Sasterawan v Molla

[2025] NSWDC 185

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Sasterawan v Molla [2025] NSWDC 185

Hearing dates:

24 February 2025

Date of orders:

23 May 2025

Decision date:

23 May 2025

Jurisdiction:

Civil

Before:

Weber SC DCJ

Decision:

(1) Judgment and verdict for the defendant against the plaintiff.

(2) The plaintiff pay the defendant’s costs.

Catchwords:

CONTRACT – Oral guarantee – Written contract purported to be a written guarantee – International contractual agreement – Where foreign law not pleaded – Where agreement lacks consideration

Legislation Cited:

Imperial Acts Application Act 1969 (NSW) s 8(1)

Statute of Frauds 1677

Cases Cited:

Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1

Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549

Browne v Dunn (1893) 6 R 67

Dyno Wesfarmers Ltd v Knuckey [2003] NSWCA 375

In the matter of Pacific Springs Pty Limited [2020] NSWSC 1240

Jeans v Cleary [2006] NSWSC 647

Category:

Principal judgment

Parties:

Wahyu Sasterawan (Plaintiff)
Parulunnessa Molla (Defendant)

Representation:

Counsel:
Mr S Balafoutis SC and Mr C Chiam (Plaintiff)
Ms F Sinclair (Defendant)

Solicitors:
Lawbiz (Plaintiff)
Vaikom Law (Defendant)

File Number(s):

2022/00316188

Publication restriction:

None

JUDGMENT

Introduction

1. The plaintiff sues on what he alleges to be guarantees given by the defendant in respect of her husband’s debts. The guarantees sued upon are both an oral guarantee (the “Oral Guarantee”), and a document purporting to have been a guarantee in written form (the “Written Guarantee”). The Written Guarantee was said to be executed by the defendant in India. The Oral Guarantee purportedly arose out of a telephone conversation. This telephone conversation is said to have occurred in circumstances where the defendant was in India, and the plaintiff was in New Zealand.

2. Neither party has made any attempt to confront the private international law issues which may arise in these circumstances. There could, for example, be a live issue as to the applicable law of both guarantees, however, foreign law has not been pleaded, and no party has suggested that the law of the alleged guarantees was other than the laws of New South Wales and, as such, I will decide the matter accordingly (Dyno Wesfarmers Ltd v Knuckey [2003] NSWCA 375 at [25]).

Background

3. The plaintiff claims to be the creditor of the defendant’s husband, Jamir Ali (“Ali”). This indebtedness is said to have arisen through both advances, which the plaintiff made to Ali, and costs incurred by the plaintiff on Ali’s behalf. Ali was not called in the proceedings, notwithstanding the fact that he was present in Court while they were being heard. The plaintiff has put on an affidavit which proves that indebtedness, which is uncontradicted. In those circumstances, I find that Ali is indebted to the plaintiff as he asserts, and that Ali’s evidence in relation to that indebtedness would not have assisted the defendant’s case.

The Oral Guarantee

4. The plaintiff says in his affidavit that while the defendant was in India, he rang her and introduced himself (they had never met before). The plaintiff says that after that introduction the following conversation occurred:

[17] Sometime in 2001 or 2002, I spoke to Parulunnessa who was in India over the telephone. I introduced myself to her and she said words to the effect “I know who you are and he has spoken to me about the debt owed to you.”

[18] During this telephone call we had a conversation in words to the following effect:

a. Parulunnessa said words to the effect that “If my husband does not repay you, then I will repay you when I come to Australia”.

b. She also said words to the effect of: “Please forgive him [Jamir], and do not take any legal action”.

c. Parulunnessa further said that: “Without your assistance, it was impossible for Jamir to go to New Zealand and to get his permanent residency. I understand this, and so, from now on, I am taking the full responsibility for his all debts and any and all other monies he owes to you. Please wait until I arrive to Australia and get Australian permanent residency. I personally will contact you. I sincerely undertake that from now on his debts are my debts. From now on I will be his guarantor. I will repay the two judgments [sic] debts, and all other money you loaned to him, with 10% interest per year”. I do not now recall whether Parulunnessa said it was going to start in 2001 or 2002 with respect to the interest.

d. After Parulunnessa said this, in response I said words to the effect of: "How can I trust you?”

e. In response, Parulunnessa said words to the effect that "I understand you. I understand that it is very hard for you to trust me. But all I can say is that I am not Jamir, I am a trustworthy loyal woman. You will find that I am a very trustworthy woman."

f. In response I said words to the effect of “I have no choice. I trust you.”

