Bhundia v Sommers & Neylon (No.2)

Two notices of motion are before the Court for determination, namely:

At the commencement of the hearing an application was made by the solicitor for the first and second defendants for an adjournment of the hearing of both motions. That application was refused. [1]

The plaintiff’s case against the first and second defendants may be summarised as follows.

In December 2018, each of the first and second defendants was a director of PropertyBay Holdings Pty Ltd (PropertyBay). They approached the plaintiff in that capacity with a view to obtaining a loan in the sum of approximately USD$500,000.00 to assist PropertyBay to fund the purchase of land located off the coast of North Queensland known as Dunk Island.

The amount of the loan was later increased, resulting in the plaintiff agreeing to lend USD$630,000.00 to PropertyBay which was required to be repaid on or before 31 January 2019, along with interest totalling USD$189,000.00. There were two written agreements between the plaintiff and PropertyBay which recorded the loan. It is the plaintiff's case that each of the first and second defendants personally guaranteed, in writing, the obligation of PropertyBay to repay the principal sum and interest. Two separate guarantees were signed by each of the first and second defendants.

The plaintiff’s case is that PropertyBay refused to comply with a formal demand and failed to repay the principal sum and interest, and that both the first defendant and the second defendant failed to repay the principal sum and interest pursuant to the respective guarantees. PropertyBay was wound up on the plaintiff's application in July 2019.

The plaintiff commenced proceedings against the first and second defendants on 23 July 2019. The plaintiff's case against the first defendant is listed for hearing on 27 April 2021, with an estimate of two days. On 11 October 2019, default judgment was entered against the second defendant in the sum of $935,701.19.

The notice of motion brought by the first defendant seeking an order for security for costs was supported by his affidavit of 14 October 2020. In that affidavit, the first defendant said that the claim brought against him by the plaintiff is to be defended on the basis that the guarantees were “induced through fraud or misrepresentation". [2] The second defendant said that he had “not yet engaged full legal representation”, [3] and that he had established that the plaintiff has no assets in Australia. [4]

The first defendant’s affidavit also included the following: [5]

Counsel for the plaintiff took objection to that paragraph of the affidavit, on the basis that the assertion was:

Whilst I did not regard what was stated in that paragraph as being in the nature of an expert opinion, I concluded that it amounted to nothing more than a bare assertion, absent any foundational basis. For that reason, that the paragraph was excluded.

The first defendant was not cross-examined on his affidavit and the plaintiff did not adduce any evidence.

Counsel for the plaintiff advanced a number of submissions in support of the proposition that the order sought in the motion should not be made.

Firstly, counsel submitted that the application had been brought at an extremely late stage, in circumstances where the proceedings between the plaintiff and the first defendant had already been set down for hearing, and where no explanation had been provided for the delay. Counsel submitted that this was, of itself, a sufficient basis upon which to dismiss the motion.

Counsel further submitted that the application was entirely unsupported by any proper evidence as to the likely costs which the first defendant would incur in defending the proceedings between now and the final hearing. Counsel submitted that in these circumstances, and given the first defendant’s reference to not having engaged “full representation”, the Court was simply not in a position to fix security in any sum.

Finally, counsel submitted that the plaintiff was, in effect, in the position of a defendant, in the sense that he had been forced to commence proceedings to recover a substantial amount of money which was advanced to a company of which the first and second defendants were directors, the repayment of which they had each guaranteed. It was submitted that this was a further matter which militated against the order sought being made.

As I have previously noted, an application for an adjournment of hearing of the first defendant’s motion was rejected. In the course of the hearing of that application, the first defendant’s solicitor said: [6]

Rule 42.21(1) of the Uniform Civil Procedure Rules 2005 (NSW) (the Rules) is in the following terms:

No submission was made as to the particular sub-paragraph(s) of r 42.21(1) upon which the first defendant relied. In circumstances where the plaintiff has filed an affidavit in the proceedings giving an address in the United Arab Emirates, I have proceeded on the basis that in bringing the application, the first defendant relied on sub-paragraph (1)(a) of r 42.21.

