Supreme Court New South Wales Medium Neutral Citation: Bank of Western Australia v Tumuluri [2011] NSWSC 832 Hearing dates: 21/07/2011 Decision date: 21 July 2011 Jurisdiction: Equity Division - Commercial List Before: McDougall J Decision: Refuse leave to amend Catchwords: PRACTICE - pleadings - application to amend pleadings brought by defendant on morning of hearing - application raised new issues - defendant not likely to succeed in making out those issues - application refused pursuant to discretion - s56 Civil Procedure Act 2005 (NSW). Legislation Cited: Civil Procedure Act 2005 (NSW) Consumer Credit (New South Wales) Act 1995 (NSW) Category: Procedural and other rulings Parties: Bank of Western Australia Limited ACN 050 494 454 (Plaintiff) Sastry Tumuluri (First Defendant) Sanjay Srinivasan (Second Defendant) Mahalingam Srinivasan (Third Defendant) Representation: P T Russell (Plaintiff) J A Raine (Third Defendant) Blake Dawson (Plaintiff) Avondale Lawyers (Third Defendant) File Number(s): 2011/33949 Judgment (EX TEMPORE) - APPLICATION TO AMEND PLEADINGS 1HIS HONOUR: The third defendant wishes to amend his list response to raise two fresh defences. One of those allegations is that the guarantee on which he is sued is unenforceable for noncompliance with s 50 of the Consumer Credit Code and s 20 of the Consumer Credit Regulation . 2The Consumer Credit Code (which was in force as a law of New South Wales when the guarantee in question was made, or purportedly made - see the Consumer Credit (New South Wales) Act 1995 - states, in s 9, that the Code applies to a guarantee if, among other things, it guarantees obligations under a credit contract. Section 6 of the Code defines the circumstances in which the Code applies to the provision of credit. It applies if, among other things, the debtor is a natural person ordinarily resident in the jurisdiction or a strata corporation formed in the jurisdiction. 3Section 5 defines a credit contract to be a contract under which credit is or may be provided where the Code applies to that provision of credit. 4The debtor in this case is neither a natural person nor a strata corporation. It is a corporation of the more usual kind. It follows that it is not one of the entities in respect of which s 6 prescribes that the provision of credit may be relevant. It follows in turn that the contract of loan made between the plaintiff and that borrower is not a credit contract for the purposes of the Code. It follows in turn that the guarantee on which the third defendant is sued is not one to which the Code applies. Thus, this proposed ground of defence has no prospects of success. 5The alternative defence which the third defendant wishes to raise is that the loan that he guaranteed (or purported to guarantee) is unenforceable because it was not executed validly by the directors of the borrower corporation. 6In support of that, the third defendant wishes to rely, in some unspecified way, on the defence of the first defendant, who apparently took a point that he had not executed one version of the loan agreement. It wishes to prove its case first by relying on an affidavit sworn by the first defendant, and secondly by asking him some, unspecified, questions. 7The loan agreement between the plaintiff and the borrower, on which the plaintiff relies, is a loan agreement made by the borrower's acceptance of the plaintiff's loan offer dated 27 June 2006. The first defendant's affidavit states, in relation to that, among other things that "the signature on page 9 of [that] document above the words 'signature of director' is my signature". In other words, on the first defendant's affidavit, he admits that he signed, as director, the document on which the plaintiff sues, as the loan agreement between it and the borrower. 8Leaving aside the fact that the third defendant has not served the first defendant's affidavit as one intended to be relied upon in support of his case, it is clear that the affidavit, so as far as it goes, could not possibly support the defence asserted. 9It follows that if the defence is to be supported in any way, that must be by some unspecified evidence that is to be (or might be) adduced orally from the first defendant. The court has not been told what this evidence might be, and I have the very strong feeling that that is because neither the third defendant nor his counsel knows what the evidence might be. But be that as it may, on 3 June 2011 (when the proceedings were fixed for hearing), the third defendant was directed to serve any further evidence intended to be relied upon by him by 4 July 2011. Not only did the third defendant not serve the first defendant's affidavit, he did not then serve, and has not since then served, any affidavit explaining what it might be that the first defendant will say if asked the questions to which his counsel referred in the course of argument. 10The effect of the amendment sought to be made is to raise an issue as to the validity of the loan agreement that is the foundation of the plaintiff's case, and to do so on the morning of the hearing, without giving any clue as to what the factual foundation for that issue might be. It is not hard to imagine that if (by way of hypothesis) the first defendant could be persuaded to agree, in evidence in chief, that there was some doubt about his signature as a director of the borrower (and it is hard to see how he could do so, having regard to his affidavit) the plaintiff, had it been forewarned of this, might have wished to obtain other evidence, including perhaps from a handwriting expert. The plaintiff has prepared its case for hearing, against the third defendant, upon the basis that there was no issue as to the execution by the borrower of the loan agreement that is the foundation of the plaintiff's case (and I repeat that I am referring to the loan agreement that the plaintiff says was constituted by the borrower's acceptance of its offer in writing dated 27 June 2006). 11To permit that issue to be raised now would necessarily require the proceedings to be adjourned so that the plaintiff could investigate the matter. That would be a grave disadvantage, in circumstances where the parties are prepared for trial on the basis of issues as they presently stand. In circumstances where we do not even know what it is that the first defendant might say, it seems to me that the interests of justice, applied in accordance with s 56 of the Civil Procedure Act 2005 (NSW), require that the case should proceed to trial on the basis of the issues that have been formulated on "pleadings" as they stand, and on the basis of the evidence that has been served in support of those pleadings. 12For those reasons, I dismiss with costs the third defendant's notice of motion filed in court today. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 August 2011