurst CJ, Beazley P & McColl JA). -- 14 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 15 defendants to demonstrate they have an arguable defence, that there is an issue to be tried or some other reason why there ought to be a trial of the action. 52 However, for completeness, I will also consider the issues raised by the defendants and whether, if the plaintiffs had demonstrated a prima facie case, there is an issue to be tried or another reason why the action should proceed to trial. Is there an issue to be tried or some other reason why there should be a trial of the action? 53 I will deal with each of the issues raised by the defendants, as summarised earlier in these reasons. When was the advance made and in what amount? 54 Although the plaintiffs plead the amount of the Principal Sum of each of the loans, they do not plead that those amounts, or any amounts, were advanced to Cecilia Holdings, or when. 55 Given the issues outlined as to the execution of the deeds, I do not consider the plaintiffs' reliance on cl 1 to cl 3 of the deeds is sufficient to resolve this issue on a summary basis on the available evidence. When did interest become payable or start to accrue? 56 Clause 8 of each of the deeds provides that interest is payable by the borrower and shall be calculated from the date the Principal Sum is paid to Cecilia Holdings to the date of repayment of the Principal Sum in full. 57 Each of the parties have calculated interest from 1 September 2023. The defendants do so, assuming it is established that the loan agreements were entered into with the plaintiffs on the terms alleged, that the monies were advanced to Cecilia Holdings in accordance with the loan agreements relied upon by the plaintiffs, and that interest started to accrue from 1 September 2023. 58 If, in each case, the Principal Sum was advanced to Cecilia Holdings on 1 September 2023, interest would accrue from that date until the amount is paid in full. However, the date the Principal Sum was paid to Cecilia Holdings, in each case, is not made out on the evidence adduced. -- 15 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 16 Are payments made to be applied to principal or interest? 59 The deeds do not address whether payments made in respect of each loan are to be applied to the principal amount of the loan first or to interest. 60 The plaintiffs contend, and have calculated interest on the basis that, payments made are to be applied to interest in priority to principal. The defendants dispute this and say the payments should be applied to the principal first as they made an express appropriation to apply the payments to principal, which the plaintiffs must adhere to. 61 The plaintiffs' position is that the court may infer that all payments made by the defendants towards any of the debts owed to the plaintiffs were appropriated towards the interest accrued on the respective debts. They accept that a debtor may elect to appropriate a payment made towards a debt to interest or to the Principal Sum. However, they say that where a debtor pays money pursuant to a debt owed without any definite appropriation, which they submit is the position in this case, the money should be applied to the interest first, then the Principal Sum. 62 The defendants acknowledge this but emphasise the presumption that payments made toward an interest-bearing debt are to be applied first to interest arises only when there has not been an appropriation by the debtor or the creditor.39 63 It has long been held that when payments are received generally on account of a debt, which is in part interest and in part principal, the payments are to be treated as applicable to interest in priority to principal.40 64 It is also well-established that, when a debtor is making a payment to their creditor, they may appropriate the money as they please, and the creditor must apply it accordingly. If the debtor does not make any appropriation at the time when they make the payment, the right of application devolves to the creditor.41 39 Referring to Stein v Torella Holdings Pty Ltd [2010] NSWSC 1445 (Stein) [67], [68] (Hallen AsJ) and the authorities referred to. See also consideration of further authorities in Stein [69] - [72]. 40 See Falk v Haugh [1935] HCA 35; (1935) 53 CLR 163, 173 (Rich, Starke, Dixon, Evatt & McTiernan JJ). 41 Cory Brothers & Co v The Owners of the Turkish Steamship 'Mecca' [1897] AC 286 (The Mecca) 293 - 294 (Lord MacNaghten), applied in Visbord v Federal Commissioner of Taxation (1943) 68 CLR 354, 370 - 371 (Latham CJ). See also Volonakis v Erceg [2019] NSWSC 1875 [269] (Hallen J), citing The Mecca (293). -- 16 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 17 65 Appropriation refers to the assignment or allocation of something to a particular purpose. Whether a payment has been appropriated and, if so, how, are matters of facts to be determined on the evidence.42 66 An appropriation made by a debtor must be made at or before the time of payment.43 In the absence of any agreement, a guarantor or surety does not have a personal right to dictate either to the principal debtor or the creditor how a payment made by the principal debtor is to be appropriated.44 67 The plaintiffs and the defendants each acknowledge that there need not be an express appropriation for payment and that, in the absence of an express appropriation, an appropriation may be inferred from the circumstances known to both parties. The inference is that which a reasonable person would draw from the circumstances known to both parties. An undisclosed intention in the mind of the debtor is not sufficient to support an appropriation.45 The circumstances from which the inference can be drawn include the purpose and object of the application of the payment.46 68 The plaintiffs say there was no express appropriation on the part of the defendants for any of the loan repayments made. They say that, as such, the default position applies. That is that interest is to be paid before principal, unless an inferred appropriation provides otherwise. 