Angius v Perez

[2025] NSWSC 954

Supreme Court

New South Wales

Medium Neutral Citation:

Angius v Perez [2025] NSWSC 954

Hearing dates:

11 August 2025

Date of orders:

21 August 2025

Decision date:

21 August 2025

Jurisdiction:

Equity - Applications List

Before:

McGrath J

Decision:

Application for leave to amend defence dismissed and parts of defences struck out.

Catchwords:

CIVIL PROCEDURE — Pleadings — Amendment — whether fifth, sixth and seventh defendants should be granted leave to amend their defence to rectify deficiencies in current defence — where amended defence replaces the generic defined term of “the Lawyers” with the names of two identified individuals in the pleading of concurrent wrongdoers — HELD — application for leave to amend dismissed — deficient parts of current defences of the third to seventh defendants struck out in their entirety

Legislation Cited:

Civil Liability Act 2002 (NSW), s 5O

Civil Procedure Act 2005 (NSW), s 56

Corporations Act2001 (Cth), ss 480, 488

Legal Profession Act 2004 (NSW)

Legal Profession Uniform Law (NSW)

Cases Cited:

Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11

Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184

Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216

Dickens v New South Wales (No 3) [2018] NSWSC 485

Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490; [1916] HCA 81

H.S.D. Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279

McGuirk v University of New South Wales [2009] NSWSC 1424

Permanent Custodians Ltdv King [2010] NSWSC 509

The Owners – Strata Plan No 87265 v Saaib [2021] NSWSC 150

The Owners Strata Plan v Brookfield Multiplex Limited [2010] NSWSC 360

Thorp v Holdsworth (1876) 3 Ch D 637

Ucak v Avante Developments [2007] NSWSC 367

Category:

Procedural rulings

Parties:

Robert Angius (Plaintiff)
Jose Apolinar Perez (First Defendant)
Perez Varela Lawyers Pty Ltd (Second Defendant)
Brian Silvia & Geoffrey Granger in their capacity as liquidators of Angius Hotel Investments Pty Ltd and Tararba Pty Ltd (Third and Fourth Defendants)
Carneys Lawyers Pty Ltd (Fifth Defendant)
Arthur Anthony Carney (Sixth Defendant)
Henry James Wrench (Seventh Defendant)

Representation:

Counsel:
P Doyle Gray (Plaintiff)
D H Mitchell and E Kneebone (Third and Fourth Defendants)
A Avery-Williams (Fifth, Sixth and Seventh Defendants)

Solicitors:
Julie Orsini (Plaintiff)
Wotton Kearney (Third and Fourth Defendants)
K&L Gates (Fifth, Sixth and Seventh Defendants)

File Number(s):

2022/00348040

Publication restriction:

Nil

Judgment

INTRODUCTION

1. There are two pleading disputes for determination before me involving the form of the existing defences and proposed amendments to those defences which have attempted to overcome acknowledged deficiencies in them.

2. These proceedings arise out of a dispute concerning the estate of Laura Angius, the late mother of the plaintiff, Robert Angius. The broad dispute concerns the payment of money in June 2022 for fees said to be owing to the first and second defendants, Jose Perez and Perez Varela Lawyers Pty Ltd (PVL), pursuant to written authorities that Mr Angius asserts were not signed by him but were fraudulently created by Mr Perez and PVL to obtain a financial benefit from Mr Angius.

3. Between October 2013 and 29 June 2022, Mr Angius retained Mr Perez and PVL in relation to matters concerning his late mother’s estate. Mr Perez is a practising solicitor and the principal and director of PVL. PVL instructed counsel, Vera Culkoff, to act for Mr Angius in relation to the estate dispute.

4. The third and fourth defendants, Brian Silvia and Geoffrey Granger respectively, are the liquidators of Angius Hotel Investments Pty Ltd (AHI) and Tararba Pty Ltd, companies in which Ms Angius held a 50% shareholding that had beneficially passed to Mr Anguis from his mother’s estate. On 6 December 2021, the court appointed Mr Silvia and Mr Granger as liquidators of AHI and Taraba. Pursuant to orders made on 21 September 2022, upon the realisation of assets the liquidators were to make an interim distribution, with 50% to be paid to Mr Angius as part of his beneficial entitlement to his mother’s estate.

5. The fifth defendant, Carney Lawyers Pty Ltd, was retained by the liquidators to advise on the interim distributions. The sixth and seventh defendants, Arthur Carney and Henry Wrench, were responsible for the legal work undertaken at Carney Lawyers. I will collectively refer to Carney Lawyers, Mr Carney and Mr Wrench as the Carney defendants.

6. On 22 June 2022, the liquidators paid the interim distributions totalling $5.075 million to PVL in accordance with an allegedly fraudulent direction that Mr Angius says was not signed by him. Mr Angius says that he did not become aware of the fraud until 29 June 2022, at which time he terminated his retainer of PVL. It appears that by 31 July 2022, Mr Angius had appointed Julie Orsini as solicitor to act for him.

7. On 8 December 2022, Mr Angius filed the statement of claim (SOC) against Mr Perez, PVL and the liquidators alleging, amongst other things, fraudulent misappropriation of funds by Mr Perez and PVL and breaches of fiduciary duties and negligence in the distribution of the funds by the liquidators. These allegations were later extended to the Carney defendants in the further amended statement of claim filed by Mr Anguis on 18 December 2023 (FASOC). In the FASOC, Mr Angius claims that the Carney defendants acted negligently.

8. On 22 February 2024, the Carney defendants filed their defence to the FASOC (Carney defence).

9. On 15 March 2024, the liquidators filed their defence to the FASOC (liquidators’ defence).

10. On 1 April 2025, the Carney defendants filed the notice of motion seeking to amend the Carney defence to the FASOC (proposed Carney amended defence). In general terms, the amendments in the proposed Carney amended defence replace the generic defined term of “the Lawyers” in the Carney defence with the names of two identified individuals (Ms Culkoff and Ms Orsini) in the pleading of concurrent wrongdoers for the purposes of the proportionate liability provisions in the Civil Liability Act 2002 (NSW) (CLA), as well as setting out more extensively the basis on which that defence is pleaded.

11. On 29 April 2025, Mr Angius filed a notice of motion seeking to strike out the parts of the Carney defence (which are sought to be amended by the proposed Carney amended defence) and the equivalent parts of the liquidators’ defence.

12. I am required to determine these two applications. It is accepted by the Carney defendants that the parts of the Carney defence which are sought to be amended are deficient and should be struck out if I am not minded to grant them leave to file the proposed Carney amended defence. It is accepted by the liquidators that if I strike out any parts of the Carney defence, then the equivalent parts of the liquidators’ defence should also be struck out.

13. For the reasons set out below, I have determined that the Carney defendants’ application for leave to file and serve the proposed Carney amended defence should be dismissed and the relevant parts of the Carney defence and the liquidators’ defence should be struck out. In other words, I consider that Mr Angius should be successful in relation to both applications.

RELEVANT FACTS

General factual background to the proceedings

14. On 22 June 2022, allegedly relying on fraudulent directions, the liquidators paid $5.075 million to PVL at the direction of PVL and Mr Perez. A total of $2.075 million was paid into PVL’s general office account (PVL account) and $3 million was paid into Piper Alderman’s trust account to be held on trust on the direction of PVL (as PVL had no trust account). Mr Angius later recouped a substantial portion of the $3 million payment.