Rule 42.21(1A) sets out a non-exhaustive list of relevant considerations in the following terms:

The discretion conferred on the Court to make an order for security for costs is necessarily a wide one which must obviously be exercised having regard to all of the relevant circumstances of the particular case. There is no fixed principle which warrants the making of an order simply because one or more of the grounds specified in r 42.21(1) has been established. All of the circumstances of the case must be considered. [7]

The first defendant, as the applicant for the order for security, bears the onus of adducing the necessary evidence to enable the Court to make the order sought. [8] It is generally accepted that in order to discharge that onus, an applicant will be required to adduce evidence from his or her solicitor setting out, in detail, a reasoned estimate of the costs, security for which is sought.

No such evidence has been adduced by the first defendant. The highest point that the evidence reached in this respect was paragraph 5 of the first defendant’s affidavit which, for the reasons previously outlined, I excluded. Even if that evidence had been admitted, it fell substantially short of constituting the detailed estimate of costs which is required on an application of this nature. The significance of the absence of such evidence is highlighted by the fact that the first defendant stated that he “had not yet engaged full legal representation”. Whatever that may actually mean, it presents an obvious difficulty in the Court making the order sought.

In my view, the failure of the first defendant to adduce such evidence is fatal to his application and has resulted in a failure to discharge the onus that he bears. Over and above that, there are two other factors which, in my view, support the conclusion that the first defendant's notice of motion should be dismissed.

The first factor is the delay in bringing the present application. As I have noted, the plaintiff commenced these proceedings in July 2019. The first defendant filed a defence in August 2019. On 17 September 2020 the proceedings between the plaintiff and the first defendant were allocated a date of 27 April 2021. The present notice of motion was not filed until 28 October 2020, some 14 months following the filing of a defence. The first defendant has adduced no evidence explaining that delay, in circumstances where timing is a relevant factor. [9] Whilst I would not necessarily accept the proposition advanced on behalf of the plaintiff that this is, of itself, a sufficient reason to dismiss the motion, it is certainly one which weighs heavily in favour of doing so.

The second factor is that the plaintiff’s cause of action is really one in the nature of a defence arising from the conduct of the first and second defendants in not meeting their obligations under the respective guarantees. [10] That also militates against the order sought being made. [11]

For all of these reasons, the first defendant’s motion should be dismissed.

The notice of motion brought by the second defendant is supported by his three affidavits dated 14 September 2020, 6 October 2020 and 27 October 2020 as well as an affidavit of his current solicitor, Mr Sewell, of 13 November 2020 (annexed to which was a defence in draft form, a further version of which was provided in the course of the hearing). [12]

In his affidavit of 14 September 2020 which was prepared and filed at a time when he was unrepresented, the second defendant said (inter alia) the following:

In a subsequent affidavit of 6 October 2020, which was also prepared and filed at a time when he was unrepresented, the second defendant said:

The second defendant’s third affidavit of 27 October 2020 was filed by his then solicitor, Mr Bastick, and included the following:

The second defendant was cross-examined by counsel for the plaintiff in relation to a number of issues, one of which was his recent ill health. He agreed that on 2 July 2019 he underwent surgery for testicular cancer. [13] He said that he did not undergo chemotherapy treatment in 2019, [14] and that the cancer had returned in 2020. [15]

He was asked about the assertion in his affidavit of 6 October 2020 [16] that “the extensive cancer chemotherapy program causes many side effects – such as memory loss or fogginess of the brain": [17]

He was then asked: [18]

A report of Dr Elizabeth Hovey [19] which was prepared following her review of the second defendant on 26 May 2020 confirmed that he had undergone a left orchidectomy (which I gather is surgery to remove a cancerous testicle) on 2 July 2019, and that the cancer had returned in March 2020, following which he commenced chemotherapy. A CT scan on 19 May 2020 showed improvement in his condition. The report of Dr Hovey recorded the following history provided by the second defendant at her review on 26 May 2020:

