Nitopi v Nitopi

[2018] NSWCA 228

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Nitopi v Nitopi [2018] NSWCA 228
Hearing dates:	10 October 2018
Decision date:	10 October 2018
Before:	Basten JA at [1]; Simpson AJA at [30]
Decision:	(1)   Grant leave to appeal from the judgment of Hulme J given on 5 April 2018.  (2)   Costs of the leave application to be costs in the appeal.
Catchwords:	PROCEDURE – civil – application for leave to appeal – order dismissing proceedings – want of due despatch – whether delay adequately explained – changes of legal representation – cross claim to proceed – prejudice to defendant
Category:	Procedural and other rulings
Parties:	Cristina Pirrello Nitopi (Applicant) Giuseppe Nitopi (Respondent)
Representation:	Counsel: P Folino-Gallo (Applicant) H W M Stitt/J Tsang (Respondent)   Solicitors: David Leamey (Applicant) Hunter Lawyers (Respondent)
File Number(s):	2018/137786
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Division Date of Decision: 5 April 2018 Before: R A Hulme J File Number(s): 2015/94733

Judgment

1. BASTEN JA: On 30 March 2015 the applicant, Cristina Pirrello Nitopi, commenced proceedings against her son, Giuseppe Nitopi, seeking damages in an amount in excess of $7 million. (It is convenient to identify the parties by their respective roles in the proceedings below where the applicant was the plaintiff and the respondent was the defendant.) On 5 April 2018 the proceedings were dismissed by Hulme J in the Common Law Division for want of due despatch, pursuant to r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). Within time, the plaintiff filed and served a notice of intention to appeal; also within time, she served a summons seeking leave to appeal. The leave application has been listed for separate hearing.

2. The application to dismiss for want of due despatch was made by the defendant by notice of motion filed on 27 March 2018. It was supported by an affidavit of the defendant’s solicitor, Sam Parisi, to which were annexed copies of correspondence between himself and the plaintiff’s solicitors. The procedural history revealed by the affidavit was summarised in a detailed chronology. The plaintiff presented no evidence although an affidavit of her solicitor of 2 February 2018 was annexed to Mr Parisi's affidavit. The judge no doubt had access to the file which included pleadings, though he did not refer to them.

3. Hulme J relied upon two factors to justify dismissal of the proceedings. The first factor was that there had been “constant breaches” of orders requiring that evidence be filed by the plaintiff, with lack of appropriate explanation for such failures. The second reason was that there had been “frequent changes of solicitors and counsel acting for the plaintiff in the three year history of the matter.” The primary judge said that the defendant “is rightly aggrieved by the cost and drawn out nature of these proceedings which I am given to understand are not complex.”

4. It is understandable that a duty judge with a busy list may not be in a position to give lengthy reasons supporting such conclusions. However, reference by the judge to a “tortured history” (quoting counsel for the defendant) which is “set out in a procedural chronology” prepared on behalf of the defendant, does not do justice to the plaintiff's position. The chronology sets out the numerous orders made by way of directions, often by consent.

5. Some examples may indicate the flavour of the procedural history. The proceedings were commenced on 30 March 2015. On 20 August the plaintiff was directed to file her evidence by 8 October. The second directions hearing, held on 15 October 2015, varied that date, curiously, to 15 October 2015, being the date of the directions hearing. Those orders were apparently made by consent. Eight days later the plaintiff was directed to file her affidavits by 12 November 2015.

6. On 19 November 2015 time was extended for service of the plaintiff's evidence to 3 December 2015, with a warning that should the plaintiff not comply she should be in a position on 4 December to argue why the matter should not be dismissed. It appears that an affidavit, possibly improperly sworn, was served on 3 December, because, although the matter was referred to the duty judge for a show cause hearing the following day, the defendant's application to dismiss the proceedings was rejected, Adamson J directing the plaintiff “to re‑swear an affidavit in identical form save as to the date of the affidavit which was filed in court today, and apparently sworn on 3 December 2015”.

7. It appears that the issue of evidence might have been resolved at that time because the plaintiff was also directed that she could not, without leave of the Court, rely on any further evidence. The plaintiff apparently re‑swore the affidavit and filed it on 11 December 2015. Between January and April 2016, the defendant unsuccessfully pursued an order against the plaintiff for security for costs.

8. On 15 April 2016 the plaintiff indicated that she wished to amend her statement of claim; she was directed to file a notice of motion and affidavit in support by 6 May 2016. The notice of motion was filed on 5 May 2016.

9. On 13 May the defendant was directed to serve affidavits, presumably with respect to the application to amend, by 3 June 2016. The chronology does not indicate that he complied with that order. However, on 6 June an affidavit was filed by his solicitor, “arguing why the plaintiff should not be permitted to file an amended statement of claim.” The skirmishing continued through June, including disputes in relation to a subpoena issued by the plaintiff. Leave to file an amended statement of claim was granted on 28 June 2016. An amended statement of claim was apparently provided to the Court on 28 June and was directed, by orders made on 1 July 2016 to be filed by 5 July 2016. There is no suggestion that it was not filed.

10. On its face the evidence suggests that the plaintiff's first solicitor continued to enjoy the plaintiff's confidence from the commencement of the proceedings in March 2015 until August 2016 (17 months) when he was replaced by the second solicitor.

11. Exchanges between the solicitors for the parties, and further directions hearings, continued through to June 2017, when the plaintiff filed a further amended statement of claim, within the time specified in directions given on 5 June 2017. In the course of those months, the defendant had taken steps to file a cross‑claim and an amended cross‑claim.