15. On 29 June 2022, Mr Angius says that he first became aware of the $5.075 million payment and one of the forgeries. On the same day, Mr Angius then notified the liquidators of the forgery, terminated his retainer with PVL, informed the liquidators he was no longer legally represented and instructed the liquidators not to make any payment to Mr Perez or PVL. By this date, it would appear that Mr Perez had dissipated approximately $1 million from the first tranche of $2.075 million, leaving a balance of $1.075 million.

16. On 29 June 2022, Mr Angius wrote to Ms Culkoff to inform her that he had terminated PVL’s retainer and asked her to notify the parties and the court of PVL’s dismissal and the unauthorised transfer.

17. On 7 July 2022, Ms Culkoff sent an email to the Associate to Robb J, copied to Mr Wrench, Mr Perez, Mr Carney and Malcolm Quirey of Piper Alderman, which stated:

In light of the disturbing email below, I have been instructed to have the matter relisted before his Honour, as a matter of urgency.

Also attached is a copy of the Authority forwarded by Robert Anguis to Jose Perez/Perez Varela Layers [sic] and to Malcolm Quirey.

All relevant parties have been cc into this email.

18. The “disturbing email below” was an email dated 6 July 2022 from Ms Culkoff to Mr Perez and Mr Quirey. The email stated that Ms Culkoff had “very disturbing communications” from Mr Angius requesting that the matter be urgently be relisted before Robb J, and that she had spoken to the liquidators and they had been disturbed by Mr Angius’ allegations. In summary, the effects of Mr Angius’ allegations were that:

1. he had never signed an authority unless he had been “tricked or conned” into signing it;

2. he had refused to sign such a document;

3. he had been assured by Mr Perez that the funds would be transferred to him;

4. quick action had to be taken as he had concerns that Mr Perez might leave the country or deal with the $2 million; and

5. he wanted to freeze the $2 million until the issue was resolved.

19. In the email of 6 July 2022, Ms Culkoff stated:

Given, all of the above, it seem [sic] to me that the best and most sensible course is for Jose to agree to transfer the $2m back into the Piper Alderman trust account, pending resolution of the above matters and pending whatever “quick assessment” Robert wishes to make in relation to Jose’s invoices. If this is not agreed, Robert will have no alternative but to relist the matter and commence proceedings.

20. On around 31 July 2022, Mr Angius consulted Ms Orsini, who was retained soon afterwards and briefed Ms Culkoff. By this date, Mr Perez had dissipated approximately $1.815 million from the first tranche of $2.075 million, leaving a balance of $260,000.

21. By 6 September 2022, Mr Perez had dissipated the entirety of the first tranche of $2.075 million, leaving a balance of nothing.

22. On 21 September 2022, Robb J granted leave to the liquidators to make final distributions in the windings up of AHI and Tararba pursuant to s 488(2) of the Corporations Act 2001 (Cth), and for their release upon the completion of those distributions pursuant to s 480 of the Corporations Act. Ms Culkoff, appearing for Mr Angius, informed the court of the dispute between Mr Angius, Mr Perez and PVL, and that Ms Orsini intended to seek freezing orders. No application for any freezing orders was made at that time.

23. On 26 October 2022, Mr Angius, acting through Ms Orsini and Ms Culkoff, sought freezing orders before Robb J. His Honour declined to deal with the application on an urgent basis. When the proceedings next came before Robb J on 9 November 2022, his Honour declined to make the freezing orders due to a lack of any evidentiary basis.

24. On 18 November 2022, on the giving of the usual undertaking as to damages by Mr Angius, Hammerschlag CJ in Eq accepted an undertaking from Mr Perez not to dispose of the balance of the funds left in the PVL account in lieu of making freezing orders and ordered Mr Perez to file an affidavit disclosing the status of the $2.075 million transferred by the liquidators to the PVL account, how much of the $2.075 million remained in the PVL account and what amounts had been withdrawn from the PVL account and for what purpose.

Relevant procedural history

25. On 8 December 2022, Mr Angius filed the SOC making claims against Mr Perez, PVL and the liquidators. In essence, Mr Angius alleged that:

1. Mr Perez and PVL fraudulently misappropriated $5,075,000, with orders sought for repayment, trust fund release and damages;

2. the liquidators breached their fiduciary duties and their duty of care in distributing the funds; and

3. Mr Perez and PVL breached their duties under the Legal Profession Act 2004 (NSW) and the Legal Profession Uniform Law (NSW), affecting their entitlement to legal costs.

26. Various cross-claims and motions were filed in relation to the SOC; however, they are not outlined below as the issues for determination before me relate only to the different iterations of the SOC and the corresponding defences.

27. On 3 February 2023, Mr Perez and PVL filed their defence to the SOC.

28. On 7 March 2023, the liquidators filed their defence to the SOC.

29. On 12 March 2023, Mr Perez and PVL filed an amended defence to the SOC.

30. On 27 March 2023, Mr Perez filed a notice of motion seeking to restrain Ms Culkoff from acting for Mr Angius on the basis that Mr Perez formerly instructed her while he was acting for Mr Angius.

31. On 24 April 2023, Mr Angius filed an amended statement of claim (ASOC).

32. On 15 May 2023, the liquidators filed and served their amended defence to the ASOC, paragraph 78 of which pleaded a defence of proportionate liability.

33. On 21 May 2023, Mr Angius served a reply to the liquidators’ amended defence, which denied paragraph 78 of the amended defence and did not assert that it was improperly pleaded in any way.

34. On 20 June 2023, the application to restrain Ms Culkoff was resolved by Ms Culkoff, without admissions of any kind, giving an undertaking not to appear for Mr Angius in these proceedings without the leave of the court. Ms Orsini continues to act for Mr Angius.

35. On 8 December 2023, Kunc J made orders in these proceedings, including an order that Mr Angius be granted leave to file and serve the FASOC.

36. On 18 December 2023, Mr Angius filed the FASOC joining the Carney defendants as the fifth, sixth and seventh defendants.

37. On 20 December 2023, Natalie Polorotoff (Special Counsel at K&L Gates, the solicitors for the Carney defendants) sent an email to Ms Orsini (solicitor for Mr Angius) requesting “a box link to all pleadings and other court documents filed and/or served in the proceedings to date”.

38. On 20 December 2023, Ms Orsini sent an email in reply to Ms Polorotoff, which provided a link to various pleadings filed in the substantive proceedings. In the email, Ms Orsini then stated:

In relation to your request for all other documents filed or serve [sic] in the proceedings to date, I am happy to provide to [sic] those in the ordinary course, however for the present purposes, please confirm on what basis you assert that your client is entitled to all evidence filed in the proceedings prior to your clients’ request for particulars and the filing of their defence and any cross claim.

39. On 17 January 2024, Ms Polorotoff sent an email to Ms Orsini attaching a request for particulars (Request for Particulars). Paragraphs 116, 117, 144 and 145 of the Request for Particulars are as follows:

Paragraph 39K

…

[116]   Please advise whether the plaintiff was represented by counsel as at 29 June 2022 and continued to be represented by counsel.

[117]   On what date it is alleged that the plaintiff retained new solicitors to act for him?