69 The defendants submit that payments were made by electronic funds transfer and that the electronic funds transfer receipt for each transfer included a notation, referable to the account into which the transfer was made, which included the words 'loan repay' or 'loan repayment' and a reference to 'Cecilia' or 'CH' or similar.47 42 Volonakis v Erceg [271]. 43 Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 [210] (Katzmann J); Smith v Leveraged Equities [2020] WASCA 122 [138] (Buss P, Beech & Vaughan JA), citing The Mecca (293); Moree Plains Shire Council v Goater [2016] FCAFC 135 (Moree Plains v Goater) [58]; WorkPac Pty Ltd v Rossato [2020] FCAFC 84; (2020) 378 ALR 585 [257], [866], [987]. 44 Smith v Leveraged Equities [137], citing Fahey v MSD Speirs Ltd [1975] 1 NZLR 240, 245. 45 Leeson v Leeson [1936] 2 KB 156, 162 - 163 (Greene LJ), cited with approval in Smith v Leveraged Equities [136]. See also Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) (1982) 60 FLR 355, 357 - 358; Caltabiano v Electoral Commission of Queensland (No 1) [2009] QCA 182 (Caltabiano) [31] - [32], [109]. 46 Caltabiano [34] (Muir JA), [111] (Fraser JA); Moree Plains v Goater [59] (Rares, Katzmann & Markovic JJ). 47 See Chan Affidavit, pages 4 - 8, 'HYC-1', 'HYC-2', 'HYC-3', 'HYC-4', 'HYC-5'. -- 17 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 18 70 The defendants refer to Moree Plains Shire Council v Goater in support of its contention that a debtor can appropriate a payment by way of a notation on an electronic fund transfer.48 71 However, in that case, the Court stated that no appropriation appeared on any of the recipient's bank statements after a certain date, albeit that a bank statement recording receipt of a payment on a particular date was not in evidence. In that case, there was no evidence of any notations on the debtor's statements, other than handwritten ones. Nor did the debtor in that case give any evidence that she had communicated an appropriation of the relevant payment to the creditor before or at the time it was made.49 72 The defendants contend, in effect, that the reference to 'repay' or 'repayment' included in the payment reference can refer only to a payment being appropriated toward principal. This is on the basis that only principal is 'repaid' whereas interest is paid for the first time. I do not find that argument persuasive. 73 The defendants submit there is no evidence to suggest that the notations they rely on were not also visible in the banking records of the plaintiffs who received the payments. However, there is no evidence from which I am able to conclude that they were. 74 In my view, there is insufficient evidence, at this stage, to conclude that an appropriation to principal was communicated to the plaintiffs so as to infer that the appropriation was known not just by the defendants but also by the plaintiffs, or the relevant plaintiff. 75 There is no evidence of any direct communication or instruction by the defendants to the plaintiffs to the effect that payments were to be appropriated to principal in priority to interest. 76 The plaintiffs submit, in effect, that an appropriation by the defendants towards the payment of interest may be inferred in relation to payments made on 28 October 2024 in the amount of $10,000 and on 31 October 2024 in the amount of $18,000.50 The inference is said to arise because the defendants were requested by Ms Payne to '…please pay the interest owing to date…' immediately prior to the payments being made.51 The plaintiffs submit that this creates a reasonable 48 Moree Plains v Goater [68]. 49 Moree Plains v Goater [68] - [69]. 50 McGowan Affidavit [8] - [9]; Chan Affidavit [4] - [7], 'HYC-1', 'HYC-2'. 51 McGowan Affidavit [7], 'HGM-1'. -- 18 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 19 inference that, in the minds of the parties to the debt at the time of repayment, those payments were to be appropriated towards the interest. 77 However, I note that contrary to the plaintiffs' submission that the message from Ms Payne to Ms Chan referred to paying interest on the Propride Loan, the message does not refer specifically to a loan. It says '…Can you please pay the interest owing to date to our Super fund today…'. There is no context provided from which it may be discerned that this communication related to payment of interest on the Propride Loan, or any of the other loans. 78 The defendants say that, at their highest, the messages relied upon by the plaintiffs constituted statements by Ms Payne requesting payment of interest. They submit that there is no evidence to support that Ms Payne had any authority to act on behalf of or bind Propride. Ms Payne is the sole director of OPB and was not a shareholder or officeholder of Propride. 79 In any event, as submitted by the defendants, it is Cecilia Holdings, as the debtor, that had the right to appropriate any payment it made to a particular debt. There is no acknowledgement or confirmation by Ms Chan in response to Ms Payne's messages or communication from her to the effect that the payments of $10,000 and $18,000 subsequently made were to be appropriated to interest. 80 As to the larger payments of $200,000 made on 12 December 2024 and 13 December 2024 and $300,000 on 10 January 2025,52 the plaintiffs contend that the fact that the previous payments of $10,000 and $18,000 towards the Propride Loan were appropriated to satisfy interest first indicates an established convention between the parties to pay interest first. 