5. The defendant also put on an affidavit in these proceedings. In that affidavit, she does not deny the conversations to which I have just referred. In the circumstances, though with some reluctance, I feel that I have no alternative other than to accept that the conversation took place in the form asserted by the plaintiff. I say that I do so with some reluctance as the conversations seem to me to be entirely self-serving, and are expressed in most unlikely of terms.

6. The plaintiff says that the conversation constituted an oral guarantee. New South Wales is a fairly rare example of a jurisdiction where an oral guarantee can be enforceable. This is so as the Statute of Frauds 1677 does not apply in this State. This is the effect of s 8(1) of the Imperial Acts Application Act 1969 (NSW), which had the effect of repealing the Statute of Frauds (see also Jeans v Cleary [2006] NSWSC 647 at [192]).

7. As I have indicated, the parties must be taken to have conducted the proceedings on the basis that the applicable law in respect of both alleged guarantees is the law of New South Wales, and I shall apply that law accordingly.

8. The defendant relies, in her written submissions, on; first, her denial of having given the Oral Guarantee as she pleads in her defence; and, secondly, on the failure of the plaintiff to put conversations said to constitute the Oral Guarantee to her in cross-examination. These submissions, in my view, are quite unfounded. The effect of the defence denying the existence of the Oral Guarantee was to put the question as to whether there was such a guarantee in issue in the proceedings. The evidence in the proceedings, however, is uncontradicted; namely, that the defendant did not deny the conversations which are said to give rise to the Oral Guarantee. As such, the issue of whether the conversation took place must be revolved in the plaintiff’s favour.

9. The suggestion in the defendant’s written submissions that the plaintiff’s Senior Counsel should have put the terms of the uncontradicted conversation to her in cross-examination only needs to be stated to be rejected. It would have been an exercise of poor advocacy for Senior Counsel to have done so, as the defendant was on notice of what the plaintiff stated in the conversation, and the defendant did not rebut it.

10. In the circumstances, there was no obligation to put the uncontradicted evidence of the plaintiff to the defendant. This is so, inter alia, as the rule in Browne v Dunn (1893) 6 R 67 does not apply to cases conducted on affidavits or witness statements. This is so as the party responding to an affidavit is put on notice that there is a dispute between the parties and, as a consequence, there is no unfairness in not putting the opposing version of events to the witness in cross-examination (Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1).

11. The issue, therefore, reduces to whether the conversation upon which the plaintiff relies constitutes an enforceable guarantee. In my view, it does not. As with all contracts, a contract of guarantee, in order to be enforceable, must be supported by consideration. I do not consider that the guarantee said to arise from the conversation upon which the plaintiff relies provides such consideration.

12. In both conversations, the defendant mentions her desire for the plaintiff to desist from taking legal proceedings against her husband, Ali. Crucially, however, the plaintiff does not undertake to do so.

13. The liability of a surety under a contract of guarantee is strictissimi juris, and as such, ambiguous clauses should be interpreted in favour of the surety (Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 561). This is a principle usually applied to written contracts of guarantee. It must, in my view, be at least equally applicable to alleged oral contracts of guarantee. Applying this approach, there is simply no evident promise on the part of the plaintiff to refrain from suing Ali.