…

Paragraph 64

[144]   Please advise whether the plaintiff was represented by a solicitor or counsel during the period 22 June 2022 and 6 September 2022.

[145]   If so, please advise the name of that solicitor or counsel representing the plaintiff.

40. On 19 January 2024, Ms Orsini sent a letter to Ms Polorotoff responding to the Request for Particulars (Response). Paragraphs 116, 117, 144 and 145 of the Response stated as follows:

[116]   The Plaintiff sought to retain Ms Culkoff on 29 June 2022, however given the bar rules, Ms Culkoff was unable to act without an instructing solicitor.

[117]   The Plaintiff retained this firm in early September 2022; however the solicitor was in a trial which extended from the intended 3 weeks to 6 weeks and did not conclude until 6 October 2022 at which time an appeal was required to be prepared urgently. This firm accordingly commenced acting for the Plaintiff in mid October 2022.

…

[144]   The Plaintiff was not represented by a solicitor. Whilst the Plaintiff sought to retain Counsel, counsel was unable to act without an instructing solicitor.

[145]   Counsel:- Vera Culkoff

41. On 22 February 2024, the Carney defendants filed the Carney defence, which relevantly states at [64], [68] and [73]–[79] (emphasis in original):

Loss arises out of the Plaintiff’s conduct

64. Further and in the alternative, the Defendants say that if the plaintiff has suffered loss and damage as alleged, or at all, as a result of the conduct of the Defendants (which is denied), then such loss or damage was caused by the plaintiff’s own negligence/own failure to take reasonable care and the amount of the loss or damage that the plaintiff may recover from the Defendants is to be reduced pursuant to s. 5S of the Civil Liability Act 2002(NSW) (the Act) (or otherwise) having regard to the plaintiff’s share in responsibility for the loss or damage.

Particulars

(a)   Despite being aware of the alleged fraud (not admitted) on 30 June 2022, the plaintiff failed to:

(i)   promptly bring an application to the Court to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received; and/or

(ii)   promptly seek legal advice, which advice would have been that the plaintiff should promptly bring such an application, or alternatively follow that legal advice had he sought it.

…

(c)   Further particulars will be provided following discovery and evidence.

…

Apportionable claims

68.   If the Defendants are found to have caused the loss and damage (which is denied), then:

(a)   the claims are apportionable claims as defined under section 34(1) of the Act;

(b)   for the reasons set out below the following are concurrent wrongdoers because their acts or omissions have caused the loss and damage the subject of the claims: section 34(2) of the Act:

(i)   the first to fourth defendants; and

(ii)   in the alternative to 64(a)(ii) above, if the plaintiff did seek legal advice promptly following his discovery of the fraud and that he was not advised that he should promptly bring an application to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received or that any of the lawyers failed to act promptly to bring such an application, then those lawyers who failed to give him that advice or so act (The Lawyers);

…

The Lawyers

73.   The Lawyers owed the plaintiff a duty to exercise reasonable, skill and diligence.

74.   The risk that the first and second defendant would dissipate the funds received by them was not insignificant, particularly having regard to the plaintiff’s allegation of fraud by the first and second defendants.

75.   If the first and second defendants had acted fraudulently (which is not admitted) the probability they would dissipate the funds was high and the seriousness of the potential harm was high.

76.   A reasonable lawyer acting with reasonable care, skill and diligence would have taken precautions against the risk of harm namely by promptly advising the plaintiff to promptly bring an application to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received.

77.   To the extent that the plaintiff has suffered loss or damage as alleged in the Claim (which is denied) that loss or damage has been caused by the conduct of the Lawyers.

78.   If the plaintiff establishes the matters pleaded in the Claim, the conduct of the Lawyers caused or contributed to the same loss for which the plaintiff sues the Defendants.

79. If (which is denied) the plaintiff has suffered, and continues to suffer, the loss and damage alleged in the Claim, and the Defendants are liable to the plaintiff, the Defendants say that pursuant to Part 4 of the Act:

(a)   the Lawyers are concurrent wrongdoers in relation to plaintiff’s claims; and

(b)   the Defendants’ liability should be limited having regard to the extent of first and second defendants’ responsibility for the plaintiff’s damage or loss.

42. On 15 March 2024, the liquidators filed and served the liquidators’ defence. Paragraph 75 of the liquidators’ defence pleads a similar contributory negligence defence to that contained in paragraph 64 of the Carney defence. Paragraph 78 of the liquidators’ defence pleads a similar proportionate liability defence to that contained in paragraph 68 of the Carney defence.

43. On 15 March 2024, Mr Angius filed a reply to the liquidators’ defence.

44. On 28 February 2025, the proceedings were listed for directions before Hammerschlag CJ in Eq, who made the following orders:

1. The third to seventh defendants to circulate any draft amended defence by 14 March 2025.

2. The parties to state in writing whether they consent or not to the third to seventh defendants having leave to file the amended defence in the form circulated to the parties by 21 March 2025.

3. If the parties consent to the third to seventh defendants having leave to file the amended defence, the third to seventh defendants have leave to file the amended defence by 27 March 2025.

3A. If they do not consent, they are to state brief reasons why and the third to seventh defendants have leave to make returnable on 4 April 2025 a motion for leave to amend provided it is filed and served with supportive material by 1 April 2025.

4. The plaintiff to serve any further lay and expert evidence by 21 March 2025.

5. The proceedings stood over to 4 April 2025 before the Applications List judge.

45. On 14 March 2025, in accordance with the orders made by Hammerschlag CJ in Eq above, Ms Polorotoff sent an email to all parties attaching a form of the proposed Carney amended defence, which specifically identified Ms Culkoff and Ms Orsini as possible concurrent wrongdoers and retained the general defined term of “the Lawyers”.

46. The solicitors for Mr Angius (Ms Orsini) and the Carney defendants (Ms Polorotoff) then engaged in correspondence concerning the form of the proposed Carney amended defence.

The proposed Carney amended defence

47. On 1 April 2025, the Carney defendants filed a notice of motion seeking leave to file and serve the proposed Carney amended defence in the form attached to the notice of motion.

48. Subsequently, after the hearing on 11 August 2025, the Carney defendants sent to my Associate the precise form of the proposed Carney amended defence for which they sought leave. I have extracted the relevant proposed amendments from that version of the proposed Carney amended defence below.

49. Paragraph 64 of the proposed Carney amended defence is in the same form as paragraph 64 of the Carney defence outlined above. The amendments contained in the proposed Carney amended defence are in the following form (emphasis in original):

Apportionable claims

68.   If the Defendants are found to have caused the loss and damage (which is denied), then:

(a)   the claims are apportionable claims as defined under section 34(1) of the Act;

(b)   for the reasons set out below the following are concurrent wrongdoers because their acts or omissions have caused the loss and damage the subject of the claims: section 34(2) of the Act:

(i)   the first to fourth defendants (as set out in paragraphs 69-72 below); and

(ii)   Vera Culkoff and Julie Orsini (and each of them) (as set out in paragraphs 80-105) being lawyers the plaintiff consulted, engaged and/or retained from in or about June or July 2022, if, in the alternative to 64(a)(ii) above, if the plaintiff did seek legal advice promptly following his discovery of the alleged fraud by the first and second defendants and that he was not advised by them that he should promptly bring an application to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received (Advice) or if Ms Culkoff and/or Ms Orsini that any of the lawyers failed to act promptly to bring such an application (Action) having received instructions to do so, then those lawyers who failed to give him that advice or so act (The Lawyers);

…

The Lawyers

73.    The Lawyers owed the plaintiff a duty to exercise reasonable care, skill and diligence.

74.    The risk that the first and second defendant would dissipate the funds received by them was not insignificant, particularly having regard to the plaintiff’s allegation of fraud by the first and second defendants.

