McCrohon v Leodaritsis

[2020] NSWSC 1537

Supreme Court

New South Wales

Medium Neutral Citation:

McCrohon v Leodaritsis [2020] NSWSC 1537

Hearing dates:

23 October 2020

Decision date:

23 October 2020

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Give leave to the plaintiffs/applicants to file and serve the amended statement of claim annexed to the notice of motion filed on 7 September 2020.

2.   Direct that the amended statement of claim be filed and served within seven days.

3.   Note that the second respondent will, by the filing of the amended statement of claim, be joined to the proceedings as the second defendant.

4.   Order that the plaintiffs/applicants pay the first defendant’s costs thrown away by reason of the amendment of the statement of claim.

Catchwords:

CIVIL PROCEDURE — Originating process — Amendment — Joinder of second defendant who is an undischarged bankrupt

Legislation Cited:

Bankruptcy Act 1966 (Cth), s 60

Civil Procedure Act 2005 (NSW), ss 56, 58, 64

Competition and Consumer Act 2010 (Cth), sch 2, ss 18, 20, 30

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Category:

Procedural and other rulings

Parties:

Peter Edward McCrohon (First Plaintiff/First Applicant)
Karin Elizabeth Bergseng (Second Plaintiff/Second Applicant)
Vasilios Petros Leodaritsis (First Defendant/First Respondent)
Petros Vasilios Leodaritsis (aka Peter) (Second Defendant/Second Respondent)
Andrew John Scott (in his capacity as trustee in bankruptcy of Peter Leodaritsis) (Third Respondent)

Representation:

Counsel:
Mr L Gor (Plaintiffs/Applicants)
Ms C Parker (First Defendant/First Respondent)
Mr J Doyle (Second Defendant/Second Respondent)
No Appearance for Third Respondent

Solicitors:
CharterLaw Legal (Plaintiffs/Applicants)
Michael Flaherty Solicitor (First Defendant/First Respondent)
Connor & Co Lawyers (Second Defendant/Second Respondent)
No Appearance for Third Respondent

File Number(s):

2020/00021678

Publication restriction:

Nil

Judgment

1. HER HONOUR: This is a notice of motion filed on 7 September 2020 by the plaintiffs (the applicants) seeking to file an amended statement of claim and to join a proposed second defendant to the proceedings. The proposed second defendant is Mr Petros (Peter) Vasilios Leodaritsis; I will refer to him as the second respondent. (I note that there was a third respondent to the notice of motion; namely the trustee in bankruptcy for the second respondent (Mr Andrew John Scott) who did not appear in the present hearing, and has indicated that he will not be taking part in the proceedings per se (see Ex B).

2. At the outset I should note that the second respondent, (who was represented at the hearing of this motion by his counsel), though his counsel sought an adjournment of the hearing of the notice of motion on the basis that he is presently undergoing hip replacement surgery (see Ex 1). In the circumstances, it does not seem to me that it is consistent with the just, quick and cheap resolution of the real issues in dispute, to stand over the application for leave to file the amended statement of claim (s 56 of the Civil Procedure Act 2005 (NSW)). The second respondent is not presently a party; and ordinarily someone who is not a party would not have a right to appear in order to argue against his or her joinder as a party to the proceedings.

3. Moreover there is nothing that I have been taken to in the proposed pleading that suggests that it propounds an untenable cause of action as against the second respondent, (even though there may be issues as to whether or not the claim is ultimately able to be maintained and even though it has been suggested that there might be an application for a stay of the proceedings on the basis that the second respondent is presently an undischarged bankrupt).

4. The first respondent is the second respondent’s son. The first respondent was represented by his solicitor on the present application. The submission made by the first respondent’s solicitor on the present application related solely to the delay in relation to the application for an amendment, and the cost that would be occasioned to the first respondent if leave were granted for the amended statement of claim and it were then necessary for a defence to be filed thereto.