14. The Oral Guarantee, therefore, is not supported by consideration and, as a consequence, it is unenforceable.

The Purported Written Guarantee

15. The plaintiff pleads that the defendant executed a document entitled “Consigner / Guarantor Contract Agreement”. It is pleaded that this occurred in or about 20 August 2002. The defendant denies that she executed the document. Unfortunately for the defendant, the defence did not stop there, but rather continued:

[6(f)] says that some unknown person has marked the Guarantee Contract Agreement in a way or in a fashion that resembles her signature without her knowledge;

[6(g)] says that the document relied upon by the Plaintiff is fake, untrue and has been created for the purpose of perpetrating a fraud;

…

16. The plaintiff says that these subparagraphs amount to an allegation that the plaintiff’s signature appearing on the document is, in fact, a forgery. The plaintiff goes on to submit that, as consequence, the defendant bears the burden of proving that it is a forgery (In the matter of Pacific Springs Pty Limited [2020] NSWSC 1240 at [9]).

17. I am not convinced that the plaintiff is correct in this analysis, as the defendant is, in substance, alleging that she did not sign the document. She does not need to prove that it was signed by someone else in order to make that proposition good. Accordingly, the plaintiff’s case does not depend upon the defendant proving that someone else signed the document. Rather, it would be sufficient for the plaintiff to prove that she did sign the document.

18. That said, I do not consider that the issue is important, in a practical sense, to the outcome of the proceedings. I take this view as both in her affidavit and in her oral evidence, the defendant denies signing the document. This denial, in my view, serves as to cast an evidentiary burden on the plaintiff to establish that she did sign. This evidentiary burden, in my view, has not been discharged by the plaintiff.

19. The document in question must have been produced on the plaintiff’s instructions. I so conclude as it contains a recitation of historical facts which could only have come from the plaintiff.

20. The most obvious way in which the plaintiff could have negated the defendant’s assertion that she did not sign the document would have been to call the witnesses to the Written Guarantee. There were two such witnesses. In addition to the two witnesses, the execution of the document was said to be verified by an advocate at Alipore Police Station in Calcutta in India. None were called.

21. In light of the fact that the document was, on the balance of probabilities, prepared on the plaintiff’s instructions, those witnesses, I would comfortably conclude, are in the plaintiff’s “camp” and as such I infer that their evidence would not have assisted the plaintiff’s case.

22. The second obvious way in which to rebut the plaintiff’s denial of her signature on the alleged Written Guarantee would be to call a handwriting expert. This step was also not taken. I again infer that such evidence would not have assisted the plaintiff’s case.

23. I should also add that an objective consideration, to my mind, casts doubt on the proposition that the defendant executed the document. This objective fact is that the document is dated a mere 17 days before her husband, Ali, the principal debtor, filed a debtor’s petition which led to his bankruptcy. In my view, it is unlikely that the defendant executed the document in those circumstances.

24. Further, I should add that the document that is said to constitute the Written Guarantee, in reality, does not purport to be a guarantee. Rather, it is an agreement by the defendant to make herself liable as principal debtor for her husband’s debts in the sum of $62,909.80.

25. Significantly, the plaintiff gave no consideration for this promise. The plaintiff says that the Written Guarantee need not be supported by consideration as it is enforceable as a deed. I do not accept this argument. The document does not purport to be a deed. It is consistently described as a “Contract Agreement”.

26. The only facts relied upon by the plaintiff to justify its assertion that the document constituted a deed are the words, “signed, sealed and delivered” appearing immediately before the attestation.

27. The plaintiff says that the document is sealed, however, the better view is that the seal to which the plaintiff refers is part of the attestation rather than the seal recognised by the person binding themself to the document as a deed.

28. In order to establish that the document operated as a deed, I must find that this was the intention of the defendant, objectively determined. Beyond the words, “signed, sealed and delivered”, there is no such objective evidence. Indeed, as I have indicated, the objective evidence tends in the other direction.

Conclusion

29. Accordingly, I am of the view that the plaintiff has not established its case that the defendant guaranteed her husband’s debts and, accordingly, the proceedings should be dismissed and costs should follow the event.

Orders

30. Accordingly, I make the following Orders:

1. Judgment and verdict for the defendant against the plaintiff.

2. The plaintiff pay the defendant’s costs.

**********

Amendments

24 May 2025 - Cover sheet amended.

Decision last updated: 24 May 2025