75.    If the first and second defendants had acted fraudulently (which is not admitted) the probability they would dissipate the funds was high and the seriousness of the potential harm was high.

76.    A reasonable lawyer acting with reasonable care, skill and diligence would have taken precautions against the risk of harm namely by promptly advising the plaintiff to promptly bring an application to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received.

77.    To the extent that the plaintiff has suffered loss or damage as alleged in the Claim (which is denied) that loss or damage has been caused by the conduct of the Lawyers.

78.    If the plaintiff establishes the matters pleaded in the Claim, the conduct of the Lawyers caused or contributed to the same loss for which the plaintiff sues the Defendants.

79. If (which is denied) the plaintiff has suffered, and continues to suffer, the loss and damage alleged in the Claim, and the Defendants are liable to the plaintiff, the Defendants say that pursuant to Part 4 of the Act:

(a)    the Lawyers are concurrent wrongdoers in relation to plaintiff’s claims; and

(b)    the Defendants’ liability should be limited having regard to the extent of first and second defendants’ the Lawyers’ responsibility for the plaintiff’s damage or loss.

Ms Culkoff

80.   From June 2022, or alternatively by early July 2022, Vera Culkoff acted for the plaintiff with respect to the alleged fraud by the first and second defendants.

Particulars

(a)   Email from Ms Culkoff to the first defendant sent 29 June 2022 (at page 87 of exhibit NP-1 to the affidavit of Natalie Polorotoff dated 1 April 2025), by which Ms Culkoff requested certain documents in relation to the alleged fraud;

(b)   Email from Ms Culkoff to the first defendant recording the instruction she had received from the plaintiff that the plaintiff considered that quick action must be taken as he had concerns that the first defendant might leave the country or deal with the money in some way that makes it inaccessible, and that he wanted a freeze on the money until the issue is resolved (see email from Ms Culkoff to the first defendant and his solicitor dated 6 July 2022 at page 40 of exhibit RH-M to the affidavit of the plaintiff dated 29 April 2025);

(c)   Emails from Ms Culkoff to the Associate to Robb J sent 7 July 2022 and 11 July 2022 asking for the matter to be listed before Robb J (see emails from Ms Culkoff to the Court dated 7 July 2022 and 11 July 2022 at pages 38 and 39 of exhibit RH-M);

(d)   Further particulars may be provided following production of documents produced under notice to produce, discovery and evidence.

81.   In so acting, Ms Culkoff owed the plaintiff a duty to exercise reasonable care, skill and diligence.

82.   The risk that the first and second defendant would dissipate the funds received by them was not insignificant, particularly having regard to:

(a)   the plaintiff’s allegation of fraud by the first and second defendants;

(b)   the instruction Ms Culkoff had received by 6 July 2022 that the plaintiff considered that quick action must be taken as he had concerns that the first defendant might leave the country or deal with the money in some way that makes it inaccessible, and that he wanted a freeze on the money until the issue is resolved (see email from Ms Culkoff to the first defendant and his solicitor dated 6 July 2022 at page 40 of exhibit RH-M);

(c)   the fact that by 6 July 2022 Ms Culkoff had requested that the first defendant transfer the $2 million paid into the second defendant’s account be transferred to the first defendant’s solicitor’s trust account pending resolution of the dispute as to costs between the plaintiff and the first and second defendants (see email from Ms Culkoff to the first defendant and his solicitor dated 6 July 2022 at page 40 of exhibit RH-M), but the first defendant did not agree to do so.

83.   If the first and second defendants had acted fraudulently (which is not admitted) the probability they would dissipate the funds was high and the seriousness of the potential harm was high.

84.   The burden on Ms Culkoff of taking precautions to avoid the risk of harm to the Plaintiff was low – she needed only to promptly provide the Advice.

85.   In the circumstances, a reasonable lawyer in the position of Ms Culkoff, acting with reasonable care, skill and diligence would have taken precautions against the risk of harm namely by providing the Advice.

Particulars

(a)   The Advice should have been given as a matter of urgency by late June or early July and in any event but not later than the end of July or alternatively the end of August.

86.   Had the plaintiff promptly brought an application to the Court to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received:

(a)   the Court would more likely than not have so restrained the first and second defendants until the resolution of the plaintiff’s claims against them; or alternatively

(b)   the application would have likely produced a similar result, such as by the first and second defendants giving undertakings to the Court not to deal with or otherwise dispose of the funds they had received; or alternatively

(c)   there was a material chance that the application would have produced a result of the kind referred to in a or b above.

Particulars

(i)   Without limitation, at most, on any such application the plaintiff would only have needed to establish a serious question to be tried (which would be established by evidence from the plaintiff that he did not authorise the payment or sign the November 2021 Authority (referred to in paragraph 18 above), a risk of dissipation by the first and second defendants (which would be inferred by reason of the allegation of fraud) and that the balance of convenience would have favoured the restraint (which would also be inferred by reason of the allegation of fraud/unauthorised payment of the plaintiff’s funds).

87.   A result of the kind referred to in paragraph 86 above would likely have ensued either on the day the application was brought or within a week after that time and in any event before the end of July or alternatively end of August.

88.   At all material times the first and second defendants had funds in their bank accounts, including proceeds of the distributions.

Particulars

(a)   Paragraph 23 of the affidavit of Natalie Polorotoff dated 1 April 2025 and the documents contained in subpoena packet S-1 produced by Australia & New Zealand Banking Group Limited.

89.   The plaintiff’s case against the Defendants depends upon the first and second defendants having dissipated funds received by them.

90.   To the extent that the plaintiff has suffered loss or damage as alleged in the Claim (which is denied) that loss or damage has been caused by the conduct of Ms Culkoff to the extent that she failed to provide the Advice.

91.   If the plaintiff establishes the matters pleaded in the Claim, the conduct of Ms Culkoff to the extent that she failed to provide the Advice caused or contributed to the same loss for which the plaintiff sues the Defendants.

92. If (which is denied) the plaintiff has suffered, and continues to suffer, the loss and damage alleged in the Claim, and the Defendants are liable to the plaintiff, the Defendants say that pursuant to Part 4 of the Act:

(a)   Ms Culkoff (to the extent that she failed to provide the Advice) is a concurrent wrongdoer in relation to plaintiff’s claims; and

(b)   the Defendants’ liability should be limited having regard to the extent of Ms Culkoff’s responsibility for the plaintiff’s damage or loss.

Ms Orsini

93.   From July 2022, Ms Orsini was retained to act for the plaintiff with respect to the alleged fraud by the first and second defendants.

Particulars

(a)   Paragraph [3] of the Affidavit of Julie Orsini affirmed 15 November 2022;

(b)   General Costs Agreement dated 27 July 2022, signed by the plaintiff on or about 31 July 2022;

(c)   Correspondence between 6 August 2022 and 14 September 2022 between Julie Orsini and Piper Alderman.