The second defendant was cross-examined about the contents of this report, and particularly about the recorded history: [20]

He was later asked: [21]

After further cross-examination counsel for the plaintiff returned to the contents of Dr Hovey’s report: [22]

The second defendant was also cross-examined about the cause of action brought by the plaintiff against him. He was asked: [23]

The second defendant was also cross-examined about the service of the statement of claim: [24]

He was later asked: [25]

It was also put to the second defendant: [26]

The plaintiff read the following affidavits without objection:

In his affidavit [27] Mr Roppolo said (inter alia) as follows:

The plaintiff said that on about 20 December 2018, his business associate, a Mr Tim Ward, informed him that the first and second defendants were “putting together a consortium” to purchase Dunk Island Resort in Queensland and sought to borrow approximately USD$500,000.00 as part of the funding. [28] The plaintiff told Mr Ward that he may be interested in making a short-term loan to the defendants, or to one of their companies. According to the plaintiff, Mr Ward was his only point of contact and it was Mr Ward who facilitated the negotiations between he and the defendants. At some stage during those negotiations Mr Ward told the plaintiff that the proposed borrower was PropertyBay. At that point, the plaintiff told Mr Ward that he would require a personal guarantee from each of the defendants in respect of any loan that he made to the company.

On 30 December 2018 the plaintiff entered into a loan agreement with PropertyBay pursuant to which he agreed to lend property by the sum of USD$500,000.00. That agreement was varied on 3 January 2019 to increase the amount of the loan to USD$630,000.00. On 31 December 2018, the second defendant signed a document headed “Loan personal guarantee". He signed a second similar document on 3 January 2019. The first of those guarantees included the following clause:

Immediately under the second defendant's signature on each guarantee the following words appear:

Pursuant to the loan agreement, PropertyBay was required to repay the plaintiff the principal sum plus interest on or before 31 January 2019. On the plaintiff’s case, that obligation was guaranteed by the first and second defendants. [29] When the money was not repaid, the plaintiff issued a default notice to PropertyBay, and to each of the defendants. Neither PropertyBay, nor the defendants, complied with such notices.

The affidavit of Mr Harkin establishes that on 13 December 2019, the Official Receiver issued a Bankruptcy Notice to the second defendant. [30] An attempt was made to serve that Notice on the second defendant at premises in Kambala Road, Bellevue Hill on 18 December 2019. The process server was told the second defendant no longer resided there. [31] The plaintiff then obtained an order from the Federal Circuit Court for substituted service of the Notice, allowing for service to be effected by sending it to the email address provided by the second defendant in these proceedings. [32] On 12 May 2020, the notice was served on the second defendant by that method. [33]

On 30 July 2020, the plaintiff filed a Creditor’s Petition against the second defendant, [34] following which the plaintiff made several unsuccessful attempts to effect personal service on the second defendant. This resulted in an order for substituted service being made by the Federal Circuit Court on 6 October 2020.

The most recent version of the proposed defence is, in some respects, a confusing document, and one in which has not been drafted in accordance with the rules as to the appropriate form of pleadings. [35] For present purposes, the following observations in relation to it are relevant.

Firstly, paragraph 5B is in (inter alia) the following terms:

Secondly, central to the proposed defence is what is referred to as a “non-enforcement promise", which appears to amount to the assertion that “any personal guarantee would not be called upon by the Plaintiff if a letter of comfort for the benefit of the Plaintiff was obtained from Empire Securities". [36] Linked to this is an assertion by the second defendant that he “understood” that the loan monies would be payable from future investment monies obtained by Empire Securities, and that the loan was only repayable once such monies were raised and held by Empire Securities. [37]

Thirdly, in terms of the guarantee(s), the proposed defence asserts:

Finally, in purported answer to the entire statement of claim, the following is pleaded: [38]

Counsel for the plaintiff submitted that there were three matters for the Court to consider, namely:

It was submitted that the ultimate question for the Court was whether it was in the interests of justice that the second defendant, as the party seeking to set aside the judgment, be permitted to defend the proceedings on its merits.

