In this case the lender is seeking summary judgement against the guarantors to a loan for $2.6m to the borrower which was to be repaid by 8 June 2006 and is now in default. The debt is secured by a mortgage over property but the lender has chosen to call on the guarantees rather than exercise its powers of sale.
The guarantors have endeavoured to seek the lenders cooperation in a series of simultaneous transactions which will result in the lender being repaid and the lender assigning the mortgage to the guarantors so the property can be sold. Unfortunately because of a number of encumbrances on the property this transaction is taking time to set up and a final date is not known. The guarantors resist this summary judgement to allow them time to set this transaction up. The lender takes the position that this is not their problem and it will assign the mortgage only when the debt is satisfied.
Justice Palmer agreed with the lender and stated that no defence had been made out that the lender is not entitled to judgement on its debt. Although cooperation between the parties would avoid needless cost and delay the guarantors are not even in a position to ask for specific performance against the lender to get them to assign the mortgage. Therefore as no defence has been made out the summary judgement is granted.