Govindasamy v Marketlend Pty Ltd

[2023] NSWCA 90

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Govindasamy v Marketlend Pty Ltd [2023] NSWCA 90

Hearing dates:

5 May 2023

Decision date:

12 May 2023

Before:

Adamson JA at [1]; Simpson AJA at [46]; Basten AJA at [47]

Decision:

(1)   Dismiss the appeal.

(2)   Subject to order (3), order the appellant to pay the respondent’s costs of the appeal.

(3)   If either party seeks to vary order (2), direct that the party send by email a notice of motion, together with any evidence and submissions in support, within 14 days to the Associate of the Presiding Judge, following which directions for responses will be made.

Catchwords:

CONTRACT — deed of settlement — agreement to pay amount due under loan agreements — personal guarantee by appellant liable for debts owing by business to respondent — whether deed legally enforceable — allegation of unconscionable conduct by respondent

PROCEDURE — procedural fairness — failure to comply with directions as to service of affidavits — leave to adduce evidence from further witness refused — possible prejudice to respondent — evidence irrelevant to enforceability of deed

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), r 13.1

Cases Cited:

Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35

Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12

Category:

Principal judgment

Parties:

Senthil Govindasamy (Appellant)
Marketlend Pty Ltd (Respondent)

Representation:

Counsel:
Appellant (Self-represented)
J Willis (Respondent)

Solicitors:
Not applicable (Appellant)
Emerson Lewis (Respondent)

File Number(s):

2023/4404

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Citation:

Marketlend Pty Ltd v Govindasamy [2022] NSWDC 593

Date of Decision:

24 November 2022

Before:

Montgomery DCJ

File Number(s):

2021/331955

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant, Senthil Govindasamy, is a medical practitioner and proprietor of a medical centre in Adelaide, EBM Medical Practice. In 2016 and 2017, the practice was in need of money. Mr Govindasamy was introduced by Jagadish Saripalli, his bookkeeper, to Marketlend Pty Ltd, the respondent, which is a money lender. Mr Saripalli arranged for loans from the respondent.

Seven credit agreements between EBM, the appellant and the respondent were entered into between 2 September 2016 and 22 September 2017. The agreements were executed by the affixing of the appellant’s electronic signature to the agreement. Under the terms of the associated guarantees, the appellant guaranteed EBM’s liability to the respondent and secured EBM’s debt over his own property, over which the respondent lodged a caveat. The respondent advanced the funds to EBM pursuant to the credit agreements. The appellant’s evidence was that he did not read the agreements.

EBM breached the credit agreements by not paying the outstanding sums on demand. A deed was signed in May 2021, providing that the appellant would pay the settlement amount of $50,000 (less than one third of the amount owing under the credit agreements) on or before 30 May 2021. Upon receipt of the full amount, the respondent would release the appellant from the claim against him pursuant to the guarantees, not sue in relation to the asset transfer, remove its caveat over real property and not apply to wind up EBM.

The appellant sought an extension of time to pay the $50,000. His last request for an extension was made on 27 July 2021. On 22 November 2021, the respondent filed a summons in the Supreme Court seeking an order for summary judgment of $185,701.95. The matter was transferred to the District Court.

The respondent sued on the settlement deed. During the hearing, the appellant sought leave to call Mr Saripalli to give evidence that without his authority, Mr Saripalli had applied the electronic signature to the credit agreements, and of conversations between them as to the terms of the credit agreements. No affidavit of Mr Saripalli had been served; nor had any notice been given of his putative evidence. The primary judge refused the appellant’s application. Judgment was entered against the appellant.

The appellant appealed on two grounds (the second of which was added in the course of the hearing): first, that he was not afforded procedural fairness when he was not permitted to call Mr Saripalli and secondly, that the Court below did not consider the unconscionable conduct of the respondent during the claimed credit agreements, heads of agreement and settlement deed. The second ground was founded on the allegation that the appellant was at a special disadvantage when he executed the settlement deed because he did not have copies of the credit agreements.

The Court held (Adamson JA, Simpson AJA and Basten AJA agreeing):

1. There was no denial of procedural fairness because the appellant had no entitlement to have irrelevant evidence admitted: [35].

2. The allegation of unconscionability by reason of special disadvantage was not raised at first instance. If it had been, the respondent would have been entitled to cross-examine the appellant. The Court ought not uphold a ground of appeal which, had it been raised at first instance, could have led to evidence being adduced by the respondent: [42].

Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33, applied

Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12, applied.

Judgment:

1. ADAMSON JA: Senthil Govindasamy (the appellant) appeals against the judgment ordered against him on 24 November 2022 by Montgomery DCJ (the primary judge) that he pay Marketlend Pty Ltd (the respondent) the sum of $185,701.95, together with interest from 31 July 2021.

2. The notice of appeal contained the following sole ground of appeal:

“[The] appellant [was] not afforded procedural fairness in that the Appellant was not permitted to call certain witnesses to give evidence in relation to material questions of fact.”

3. In the course of the hearing of the appeal, the appellant sought to add a second ground, which was not opposed by Mr Willis, who appeared for the respondent, as follows:

“The Court below did not consider the unconscionable conduct of the respondent during the claimed credit agreements, heads of agreement and settlement deed.”

4. Ground 1 concerns the primary judge’s refusal to allow the appellant to call Jagadish Saripalli, a bookkeeper who worked for Lyndoch Medical Centre Pty Ltd (EBM) as trustee for the ANBU Unit Trust (trading as EBM Medical Practice). The appellant was a director and shareholder of EBM. No affidavit of Mr Saripalli had been served; nor had any notice been given of his putative evidence.

5. Ground 2 is, in substance, a complaint that the appellant was at a special disadvantage because he did not have copies of the credit agreements (which included guarantees, pursuant to which the appellant guaranteed EBM’s debt to the respondent) between himself, EBM and the respondent at the time he executed the settlement deed (on which the respondent’s claim was based).

6. For the reasons which follow, I am not persuaded that either ground of appeal has been made out.

The facts

7. The appellant is a medical practitioner. The primary judge found him to be a sophisticated businessperson. He was also the proprietor and manager of the medical centre conducted by EBM at a location in Mawson Lakes (a suburb of Adelaide in South Australia) until about 2017, when he, or EBM, transferred the business to Bamboo Medical Group Pty Ltd.

8. In 2016 and 2017, EBM was in need of money. Mr Saripalli introduced the appellant to the respondent, which is a money lender. Mr Saripalli arranged for loans to EBM from the respondent. Seven credit agreements between EBM, the appellant and the respondent were entered into between 2 September 2016 and 22 September 2017. The agreements were executed by the affixing of the appellant’s electronic signature to the agreement. Under the terms of the associated guarantees, the appellant guaranteed EBM’s liability to the respondent and secured EBM’s debt over his own property at Mawson Lakes, over which the respondent lodged a caveat. The respondent advanced the funds to EBM pursuant to the credit agreements. The appellant’s evidence was that he did not read the agreements.

9. EBM breached the credit agreements by not paying the outstanding sums on demand. The respondent foreshadowed that it would exercise its rights under the credit agreements. On 26 February 2021, Frank Iannuzzelli (the respondent’s Chief Financial Officer) and David Levi (a registered liquidator and Chartered Accountant) met with the appellant and Anantha Gangapatnam (the principal of Bamboo Medical Group Pty Ltd, which continued to operate a medical practice from the same premises in Mawson Lakes) to discuss the potential recovery action. On the following day, Mr Levi returned and met again with the appellant and Mr Gangapatnam. He told them that if he did not return from the meeting with an agreement to give to the respondent, the respondent would proceed to exercise its powers under the credit agreements (including the guarantees). At the conclusion of the meeting the appellant (but not Mr Gangapatnam) signed heads of agreement which referred to the credit agreements, provided for a repayment schedule and contemplated that the parties would enter into a deed to formalise their arrangement. As the primary judge found, at no stage during this process did the appellant allege that he had not signed the credit agreements (or associated guarantees).

10. Between February and May 2021, the appellant and the respondent negotiated a settlement. Draft deeds were exchanged between them as part of the negotiation. In early May 2021, the appellant signed a draft of the deed incorporating some changes he made to the document. The respondent’s solicitors created an updated version of the draft which included the appellant’s changes. This updated version became the deed which was ultimately signed on 7 May 2021 by the appellant and, on 11 May 2021, by a person authorised to sign on behalf of the respondent. There was no issue that the deed had been properly executed by both parties. EBM was not a party to the deed.