Counsel for the plaintiff submitted that the discretion to set aside a default judgment must be exercised in accordance with the provisions of ss 56 to 59 of the Civil Procedure Act 2005 (NSW) which requires the Court to:

It was submitted that as a general proposition, a party who seeks to set aside a default judgment must demonstrate that he or she has a bona fide defence, which ordinarily requires that party to file an affidavit demonstrating a prima facie defence on the merits. It was submitted that the rationale for such a requirement is that the Court is required to consider:

By reference to these matters, and in the context of the present case, counsel for the plaintiff submitted that the statement of claim had been personally served on the second defendant on 25 July 2019 and that the second defendant had failed to provide any proper explanation for his failure to file a defence in the proceedings, and for his delay in taking any step to have the default judgment set aside.

In terms of the proposed defence, counsel for the plaintiff raised a number of issues. To the extent that the proposed defence pleaded a challenge to the interest rate, counsel submitted that even if made out, this would provide a defence to a small part of the claim but not to the substantive issues.

To the extent that reliance was placed on the provisions of the CRA, counsel drew my attention to the provisions of s (6)(2) which are in the following terms:

Counsel for the plaintiff stressed that there was no issue that the loan agreements had been signed, and that the guarantees had been signed. He also stressed that there was no issue that the second defendant knew, and accepted, that the principal loan had been advanced to PropertyBay and had not been repaid. In terms of the suggestion that any consideration for the guarantee was in the nature of past consideration, counsel for the plaintiff submitted that such a proposition was defeated by the terms of the guarantees themselves.

In terms of the proposed defence, counsel for the plaintiff submitted that much of it amounted to little more than a bare denial of liability. He pointed out that in terms of the “non-enforcement promise", no such assertion had been made by the second defendant in any of his affidavits. Counsel further submitted that the proposition that such a promise was made was wholly inconsistent with the terms of each guarantee.

Counsel further submitted that there would be prejudice to the plaintiff if the second defendant were allowed to set aside the default judgment. In this regard, he pointed to the fact that the proceedings had been commenced in July 2019 and that, as between the plaintiff and the first defendant, the pleadings had closed, both parties had filed all of their evidence, and the proceedings had been listed for hearing in April 2021. It was submitted that in the event that the second defendant was successful in setting aside the default judgment, the proceedings would, in effect, be required to “restart", with the likely result that the hearing date in April 2021 would be vacated, thus causing considerable further delay in the proceedings being heard and determined, and resulting in further cost to the plaintiff.

Counsel also relied on the fact that the plaintiff had taken various steps to have the judgment debt satisfied by the second defendant which included the issue of a bankruptcy notice and obtaining related orders in the Federal Circuit Court, all of which had been both costly and time consuming.

It was submitted that in all the circumstances the interests of justice weighed in favour of the Court dismissing the motion.

It was submitted on behalf of the second defendant that the form of defence which had been provided for the purposes of the application was a defence that the second defendant would “want to have settled by counsel before it [was] filed”. The second defendant's solicitor said that what had been put before the Court was “not a refined defence” and had been “created over a very short period of time" but that, notwithstanding that, it contained “real issues" to be determined by the court. As to those matters, I should simply observe that the present application is to be determined having regard (inter alia) to the form of proposed defence which is in evidence, the majority of the contents of which have not been verified or confirmed by the sworn evidence of the second defendant.

As to the reliance placed on the CRA, it was submitted on behalf of the defendant that in circumstances where the land which was the subject of the proposed purchase by PropertyBay was in Queensland, it was arguable that the provisions of s 6(2) had no application.

It was further submitted that at the time of being served with the statement of claim the second defendant was unwell and unable to manage his affairs and that this explained the delay in bringing the present application. It was submitted that the second defendant had given evidence that he had no recollection of being served. At the same time, it was expressly stated that the second defendant did “not seek to call into doubt the affidavits relied upon by the plaintiffs [but that] personal sickness [was] the explanation for default on the part of the second defendant and there is no dispute about this fact by the plaintiff”.