5. The timeframe within which this application has been brought is set out in the affidavit sworn by the first applicant (Mr Peter McCrohon). I am satisfied there has been a satisfactory explanation for the circumstances in which there has been some delay in the application for the filing of an amended statement of claim.

Background

6. I do not propose, in these brief oral reasons, to go into the history of the proceedings to date. I simply note that the proceedings were commenced by statement of claim on 22 January 2020. The applicants, who are husband and wife, seek a declaration that they validly terminated a contract for the sale of property in Mosman, and an order that the first defendant pay the balance of the deposit in a particular amount. A defence and a statement of cross-claim have been filed by the first respondent.

7. The applicants are now seeking to join the second respondent in order to make claims against the second respondent for contravention of ss 18, 20 and 30(1)(b) of the Australian Consumer Law (sch 2 of the Competition and Consumer Act 2010 (Cth)), on the basis that it is alleged that he represented to the applicants that he would be the purchaser and would fund the purchase price. It is said for the applicants that, had they known that the true purchaser, (the first respondent), was 19 years’ old and a first year university student at the time, they would not have entered into the contract.

8. Claims are also sought to be advanced against the first respondent for being knowingly concerned in the second respondent’s contraventions, and to be subrogated to the first respondent’s rights of indemnity against the second respondent (on the basis that the second respondent paid the first tranche of the deposit, and the first respondent held his interest in the property on resulting trust for the second respondent).

Determination

9. Section 64 of the Civil Procedure Act provides that, subject to s 58 of the Civil Procedure Act, all necessary amendments to pleadings are to be made before determining the real questions in proceedings. In exercising the discretion to grant leave, regard must be had both to the overriding purpose of the Civil Procedure Act and to the dictates of justice. Discharge of that obligation requires consideration among other things, of the nature of the proposed amendment and its consequences for the other parties in the expeditious conduct of the proceedings.

10. The factors relevant to be taken into account on such an application are well-known (see the consideration given to those issues in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [14], per French CJ; and [71], per Gummow, Hayne, Crennan, Kiefel J (as her Honour then was), and Bell JJ.

11. Broadly speaking there are four factors to be considered in relation to the exercise of the discretion to grant leave to amend, namely, that the application must be made for a proper purpose; that the proposed amendments must be proper in substance and form; that the amendment must not cause undue prejudice to the other party; and that the amendment must be consistent with the dictates of justice.

12. There is no suggestion in the present case that the proposed amendments are futile or unviable (or that untenable claims are sought to be raised). There do not seem to be any issue raised whether of in form or substance to the effect that the pleading is deficient. It does not seem to me that there would be any prejudice to the existing defendant (the first respondent) beyond the issue of costs (which the applicants propose ought be dealt with by way of the usual order as to costs thrown away by the amendment).

13. In my opinion, it is appropriate for leave to be granted for the filing of the amended statement of claim.

14. I add that, although the second respondent is an undischarged bankrupt, the date of sequestration was 11 July 2019, and the events the subject of the proceedings are events that have occurred after that date. It is for that reason that the applicants maintain that leave is not required for them to commence proceedings against the bankrupt (and I note that the second respondent’s trustee in bankruptcy has taken no issue with that proposition).

15. The second respondent’s counsel has adverted to the possibility that an application might at some stage be made pursuant to s 60 of the Bankruptcy Act 1966 (Cth) for a stay of the proceedings; but that is for another day, if and when such an application is made.

16. In those circumstances, I make the following orders.

1. Give leave to the plaintiffs/applicants to file and serve the amended statement of claim annexed to the notice of motion filed on 7 September 2020.

2. Direct that the amended statement of claim be filed and served within seven days.

3. Note that the second respondent will, by the filing of the amended statement of claim, be joined to the proceedings as the second defendant.

4. Order that the plaintiffs pay the first defendant’s costs thrown away by reason of the amendment of the statement of claim.

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Decision last updated: 02 November 2020