11. The deed defined “EBM Credit Agreements” as the seven credit agreements (referred to above). It defined “EBM Personal Guarantees” by reference to recital B (set out below) and “EBM Personal Guarantee Claim” as meaning the claim that the respondent had against the appellant pursuant to the EBM Guarantees. The “Settlement Amount” was defined as meaning the amount of $50,000. This amount constituted less than one third of the amount owing under the credit agreements (which, as at 23 March 2021, was $185,701.95).

12. The recitals stated:

“A.    Marketlend and EBM entered into the EBM Credit Agreements, pursuant to which Marketlend provided financial accommodation to EBM.

B.    Pursuant to the personal guarantee provisions contained in the EBM Credit Agreements, Govindasamy agreed that:

(1)    he would be personally liable for the debts owing by EBM to Marketlend (EBM Personal Guarantees);

(2)    that he would indemnify Marketlend in relation to any loss or liability arising by reason of EBM's breach of the EBM Credit Agreements.

C.    EBM has breached the EBM Credit Agreements in that it has failed to make payment to Marketlend in accordance with those agreements.

D.    As at 23 March 2021, the debt due and payable to Marketlend by EBM was $185,701.95 (Total EBM Debt).

E.    By reason of the failure by EBM to make payment to Marketlend in accordance with the EBM Credit Agreements, Marketlend has the EBM Personal Guarantee Claim.

F.    Marketlend has made demand on Govindasamy for payment of all amounts owing by EBM pursuant to the EBM Credit Agreements and Govindasamy has failed to make payment to Marketlend as demanded.

G.    Marketlend has also made a claim against Govindasamy relating to the transfer/ assignment or EBM's business and/or assets to another person or entity without Marketlend's consent, the details of which were set out in a letter from Emerson Lewis lawyers to Govindasamy dated 19 March 2021 (Asset Transfer Claim).

H.    On a commercial and without admissions basis, the parties have agreed to settle the dispute between them with respect to the EBM Personal Guarantee Claim and the Asset Transfer Claim on the basis of this deed.”

13. Clause 3 of the deed provided that, in full and final settlement of the EBM Personal Guarantee Claim and the Asset Transfer Claim, the appellant would pay to the respondent the Settlement Amount without any manner of set-off, deduction or counterclaim, to be paid on or before 30 May 2021.

14. Clause 4.1 provided that, upon receipt of the full amount of the Settlement Amount in cleared funds, the respondent would release the appellant from the EBM Personal Guarantee Claim, not sue the appellant in relation to the Asset Transfer Claim, remove its caveat over real property owned by the appellant and not apply to wind up EBM.

15. Clause 5 provided for the consequences of default as follows:

“5.   Default

5.1    In the event that Govindasamy fails to pay the Settlement Amount as required by clause 3.1 above, Govindasamy expressly acknowledges and agrees that:

(a)    Marketlend will be entitled to obtain judgment for the Total EBM Debt, plus the costs of obtaining judgment; and

(b)    Marketlend may sue, commence proceedings or otherwise take any action against Govindasamy in relation to the Asset Transfer Claim.

5.2    For the purposes of obtaining judgment pursuant to clause 5.1(a) above, Govindasamy agrees that:

(a)    this Deed may be produced to the Court as evidence of Govindasamy’s consent to judgment; and

(b)    that an affidavit by a solicitor acting for Marketlend will be sufficient evidence of:

(i)    a failure to receive any amount provided for by clause 3 above; and

(ii)    any amounts which might have been received and any amounts which remain outstanding.”

16. The appellant sought extensions of time to pay the $50,000. As far as the evidence revealed, his last request for an extension was made on 27 July 2021.

The procedural background

17. On 22 November 2021, the respondent filed a summons in the Supreme Court, seeking orders which included an order for summary judgment of $185,701.95 pursuant to r 13.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). On 24 February 2022, the proceedings were transferred to the District Court. On 29 March 2022, the Registrar ordered the appellant to serve his affidavits by 22 April 2022 and the respondent to serve its affidavits in reply by 3 June 2022. On 8 June 2022, the Registrar extended the time for the appellant to serve his affidavits to 8 July 2022. On 7 July 2022, the appellant served his own affidavit sworn on 7 July 2022. This was the only affidavit served by him. On 21 July 2022, the Registrar made directions for the service of evidence in reply and listed the matter for hearing on 23 November 2022. The respondent confirmed that it would proceed in the usual way and not press its application for summary judgment.

