Ramoo v Grow Trade Finance Pty Ltd [2026] FCA 286

This case came out of a common funding structure for closely held businesses. A company needed trade finance. The lender agreed to provide it. But the lender did not rely only on the company. It also required the sole director to sign personally as guarantor and to charge her own property.

Medoc International Pty Ltd ran a timber wholesale business across four Australian States. On 6 February 2019, Grow Trade Finance Pty Ltd entered into a Trade Finance Facility Agreement with Medoc for a facility limited to $100,000. Ms Rani Ramoo, Medoc's sole director, executed the agreement in two capacities: for the company and personally. Under the agreement she was expressly defined as the guarantor.

The personal obligations were broad. Clause 19 was not limited to a simple promise to pay if the company defaulted. It included a guarantee of amounts owing, a guarantee of Medoc's obligations, an indemnity for losses and costs, and a charge over all of the guarantor's property. It also required the guarantor, if requested, to provide further written security in registrable form and to do what was necessary to enable registration.

Grow Trade then took practical steps to support that position. On the same day as the agreement, it registered security interests over all of Ms Ramoo's present and after-acquired property on the PPSR. It also lodged a caveat over real property she owned at Frewville in South Australia.

Years later, on 26 September 2022, Medoc and Grow Trade agreed in writing to increase the facility limit from $100,000 to $250,000. That variation became central to the dispute. Ms Ramoo alleged that she had not signed the variation in her personal capacity as guarantor. That argument mattered because she said the increased facility changed the position and affected whether she remained personally bound.

Medoc later defaulted on repayments under the extended facility. On 27 November 2024, Grow Trade, acting by its own receivers and managers, appointed Richard Albarran and Brent Trevor-Alex Kijurina as receivers over Medoc's property. On the same day, a notice was issued to Ms Ramoo as guarantor stating that receivers had been appointed over all of her present and after-acquired consumer and commercial property. The asserted source of that right was the PPSR, the original agreement and the variation.

Ms Ramoo challenged that position in the Federal Court. Grow Trade and the receivers responded with a cross-claim seeking declarations to settle the parties' rights. So the case was not just about whether Medoc owed money. That was accepted. The real fight was about whether the lender could move from company default to enforcement against the director's personal assets, and on what legal basis.

The judgment identifies a detailed list of issues. They were not all the same. Some were contract questions about the guarantee and the variation. Others were enforcement questions about the PPSA, receivers and the lawful method of seizure.

One major issue was whether Ms Ramoo was bound to guarantee Medoc's indebtedness incurred under the increased facility limit in circumstances where she alleged she did not sign the 2022 variation in her personal capacity as guarantor. That point goes to a recurring business problem. In founder-led companies, the same person often signs documents in multiple capacities. If the paperwork is not clear, disputes can arise later about whether a person agreed only for the company or also personally.

A second major issue was whether the guarantee had been discharged. The judgment's catchwords and issue list show that Ms Ramoo argued the guarantee should no longer bind her, including by reason of the receivers' conduct in asserting rights in her personal property by reference to the variation. The Court therefore had to consider not just whether the original guarantee existed, but whether later events had brought it to an end.

A third issue concerned the nature of the security created by clause 19.1(e). Ms Ramoo argued, in substance, that the clause created a charge but did not itself confer a right to appoint receivers over her property without first obtaining a court order. Related to that was the question whether there was, at that point, any method permitted by law for seizure of her property within the meaning of s 123 of the PPSA.

The Court also had to consider whether Ms Ramoo was a debtor in default for PPSA purposes, whether a demand first had to be made on her before resort could be had to her personal property, whether the receivers could take possession of money in her bank accounts without first complying with s 123(2) of the PPSA, and whether the receivers had been appointed in respect of the Frewville land consistently with South Australian property law.

After the hearing, Ms Ramoo also raised a new argument that the property to which the receivers were appointed was not property to which the PPSA applied at all because of the operation of s 8. The judgment records that this was raised without leave after the hearing had concluded.

For business readers, the legal issue was therefore broader than a simple guarantee dispute. The Court had to work through how the original finance agreement, the later variation, the guarantee and indemnity wording, the charging clause, the PPSR registrations and the statutory enforcement regime all interacted once the company defaulted.

The Court dismissed Ms Ramoo's originating application and allowed the respondents' cross-claim to the extent reflected in the declarations. The key declaration was that Ms Ramoo's personal guarantee under the February 2019 Trade Finance Facility Agreement, as amended by the Letter of Variation dated 26 September 2022, had not been discharged.

That declaration is commercially significant. It means the Court rejected the argument that the guarantee had fallen away. It also means the Court accepted that the guarantee continued notwithstanding the dispute about the 2022 variation and Ms Ramoo's argument that she had not signed that variation in her personal capacity. The orders do not merely say the original guarantee once existed. They say it had not been discharged under the agreement as amended by the variation.

The Court also declared that s 123 of the PPSA operated such that Grow Trade, whether directly or by any agent or by any receiver appointed under clause 13(c) of the agreement, could seize Ms Ramoo's personal property in two ways. First, in the exercise of rights conferred by the agreement as construed in accordance with the reasons for judgment. Second, in any event, by any method permitted by law, including any method authorised by an order of the Court.

The orders identified the persons presently appointed as receivers for the purpose of that declaration. The Court also gave the parties liberty to apply to re-open the proceeding on or before 30 June 2026 for an order authorising a method of seizure, or for declaratory relief as to lawful methods of seizure otherwise permitted by law.

