Accom Finance Pty Ltd v Kowalczuk
[2006] NSWSC 730
•01/09/2006
CITATION: Accom Finance Pty Ltd v Kowalczuk [2006] NSWSC 730 HEARING DATE(S): 01/09/2006 JURISDICTION: Equity Division JUDGMENT OF: Brereton J EX TEMPORE JUDGMENT DATE: 09/01/2006 DECISION: Grant leave to file cross-claim CATCHWORDS: PROCEDURE – Supreme Court procedure – Miscellaneous procedural matters – Cross-claims – whether cross-claim can be filed after judgment on claims – UCPR, rr 9.1, 9.10 LEGISLATION CITED: Civil Procedure Act 2005 (NSW), s 22
Fair Trading Act 1987 (NSW), ss 68, 72
Trade Practices Act 1974 (Cth), ss 82, 87
Uniform Civil Procedure Rules 2005 (NSW), rr 9.1, 9.10(1)CASES CITED: Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328
CSI International Co Ltd v Archway Personnel (Middle East) Ltd [1980] 3 All ER 215
Ernst & Young v Butte Mining plc [1996] 1 WLR 1605
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268
Seltsam Pty Limited v Energy Australia (1999) 17 NSWCCR 720
Shanks & Co Pty Ltd v Hohne [1963] VR 198
Stott v West Yorkshire Road Car Co Limited [1971] 2 QB 651
The Salybia [1910] P 25
The Saxicava [1924] P 131PARTIES: 1887/06
10743/06
Accom Finance Pty Ltd (P)
Edward John Kowalczak (D)
Accom Finance Pty Ltd (P)
Mars Pty Ltd (D)FILE NUMBER(S): SC 1887/06; 10743/06 COUNSEL: Ms L Young (P)
Mr M R Gracie (D)SOLICITORS: Bransgroves Lawyers (P)
Greg Mackey & Associates (D)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST
BRERETON J
Friday 1 September 2006
1887/06 Accom Finance Pty Ltd v Edward John Kowalczuk
10743/06 Accom Finance Pty Ltd v Mars Pty Ltd
JUDGMENT
1 HIS HONOUR: In proceedings 1887/06, I grant leave to the defendant Mr Kowalczuk to file a defence and first cross-claim in the form initialled by me, dated this day and placed with the papers.
2 In proceedings 10734/06, which have been transferred to this division by order of Kirby J in the Common Law Division made on 17 July 2006, the defendant seeks leave to file a cross-claim. On the plaintiff’s claim, judgment has already been given for the plaintiff for possession of the defendant's land, and for the money secured on that land. An application to set aside that judgment, which was first entered by default, has been unsuccessful. An application for a review of the registrar's decision to decline to set aside that judgment has been filed and remains pending, but has not apparently been prosecuted at this stage.
3 The proceedings were transferred to this division by Kirby J on the basis that there were sufficient suspicions arising, as to the circumstances in which the mortgage was granted and the interest rate charged under it, to warrant more than cursory investigation, and in order to preserve the position His Honour ordered that subject to further order the plaintiff should hold the net proceeds of sale of the subject property in a controlled moneys account. Those proceeds of sale have not yet been realised, because the property has not yet been sold. However, the plaintiff has possession of the subject property pursuant to the original default judgment.
4 The proposed cross-claim would claim relief under Trade Practices Act 1974 (Cth), ss 82 and/or 87, and/or Fair Trading Act 1987 (NSW), ss 68 and/or 72, preserving any proceeds of sale on an interlocutory basis, staying or setting aside the judgment, and setting aside the mortgage and either restoring the defendant to possession, or for monetary compensation in the alternative. It would also claim damages against the proposed second cross defendant, Samir Dalla, a solicitor who acted for Mars in connection with the grant of the mortgage.
5 The question which presently arises is whether a cross-claim may be filed at this stage of the proceedings, in which judgment has already been given for the plaintiff on its claim, and which judgment has, at least in respect of the claim for possession, already been executed.
