Garuccio v Costanzo - [2012] SADC 103

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
GARUCCIO v COSTANZO & ANOR
[2012] SADC 103
Reasons of His Honour Judge Slattery
9 August 2012
PROCEDURE
Interlocutory application by defendant under r 228 for default judgment. Failure by the plaintiff to amend and file pleadings, file particulars and make discovery. Failure by the plaintiff to follow orders made by the court.
HELD: Application refused.
Real Property Act 1886 (SA) s 191(g); Partnership Act 1891 (SA) s 44, referred to.
District Court Civil Rules 2006 r 228, r 229, r 230, r 232, considered.

GARUCCIO v COSTANZO & ANOR
[2012] SADC 103
Factual basis

By a Summons filed on 26 April 2012 (FDN1) Christopher Daniel Garuccio (the plaintiff) sought orders pursuant to s 191(g) of the Real Property Act 1886 (SA) and r 34 and r 246 of the District Court Civil Rules 2006 (DCR) for an extension of time for removal of a caveat that he had lodged over a residential property owned by Sebastiano Gary and Maria Carmela Costanzo (the defendants). The Summons was supported by an affidavit sworn by Mr Garuccio dated 26 April 2012. In his affidavit, Mr Garuccio identified a partnership that he had previously carried on (personally) with Mr Costanzo. The partnership business was a greengrocery called ‘Daily Fresh Produce’.
In his affidavit (para 6) Mr Garuccio alleged that the partnership commenced in 2009 and at about the time the partners entered into an agreement with SA Produce Credit Pty Ltd (SAPC) for the provision of credit to assist the partnership business purchase stock in trade. Guarantees were given by Mr Garuccio, his wife, Mr Costanzo, Mrs Costanzo and other family members. A copy of the Guarantee was exhibited to the affidavit.
Under the terms of the Guarantee, the guarantors charged in favour of SAPC:
All our estate and interest in any land and in other assets, whether tangible or intangible, in which we now have any legal or beneficial interest, or in which we later acquire any such interest, with payment of all monies owed by [us] or any of us and consent to the lodging by [SAPC] of a caveat or caveats which note [SAPC’s] interest in that real property.
Mr Garuccio deposed that the partnership had terminated in April 2011, that there were debts owing at the termination of partnership (the dissolution), and that some of those debts had been discharged by Mr Garuccio. One of those debts included an amount of some $145,000.00 (or thereabouts) to SAPC. Mr Garuccio claimed to have a right to be subrogated to the position of SAPC as a secured creditor, to take advantage of the charging clause under that subrogation and to therefore have the ability to claim an interest in the land owned by Mr and Mrs Costanzo.
There were also assertions in the affidavit about an acknowledgement of debt allegedly signed by Mr Costanzo, details of the caveat that had been lodged to protect the interest in land claimed by Mr Garuccio (the land owned…

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: [2012] SADC 103
Decision Date: 9 August 2012

CaseChat Overview and Summary

The case of Garuccio v Costanzo involved an interlocutory application by the defendants, Costanzo and his wife, under rule 228 of the District Court Civil Rules 2006 (SA) for default judgment against the plaintiff, Garuccio. The defendants sought default judgment due to the plaintiff's failure to amend and file pleadings, file particulars, make discovery, and follow court orders. The application was heard by Judge Slattery, who ultimately refused the application for default judgment. The court found that while the plaintiff had indeed failed to comply with several court orders, the trial date was imminent, and the trial judge would be best positioned to dispose of the whole action as quickly as possible. Furthermore, there were some mitigating factors, such as unresolved professional issues affecting the plaintiff's counsel, which caused complications in the case. The court also noted that the plaintiff's failure to amend his claim could potentially expedite the matter. The paramount interest, according to the court, was the final disposition of the matter on the merits rather than on an interlocutory basis.

The court's decision was based on a careful consideration of the facts and circumstances of the case. The court found that the trial judge would be best placed to decide on the merits of the case, particularly given the complexity of the issues surrounding the partnership dissolution agreement and the potential for partnership liabilities to be addressed at trial. The court also emphasised the importance of final disposition of the matter on the merits, rather than an interlocutory determination. In light of these considerations, the court exercised its discretion to refuse the application for default judgment and allowed the matter to proceed to a full hearing. The question of costs was reserved for the trial judge.

Orders