(d)   Further particulars may be provided following production of documents produced under notice to produce, discovery and evidence.

94.   In so acting, Ms Orsini owed the plaintiff a duty to exercise reasonable care, skill and diligence.

95.   The risk that the first and second defendant would dissipate the funds received by them was not insignificant, particularly having regard to:

(a)   the plaintiff’s allegation of fraud by the first and second defendants;

(b)   the first and second defendants were still refusing to return or otherwise preserve the funds over a month after they had been distributed.

96.   If the first and second defendants had acted fraudulently (which is not admitted) the probability they would dissipate the funds was high and the seriousness of the potential harm was high.

97.   The burden on Ms Orsini of taking precautions to avoid the risk of harm to the plaintiff was low – she needed only to promptly provide the Advice or take the Action.

98.   In the circumstances, a reasonable lawyer in the position of Ms Orsini, acting with reasonable care, skill and diligence would, have taken precautions against the risk of harm namely by providing the Advice and taking the Action.

Particulars

(a)   By late July 2022 or early August 2022, Ms Orsini knew or ought to have known of the matters set out in the email dated 6 July 2022 from Ms Culkoff to the first defendant and his solicitor by reason of:

(i)   her having been retained to act by the plaintiff in relation to the alleged fraud on the recommendation of Ms Culkoff (see paragraph [28] of the plaintiff’s affidavit dated 29 April 2025); and

(ii)   her having retained Ms Culkoff.

(b)   By 6 August 2022, Ms Orsini knew of the matters identified in correspondence sent by her to Piper Alderman including that the plaintiff claimed the 30 November 2021 authority to be fraudulent or that he was tricked into signing it;

(c)   The Advice should have been given, and the Action should have been taken, as a matter of urgency by late July or early August, or by not later than the end of August.

99.   Had the plaintiff promptly brought an application to the Court to restrain the first and second defendants from dealing with or otherwise disposing of the funds they had received:

(a)   the Court would more likely than not have so restrained the first and second defendants until the resolution of the plaintiff’s claims against them; or alternatively

(b)   the application would have likely produced a similar result, such as by the first and second defendants giving undertakings to the Court not to deal with or otherwise dispose of the funds they had received; or alternatively

(c)   there was a material chance that the application would have produced a result of the kind referred to in a or b above.

Particulars

(i)   Without limitation, at most, on any such application the plaintiff would only have needed to establish a serious question to be tried (which would be established by evidence from the plaintiff that he did not authorise the payment or sign the November 2021 Authority (referred to in paragraph 18 above), a risk of dissipation by the first and second defendants (which would be inferred by reason of the allegation of fraud) and that the balance of convenience would have favoured the restraint (which would also be inferred by reason of the allegation of fraud/unauthorised payment of the plaintiff’s funds).

100.   A result of the kind referred to in paragraph 99 above would likely have ensued either on the day the application was brought or within a week after that time and in any event before the end of August.

101.   At all material times the first and second defendants had funds in their bank accounts, including proceeds of the distributions.

Particulars

(a)   Paragraph 23 of the affidavit of Natalie Polorotoff dated 1 April 2025 and the documents contained in subpoena packet S-1 produced by Australia & New Zealand Banking Group Limited.

102.    The plaintiff’s case against the Defendants depends upon the first and second defendants having dissipated funds received by them.

103.   To the extent that the plaintiff has suffered loss or damage as alleged in the Claim (which is denied) that loss or damage has been caused by the conduct of Ms Orsini to the extent that she failed to provide the Advice and/or take the Action.

104.   If the plaintiff establishes the matters pleaded in the Claim, the conduct of Ms Orsini to the extent that she failed to provide the Advice and/or take the Action caused or contributed to the same loss for which the plaintiff sues the Defendants.

105. If (which is denied) the plaintiff has suffered, and continues to suffer, the loss and damage alleged in the Claim, and the Defendants are liable to the plaintiff, the Defendants say that pursuant to Part 4 of the Act:

(a)   Ms Orsini (to the extent that she failed to provide the Advice and/or take the Action) is a concurrent wrongdoer in relation to plaintiff’s claims; and

(b)   the Defendants’ liability should be limited having regard to the extent of Ms Orsini’s responsibility for the plaintiff’s damage or loss.

50. The form of the proposed Carney amended defence for which leave is now sought addressed many of the criticisms made by counsel for Mr Angius during the course of the hearing on 11 August 2025. It has significantly changed from what was attached to the notice of motion filed on 1 April 2025.

Mr Angius’ strike out application

51. On 29 April 2025, Mr Angius filed the notice of motion seeking, amongst other things, to strike out paragraph 78(d) of the liquidators’ defence and paragraphs 68(b) and 73–79 of the Carney defence in their entirety on grounds that they disclose no reasonable grounds of defence, have a tendency to cause prejudice, embarrassment and delay in the proceedings, and are otherwise an abuse of process.

52. On 29 April 2025, Mr Angius also served a proposed reply to the liquidators’ defence.

No evidence filed by the Carney defendants

53. As at 1 August 2025, all parties have served the evidence in chief upon which they wish to rely at trial, except for the Carney defendants who have not served any evidence yet. No orders have been made for the Carney defendants to serve their evidence.

54. Mr Angius is yet to file any evidence in reply.

Hearing of applications

55. On 11 August 2025, I heard the application by the Carney defendants for leave to amend the Carney defence in the form of the proposed Carney amended defence and the application by Mr Angius to strike out particular paragraphs of the liquidators’ defence and the Carney defence.

56. There has been no formal application by Mr Perez and PVL to amend their defence or by the liquidators to amend the liquidators’ defence. The liquidators have indicated that if I grant leave to the Carney defendants to amend the Carney defence that they will seek leave to make similar amendments to the liquidators’ defence.

LEGAL PRINCIPLES

Function of pleadings

57. Pleadings are central to the conduct of a case as they ensure procedural fairness by defining the issues in dispute, give parties advance notice and prevent a ‘trial by ambush’. Their function is to clearly set out the case that must be met.

57. In Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490; [1916] HCA 81, Isaacs and Rich JJ at 517, stated:

Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.

59. The need for pleadings to be sufficiently clear was emphasised by Mason CJ and Gaudron J in Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11,who stated at 286 that:

The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In Liquidation) [1916] HCA 81; (1916) 22 CLR 490 per Isaacs and Rich JJ. at p 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.

60. In Banque Commerciale, Dawson J at 296–7 examined the function of pleadings in defining the issues between the parties (citations omitted):

It is, of course, the purpose of pleadings to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings upon trial may be conducted in an orderly fashion by reference to those issues. The defined issues provide the basis upon which evidence may be ruled admissible or inadmissible upon the ground of relevance. But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings. It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings.