That final feature matters. The Court recognised that the lender's security position and the practical mechanics of enforcement are connected but not always identical. A lender may establish that it has rights to seize collateral under s 123, but the lawful method of seizure for particular property may still need to be worked out, and in some cases may require a court order.

The judgment also records that the Court was satisfied the declarations sought fairly reflected a real controversy between the parties and were not merely hypothetical. So this was not an advisory exercise. It was a live dispute about actual enforcement steps already asserted by the lender and challenged by the guarantor.

Business owners should read this case as a reminder that finance documents operate as a package. The original facility agreement mattered. The guarantee and indemnity wording mattered. The charging clause mattered. The PPSR registrations mattered. The later variation mattered. Looking at only one document in isolation can give a false sense of safety.

The case is especially relevant where a sole director or founder signs in more than one capacity. In practice, many directors focus on the company borrowing and do not fully separate their personal role from their corporate role. This case shows why that distinction matters. A later dispute may turn on whether a person signed as director only, personally only, or in both capacities. If the paperwork is unclear, the consequences can be serious.

The decision also shows that a facility increase is not just an administrative event. A top-up from $100,000 to $250,000 may look like a routine working capital adjustment, but it can materially increase the guarantor's personal exposure. If a lender says a variation is straightforward, that does not mean the legal effect is minor.

Another practical point is that a broad charging clause can have real force when combined with PPSR registrations. Here, the agreement charged all of the guarantor's property and the lender registered security interests over present and after-acquired property. That combination gave the lender a serious enforcement platform once default occurred.

At the same time, businesses should not overread the case as saying every enforcement step is automatic. The Court's orders expressly refer to seizure by methods permitted by law, including methods authorised by court order, and gave liberty to apply for orders about the method of seizure. That means enforcement rights may exist even where the exact process for taking a particular asset still needs to be established.

For directors, the safest approach is to treat every finance variation, extension, refinance or restructure as a fresh legal review point. Ask whether the guarantee still applies, whether the secured property description is broad enough to catch personal assets, whether any new document should be signed personally, and whether the lender has already registered or intends to register security interests against you.

Several features of the transaction stand out from the judgment.

First, the original 2019 agreement was drafted broadly. Clause 19 did not stop at a narrow promise to answer for the company's debt. It guaranteed amounts owing, guaranteed obligations, covered recovery costs, included an indemnity and charged all of the guarantor's property. That breadth is important because disputes about variations and enforcement are often shaped by the original drafting.

Second, the lender acted consistently with the charging clause by registering security interests over all of Ms Ramoo's present and after-acquired property on the PPSR. Registration does not answer every enforcement question, but it is a major practical step in preserving and asserting a secured position.

Third, the lender also lodged a caveat over the Frewville land. That shows the lender was not relying on one enforcement route only. It was using both personal property security mechanisms and land-related protective steps.

Fourth, the 2022 variation increasing the facility limit became a focal point because of signing capacity. The issue was not simply whether the company agreed to the increase. The issue was whether the guarantor was personally bound in relation to indebtedness under the increased limit where she alleged she had not signed the variation in her personal capacity. That is exactly the kind of dispute that can arise when a director signs quickly without clear execution blocks or without separate advice.

Fifth, the lender's conduct after default mattered. Grow Trade appointed receivers over Medoc's property and issued a notice to Ms Ramoo stating that receivers had been appointed over all of her present and after-acquired consumer and commercial property. That assertion of rights triggered the challenge and forced the Court to decide not only whether the guarantee continued, but also what enforcement rights were presently available under s 123 of the PPSA.

For businesses, the lesson from these facts is practical. Keep complete copies of the original facility, all guarantees, all variations, all PPSR registration details and any notices of default or appointment. In disputes like this, the outcome often turns on the exact wording of the documents and the exact capacity in which each person signed.

If you are a director, founder or shareholder asked to support company borrowing, this case gives a practical checklist.

Start with signing capacity. Check every signature block and every defined term. If you are named as guarantor, indemnifier or grantor of security, your personal assets may be in play. Next, review the scope of the guarantee. Does it cover all amounts owing, all obligations, costs and indemnities, or only a capped amount? Then review the security language. A charge over all present and after-acquired property is much broader than many directors realise.

After that, check the PPSR. If a lender has registered against you personally, understand what collateral description has been used and whether it extends to consumer and commercial property. If real property is involved, check whether a caveat has been lodged. Finally, treat every variation as a fresh risk event. A facility increase, extension or restructure can change the practical size of your exposure even if the original guarantee wording remains the same.

This case also shows the importance of process after default. Questions about demand, notices, seizure of bank accounts and the lawful method of seizure can all matter. Even where the lender has a strong security position, the exact enforcement path may still require careful legal steps.

Common questions from directors are answered in the FAQ section on this page. The short version is that personal guarantees can survive later changes, disputes about signing capacity can become central, and enforcement rights may exist even where the lender still needs to establish the lawful method for taking a particular asset.

The judgment was delivered by Charlesworth J in the Federal Court of Australia on 18 March 2026. The hearing took place on 24 July 2025, and the respondents' last submissions were dated 12 August 2025. The Court's orders dismissed Ms Ramoo's originating application, allowed the cross-claim to the extent of the declarations, and gave the parties liberty to apply on or before 30 June 2026 for orders or declarations about lawful methods of seizure.

Readers using this case for practical guidance should remember that the declarations resolve the main controversy about the continuing guarantee and the operation of s 123, but the judgment also recognises that some enforcement mechanics may require further steps. For detailed argument on specific assets or procedures, the full reasons should be checked carefully.