Jovan Sarai v N1 Loans Pty Ltd

2026/00098830

CONTRACT – the first appellant (Mr Sarai) is the sole shareholder and director of the second appellant (Aldrich), as well as the registered proprietor of a property in Ryde and another in Darling Point – on 26 September 2024, the first, second, third and fourth respondents (N1 Loans, N1 Venture, N1SY, and N1 WH2, respectively) loaned Aldrich a total of $12,825,000 pursuant to two loan agreements and two mortgage agreements – one loan of $10,500,000 was secured by a mortgage over the Darling Point property with N1 Loans, N1 Venture and N1SY as lenders and mortgagees – the other loan of $2,325,000 was secured by a mortgage over the Ryde property with N1 WH2 as lender and mortgagee – Mr Sarai was guarantor and mortgagor under the agreements – the parties also executed a Deed of Cross-Collateralisation under which the two loans were collateralised such that each loan secured the whole of the secured moneys – pursuant to identical terms in each of the loan agreements (the interest provisions), the loans were repayable after three months, with monthly interest payable for those three months – on 4 November 2024, the lenders served on the appellants default notices in respect of each of the loans on the basis of non-payment of the monthly interest for November 2024 – on 21 November 2024, N1 Loans, N1 Venture and N1SY appointed the fifth respondent (Mr Kaso) as receiver and manager of the assets of Mr Sarai – the four lenders subsequently commenced proceedings seeking orders for possession of the two properties – the appellants cross-claimed, arguing that the monthly interest was payable in arrears, not in advance, and thus, they were not in default on 21 November 2024 – the appellants alleged that the appointment of the receiver therefore constituted a breach of the terms of the agreements – the issues for determination included: the proper construction of the interest provisions; whether the appointment of the receiver constituted a breach of the agreements; whether any loss was occasioned to the appellants by reason of that breach; and whether the lenders were entitled to orders for possession of the two properties – the primary judge held that: the monthly interest was payable in advance and the appellants were therefore in default on 21 November 2024; the appointment of Mr Kaso as receiver was valid; and the lenders were entitled to orders for possession of the properties – the primary judge made a contingent finding that if the cross-claim had been successful, there would have been a declaration that the receiver was wrongly appointed, but no damages would have been awarded to the appellants – whether the primary judge erred in his Honour’s construction of the interest provisions – whether the primary judge erred in failing to find that the appointment of the receiver was a breach of the loan agreements and was void – whether the primary judge erred in failing to award damages to the appellants – whether the primary judge erred in failing to declare certain clauses of the loan agreements void as penalties – whether the primary judge erred in making, and failing to make, various factual findings.

N1 Loans Pty Ltd v Sarai [2026] NSWSC 150