61. Additionally, in Banque Commerciale, Brennan J at 288 quoted with apparent approval the remarks of Jessel MR in Thorp v Holdsworth (1876) 3 Ch D 637, concerning the object of pleadings as stated at 639:

When the pleadings bring the parties to the issue, the court’s function is to determine that issue and to grant relief founded on the pleadings unless the parties are allowed to alter the issues at the trial without amendment of the pleadings …

62. Pleadings not only inform the opponent of the case to be met but also facilitate the just, quick and cheap determination of the real issues in the proceedings, which is the overriding purpose of the rules of court in their application to civil proceedings: s 56(1) of the Civil Procedure Act 2005 (NSW) (CPA). In Dickens v New South Wales (No 3) [2018] NSWSC 485, Adamson J stated at [36] and [38]–[39] that:

[36]   The importance of pleadings ought not be underestimated. A statement of claim serves a number of functions. It indicates, to the Court and to the defendant or defendants, the basis of the plaintiff’s claim for relief. The statement of claim must set out, in numbered paragraphs, the material facts on which the plaintiff relies (UCPR rr 14.6 and 14.7). Where the rules require that certain matters be particularised (such as allegations of fraud or states of mind), the statement of claim must contain those particulars. It is an aspect of natural justice that the defendant be apprised of the case it has to meet by a properly pleaded statement of claim: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [25] (French CJ, Gummow, Hayne and Kiefel JJ). Where unparticularised allegations of fraud and intention are made, there can be a tendency for the deficient pleading to amount to an abuse of process. Pleadings must be consistent, except where allegations are expressed to be in the alternative: UCPR 14.18. A pleading must not be “embarrassing” in any of the senses set out by Tamberlin J in Shelton v NRMA Ltd [2004] FCA 1393; 51 ACSR 278 at [18]:

‘Embarrassment’ in this context refers to a pleading that is susceptible to various meanings, or contains inconsistent allegations, or in which alternatives are confusingly intermixed, or in which irrelevant allegations are made that tend to increase expense.

…

[38]   Where a statement of claim is deficient, in that it does not identify the connection between allegations of fact and causes of action alleged; contains a discursive narrative, the relevance of which can only be the subject of conjecture; and makes generalised allegations which could not sensibly be the subject of a response in the defence, it cannot be allowed to stand, if objection is taken. Although there are occasions where a defendant, for forensic reasons, might not take objection to a deficient pleading and prefer to conduct the proceedings on that basis, a defendant who approaches the Court to enforce its rules regarding a pleading is entitled to have the Court require compliance: Northam v Favelle Favco Holdings Pty Ltd (Unreported, Supreme Court of New South Wales, Bryson J, 7 March 1995).

[39] The matters to be taken into account in determining which order to make are set out in Part 6 of the Civil Procedure Act 2005 (NSW), the overriding purpose of which is “to facilitate the just, quick and cheap resolution of the real issues in the proceedings”: s 56. A properly pleaded statement of claim is, in my view, a prerequisite for the just, quick and cheap resolution of the real issues in the proceedings.

63. The concept of whether a pleading is embarrassing has also been the subject of extensive judicial consideration, as drawn together by Johnson J in McGuirk v University of New South Wales [2009] NSWSC 1424 at [32]–[35]:

[32]   A pleading may be embarrassing even though it contains allegations of material facts sufficient to constitute a cause of action, if the material facts alleged are couched in expressions which leave difficulties or doubts about recognising or piecing together what is referred to: Northam v Favelle Favco Holdings Pty Limited (Bryson J, 7 March 1995, BC9504276 at 5–6).

[33]   Although the pleading of a conclusion may, in some circumstances constitute a material fact, nevertheless, the pleading will be embarrassing if allegations are made at such a level of generality that the defendant does not know in advance the case it has to meet: Charlie Carter Pty Limited v Shop Distributive and Allied Employees Association (1987) 13 FCR 413 at 417–418. In such a case, the appropriate remedy is to strike out the pleading rather than to order the provision of particulars, as it is not the function of particulars to take the place of the necessary averments in a pleading: Trade Practices Commission v David Jones (Aust) Pty Ltd (1985) 7 FCR 109 at 112–114.

[34] Rule 14.28 UCPR provides that pleadings that involve non-compliance are liable to be struck out as an embarrassment. However, generally the Courts recognise that a wide range of discretionary considerations arise where there is a failure to comply with the technical requirements of the pleading rules: Beach Petroleum NL v Johnson (1991) 105 ALR 456 at 466. In many instances, the appropriate order may be to strike out the offending pleading, but grant leave to amend: Rubenstein v Truth & Sportsman Ltd [1960] VR 473 at 476; H 1976 Nominees Pty Ltd v Galli (1979) 30 ALR 181 at 186.

[35]   It is not the function of the Court to draw or settle a party’s pleading. The Court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. Objectionable matter that is so mingled with other matter may lead to the conclusion that the pleading as a whole would tend to embarrass the fair trial of the action ought be struck out: Turner v Bulletin Newspapers Co Pty Ltd (1974) 131 CLR 69 at 72, 87–88 and 97–98; Gunns Limited v Marr at [57]–[58]; Fleet v Royal Society for the Prevention of Cruelty to Animals NSW [2005] NSWSC 926 at [55].

Pleading concurrent wrongdoers

64. In Ucak v Avante Developments [2007] NSWSC 367, Hammerschlag J at [35]–[42] set out the requirements that must be met for a pleading of concurrent wrongdoers under Part 4 of the CLA (emphasis in original):

[35]   It follows in my view, that for a defendant to assert that there is a person who is a current wrongdoer the defendant must plead the necessary elements which result in the asserted conclusion. Those elements are:

a. the existence of a particular person;

b. the occurrence of an act or omission by that particular person; and

c. a causal connection between that occurrence and the loss that is the subject of the claim.

[36]   What the defendant in this case has done is to assert a conclusion without the material facts upon which that conclusion depends. This is a course which is not permissible.

[37]   Here the material facts would have to be the identification of the particular person, the identification of the act or omission of that particular person and the facts which if proven at trial would establish that that act or omission caused the loss or damage that is the subject of the claim.

[38]   Paragraph 20 fails with respect of each of the elements and accordingly is liable to be struck out.

[39]   It was put on behalf of the defendant, and accepted by the plaintiffs for the purposes of this application, that the defendant is not yet in a position to plead the material facts with respect to the supposed concurrent wrongdoers. The approach which should be taken, it was submitted, was that the plaintiffs should seek to administer interrogatories with respect to the facts the defendant should have alleged. Support for this approach, it was said, is to be found in the decision of Einstein J in Ferdinand Nemeth v Prynew Pty Limited [2005] NSWSC 1296 in which His Honour gave leave to a defendant to plead in the following terms, “In the alternative, the third defendant’s liability is limited to such other proportion as the Court determines is just and equitable, having regard to the extent of its liability for any damage.” The plaintiff in that case opposed leave to amend unless as a condition the third defendant be required to identify the particular person or persons who the third defendant had reasonable grounds to believe may be the concurrent wrongdoer in relation to the claim. His Honour ordered interrogatories.

[40]   That decision does not assist the defendant in this case. There was apparently no opposition to the amendment based on the proposition that it did not disclose a defence, and His Honour was not asked to, and therefore did not, consider whether it did or did not. The third defendant was at that point apparently content to proceed on the basis of being satisfied with interrogatories. Plainly, had the terms of the proposed defence been subject to scrutiny on the basis that it did not properly plead or disclose a defence, it would have been found wanting.