12. The plaintiff's second firm of solicitors gave notice of ceasing to act for the plaintiff in July 2017, almost a year after they had commenced. In September 2017, the plaintiff filed a defence to the amended cross‑claim and the defendant filed an amended defence to the amended statement of claim. Further directions were given on 15 September for the plaintiff to file her evidence by 30 October 2017.

13. Between July and December 2017 the plaintiff changed solicitors twice. However, counsel who appeared on the present application was briefed in or about October 2017 and has acted for her throughout the last 12 months.

14. There is no doubt that the changes in solicitors led to some delay because the previous solicitors had asserted a lien over the papers which they held for the plaintiff. To that extent, there were clear statements as to the reasons for delay contained in the ongoing correspondence between the plaintiff's solicitors and the solicitors for the defendant. The only explanation that was missing was the reason for the changes in solicitors and for the failure, it may be inferred, of the plaintiff to pay all outstanding bills rendered by solicitors who had ceased to act.

15. On 7 December 2017 the defendant filed a notice of motion seeking dismissal of the proceedings for want of due despatch. The motion was dismissed on 13 February 2018 by the Registrar, although the evidence does not reveal why. On 27 March 2018 a second notice of motion to dismiss the further amended statement of claim was filed; it was that motion which came before Hulme J on 5 April 2018.

16. A careful survey of the chronology suggests that there were explanations for delay given on numerous occasions by solicitors acting for the plaintiff. It also suggests that some of the costs incurred by the defendant related to steps taken by him in the proceedings, some of which were unsuccessful.

17. The matter which lacked explanation in April 2018 was the reason for there having been four changes in solicitors which changes gave rise to delays. However, it also appears that for some two and a half years, there was only one change of solicitors.

18. Although the primary judge observed that he had been given to understand that the proceedings were “not complex”, it is not difficult to imagine that the documentary evidence may be extensive. The Court does not have before it on the leave application either the current (or any) version of the statement of claim or the cross‑claim. It appears not to be in dispute that the plaintiff obtained bank loans secured against an industrial property in an amount exceeding $6 million. The issues appear to involve counter allegations as to who received the moneys, who was obliged to make payments under the mortgages and for whose benefit the moneys were obtained. The sum involved in the claim is not insignificant. Although there is no evidence as to the amount involved in the cross‑claim, the Court was informed by counsel that it was in excess of $5 million.

19. The plaintiff's written submissions noted that while the defendant is keen to have the plaintiff's proceedings dismissed, there is no suggestion that the cross‑claim will be withdrawn. Based on the explanation given by counsel for the defendant in this Court, the cross‑claim is likely to proceed and it is at least possible that a number of the issues between the parties with respect to the same business arrangements which are apparently intertwined will be litigated in any event. There is a real possibility of injustice to the plaintiff if her claim is not to be heard. The plaintiff also noted that the defendant has been in default with respect to directions in relation to his cross‑claim.

20. It appears that the evidence of the plaintiff was ultimately filed three days after the date provided by way of the last directions, but it had been filed by the time the motion to dismiss the proceedings was heard. The judge was informed that a final version of the plaintiff’s affidavit, together with annexures, was provided very shortly before the hearing. Accordingly, the pleadings with respect to the plaintiff’s claim were complete and the evidence‑in‑chief had been filed. The matter was not ready for hearing, but that was because the defendant had not filed his evidence and the cross‑claim was not ready to be heard. The purpose of dismissal proceedings is not limited to policing non‑compliance with interlocutory orders.

21. In these circumstances it would appear that, although the plaintiff seeks leave to appeal from a procedural ruling, she has reasonably good prospects of success and it cannot be said that the proposed appeal is merely arguable.

22. Further, although it is three years since the proceedings were commenced, the fact that there have been regular and detailed communications from the plaintiff's solicitors to the defendant's solicitors throughout that period is, on its face, not consistent with an allegation that the delay is totally unexplained.

23. There is no dispute that the amount involved is a considerable sum for individual litigants. Nor was there any attempt by the defendant to demonstrate that the plaintiff's substantive claim was not reasonably arguable.

24. It is not necessary for the purposes of this application to address all the issues which may be canvassed on an appeal; however, it must be observed that the submissions based on the content of the pleadings, the matters set out in affidavits and the availability of documents inevitably could not be evaluated on this application, neither party having put such material before this Court.

25. In these circumstances the Court should be slow to dismiss proceedings, let alone one part only of the proceedings, unless affirmatively satisfied that the manner in which the plaintiff was conducting the proceedings has caused actual prejudice to the defendant. While costs have undoubtedly been incurred over the years, no specific claim of actual prejudice was proved before the primary judge.

26. On the other side of the equation, there is a disturbing lack of explanation by the plaintiff for the changes in solicitors. Whether the lack of explanation is fatal to the plaintiff's maintenance of the proceedings is a matter which would have to be explored on an appeal. It is possible that the explanation would reveal matters prejudicial to the plaintiff's pursuit of the proceedings. At some stage it may become necessary to require an explanation even if it may lead to the disclosure of confidential communications, but that stage has not been reached so far as the present application is concerned.

27. On 31 August 2018 the plaintiff filed an affidavit noting that she had been in Concord Hospital from her admission on 6 August 2018 until her discharge 14 days later. The dates are supported by an annexed certificate from the hospital but the reason for her hospitalisation was not given.

28. These circumstances warrant a grant of leave to appeal. The costs of the application should be costs in the appeal. The parties should give urgent attention to the material, including pleadings and affidavits served in the substantive proceedings, which may need to be before this Court by way of evidence on the hearing of any appeal.

29. Accordingly, I propose the following orders:

1. Grant the applicant leave to appeal from the judgment of Hulme J given on 5 April 2018.

2. Costs of the leave application to be costs in the appeal.

30. SIMPSON AJA: I agree.

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Decision last updated: 15 October 2018