It was further submitted that in circumstances where the proceedings as between the plaintiff and the first defendant are listed for hearing in April 2021, the plaintiff would not be prejudiced by the second defendant joining the trial date “provided the second defendant is able to finalise his defence and serve evidence in chief". It was further submitted that any refusal to set aside the default judgment would result in the second defendant suffering injustice by virtue of the bankruptcy proceedings pending against him.

The solicitor for the second defendant emphasised that the proposed defence encapsulated a number of propositions including that:

Finally, it was submitted that once the second defendant had become aware of the entry of default judgment against him, he had prepared and filed the present motion without delay. It was further submitted that the 11 month period between the entry of default judgment and the bringing of the present application was “not a long period given it is before the listing of the hearing date but it must be conceded that it is not a short period either given the pleadings closed and evidence in chief was served by the plaintiff".

Rule 36.16 of the rules is in the following terms:

In Dai v Zhu [39] three factors were identified as being of particular relevance to the exercise of the discretion conferred by rule 36.16(2)(a) namely whether:

In J & M McNamee Holdings Pty Limited v Mungerie Vale Pty Limited t/as Greenwood Group Realtors [40] Gleeson JA made the following observations:

The discretion must be exercised having regard to the provisions of s 56-59 of the Civil Procedure Act 2005 (NSW). [41]

Generally speaking, I found the second defendant to be a most unsatisfactory witness. The transcript will reflect that he often gave unnecessarily protracted answers to the simplest of questions, often in terms which were non-responsive. On those occasions he appeared intent upon giving answers which he considered suited his position, and which portrayed him in the most favourable light. There are a number of instances which reflect what I consider to be the second defendant’s unreliability. One example stems from the fact that in his affidavit of 27 October 2020 the second defendant asserted that he did not have the opportunity to seek independent legal advice as to the guarantee. [42] There is no serious issue that he signed each guarantee. [43] Significantly, immediately below his signature on each was an express acknowledgement of the fact that he had sought legal advice. The second defendant's assertion that he was not given a proper opportunity to obtain such advice is completely at odds with the objective evidence, and I do not accept it.

Further, and more specific, instances of the second defendant’s unreliability are to be found when analysing the evidence in respect of particular issues which are directly relevant to my determination of the present motion.

When the hearing of the second defendant’s motion commenced before me on 28 October 2020, Mr Bastick, who then appeared for the second defendant, belatedly notified those acting for the plaintiff that Mr Roppolo, who had sworn an affidavit of service of the statement of claim, would be required for cross-examination. When I asked Mr Bastick why it was that this notification had come at such a late stage, he responded: [44]

Having drawn Mr Bastick's attention to the content of some of the affidavit material filed by the second defendant, he said: [45]

The “varying instructions" with which Mr Bastick had apparently been provided regarding the service of the statement of claim are reflected in the differing assertions made by the second defendant in his various affidavits. In his affidavit of 6 October 2020, he asserted that he had “never been served in these proceedings". [46] In his affidavit of 27 October 2020 he asserted that he had “no recollection" of having been served. [47] When cross-examined, he denied, on several occasions, that he had been served. [48] On other occasions he variously asserted that he didn't remember being served, [49] that he “didn't think [he] was [served]", [50] and that he “didn't believe" he had been served. [51]

The unchallenged evidence before this Court, which I accept, is that Mr Roppolo personally served the second defendant with a copy of the statement of claim on 25 July 2019 and, when doing so, had a conversation with the second defendant for the purposes of confirming that he was in fact the person named in the statement of claim. I do not accept the second defendant's assertion that he was not served, nor do I accept his assertion that he has no recollection of being served. I am satisfied that he was served with the statement of claim on 25 July 2019 and did nothing at any time about filing a defence. The second defendant asserts that any delay in taking any step in the proceedings was due to his ill health. I have addressed that issue further below.