[41]   I agree with the view expressed by R J McDougall J in his paper “Proportionate Liability in Construction Litigation” (2006) vol 22(6) Building and Construction Law Journal 394 at 400 that a defendant should plead with the same degree of precision and particularity as it would have done before the Act if it were bringing a cross-claim against an alleged concurrent wrongdoer.

[42] This approach is consistent with s 345(1) of the Legal Profession Act 2004 (NSW) under which a law practice must not provide legal services on a defence of a claim for damages unless a legal practitioner reasonably believes, on the basis of provable facts, and a reasonably arguable view of the law, that the defence has reasonable prospects of success. The defence should not be put on before there are sufficient provable facts available to the practitioner to found the necessary belief.

65. The approach in Ucak has been followed in H.S.D. Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279, Rothman J at [18]; Permanent Custodians Ltd v King [2010] NSWSC 509, Schmidt J at [17]–[19]; The Owners Strata Plan v Brookfield Multiplex Limited [2010] NSWSC 360, McDougall J at [3]–[4]; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (2007) 164 FCR 450; [2007] FCA 1216, Middleton J at [31]; and Bingo Holdings Pty Ltd v GC Group Company Pty Ltd [2021] NSWCA 184, Meagher, Payne and Brereton JJA at [21].

66. In The Owners – Strata Plan No 87265 v Saaib [2021] NSWSC 150, Henry J summarised the approach in Ucak, at [514] as follows:

As has been said, an obvious precondition to limiting liability on the basis that others are also responsible for the damage is that it is necessary to prove that those others have caused the damage and are legally responsible for it. If the provisions are to operate appropriately, it is essential that any defendant be required to plead the proportionate liability defence in a manner that discloses the cause of action and damage in at least as detailed a manner as would be required for any initiating process for a cause of action: Ucak v Avante Developments Pty Ltd [2007] NSWSC 367 at [35]–[42]; H S D Co Pty Limited v Masu Financial Management Pty Limited [2008] NSWSC 1279 at [18].

SUBMISSIONS

Submissions of the Carney defendants

67. The Carney defendants submit that the Carney defence in paragraph 68(b)(ii) does not comply with the requirement set out in Ucak to identify a particular concurrent wrongdoer, namely identifying a particular person. They say that the proposed Carney amended defence seeks to make a substantive change to the Carney defence to rectify this deficiency by naming with precision two lawyers said to be concurrent wrongdoers.

68. The first identified individual is Ms Orsini. Following recent service of evidence received by the solicitors for the Carney defendants (namely on 18 February 2025 and in answer to a notice to produce received on 30 March 2025), Ms Orsini has been identified as being retained by Mr Angius in July 2022 (being approximately one month after the alleged fraud was discovered).

69. The second identified individual is Ms Culkoff. Following receipt of an affidavit served in these proceedings in February 2024, Ms Culkoff has been identified as having been acting for Mr Angius or at least corresponding on his behalf with this court in July 2022.

70. The Carney defendants submit that the delay in identifying Ms Orsini and Ms Culkoff is due to only recently receiving the evidence that Ms Orsini was retained, being as recent as a few weeks ago. The Carney defendants submit that the evidence of Ms Orsini’s retainer and correspondence sent by Ms Culkoff are inconsistent with the Response to the Request for Particulars provided in January 2024.

71. The Carney defendants say that they now seek to align the pleadings with the evidence and rectify the deficiency in the current pleadings.

72. The Carney defendants submit that Mr Angius knows what advice was given by Ms Orsini and Ms Culkoff and whether they acted promptly regarding the freezing orders. The Carney defendants also submit that because this information is within Mr Angius’ knowledge, and not known by the Carney defendants, Mr Angius must therefore respond to the proposed amendments to the Carney defence as he considers appropriate.

73. The Carney defendants claim that there is no prejudice to Mr Angius where:

1. if either Ms Orsini or Ms Culkoff failed to give the advice or take action promptly, they already fall within the class pleaded in the Carney defence (being “the Lawyers”), such that Mr Angius is in no different position than he was on the filing of the Carney defence; and

2. if Ms Orsini did in fact give the relevant advice (a matter entirely within Mr Angius’ knowledge) then naming her as a concurrent wrongdoer will have no impact on her continuing to act in these proceedings.

Submissions of Mr Angius

74. Mr Angius submits that the Carney defendants should not be permitted to plead that Ms Orsini and Ms Culkoff were professionally negligent in the manner proposed by the amendments. At the heart of Mr Angius’ complaints is that the proposed amendments to the Carney defence rely only on hypothetical “if-then” statements, raising a mere possibility of negligence without pleading the necessary material facts such as:

1. when and what were Mr Angius’ instructions;

2. when and what was Mr Angius’ legal advice;

3. when and what were Mr Angius’ instructions after receiving that advice;

4. reasonably competent lawyers could have applied for a freezing order on a particular date;

5. Robb J (or any judge) would have made a freezing order on that date; and

6. that was a date before Mr Perez dissipated all, or most of, the money.

75. Mr Angius claims that those material facts are not within the knowledge of the liquidators and the Carney defendants, and are protected by legal professional privilege, which has not been waived. Mr Angius says that this means the liquidators and the Carney defendants will never obtain the evidence required to support such allegations, making the concurrent wrongdoer defences futile.

76. Mr Angius submits that the solicitors for the liquidators and the Carney defendants have candidly acknowledged in affidavits that they do not know what legal advice was given and cannot form the view that the defences have reasonable prospects of success. Mr Angius refers to Ms Polorotoff’s affidavit sworn 1 April 2025, at [37], where she states: “While I do not know what advice was obtained by the plaintiff from Ms Orsini and/or Ms Culkoff …”. Mr Angius claims the proposed amendments to the Carney defence do not cure these defects and so they remain deficient.

77. Mr Angius claims that to allow such amended pleadings would permit the Carney defendants to circumvent their solicitors’ professional obligations to only advance claims with a proper factual and legal basis. Mr Angius says that the existing paragraphs in the Carney defence should therefore be struck out, leave to amend refused, and the Carney defendants ordered to pay Mr Angius’ costs of the two notices of motion on an indemnity basis.

Submissions of the liquidators

78. The liquidators made submissions seeking to support paragraph 78(d) of the liquidators’ defence in response to the submissions made by Mr Angius that it should be struck out.

79. In summary, the liquidators’ submissions were as follows:

1. The failure to plead “when and what were Mr Angius’ instructions” overlooks the express premise that Mr Angius promptly sought legal advice following the discovery of the alleged fraud. This is not a true or impermissible hypothetical but is better characterised as a pleading of an alternative to the allegations that Mr Angius either failed to seek legal advice or, having received it, did not follow it. Mr Angius will be aware which alternative applies.

2. The failure to plead “when and what was Mr Angius’ legal advice” and “when and what were Mr Angius’ instructions having received that advice” overlooks the express premise that no legal advice, of the kind that ought to have been provided, was provided.

3. The failure to plead “reasonably competent lawyers could have applied for a freezing order on a particular date”: The advice that competent lawyers ought to have given is pleaded as being prompt advice to promptly seek a freezing order. The precise date on which such an application should have been brought as a matter for submissions or particulars which Mr Angius has not sought.

1. The failure to plead “Justice Robb (or any judge) would have made a freezing order on that date” and “that was a date before Mr Perez dissipated all, or most of, the money”: This overlooks the pleading that had an application for a freezing order been made promptly, the court would have granted it and also notes the premise of Mr Angius’ claim is that Mr Perez dissipated the funds. The date by which all funds were dissipated is otherwise a matter for evidence or perhaps particulars, which Mr Angius has not sought.

2. As to the argument that there is client legal privilege as a barrier to the defendants ever proving their case so that the pleading is futile, this overlooks that a case can be made not just in the documents passing between Mr Angius and his lawyers but also based on inference from other evidence. Further, the futility argument is not one which the court should determine at an interlocutory stage except by the General Steel standard, which Mr Angius cannot meet.

CONSIDERATION

80. Whilst it is true that the very nature of a concurrent wrongdoer pleading rests on a hypothetical yet to be proved (whether the defendant has any liability at all to the plaintiff, which will most often be denied), each of the central pillars for the alleged basis on which the concurrent wrongdoer is also said to have caused the same loss and damage cannot itself be a hypothetical. This is a case where those central pillars are posed as hypotheticals.

81. I consider that the amendments sought to be made in the proposed Carney amended defence contain fundamental flaws in its pleading of concurrent wrongdoers. The Carney defendants have not pleaded whether or not Mr Angius sought any legal advice from either Ms Culkoff or Ms Orsini on what steps he should take to prevent PVL and Mr Perez dissipating or otherwise dealing with the funds, what legal advice was sought and whether or not either Ms Culkoff or Ms Orsini gave that legal advice.

82. As a result, the proposed pleading relies on hypothetical “if-then” statements and omits the material facts necessary to disclose a proper defence. As emphasised in Banque Commerciale and Gould, such defects undermine the essential function of pleadings, which is to define the issues in dispute with sufficient clarity so as to ensure procedural fairness and prevent a trial by ambush. Conjectural or conditional allegations fail to achieve this function.

83. The use of “if-then” statements in the proposed Carney amended defence (including at paragraph 68(b)(ii)) highlights the Carney defendants’ failure to plead the material facts necessary to establish their case. The Carney defendants do not identify with specificity the particular conduct it is alleged Ms Culkoff and Ms Orsini engaged in or failed to engage in. The Carney defendants do not plead whether Ms Culkoff and Ms Orsini were instructed to provide legal advice, whether they failed to do so, whether any legal advice was given, or whether Mr Angius, if legal advice was given, failed to follow it. As Hammerschlag J observed in Ucak at [36], a pleading that asserts only a conclusion, without the material facts on which it depends, is impermissible.

84. Instead, the central pillars of the entire concurrent wrongdoer defence in respect of Ms Culkoff and Ms Orsini contained in paragraph 68(a)(ii) raise the following hypotheticals:

1. if Mr Angius did seek legal advice promptly from Ms Culkoff and Ms Orsini following his discovery of the alleged fraud by PVL and Mr Perez; and

2. if Mr Angius was not advised by Ms Culkoff and Ms Orsini that he should promptly bring an application to restrain PVL and Mr Perez from dissipating or otherwise dealing with the funds; or

3. if Ms Culkoff and Ms Orsini failed to act promptly to bring such an application having received instructions to do so.

85. A chain of hypothetical alternatives does not amount to a statement of material facts but is rather an exercise in conjecture. Such an approach causes embarrassment in the pleading sense because the opposing parties cannot discern the case they are required to meet: Dickens, Adamson J at [36]–[39]; McGuirk, Johnson J at [32]–[33]. The absence of clear factual allegations also prevents the issues from being properly defined, thereby frustrating the overriding purpose of the CPA to secure the just, quick and cheap resolution of the real issues in dispute: s 56(1) of the CPA.

86. The problem with the conjecture is highlighted in paragraphs 90 (with respect to Ms Culkoff) and 103 (with respect to Ms Orsini) of the proposed Carney amended defence where it is stated that the loss or damage was caused by them “to the extent that she failed to provide the Advice and/or take the Action”, when it is not even known whether they were instructed to provide the advice or take the action and whether or not they gave advice to take the action. A pleading of professional negligence against each of them could never rest of such fundamental conjecture.

87. Although the Carney defendants contend that the proposed Carney amended defence cures a defect in the Carney defence by naming Ms Culkoff and Ms Orsini as concurrent wrongdoers (cf Ucak, Hammerschlag J at [35(a)]), that step alone does not overcome the more fundamental defect, being the absence of pleaded material facts.

88. The issue of futility was raised by Mr Angius on the basis that the relevant instructions and advice are legally privileged such that the Carney defendants may never know the requisite particulars to plead the necessary material facts. This may or may not be the case, but it would always be open to the Carney defendants to seek to plead their case based on inferences that arise in the circumstances. But as matters presently stand, without these particulars, the proposed Carney amended defence – if treated as though it was an initiating process for a cause of action – does not disclose the cause of action and damage with the requisite detail and is therefore deficient: Saaib, Henry J at [514], citing Ucak, Hammerschlag J at [35]–[42]; H.S.D, Rothman J at [18].

89. In my view, the absence of the pleaded material facts also precludes Mr Angius from being able to plead a proper reply in the form of s 5O of the CLA, namely that Ms Culkoff and Ms Orsini as professionals acted in a manner widely accepted in Australia by peer professional opinion as competent professional practice. Without the material facts of what it is alleged that Ms Culkoff and Ms Orsini did or omitted to do, it would be impossible for Mr Angius to be able to address the proposed amended pleading by reference to the matters in s 5O of the CLA.

90. Accordingly, in light of the Carney defendants’ failure to plead the material facts which would have been necessary to sustain a negligence claim against Ms Orsini and Ms Culkoff, I have determined that leave to amend the Carney defence in the form of the proposed Carney amended defence should be refused. As a result, the relevant parts of the Carney defence in its current form are deficient (as admitted by the Carney defendants) and should therefore be struck out. On the same basis, the equivalent parts of the liquidators’ defence should also be struck out.

91. I will permit the liquidators and the Carney defendants to propose further amendments to the liquidators’ defence and the Carney defence respectively, if they wish to take that course. With the benefit of the hearing and this judgment, they may well improve their proposed pleading (as they did between the hearing and this judgment), illustrating the danger for parties such as Mr Anguis in taking pleading points in advance of the trial rather than allowing the pleading to fail on its own terms then.

92. I will not order any timetable for that to occur. In the usual way, any such amendments should be sent to the solicitors for Mr Angius for his consideration and, if Mr Angius does not consent to the making of those amendments, then applications for leave to make those amendments will have to be made by the liquidators and the Carney defendants in due course.

ORDERS

93. For the reasons outlined above, I propose to make the following orders:

1. The fifth, sixth and seventh defendants’ notice of motion filed 1 April 2025 (Amendment Motion) is dismissed.

2. The fifth, sixth and seventh defendants are to pay the plaintiff’s costs of the Amendment Motion.

3. Paragraph 78(d) of the third and fourth defendants’ defence filed 15 March 2024 is struck out in its entirety.

4. Paragraphs 68(b), 73, 74, 75, 76, 77, 78 and 79 of the fifth, sixth and seventh defendants’ defence filed 22 February 2024 are struck out in their entirety.

5. The third, fourth, fifth, sixth and seventh defendants are to pay the plaintiff’s costs of the notice of motion filed 29 April 2025.

**********

Decision last updated: 21 August 2025