81 For the purpose of the Application, as outlined, I do not accept that Ms Payne's communications to Ms Chan support an appropriation of those earlier payments to interest by Cecilia Holdings. However, I do not accept that the evidence adduced by the defendants for the purpose of the Application supports a finding that Cecilia Holdings communicated to the plaintiff, in each case, that payments were to be appropriated to principal. As such, the common law presumption 52 Wright Affidavit [8]; Payne Affidavit [7]; McGowan Affidavit [14]; Chan Affidavit [8] - [13], 'HYC-3', 'HYC-4', 'HYC-5'. -- 19 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 20 applies, as outlined. That is that the payments are to be appropriated first to interest or as determined by the creditor. What is the principal amount that is owed to each of the plaintiffs and the amount of interest that is payable? 82 The plaintiffs calculate that the total amount owing under the three loans, including interest accrued up to 28 October 2025, is $473,256.28, being: (a) $436,119.18 in relation to the Wright Loan,53 being the balance said to be owed in respect of the Principal Sum and accrued interest, taking account of a payment of $300,000 made on 10 January 2025; (b) $3,064.30 in relation to the Propride Loan,54 being the balance said to be owed in respect of the Principal Sum and accrued interest, taking account of payments of $10,000 made on 28 October 2024, $18,000 on 31 October 2024 and $200,000 made on 12 December 2024; and (c) $34,072.80 in relation to the OPB Loan,55 being the balance said to be owed in respect of the Principal Sum and accrued interest, taking account of a payment of $200,000 made on 13 December 2024. 83 The defendants have also calculated the amounts claimed to be owed by Cecilia Holdings in respect of the loans, assuming the plaintiffs prove the loan agreements and the other matters outlined and are entitled to summary judgment. The defendants' calculation of the total amount, on that basis, is $459,688.57, being:56 (a) $426,542.42 in relation to the Wright Loan; (b) $2,371.44 in relation to the Propride Loan; and (c) $30,774.71 in relation to the OPB Loan. 84 The plaintiffs and the defendants set out their calculations in their respective outlines of submissions. The difference between them is relatively modest. 53 Plaintiffs' submissions [25]. 54 Plaintiffs' submissions [28]. 55 Plaintiffs' submissions [31]. 56 Defendants' submissions [34]. -- 20 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 21 85 The difference between the plaintiffs' calculation and the defendants' calculation of the total amount claimed to be owing by Cecilia Holdings and guaranteed by Ms Chan arises because the defendants' calculation is based on payments being applied to principal first. The plaintiffs' calculation is based on the payments being applied to interest first, then principal. The defendants' calculation also includes an additional day to take account of the leap year in 2024. 86 Although the difference is modest, the defendants submit that the amount of principal and interest must be quantified in order for judgment to be entered. It says this is on the basis that judgment cannot be entered in a particular amount if it is arguable the amount owing is lower and, if judgment is entered for a lower amount than that claimed, the plaintiff will not be entitled to pursue any claim for the balance. 87 The plaintiffs' response to this was to concede that it would be content for judgment to be entered for each plaintiff for the lower amounts on the basis of the defendants' calculations, applying the payments to principal first and then interest. 88 It is not possible to determine the precise amount payable in respect of principal and interest on the evidence presently before the court. Nor is it necessary to do so, having found that the plaintiffs have not made out a prima facie case and are not entitled to summary judgment. 89 As outlined, I am not satisfied that the plaintiffs have demonstrated the basis upon which Ms Chan signed the deeds, whether Cecilia Holdings agreed to the terms upon which the claim against it is based and Ms Chan agreed to guarantee repayment of the loan in each case. There is also an issue as to when each of the loans was advanced and, as such, the date from which interest started to accrue. Conclusion and orders 90 For these reasons, it is not appropriate in my view to enter summary judgment. The action should proceed to trial in the ordinary course, if the matter is not otherwise resolved. The Application should be, and is, dismissed and the defendants should have unconditional leave to defend the action. 91 Nothing in these reasons should be taken to anticipate the outcome of the proceedings. I have reached the views expressed on the evidence presently before the court. For present purposes, it is sufficient to -- 21 of 22 -- [2026] WASC 185 MASTER RUSSELL Page 22 conclude that this is not one of those very clear cases where the court should order summary judgment. 92 I will make orders as follows and hear from the parties in respect of the orders to be made in relation to the costs of the Application, if they are not agreed: 1. The Application is dismissed. 2. The defendants have unconditional leave to defend the action. 3. Within seven (7) days of the date of these orders, the parties are to confer in relation to the costs of the Application and: (a) if agreement is reached, file a memorandum of consent orders; (b) if agreement is not reached, each party is to file a minute of proposed orders in relation to the costs of the Application. I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. SC Associate to Master Russell 12 MAY 2026 -- 22 of 22 --