18. On 23 November 2022, the hearing commenced. The respondent, for whom Mr Willis appeared (at first instance and in this Court), opened its case and indicated that it was suing on the settlement deed, which had been breached, thereby entitling the respondent to judgment for the amount outstanding ($185,701.95).

19. The primary judge invited the appellant to open. The appellant told the primary judge that:

1. when his business needed money he had asked Mr Saripalli to arrange for funds to be borrowed and Mr Saripalli had told him that the respondent offered low interest loans without security which would be repaid from the cash flow of the business;

2. he knew that money had been received by EBM from the respondent but he did not enter into the credit agreements;

3. he did not expect the respondent to lodge a caveat over his property because of what Mr Saripalli had told him; and

4. he felt he had to sign the settlement deed because he wanted to sell his house but it got blocked because of the caveat which the respondent had lodged.

20. The primary judge pressed him on the basis of his defence and why he said that the settlement deed was unenforceable. The primary judge confirmed that he would hear from the appellant again after the evidence had closed.

21. The respondent read the following affidavits:

1. affidavit of Stefano Calabretta (the respondent’s principal) affirmed on 22 November 2021, who deposed that $185,701.95 was owing;

2. affidavit of Mr Iannuzzelli affirmed on 22 November 2021, who exhibited an executed copy of the deed and deposed as to the appellant’s requests for an extension of time within which to pay the $50,000 under the deed and his failure to pay any part of that amount;

3. affidavit of Ruby Schmelzer (the respondent’s Legal Executive) sworn 15 September 2022, which exhibited documents, including the credit agreements;

4. affidavit of Mr Levi sworn 23 September 2022, who deposed as to his appointment by the respondent to liaise with the appellant regarding payment of the outstanding moneys to the respondent and the circumstances surrounding the negotiation and execution of the deed; and

5. affidavit of Isabella Saadie (a graduate-at-law employed by the respondent’s solicitors) affirmed 23 September 2022, who deposed as to the communications between the parties which led to the execution of the settlement deed on 7 May 2021 by the appellant and on 11 May 2021 by the respondent, who returned the countersigned version to the appellant on the same day.

22. On 23 November 2022, the appellant, who appeared in person, cross-examined each of the plaintiff’s witnesses, apart from Mr Iannuzzelli, who was not available until 24 November 2022. Before the Court adjourned on 23 November 2022, the primary judge asked the appellant about his case. The following exchanges occurred:

“DEFENDANT: Because Mr … Gangapatnam also was one of the main participant of the meeting between Mr Levi and myself, and because there is inconsistencies between what I and Mr Levi have agreed, can I please seek your permission to get Mr Gangapatnam’s attendance to this Court and--

HIS HONOUR: What do you say about that, Mr Willis?

WILLIS: Well, no. The time for evidence has long passed. I don’t know what he would say. I don’t know what prejudice would arise. If it was to happen, it would have to have happened in the usual course, and it’s simply too late partway through the hearing.

HIS HONOUR: You want to call him to go to evidence to corroborate your own, do you?

DEFENDANT: I want to corroborate my own, your Honour, because I believe what has--

HIS HONOUR: And this is about the statement of locking the doors, is it?

…

DEFENDANT: Yes, your Honour.

HIS HONOUR: You see, Mr Govindasamy, you’re asking so many questions about events, both the agreements, loan agreements, and the meeting in February in Adelaide. The deed is made in May.

DEFENDANT: Yes.

HIS HONOUR: Five months after Adelaide, and what is available from the emails, including your own, is that between those two dates there was negotiation of the terms leading to the deed, and the deed says all these other disputes are behind, we relinquish our rights in regard to - you relinquish your rights and they relinquish their rights in regard to them, and if you pay $50,000 by May, whatever the date was in May, then that resolves all issues and the caveat is removed and the company charges are removed from EBM, and if you don’t, then they’re entitled to proceed for the larger sum of debt which is identified in the deed. So the deed is evidence of a negotiated settlement on the documentary evidence. You want to go back to words that were said and how you considered that they might pressure you five months before … So there’s nothing you have yet asked of any witness that challenges this deed. There’s nothing you have asked that goes contrary to it being a negotiated settlement. …”

23. The primary judge read out the following passage from the appellant’s affidavit:

“Mr Jagadish Saripalli told me that Marketlend provides business loans without any personal guarantees and is a cashflow-based business lender with competitive interest rates and very good lending terms. Jagadish Saripalli never mentioned about any personal guarantees. On this basis, I asked Jagadish Saripalli to explore further about the loans. Jagadish Saripalli liaised with Marketlend to organise the loans.”

