Reliance Financial Services NSW Pty Ltd v Francesco Criniti & ors [2009] NSWSC 129

New South Wales Supreme Court

CITATION : Reliance Financial Services NSW Pty Ltd v Francesco Criniti & ors [2009] NSWSC 129

HEARING DATE(S) : 17 February 2009 JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 17 February 2009

DECISION : Second Further Amended Statement of Claim struck out with leave to replead.

CATCHWORDS : PROCEDURE – Pleading – where amended pleadings served out of time – whether inconsistency with earlier pleadings is fatal to late pleading – where pleading is shown to be incapable of proof in terms by evidence – where evidence discloses potential alternative bases for claim

CATEGORY : Procedural and other rulings

Reliance Financial Services NSW Pty Ltd (plaintiff) PARTIES : Francesco Criniti (first defendant) Caterina Criniti (second defendant) Josephine Joan Romano (third defendant)

FILE NUMBER(S) : SC 1832/05

COUNSEL : Mr D A Allen (plaintiff) Mr R J Horsley (defendants)

SOLICITORS : Proctor & Associates (plaintiff) Agostino & Co (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRERETON J

Tuesday 17 February 2009

1832/05 Reliance Financial Services NSW Pty Ltd v Francesco Criniti & ors JUDGMENT (ex tempore) 1 HIS HONOUR: By Notice of Motion originally filed on 19 March 2008 and subsequently amended on 9 May 2008, the defendants Francesco Criniti, Caterina Criniti and Josephine Romano seek the following relief: 1A That the further amended statement of claim irregularly filed by the plaintiff on 11 March 2008 and served on 1 May 2008: a. be removed from the file and its filing be set aside pursuant to s 63(3)(a) of the Civil Procedure Act 2005; or b. be struck out pursuant to rule 14.28 of the Uniform Civil Procedure Rules 2005. 1. Further or in the alternative, that the proceedings be dismissed pursuant to one or both of the following provisions of the Uniform Civil Procedure Rules: a. 12.7 b. 13.4. 2. Further or in the alternative, that the defendants be at liberty to deal with the proceeds of the sale of the property situate at 153 Jardine Drive Prestons New South Wales being the land comprised in Folio Identifier 56/293XX. 3. Such further or other order as the court thinks fit. 4. The plaintiff pay the defendants' costs of the proceedings. 5. The plaintiff pay the defendants' costs of this motion. 6. The defendant have leave to proceed forthwith to assessment of the foregoing costs. 2 The relief is sought on a number of bases. So far as paragraph 1(A) is concerned, the complaint about the Further Amended Statement of Claim, filed on 11 March 2008, is that although filed it was not served within time and, indeed, not until 1 May 2008. There is evidence from Mr Marando, the defendant's solicitor, which is uncontested, that he had not received any amended pleading by the time limited by Associate Justice McLaughlin's directions, namely, 14 March 2008, and therefore filed the motion on 19 March but received no amended pleading until following a conversation with the plaintiff's solicitor on 30 April 2008. 3 On the other hand, there is evidence of the plaintiff's solicitor, Mr Jim Kekatos, his legal secretary, Susan Clegg, and a clerk in their office, Mr Andrew Proctor, the combined effect of which is to corroborate that steps were taken on 11 March 2008 to ensure not only that the Amended Statement of Claim was filed that day, but also that it was placed in the post by way of service. What happened to it between being handed to the postal clerk on 11 March 2008, and ultimately not being received, remains unexplained, but I am satisfied that reasonable steps to duly serve the document were taken on 11 March, and that the plaintiff's solicitor had reason to believe that appropriate steps had been taken to effect service within time. 4 In those circumstances, notwithstanding that this is not the first nor even the second time that such problems have arisen in this litigation there being, in my view, no fault attributable on this occasion to the plaintiff's side of the record, I would not regard the service of the Further Amended Statement of Claim as warranting the relief granted. 5 Without prejudice to that argument, I granted leave to the plaintiff to further amend by filing a Second Further Amended Statement of Claim initialled and dated this day and placed with the papers. The defendants complain that this is yet another iteration – probably the eighth version – of the plaintiff's case, and that it departs in material respects either from earlier versions or from evidence previously given by Mr Cassaniti. 6 I am unpersuaded by the argument based on Mr Cassaniti's earlier evidence. As I indicated in the course of argument, the circumstance that the principal of a firm or company speaks in the first person when talking to a customer about a loan does not necessarily mean that he is contracting personally as distinct from on behalf of his firm or company. 7 There may be some inconsistencies in the legal construct which at various times has been sought to be put on the dealings which the plaintiff says took place between it and the defendants, but inconsistencies in the way the legal structure of a dealing is put necessarily precludes the later versions from succeeding. 8 However, the Second Further Amended Statement of Claim, as Mr Horsley has submitted, in paragraph 4(a) pleads a term which, on examination of the underlying deed, would appear to be incapable of proof in these terms; likewise paragraph 4(b). Paragraph 5 appears irrelevant to the pleading as it is presently structured. If 4(a) and 4(b) were amended appropriately, that would probably require further detail to be pleaded of the underlying "first loan agreement" and "second loan agreement", although I do not have a concluded view on that topic. 9 Regrettably, it therefore seems to me that this Second Further Amended Statement of Claim does not in its present form disclose a viable course of action because paragraphs 4(a) and (b), are central and cannot be proved in the terms in which they are currently pleaded. I say regrettably, because this is again not the first or second time on which a Statement of Claim in these proceedings has had to be struck out. 10 Often when a plaintiff has such difficulty in formulating a pleading, the Court will question whether that is illustrative of the impossibility of formulating such a pleading. But there is in evidence, a written Deed of Guarantee dated 28 January 2003, which underlies the various iterations of the Statement of Claim, and from which it seems to me that a viable course of action could, with some further thought, be pleaded. 11 I have had regard to Mr Horsley's suggestion that these proceedings should simply be dismissed, leaving the plaintiff to start again; but bearing in mind that at least some of these transactions arose in October 2001, that course would obviously confer significant advantages on the defendants from a Limitation Act point of view, if the plaintiff was forced to commence new proceedings. 12 I order that the Second Further Amended Statement of Claim filed on 17 February 2009 be struck out. 13 I direct that the plaintiff serve a draft Third Further Amended Statement of Claim by 27 February 2009. 14 I adjourn the proceedings to Tuesday 10 March 2009 at 9.30am, when I will hear any application for leave to amend by filing the Third Further Amended Statement of Claim if it is contested. 15 I order that the plaintiff pay the defendants' costs of the motion.

**********

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.