The court called the borrower's only argument not even close
Three private lenders just collected $1.286 million from a borrower who admitted the debt - then tried to argue it was never due.
The New South Wales Supreme Court entered default judgment - a win without a full trial, granted when the other side has no filed defence - on October 21, 2026, against Allcap Securities and its guarantors. The case turned on a single question: does default interest under a loan facility agreement start running automatically when the loan matures, or only after the lender sends a formal demand? The court found the answer was not even close.
The loans, the missed deadlines, and the deed that sealed it
Three lenders - each operating through self-managed super funds or private wealth vehicles - advanced a combined $1 million to Allcap between November 2024 and March 2025. Each loan carried interest at 20% per annum, with default interest at 22% on any amount left unpaid after the repayment date.
The first facility, for $220,000, matured in November 2025. The second, totaling $400,000 after a top-up advance, matured in December 2025. Neither was repaid. The lenders had each given written notice they wanted their money back at the end of the 12-month term. According to the statement of claim, Allcap’s guarantor replied that "we should be fine to return principal and interest on this date." The defendants denied that statement was made, but it hardly mattered - what came next left no room for argument.
In February 2026, the parties signed a Deed of Extension pushing the repayment deadline to February 27, 2026. But the deed did more than buy time. Its acknowledgment clauses stated in plain terms that the borrower owed specific amounts including accrued default interest. Allcap even paid $14,472.83 in accrued default interest on one of the loans as a condition of the extension taking effect. The guarantors signed it too.
The new deadline came and went. The guarantor emailed predicting payment by mid-March. That passed too. A third loan of $380,000, which sat outside the deed, matured on March 21, 2026. Also unpaid.
A defence built on sand
The lenders filed suit on June 2, 2026. No defence was lodged by the deadline. The defendants’ solicitor - a sole practitioner dealing with a serious illness - sought repeated extensions. The court set a hard cutoff: file by August 10, or get the court’s permission before filing anything at all. That deadline was missed. A draft defence finally arrived on August 28 - nearly two months late.
The entire defence rested on one argument: the loan agreements required a formal demand from the lender before any amount fell due, and without that demand, default interest could not start running.
The court found this reading of the contracts had no real prospect of success. The repayment date was a fixed date. Ordinary interest stopped accruing on that date. Under the defendants’ interpretation, a borrower who received no demand would hold the lender’s money after maturity completely free of interest. The court said that was not a result commercial parties would have intended. The agreements also drew a clear line between amounts payable on a specified date and amounts payable on demand. Reading the repayment clause as requiring a further demand would erase that distinction.
Signed, sealed, and used against them
For the first two loans, the Deed of Extension was the knockout blow. The court applied a longstanding legal principle that parties cannot contradict solemn statements they have made in a deed. Every party had acknowledged the deed’s recitals were "true and accurate." Those recitals stated the loans were "repayable, with interest" on dates that had already passed. The acknowledgment clauses went further, specifying exact amounts of default interest that had already been accruing.
Having signed a deed that said default interest was running, the borrower and guarantors could not then turn around and argue it was not.
Even on the third loan, which fell outside the deed, the court found the lenders’ written notices - requesting "the return of my initial investment amount together with all accrued interest in accordance with the agreed terms" - amounted to a demand if one was even required. The defendants admitted receiving those notices.
The numbers
Judgment was entered for $315,903.67 on the first loan, $455,494.08 on the second, and $514,817.75 on the third. Default interest was calculated as simple interest at 22%, not compounded, after the lenders accepted that the agreements only allowed compounding at intervals of 12 months or longer.
A $300,000 payment the borrower had placed into court in July 2026 was ordered released to the lenders in equal shares. The defendants were also ordered to pay the lenders’ legal costs in full - every dollar - as the loan agreements provided.
The court noted that even if the "no demand" argument had any legs, it would only have affected default interest on the third loan for a roughly two-month window - worth about $16,491. That figure fell within the jurisdiction of the Small Claims Division and would have been swallowed by the legal costs of fighting it in the Supreme Court.
For private lenders and those structuring facility agreements, the decision drives home a practical point: if default interest is meant to run automatically from the repayment date, draft the clause to say so without ambiguity - and know that a deed of extension acknowledging accrued default interest will lock the borrower into that position.