24. The primary judge asked the appellant where the evidence was that showed that he raised any issue about the credit agreements or the guarantees between February 2021 and 11 May 2021 when the deed was executed. The appellant responded:

“What I’m saying is I have received money from Marketlend based on the understanding that it is a competitive loan with interest between five per cent and six per cent …”

25. When the primary judge asked the appellant where he got that information, the appellant answered that he had got the information from “JS” [Jagadish Saripalli], his employee. The following exchange ensued:

“HIS HONOUR: And you don’t call that employee as a witness?

DEFENDANT: I want to call that employee as a witness, your Honour.

HIS HONOUR: You do?

DEFENDANT: Yes, your Honour.

HIS HONOUR: No affidavit.

DEFENDANT: I’m sorry. I mean, I want to call him as a witness.

HIS HONOUR: I think you had better raise that with your opponent, and I’ll hear from Mr Willis tomorrow morning. …”

26. When Court resumed on 24 November 2022, the primary judge raised the “procedural matter” before allowing Mr Iannuzzelli to be called. The appellant indicated that he would call Mr Saripalli and Mr Gangapatnam. When invited to respond, Mr Willis said that the appellant had not informed them of what evidence was sought to be adduced from these witnesses. The primary judge deferred the application so that Mr Iannuzzelli could be called and cross-examined. At the close of the respondent’s case, the primary judge adjourned to permit the parties to discuss the evidence which the appellant sought to adduce.

27. When the hearing resumed, the appellant informed the primary judge that Mr Saripalli would give evidence of the following two matters:

1. that, without the appellant’s authority, Mr Saripalli applied the appellant’s electronic signature to the credit agreements so that the respondent would advance the loan funds to EBM; and

2. what Mr Saripalli had told the appellant about the terms of the credit agreements.

28. Mr Willis submitted that, if Mr Saripalli were permitted to give evidence as to (1) above, the respondent would be prejudiced because it would be unable to test (by reference to technical data regarding IP addresses) the assertion that Mr Saripalli had in fact applied the electronic signature to the document. Mr Willis submitted that the evidence as to (2) was irrelevant because it was not suggested that the respondent was ever informed of what Mr Saripalli had told the appellant and the agreements were in writing and operated in accordance with their terms: Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

29. In the course of further discussion, the appellant informed the primary judge that, instead of reading the credit agreements, he had chosen to rely on what he was told by Mr Saripalli. The appellant explained his reason for doing so as follows:

“Because I was running a busy medical practice. You know, I’m a dental practitioner. Quite time pressed. I rely on people to get things done.”

30. There was nothing in the evidence to indicate that the respondent had any knowledge that the appellant had not read the agreements.

31. After further exchanges, the primary judge refused the appellant’s application to call Mr Saripalli and said:

“I don’t see how his evidence would help you as you’ve described it to me. And in any event, I wouldn’t accept his evidence unless there were to be a certificate from a lawyer that he had received advice before giving his evidence.”

32. The primary judge, over the respondent’s objection, allowed the appellant to call Mr Gangapatnam, who gave evidence about the meetings on 25 and 26 February 2021 at the premises of the medical centre. It was not suggested that Mr Gangapatnam was liable for EBM’s debt to the respondent.

Ground 1: alleged denial of procedural fairness in refusing the appellant’s application to call Mr Saripalli

33. As set out above, the primary judge gave the appellant the opportunity to articulate the evidence which he expected Mr Saripalli to give. In substance, the appellant proposed to call him to admit that he had obtained money for EBM (there being no dispute that the funds had been received) by fraud (that is, by affixing the appellant’s electronic signature to the credit agreements, when he was not authorised to do so). Secondly, Mr Saripalli was to be called to give evidence, which the primary judge held to be inadmissible, about the conversations between the appellant and Mr Saripalli (to which the respondent was not privy) regarding the effect of the credit agreements, which the appellant gave evidence that he was too busy to read.

34. The appellant had had ample opportunity before the hearing to obtain an affidavit from Mr Saripalli. The time within which he was to serve his affidavit evidence was extended. The reasons given by the primary judge for refusing leave to call Mr Saripalli were, in substance, that his evidence would be irrelevant (and therefore inadmissible) because:

1. the enforceability of the credit agreements (even if signed by Mr Saripalli without authority) did not affect the enforceability of the settlement deed (which the appellant admitted that he had signed); and

2. evidence of what Mr Saripalli said to the appellant about the terms of the credit agreements could not affect their legal operation and was irrelevant to the enforceability of the settlement deed, on which the respondent’s claim was based.