Another important aspect of the second defendant’s evidence concerns the circumstances in which he asserted that he first became aware of the fact that judgment had been entered against him. In his affidavit of 14 September 2020, he said that he had “recently" become aware that there “may" be a judgment against him in these proceedings. He attributed that awareness to an email he had received from a debt management company which informed him that he had “bankruptcy proceedings in process". [52] The email was not annexed to any of the second defendant’s affidavits and was not otherwise tendered in evidence.

In his affidavit of 6 October 2020 the second defendant again asserted that he had “recently” become aware that there may be a judgment against him due to “an unsolicited electronic communication” received from a “random personal debt management company”. [53] According to the second defendant this was the first time that he had become “aware of such proceedings” [54] (which I take to be a reference to the bankruptcy proceedings). Again, the “electronic communication” was not annexed to the affidavit and was not tendered in evidence.

The second defendant also asserted, in unequivocal terms, that he had never been served with the statement of claim filed in the current proceedings [55] and that had he been served, he “would have made [his] grounds for defence earlier and reacted accordingly". [56] He went on to assert in his affidavit of 27 October 2020 that he was “entirely surprised" to learn that default judgment had been entered against him, and that this had come to his knowledge “in July or August 2020" because he had “started receiving unsolicited calls from bankruptcy advisers and the like". [57] It is worthy of note that his earlier affidavits referred not to calls, but to written communications which, as I have noted, were not tendered in evidence.

It will be apparent that the second defendant’s assertions as to precisely when he became aware of the judgment against him are largely, if not entirely, inconsistent. He appears to assert that he became aware of the judgment at some time between June and September although for the reasons I have pointed out, his evidence in this respect is inherently vague and imprecise.

I do not accept that the second defendant did not become aware of the fact that judgment had been entered against him until that time, nor do I accept that he became aware of it as a consequence of being contacted by external agencies offering to assist him. I am satisfied, bearing in mind the unchallenged evidence of Mr Harkin, that on 12 May 2020 a Bankruptcy Notice was served on the second defendant pursuant to an order for substituted service which had been made by the Federal Circuit Court and that it was the service of that Notice which alerted him to the fact that a judgment had been entered against him.

That Notice named the plaintiff as the creditor. There is no evidence that the second defendant has ever had any dealings with the plaintiff, other than those which give rise to these proceedings. It follows that it must have been abundantly clear to the second defendant, when he was served with the Bankruptcy Notice, that the issue of that Notice stemmed from the proceedings brought against him in this Court. It follows that, leaving aside his failure to take any steps in the proceedings following the service of the statement of claim, there was a further 5 month delay between the time at which the second defendant was served with the Bankruptcy Notice and the date on which the present motion was filed.

In his affidavit of 27 October 2020, and in his oral evidence, the second defendant attributed his lack of attention to the matter to the fact that he had been diagnosed with testicular cancer in June 2019. I should make it clear that I do not, in any way, underestimate the seriousness of that diagnosis, nor do I underestimate the effect that such a diagnosis would have had on the second defendant. However, when the evidence relating to this issue is analysed, it does not properly explain why, having been served with the statement of claim in July 2019, the second defendant failed to file a defence, and took a lengthy period of time to bring the present application.

In this regard, the report of Dr Hovey is of particular importance. [58] On the basis of that report I am satisfied that at least by 26 May 2020, a little less than five months before the present motion was filed, the second defendant gave a history which included telling Dr Hovey that his energy levels had improved and that he was “very busy at work". The second defendant accepted that this had been recorded in Dr Hovey's report. [59] However, when it was put to him that the history accurately represented the fact, and that he had been very busy at work throughout his chemotherapy treatment, his response (in part) was: [60]

In a further demonstration of what I consider to be the second defendant’s inherent unreliability as a witness, he later appeared to accept that he was in fact the source of that part of Dr Hovey’s recorded history. [61]

Even if it is accepted that the second defendant was in ill health for a period (as he clearly was), I am satisfied that by the time of his review by Dr Hovey in May of this year, his condition was improving to the point where he was, as he informed her, “busy at work”. It was only a little over a week before his consultation with Dr Hovey that the second defendant had been served with the Bankruptcy Notice. The five month delay which followed in bringing the present motion is entirely unexplained. It is also noteworthy that the report of Dr Hovey makes no reference to the plaintiff having provided a history of having experienced memory loss or “fogginess of the brain” which he asserted in his affidavit of 6 October 2020.

