Credit Connect Pty Limited v Castle

[2015] NSWSC 1045

Supreme Court

New South Wales

Medium Neutral Citation:	Credit Connect Pty Limited v Castle [2015] NSWSC 1045
Hearing dates:	24 July 2015
Date of orders:	24 July 2015
Decision date:	24 July 2015
Jurisdiction:	Common Law
Before:	McCallum J
Decision:	Defendant granted leave to file cross-claim.
Catchwords:	PROCEDURE – civil – pleadings – cross claim – leave to file late – whether prejudice occasioned to cross-defendant – whether grant of leave would be in accordance with dictates of justice
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 58 Uniform Civil Procedure Rules 2005 (NSW), rr 1.12, 9.1
Category:	Procedural and other rulings
Parties:	Credit Connect Pty Limited (Plaintiff) Timothy Joseph Castle (Defendant/Applicant) Ian Gray (Cross-Defendant/Respondent)
Representation:	Counsel: T McGrath (Plaintiff) J-J Loofs (Defendant/Applicant) D Priestly (Cross-Defendant/Respondent)   Solicitors: Pateman Legal (Plaintiff) Russell Byrnes (Defendant/Applicant) Meridian (Cross-Defendant/Respondent)
File Number(s):	2013/27576
Publication restriction:	None

Judgment – Ex Tempore

1. HER HONOUR: Before the Court is a notice of motion, filed 2 July 2015, by which the defendant seeks leave to file a cross-claim against an existing party, Mr Ian Gray, a solicitor.

2. The plaintiff’s claim is for possession of a property of which the defendant is the registered proprietor. The allegations against Mr Gray sought to be raised in the cross-claim are, in substance, allegations of professional negligence in the advice given by Mr Gray to the defendant at the time he signed the relevant security documents. Mr Gray is already a party in the proceedings at the suit of the plaintiff. The proceedings are listed for hearing for five days in February 2016.

3. The application is supported by careful written submissions prepared by Mr Loofs of counsel. I have read those submissions; it is not necessary to descend to their detail in these reasons. The application is opposed by the solicitor primarily on the basis of the lateness of the proposed cross-claim. That glib summary is not intended to derogate from the careful points made by Mr Priestley in his written submissions, which I have also read.

4. One point of substance taken in opposition to the application is that it appears from the material before the Court that the cross-claim could well have been brought considerably earlier. The explanation for its not having been brought at an earlier point is that the solicitor acting for the defendant formed the view that there was an insufficient basis for asserting the existence of a retainer between the defendant and Mr Gray.

5. In April of this year, Mr Gray served an affidavit in which he openly accepts that he was retained by the defendant. It was that deposition which gave the solicitor the confidence to plead a claim some lawyers might have thought he could have pleaded at an earlier point in time.

6. In proceedings commenced (as here) by statement of claim, a cross-claim may be brought without leave within the time limited to file a defence: r 9.1(1) of the Uniform Civil Procedure Rules 2005 (NSW). There is a specific power within that rule to allow further time, in addition to the general power in r 1.12 to extend any time fixed by the rules. In any event, there is no question as to the Court’s power to grant the relief sought in the present case.

7. In determining whether to exercise that power, I must have regard to the mandatory considerations identified in Pt 6 of the Civil Procedure Act 2005 (NSW). In particular, I am required, in accordance with s 58 of the Act, to seek to act in accordance with the dictates of justice.

8. I accept, as submitted by Mr Priestley (and carefully expanded in his written submissions) that the lateness of the application to file the cross-claim is a matter to which due regard must be had. Mr Priestley's submissions list a series of factors against the interests of the solicitor alleged to flow from the lateness of the application. Perhaps most importantly among those is the contention that the solicitor, having already filed his evidence in the proceedings, will have to "reconsider the focus or completeness" of that evidence to meet a different case. As accepted by Mr Priestley, however, the proposed cross-claim does not raise a different factual case but rather one of different legal characterisation.

9. In my view, having regard to the circumstances of the defendant and in particular the fact that he faces the risk of losing his home because of a loan he claims he did not knowingly take out, in circumstances where he is alleged to suffer from a cognitive deficiency, the dictates of justice require that the application be allowed.

10. In reaching that conclusion, I have had regard to the degree of expedition with which the defendant has acted. It may be accepted that there is a respectable argument that the cross-claim could properly have been pleaded earlier, contrary to the view formed by the solicitor, but I do not think the solicitor is to be criticised in that respect. It is an issue on which, as far as the material before me reveals, reasonable minds might have differed. The delay, in my view, is adequately explained.

11. For those reasons, I make order one in the notice of motion, that is that the defendant have leave to file the cross-claim annexed to Mr Byrnes' affidavit sworn 1 July 2015.

12. The defendant sought his costs of the motion and conversely the solicitor submitted that if the application were granted he should have his costs thrown away and the costs of the application. In my view, having heard from the parties, the appropriate order as to costs is that the costs of the motion be each party's costs in the cause.

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Decision last updated: 29 July 2015