35. In these circumstances, there was no denial of procedural fairness because the appellant had no entitlement to have irrelevant evidence admitted. Thus, whether the appellant had difficulty organising a witness statement from Mr Saripalli before the trial (as he asserted in his submissions on the appeal) or whether there would be a delay to allow Mr Saripalli to obtain legal advice before giving evidence (since the answers to the questions would, if answered in the way which the appellant foreshadowed, be incriminating) were not to the point. It is thus unnecessary to enumerate the considerations to which the primary judge had regard in refusing the application. There was no error in the primary judge’s ruling. I note that no statement from Mr Saripalli was tendered on the appeal.

36. For these reasons, ground 1 has not been made out.

Ground 2: alleged unconscionability by the respondent

37. The only matter which the appellant raised in the Court below against the enforceability of the deed was duress. The primary judge found against him on that issue. There is no challenge to that finding. For the first time on appeal, the appellant raised unconscionability in respect of the credit agreements, the heads of agreement (which he admitted signing on 26 February 2021) and the settlement deed.

38. The appellant argued that the settlement deed would only be enforceable against him if the credit agreements and the heads of agreement were also enforceable. The primary judge correctly rejected this argument. The terms of the settlement deed, when read as a whole, made clear that it was a separate stand-alone agreement which would bind the parties.

39. Thus, if permitted to do so by this Court (having regard to the argument not having been raised before the primary judge), the appellant must show that the settlement deed was itself unconscionable. As referred to above, the claim of unconscionability was founded on the allegation that the appellant was at a special disadvantage when he executed the settlement deed because he did not have copies of the credit agreements.

40. Mr Willis drew the Court’s attention to the evidence of an email chain which relevantly commenced with an email dated 9 March 2021 from Jordan Pana (the appellant’s then solicitor) to Mr Calabretta (the respondent’s solicitor) referring to the caveat which the respondent had lodged against the appellant’s real property and asking for a copy of the agreement dated 22 September 2017 which created the charge which was claimed to be a caveatable interest. Mr Pana reiterated the request on 10 March 2021 as the purchasers of the appellant’s property had indicated that they would issue a notice to complete on 12 March 2021. Later on 10 March 2021, Mr Calabretta responded and attached the credit agreement (which included the personal guarantee and indemnity agreement to which the appellant was a party) dated 22 September 2017 which bore the appellant’s electronic signature (being the last of the seven credit agreements).

41. Thus, the appellant, at least through his solicitor, was aware of the terms of the credit agreement (and the associated guarantee). In these circumstances, the allegation that he was under a special disadvantage because he did not have copies of the credit agreement would appear to be difficult to make out. Further, other evidence (referred to above) established that the appellant’s usual practice was not to read agreements to which he was a party.

42. Had the allegation of unconscionability by reason of special disadvantage been raised at first instance, the respondent would have been entitled to cross-examine the appellant about whether he received the email sent to Mr Pana, whether he read it, whether he considered it at all and, if so, whether he considered it to be of any importance in relation to the deed. Further, the respondent could have cross-examined the appellant about what difference it would have made if he had received all the credit agreements given that he accepted that the respondent had advanced the money to EBM. The appellant also admitted that he had no money to seek legal advice as at February 2021, when the respondent was foreshadowing enforcement of the debt against EBM under the credit agreement and against the appellant under the guarantee.

43. In these circumstances, the principle that this Court ought not uphold a ground of appeal which, had it been raised at first instance, could have led to evidence being adduced by the respondent applies: see Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33 and Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12.

44. For these reasons, ground 2 has not been made out.

Proposed orders

45. For the reasons given above, I propose the following orders:

1. Dismiss the appeal.

2. Subject to order (3), order the appellant to pay the respondent’s costs of the appeal.

3. If either party seeks to vary order (2), direct that the party send by email a notice of motion, together with any evidence and submissions in support, within 14 days to the Associate of the Presiding Judge, following which directions for responses will be made.

46. SIMPSON AJA: I agree with Adamson JA.

47. BASTEN AJA: I agree with Adamson JA.

**********

Decision last updated: 12 May 2023