In terms of the proposed defence, and leaving aside the obvious deficiencies in the form in which it has been pleaded, the following observations can be made.

To begin with, there is a complete absence of sworn evidence from the second defendant confirming the various assertions which are sought to be raised by way of a defence to the plaintiff’s claim. The significance of the absence of such evidence is heightened by the fact that a number of assertions which have been made by the second defendant are not reflected in the proposed defence at all.

For example, in his affidavit of 27 October 2020 which was sworn prior to the proposed defence being made available, the second defendant asserted that his defence to the plaintiff’s claim would allege that the plaintiff had (inter alia) “engaged in fraudulent… conduct through his failure to disclose conflicts of interest, and illicit payments of commissions to 3rd parties which had not been disclosed …". No allegation of fraud is made in the draft pleading which has been provided to the Court, and there is no reference of “illicit payments of commissions to third parties" forming any part of the defence. It is to be noted that the affidavit of 27 October 2020 was apparently filed by Mr Bastick who then acted for the second defendant. I infer in these circumstances that in preparing it, Mr Bastick did so on the second defendant’s instructions.

Further, in circumstances where the “non-enforcement” promise is pivotal to the proposed defence (it having been pleaded as a complete defence to the plaintiff’s cause of action), the second defendant made no assertion, in any of the three affidavits which he filed in support of the present application, that such a promise had ever been made. That is to say nothing of the fact that the very existence of the non-enforcement promise is entirely at odds with the express terms of the guarantees. The assertion that the terms of the guarantee are somehow ambiguous because the non-enforcement promise was a condition of the guarantee in each case is completely at odds with the absence of any reference, in the guarantee, to the non-enforcement promise (or anything like it). Prima facie, the second defendant’s assertions in this respect would seem to fall foul of the parol evidence rule. In these circumstances, whether the guarantees attract the provisions of the CRA is not something that I need to consider any further.

Moreover, in his affidavit of 27 October 2020, the second defendant asserted that he had not been given the opportunity to obtain independent legal advice prior to signing the guarantees. Leaving aside the express acknowledgement in the guarantees which is directly to the contrary, there is no pleading in the proposed defence alleging unconscionability based upon the second defendant’s assertion.

In all of these circumstances I am not satisfied that the proposed defence is bona fide, or that it raises any triable issue.

I accept the submission advanced on behalf of the plaintiff that in light of the steps taken to enforce the judgment entered against the second defendant, and given that the proceedings as between the first defendant and the plaintiff have been listed for hearing, there would be considerable prejudice to the plaintiff if, at this late stage, the judgment which he had regularly obtained was set aside. Quite apart from the time and cost to which the plaintiff has been put in enforcing the judgment, in light of the second defendant’s conduct to date I could have no confidence whatsoever that if the judgment were set aside he would be in a position to proceed to hearing in April next year.

Moreover, the joinder of the second defendant to those proceedings would seemingly lengthen them, to the point where there would be a real risk that the hearing may not be able to be completed within the two days which have presently been allocated. That gives rise to the real risk that the proceedings would be further delayed, to the prejudice of the plaintiff. Allowing such a situation to occur, bearing in mind my findings against the second defendant, would be obviously prejudicial to the plaintiff and would be at odds with the just, quick and cheap resolution of the matter as a whole.

In light of the conduct of the first defendant to date, I have come to the view that the proceedings as between he and the plaintiff should be case managed from this point onwards to ensure that they are ready to proceed to trial on the date which has been allocated. I therefore make the following orders: