CIT Group (Australia) Limited v George Karabassis

[2008] NSWDC 87

CITATION:	CIT Group (Australia) Limited v George Karabassis [2008] NSWDC 87
HEARING DATE(S):	19/05/08
JUDGMENT DATE:	19 May 2008
JURISDICTION:	Civil
JUDGMENT OF:	Rolfe DCJ
DECISION:	See paragraph 16 of Judgment
CATCHWORDS:	Application to withdraw admission pursuant to Part 12 Rule 12.6 of the Uniform Civil Procedure Rules - Consideration of relevant principles and necessity of having affidavit evidence to support grant of leave
LEGISLATION CITED:	Uniform Civil Procedure Rules 2005 Civic Procedure Act 2005
CASES CITED:	Cooper's Brewery Limited v Panfida Foods Limited (1992) 26 NSWLR 738 Ridolfi v Rigato Farms Pty Limited (1999) 2QdR 455
PARTIES:	CIT Group (Australie) Limited (Plaintiff) George Karabassis (Defendant
FILE NUMBER(S):	4569/04
COUNSEL:	P Dowdy for the Plaintiff A M Gruzman for the Defendant

JUDGMENT

1 These proceedings were commenced by the Plaintiff on 2 November 2004. They have had a chequered history since then. The matter has been fixed for hearing on four occasions. For one reason or another, the hearing date was vacated on the Plaintiff’s application on two of these occasions and on the defendant’s application on two occasions.

2 The Plaintiff sues the First Defendant on a guarantee and indemnity dated 28 March 2001. The First Defendant has always denied that he entered into the guarantee.

3 The evidence about the guarantee is confusing.

4 First, in an affidavit sworn by the First Defendant on 1 December 2005 the First Defendant admitted that he signed one page of a document headed “Guarantee and Indemnity” but denied that he signed such document to guarantee the obligations of Apple Communications Limited (the “Company”) to the Plaintiff.

5 Secondly, in paragraph 6 of the affidavit of 1 December 2005 the First Defendant set out the basis of a conversation which he said took place before he received from the Plaintiff the three pages which are annexure A to that affidavit. The First Defendant said he then executed those three pages and faxed them back to the Plaintiff.

6 Next, there is the affidavit of Shane Anderson. Mr Anderson is a recoveries officer employed by the Plaintiff. On 30 August 2006 Mr Anderson made an affidavit in which he annexed as Annexure ‘A’ the Master Rental Agreement (the “Agreement”) which the Plaintiff says it entered into with the Company. Some of the pages in Annexure ‘A’ appear to include two of the three pages referred to in paragraph 5 above. With reference to the pagination appearing in the bottom right hand corner of Annexure ‘A’, the Agreement starts at page 8 and finishes at page 13. In relation to those signatures on Annexure ‘A’ which were said to be his, the First Defendant said in his affidavit of 9 November 2006 that the signatures on “pages 12 and 13” were not his. In my opinion, the reference in the affidavit to “pages 12 and 13” appears to me to be a typographical error. It seems tolerably clear that the First Defendant was saying that the signatures on pages 10 and 11 were not his.

7 In his defence filed on 19 May 2005 the First Defendant admitted that on 28 March 2001 the Plaintiff entered into the Agreement with the Company. The First Defendant did not then plead to paragraphs 5-15 and 19 of the Statement of Claim.

8 In January this year the First Defendant instructed new solicitors and they in turn briefed Mr Gruzman of counsel. Mr Gruzman had not been briefed before.

9 No doubt on the advice of Mr Gruzman, the First Defendant wishes to amend his defence and to withdraw the admission previously made in relation to paragraph 5 and to plead non-admission in relation to paragraphs 5-15 (inclusive) and 19 of the Statement of Claim.

10 The application was heard by the Court on 23 April 2008 without requiring the First Defendant to file a formal Notice of Motion. Mr Gruzman appeared for the First Defendant and Mr Dowdy of counsel appeared for the Plaintiff.

11 As Mr Dowdy correctly submitted, by virtue of the First Defendant not pleading to paragraphs 5-15 (inclusive) and 19 of the Statement of Claim, the First Defendant is taken to have admitted the matters pleaded in each of those paragraphs: Part 15 Rule 14.26 of the Uniform Civil Procedure Rules 2005 (“UCPR”). Consequently, Mr Gruzman’s application is, in effect, an application pursuant to UCPR Part 12 Rule 12.6 (2) to obtain the Court’s leave to withdraw the First Defendant’s admissions made in the Defence filed on 19 May 2005 which are set out above.

12 Mr Dowdy opposed Mr Gruzman’s application on the basis that the case had been in train for four years, that hearing dates had come and gone and that the Plaintiff would be prejudiced. To allow the withdrawal at this late stage would fly in the face of the overriding purpose of the Civil Procedure Act 2005 as laid down by s 56 of that Act. Mr Dowdy also referred to Cooper’s Brewery Limited v Panfida Foods Limited (1992) 26 NSWLR 738 and Ridolfi v Rigato Farms Pty Limited (1999) 2QdR 455. Relying on those cases Mr Dowdy submitted that it was not in the interests of justice to allow the admission to be withdrawn because there was no bona fide dispute about the execution of the Agreement by the Company. Secondly, he submitted that there ought be an affidavit before the Court setting out the circumstances justifying the grant of leave. Whilst I agree that in most cases one would expect to see affidavit evidence, this is not a strict requirement. For the reasons that follow, an affidavit is not necessary in this instance.

13 Mr Gruzman submitted that the pleader who had drafted the First Defendant’s Notice of Grounds of Defence had obviously made an error. In paragraph 1 the pleader had admitted paragraph 5 of the Statement of Claim but in the next breath, in paragraph 2, he or she had pleaded that the First Defendant did not plead in relation to paragraph 5 (amongst others). This is one way of looking at it although, as Mr Dowdy submitted, it is more likely the case that the pleader had simply erred in paragraph 2 of the Notice of Grounds of Defence by including a reference to paragraph 5.

14 More importantly, it seems to me that there is a bona fide dispute about what constitutes the Agreement. The dispute arises indirectly in that the First Defendant, by virtue of the documentation annexed to Mr Anderson’s affidavit, is alleged to be a party to the Agreement. As can be seen from the documents which comprise annexure A to Mr Anderson’s affidavit, it is not entirely clear what documents comprise the Agreement. Insofar as some of the documents comprising the Agreement were executed by the First Defendant, there is a dispute about whether he signed some of them. In those circumstances, in my opinion, it would be unjust not to allow the First Defendant to contest the issue concerning whether the plaintiff and the Company entered into the Agreement, particularly when, as I have said, the Guarantee and Indemnity relied on by the Plaintiff is contained in the documents which the Plaintiff says comprise the Agreement. In this respect I do not see that the Plaintiff will suffer any prejudice other than throwing away costs as a consequence of the grant of leave which the Court proposes to make. This can be remedied by the Court making an order for indemnity costs which is the appropriate order in the circumstances of this case. Accordingly, leave is granted to withdraw the admission made in relation to paragraph 5 of the Statement of Claim.

15 During the course of the argument Mr Dowdy informed the Court that the Plaintiff did not intend to amend the Statement of Claim. However, he conceded that the amount of the Plaintiff’s claim originally pleaded in the sum of $397,339.78 was to be reduced at the hearing by approximately $91,000. This being the case, in my opinion, the Plaintiff should be required to amend its pleading to reflect the amount which it now claims is properly claimed from the First Defendant under the Agreement. Such amendment should include an amendment to the schedule to the Statement of Claim. Taking this and what I have said earlier into account, it is therefore appropriate to allow the First Defendant to contest the quantum of the Plaintiff’s claim and to withdraw the previous admissions made in relation to paragraphs 6-15 (inclusive) and paragraph 19 of the Statement of Claim.

16 Accordingly, the Court makes the following orders:

1. Direct the Plaintiff to file and serve an Amended Statement of Claim within 7 days.

2. Direct the First Defendant to file and serve an Amended Defence to the Amended Statement of Claim in accordance with these reasons within 7 days thereafter.

3. Order the First Defendant to pay the Plaintiff’s costs thrown away as a consequence of the grant of leave in Order 2 above, such costs to be agreed or assessed on an indemnity basis, and upon agreement or assessment, to be paid within one month.

4. Order the Plaintiff to pay any costs of the First Defendant thrown away as a consequence of Order 1 above, such costs to be agreed or assessed on the ordinary basis and upon agreement or assessment, to be paid within one month.

5. Stand over for Directions on 13 June 2008.

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