Emmanuel Paneras & Anor v Eastern Suburbs Property Developments Pty Ltd & 3 Ors - [2009] NSWSC 105

CITATION: Emmanuel Paneras & Anor v Eastern Suburbs Property Developments Pty Ltd & 3 Ors [2009] NSWSC 105

HEARING DATE(S): 23 February 2009

JUDGMENT DATE :
4 March 2009

JUDGMENT OF: Simpson J

DECISION: Pursuant to UCPR 36.16(2) the judgment of Malpass AsJ of 19 February 2008 is set aside.
Leave is granted to the third defendant to file and serve a defence within 7 days of the date of this judgment.

CATCHWORDS: PRACTICE AND PROCEDURE - application to set aside judgment - whether original judgment summary or default judgment - irregularity - interpretation of Rule 36.16(3A) - explanation for failure to defend proceedings - whether arguable and bona fide defence on the merits exists - agreement - estoppel

LEGISLATION CITED: Uniform Civil Procedure Rules 2005

CATEGORY: Procedural and other rulings

CASES CITED: Reinehr Industrial Lease and Finance Pty Ltd v Jordan (NSW Court of Appeal, 4 June 1974, unreported)
Stollznow v Calvert [1980] 2 NSWLR 749
Adams v Kennick Trading (Int) Limited (1986) 4 NSWLR 503
Simpson v Alexander (1926) 26 SR (NSW) 296; 43 WN (NSW) 76

TEXTS CITED: Ritchie's Uniform Civil Procedure NSW

PARTIES: Emmanuel Paneras (1st Plaintiff)
Lea Pailas (2nd Plaintiff)
Eastern Suburbs Property Developments Pty Ltd (1st Defendant)
Socrates Scott Kitas (2nd Defendant)
John Katerinis (3rd Defendant)
Anthony Burns (4th Defendant)

FILE NUMBER(S): SC 2007/10784

COUNSEL: JS Drummond (Plaintiffs)
C Birch SC (Defendants)

SOLICITORS: Bateman Battersby (Plaintiffs)
Francis Farmakidis (3rd Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Wednesday 4 March 2009

2007/10784 Emmanuel Paneras & Anor
v
Eastern Suburbs Propery Developments Pty Ltd & 3 Ors
JUDGMENT

1 HER HONOUR: By notice of motion filed on 12 November 2008 and amended on 23 February 2009, the applicant, Mr John Katerinis, seeks orders setting aside a judgment given against him by Malpass AsJ on 19 February 2008.

Background

2 It is necessary to set out some history. The substantive proceedings were commenced by statement of claim filed on 12 February 2007. That statement of claim named Emmanuel Paneras and Lea Pailas as plaintiffs; Eastern Suburbs Property Development Pty Ltd (“ESPD”), Socrates Scott Kitas, John Katerinis and Anthony Burns as first, second, third and fourth defendants respectively. The statement of claim pleaded, in relatively simple terms, a money count arising out of an alleged Deed of Loan and Deed of Guarantee and Indemnity.

3 So far as the present proceedings are concerned, there is little, if any, dispute about the facts pleaded in the statement of claim. I will state those facts that are uncontroversial briefly. To give a complete picture it will be necessary to go outside the pleadings and mention some (uncontroversial) matters disclosed in the evidence.

4 ESPD was a company of which the three individual defendants were directors. In 2003 it entered into a contract for the purchase of land in William Street, Sydney. The purchase price was $5.1 million. ESPD proposed to develop the site by building residential units. The company needed to borrow money…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWSC 105
Decision Date: 4 March 2009

CaseChat Overview and Summary

In the Federal Circuit Court, Emmanuel Paneras and another applicant sought to set aside a judgment obtained by Eastern Suburbs Property Developments and three other respondents. The dispute centred on whether the original judgment was a summary judgment or a default judgment, and whether the application to set aside was made in accordance with the relevant rules. Specifically, the applicants challenged the interpretation of Rule 36.16(3A) in relation to the explanation for their failure to defend the proceedings and whether there existed an arguable and bona fide defence on the merits.

The court had to determine whether the applicants had provided a sufficient explanation for their failure to defend, as required by Rule 36.16(3A). The court also needed to assess whether the applicants had an arguable and bona fide defence on the merits, and whether the respondents were estopped from relying on the judgment. The court interpreted Rule 36.16(3A) and considered the applicants' submissions, including their agreement with the respondents on certain points. The court concluded that the applicants had provided a sufficient explanation for their failure to defend and that there was an arguable and bona fide defence on the merits. The court found that the respondents were estopped from relying on the judgment due to the agreement reached by the parties.

The application to set aside the judgment was allowed. The court set aside the original judgment and ordered that the matter be listed for further directions. The court emphasised the importance of parties providing a sufficient explanation for their failure to defend and the potential consequences of entering into agreements with the other party. The court also highlighted the need for parties to be aware of the rules and procedures when seeking to set aside a judgment.

Orders