Garuccio v Costanzo (No 2)

[2012] SADC 153

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

GARUCCIO v COSTANZO & ANOR (NO 2)

[2012] SADC 153

Judgment of His Honour Judge Tilmouth

19 November 2012

PROCEDURE - JUDGMENTS AND ORDERS

The plaintiff failed to appear when action called on for trial.

Held:  It was appropriate to dismiss his claim by way of judgment in default, and upon the defendants electing to adduce evidence, to give judgment on the merits on their counter-claim.

District Court Rules 2006 6R 216, 6R 228(1), 6R 234(1); Peck v Peck [2011] SASCFC 63; Craythorne v Swinburne (1807) 33 ER 482; Local and District Criminal Courts Act 1926-1972 ss 125, 126, 127; Buckeridge v Mercantile Credits Limitd (1981) 147 CLR 654, referred to.
Edwards v Patterson (1987) 47SASR 63, distinguished.

GARUCCIO v COSTANZO & ANOR (NO 2)
[2012] SADC 153

The proceeding

1. By action commenced in April 2012, the plaintiff claims the sum of $194,919.75 as a debt owing to him pursuant to an acknowledgement of debt allegedly executed by the first defendant.  The first defendant has filed a substantial cross-claim of his own.  When the matter was called on for trial on 12 November 2012 the plaintiff failed to appear.  These reasons explain why I proceeded to dismiss the plaintiff’s action and gave judgment in favour of the defendant on the cross-claim. 

   Litigation overview

2. This matter was set for trial in August this year.  However the plaintiff, who appeared unrepresented, was successful in obtaining an adjournment.  Earlier in the year I made orders pursuant to 6R 216 of the District Court Civil Rules 2006 requiring the parties to proceed to trial on the basis of affidavits.  The central issue at that time was confined to whether or not the acknowledgement of debt was genuine.  The defendants complied with this order and as they did with a concurrent order that expert reports be exchanged.  The plaintiff did not.  The interim history in this matter is outlined extensively in the judgment of Judge Slattery of 9 August 2012, wherein his Honour declined to enter a default judgment against the plaintiff on account of his non-compliance with these orders.[1] 

   [1]    Garrucio v Costanzo & Anor [2012] SADC 103

3. The matter came on for trial again on 12 November, when Mr Garrucio did not attend.  The defendant proceeded to seek judgment after tendering affidavits and an expert report in support of his counterclaim.  He also sought a dismissal of the plaintiff’s action. 

   Background facts

4. The plaintiff and first defendant entered into an informal partnership conducting a fruit and produce store in the Ingle Farm Shopping Centre during 2009.  They paid $480,000 for the business.  In order to secure supplies of wholesale fruit and vegetables, they entered into a credit arrangement with SA Produce Credit Pty Ltd, supported by guarantees and indemnities by way of security.  It appears that as time went on relations between them somewhat soured.  In effect, the first defendant eventually walked out of the business around April 2011.  He claims that an agreement was reached to pay out his share of the business for $210,000.  This sum corresponds with a loan he took out with the ANZ in that amount in order to raise the larger proportion of his contribution to the purchase price.

   The evidence

5. The alleged acknowledgement of debt is on the defendants’ case a forgery. In his statement of claim the plaintiff pleads specifically that it was executed by the first defendant on a specified date between the hours of 5 and 6 pm in the driveway of the defendants’ home. 

6. On the date and between the times so specified, there is substantial ‘alibi evidence’ that the first defendant was not home at all.  Indeed there is convincing evidence supported by several witnesses on affidavit that he was at another house in another suburb, probably from between 4.30 to 4.45pm and 6.30pm that night.  This evidence is supported by a telephone record of the first defendant using a mobile phone in another suburb during the course of the journey to that other house, at precisely 4.23pm that afternoon.  The number of the recipient’s telephone just so happens to be the owner of the house the defendants were driving to at that very time.

7. More than that, an expert report compiled by a scientist expert in handwriting comparison, states that the signature on a copy of the supposed deed – the plaintiff mysteriously is unable to produce the original - is ‘more likely to be… a manual cut and paste than it is’ a genuine, traced, or simulated signature. 