6 Uniform Civil ProcedureRules 2005 (NSW), r 9.1(1), provides that a party may make a cross-claim within the time limit for the party to file a defence, or within such further time as the Court may allow.
7 In the past, a number of decisions have held, or assumed, that a cross-claim could only be brought while the original proceedings were on foot [see The Salybia [1910] P 25; The Saxicava [1924] P 131; Ernst & Young v ButteMining plc [1996] 1 WLR 1605 (all cases dealing with cross-claims instituted after a plaintiff had discontinued); see also Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328 (in which the cross-claim had been filed irregularly albeit prior to discontinuance by the plaintiff); and Shanks & Co Pty Ltd v Hohne [1963] VR 198, (in which a cross-claim was not permitted after default judgment had been entered)].
8 However, the power to entertain cross-claims is now conferred by Civil Procedure Act 2005 (NSW), s 22, which provides that the Court may grant to the defendant in any proceedings such relief against any person not a plaintiff as the Court might grant against that person in separate proceedings commenced by the defendant for that purpose. Such a power to entertain cross-claims has been held sufficient to permit a cross-claim to be filed at any time before full satisfaction of the principal judgment, notwithstanding that the judgment has not been stayed [see CSI International Co Ltd v Archway Personnel (Middle East) Ltd [1980] 3 All ER 215, 220]. In CSI, a cross-claim was held to be not available after the judgment had been fully satisfied, because there was no extant matter in which the cross-claim could properly be pleaded.
9 UCPR, r 9.1, contains a power to extend the time in which a cross-claim can be filed. There is no apparent limitation on this power and, on its face, it permits that time to be extended regardless of whether or not judgment has been given or executed on the claim. UCPR, r 9.10(1) provides that a cross-claim may proceed even if judgment has been entered on the originating process in the proceedings from which a cross-claim arises, or if the proceedings on the originating process have been stayed, dismissed, withdrawn or discontinued. In this respect it is analogous to the rule considered in Stott v West Yorkshire Road Car Co Limited [1971] 2 QB 651, which allowed a cross-claim to be brought after settlement of the main action. This rule can apply to a cross-claim filed after the resolution of the plaintiff's claim [see Seltsam Pty Limited v Energy Australia (1999) 17 NSWCCR 720]. The Court's power to extend time for filing a cross-claim permits the court to continue to act in the original proceedings [FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268; see generally the commentary in Ritchie's Uniform Civil Procedure at pp 5799 to 5815, to which I am indebted for the foregoing short summary of the position].
10 Bearing those principles in mind and applying them to this case, it seems to me that although judgment has been entered on the originating process, and although an application to set it aside has so far failed, that does not, of itself, provide an insuperable obstacle to the filing of a cross-claim. Nor does the fact that the judgment for possession has been executed create an insuperable obstacle: first, because the judgment for moneys has not yet been executed (although the judgment for possession has), as that the judgment has not been fully satisfied, and there is thus still a “matter” in which the cross-claim can be pleaded in the way described in CSI; and secondly, because even if the judgment had been fully satisfied, the provisions of rr 9.1 and 9.10, and the discretion to extend time, have the effect that time could still be extended to bring this cross-claim, notwithstanding that the judgment had been satisfied.
11 No discretionary considerations against permitting the cross-claim to be filed have been advanced. Accordingly, I will grant leave to the defendant in proceedings 10743/2006 to file the first cross-claim in the form initialled by me, dated this day and placed with the papers.
12 My orders are:-
1. Extend time for the filing of the first cross-claim in proceedings 10743/06 and of the first cross-claim in proceedings 01887/06 to close of business on 1 September 2006, such cross-claims to be in the forms initialled by me, dated this day and placed with the papers.
2. Stand the proceedings over to 15 September 2006 in the Expedition List.
3. Direct that the time and date of hearing for the purpose of the cross-claim to be filed in each proceedings, be 10am on 15 September 2006.
5. Order that the defendant pay the plaintiff's costs of 25 August 2006 in each proceeding.4. Grant liberty to apply in the event of any difficulty arising in compliance with these directions.
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