PRELEA AND ANOR v WESTPAC BANKING CORPORATION LTD AND ANOR [1992] NSWCA 188

PRELEA AND ANOR v WESTPAC BANKING CORPORATION LTD AND ANOR

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, CLARKE and SHELLER JJA 25 May 1992, 29 May 1992 [1992] NSWCA 188

SUMMONS FOR LEAVE TO APPEAL — GUARANTEE — PRACTICE IN COMMERCIAL DIVISION — STRIKING OUT OF PLEADINGS.

Mahoney JA The claimants, Paulette Prelea and Prelea Investments Pty Ltd, ("Investments") seek by summons leave to appeal from a decision of Cole J sitting in the Commercial Division given on 6 April 1992 striking out certain paragraphs of the further amended defence of George Prelea and the first claimant and certain paragraphs of the second further amended cross claim in which the claimants together with George Prelea were the cross claimants. The Court refuses leave to appeal and would not normally give reasons for doing so. There is, however, one aspect of the argument as presented on behalf of the claimants to the Court which, in order to prevent future misunderstanding, calls for comment.

The first opponent, Westpac Banking Corporation Ltd, sued George Prelea and the first claimant as guarantors of the indebtedness of Investments. The proceedings in accordance with the practice in the Commercial Division (Practice Note No 39 para(3)) were commenced by summons. According to the evidence before us, on 18 October 1991 Deputy Registrar Sourdin made the following order:

(i) The defendants to file and serve any Defence and/or Cross Claim against any third party and Affidavits in support on or before 1 November 1991.

On 29 November 1991 Cole J made an order to the effect that amended defences and cross claims be filed by 4 pm on 29 November 1991 and the affidavit be served and filed on 2 December 1991. There was tendered before us and admitted in evidence an affidavit by George Prelea made on 3 December 1991 and apparently filed pursuant to this order. Subsequently, George Prelea and the first claimant and George Prelea and the claimants filed the further amended defence and second further amended cross claim said on their face to have been amended or filed pursuant to orders made by Cole J on 13 March 1992. So far as appears no order was made for the filing of any further affidavit in support. In the further amended defence George Prelea and the first claimant pleaded that Westpac was estopped from making the claim against Investments as principal debtor and from asserting the claim against the guarantor defendants. This estoppel was founded upon the knowledge of Westpac, the assumption of George Prelea and a representation by Westpac that Investments' borrowings from Westpac were on the footing that they would be repaid from and limited to the proceeds of the factoring by the second cross defendant and second opponent, Australian Guarantee Corporation Ltd, of Investments' invoices and thereafter, if necessary, from the proceeds of certain securities. The particulars of this representation were: "The representation was made to George on behalf of