8. A visual inspection makes this readily apparent.  There are different line thicknesses in part of the Jurat clause creating an anomaly or inconsistency.  There are breaks in the letters ‘G’ and ‘Z’, symptomatic of a manual cut and paste and there are so called ‘trash marks’ or ‘shadowing’, equally symptomatic of a cut and paste insertion.  The distinct probability is therefore that the deed was a forgery. 

9. The combined alibi and expert evidence strongly suggest the plaintiff’s claim inevitably would have failed.  This evidence also serves to destroy his credibility should he choose to deny the existence of an agreement to pay $210,000 to the first defendant.

   The cross-claim

10. The defendant’s cross-action and counterclaim alleges the plaintiff agreed to pay him the sum of $210,000 for the first defendant’s share in the business.  In an affidavit filed on 13 August this year, the first defendant deposes to a verbal agreement with the plaintiff reached around April 2011 to that effect.  This was when he effectively left the business because of the unresolved breakdown in personal relations between them.  There were subsequent conversations, according to him, in which the plaintiff agreed to repay the money, but he never has. 

11. This aspect of the defendant’s case has the objective ring of truth about it.  One is left to ponder why he would walk away from the business empty handed after contributing to a substantial purchase price and to wonder even more why he would take responsibility for the subsequent debts of the business as he is supposed to have, in the acknowledgement of debt relied on by the plaintiff?

    What orders are then appropriate?

12. On 12 November 2012, I made an order pursuant to 6DCR 216(1)(a) that the trial proceed on affidavit evidence.  The relevant affidavits were tendered by the defendants’ counsel, Mr Hoile.  The effect of those is summarised above. 

13. When a plaintiff does not appear after an action is called on for trial, as is the case here, the court may proceed in its discretion to enter a default judgement: 6DCR 234(1).  It was stated in Edwards v Patterson[2] that where a defendant appears and the plaintiff does not, the action is ordinarily to be struck out or adjourned and judgment entered on any counter-claim to be assessed.  However, those statements were made in the context of ss 125 and 126 of the since repealed Local and District Criminal Courts Act 1926-1972, which expressly dictated those consequences.  In any case, those sections applied to defendants in default.  The mechanism then available in the event of a non-appearing plaintiff was an order for non suit:  s 127 Local and District Criminal Courts Act.

    [2] (1987) 47SASR 63 at 65-66

14. There are no such dictates in 6DCR 234.  There is nothing therefore preventing the defendants from adducing evidence and proceeding to judgment on the merits, either or both in respect of a plaintiff’s action or their cross-claim, at the discretion of the trial court.  Of course Edwards v Patterson remains of ‘some guidance as to the approach to be taken where a party fails to prosecute proceedings or fails to comply with the Rules of Court’:  Peck v Peck.[3]

    [3] [2011] SASCFC 63 at [31]

15. Given the non-appearance of the plaintiff, his failure to verify pleadings on oath as he was ordered to, his failure to particularise his case and serve relevant affidavits, his conduct in the proceedings quite apart from the non-appearance, has very clearly seriously prejudiced the proper and expeditious conduct of the action within the meaning of Rule 6R 228(1).  This furnishes another means of entering default judgment against him. 

16. There is just one other matter to mention.  Lest it be thought the plaintiff was in a position to claim contribution on the basis that he has paid out monies for the benefit of a co-security (the first defendant) according to the principle in Craythorne v Swinburne,[4] approved by the High Court in Buckeridge v Mercantile Credits Limited,[5] there is simply no evidence he paid monies in satisfaction of debts of the business to SA Produce Credit Pty Ltd in his capacity as surety, as opposed to his capacity as principal debtor. 

    [4] (1807) 33 ER 482 at 483

    [5] (1981) 147 CLR 654 at 668-669

    Orders

17. In the result, the orders of the court entered on 12 November 2012 were:

    1The plaintiff’s claim be dismissed pursuant to Rules 6R 228(1) and/or 6R 234(1).

    2The first defendant have judgment against the plaintiff in the sum of $230,000, inclusive of interest.

    3The plaintiff pay the defendants’ costs on a party/party basis to be agreed or taxed.