Nitopi v Nitopi

[2018] NSWSC 1504

Supreme Court

New South Wales

Medium Neutral Citation:

Nitopi v Nitopi [2018] NSWSC 1504

Hearing dates:

3 October 2018

Date of orders:

03 October 2018

Decision date:

03 October 2018

Jurisdiction:

Common Law

Before:

Beech-Jones J

Decision:

(1)   Stand the matter over for directions before the Registrar on 20 November 2018 at 9.00am.

 

(2)   In the event that it is known by 14 November 2018 that the plaintiff’s application for leave to appeal has been refused, the parties are to confer about a court-ordered mediation and report to the Registrar accordingly on 20 November 2018.

 

(3)   The second cross-defendant is to pay the cross-claimant’s costs of the proceedings from 10 April 2018 to 15 August 2018.

 

(4)   The second cross-defendant is to pay the cross-claimant’s costs of the cross-claimant’s Notice of Motion filed 15 August 2018 up to and including 7 September 2018, and one‑third of his costs of that Notice of Motion thereafter.

 

(5)   Make no order as to costs in respect of the Notice of Motion filed by the second cross-defendant on 6 September 2018.

 

(6)   Otherwise, the two Notices of Motion filed 15 August 2018 and 6 September 2018 are dismissed.

 (7)   Grant leave to the second cross-defendant to file an Amended Defence to the Cross-claim, prepared in accordance with the reasons for judgment delivered 3 October 2018, on or before 5.00pm on 19 October 2018.

Catchwords:

PLEADING – no question of principle

Category:

Procedural and other rulings

Parties:

Giuseppe Nitopi (Cross-Claimant)
Cristina Pirrello Nitopi (First Cross-Defendant)
Christina Antonina Lucia Nitopi (Second Dross-Defendant)

Representation:

Counsel:
HWM Stitt; J Tsang (Cross-Claimant)
DE Walker (Second Cross-Defendant)

  Solicitors:
Sam Parisi Hunter Lawyers (Cross-Claimant)
LegalVision ILP Pty Ltd (Second Cross-Defendant)

File Number(s):

2015/94733

EX TEMPORE Judgment

1. Before the court are two notices of motion, one filed on 15 August 2018 by the first defendant and cross-claimant in these proceedings, Giuseppe Nitopi, seeking to strike out most of the defence of the second cross-defendant, Christina Antonina Lucia Nitopi, to his cross-claim. The other notice of motion was filed by the second cross-defendant on 6 September 2018 and seeks leave to file an amended defence to the cross-claim. The defendant/cross-claimant and the second cross-defendant are brother and sister. Their mother, Christina Pirrello Nitopi, was the original plaintiff in the proceedings, but apparently her statement of claim was dismissed for want of prosecution. For ease of reference, and without meaning any disrespect, I will refer to the original plaintiff and now first cross-defendant as "the mother", the defendant/cross-claimant as "the son" and the second cross-defendant as "the daughter".

2. Originally the mother sued the son for unconscionable conduct and moneys had and received. She pleaded, that her son had procured her to execute various loans over a commercial property she owned and taken the benefit of those loans over a number of years. As noted, that claim has been dismissed for want of prosecution. In his cross-claim, the son contends that he entered into an agreement with his mother under which he agreed to assist her to obtain bank loans over the commercial property, funded its development and managed its exploitation, including by way of leases to tenants, on the understanding that his mother would use the rental moneys to pay the interest payments on loans, including a loan that he had guaranteed, and on the further understanding that he would receive a third of the value of the property when it was sold as well as twenty-five per cent of any increased value in the property. He pleads that the rental income from the property was diverted by either or both of his mother and the daughter which thereby caused the loans to fall into arrears and receivers to be appointed, with the result that he did not retain the benefit of his agreement with his mother.

3. The relevant part of the son’s cross-claim against the daughter alleges that, at all material times, she knew of the agreement between the son and the mother including that the rental proceeds were to be paid into the mother's account to pay down the loans, but that she “wrongly diverted” the cheques for rent to be paid into her own personal bank account. The pleading alleges that those actions were done "thereby intending to harm" the son or recklessly indifferent to such harm.

4. During argument I raised with counsel for the son a query as to what the precise cause of action being sued upon was. I was advised that it at least included a knowing interference by the daughter in the contractual arrangements between the mother and the son, although the potential for possible action in conversion was also raised. It is clear that that aspect of the cross-claim may need some attention. It is also clear that one part of that cause of action involves an attribution of knowledge on the part of the daughter of the agreement between the mother and the son.

5. The daughter's defence to the cross-claim was filed in September 2017. It clearly has its problems. It is in large part discursive and makes various positive factual assertions that appear to have little or no relevance to the case pleaded against her. The notice of motion filed by her is a clear recognition that the document cannot survive in the form that it does. However, the son has raised a number of objections to the filing of the proposed amended defence to the cross-claim.

6. It is not contended that it is bad in form per se. Instead in broad terms two objections were raised. The first concerned what appears to be a change in the position whereby certain facts went from being denied to not admitted. The second broad objection was that various assertions in the existing defence to the cross-claim were said to constitute admissions which were being withdrawn without a proper basis being established. The son's position was complex in the sense that although he was seeking to at least maintain certain parts of the existing defence to the cross-claim which, he said, contained admissions, he was also simultaneously seeking to strike it out.

7. These respective positions raised the prospect of much further delay in that if the existing defence to the cross-claim was struck out, then no doubt any new defence would be filed in the terms now being sought and so nothing would be much advanced. In the end I dealt with these motions by firstly indicating that I was not minded to refuse leave to file the proposed defence to the cross-claim on the basis that there had been in part changes from denials to a non-admission. This was so because the gravamen of the proposed amended defence to the cross-claim is that where the cross-claim pleads that agreements were entered as between the mother and the son, the daughter was proposing to plead a non-admission, but then later where it was pleaded that she had some knowledge of a particular matter she proposed to plead a denial. Having given that indication I then allowed the parties some time so that Counsel for the son could identify those parts of the existing defence to his client's cross-claim that contained admissions which he contended should not be withdrawn in any proposed amended defence to the cross-claim that is allowed to be filed.

8. I will now address the matters that he identified. The first concerns part of the daughter’s existing defence to the cross-claim in which the cross-claim pleads an agreement between the mother and the son and the daughter responds by denying the agreement and then further saying inter alia that she was "not aware of the specifics of any instrument entered into between the defendant/cross-claimant and the first cross-defendant". In his attempt to hang on to this part of the defence, Counsel for the son submitted that it is difficult to reconcile this with other parts of the existing defence in which the daughter admits to some knowledge of a form of agreement between the mother and the son. However, in the end result, the only real utility of the above passage in the existing defence is that it appears to be a matter that goes to the daughter’s credit. In the numerous times that I looked at that part of the existing defence to the cross-claim, I could not discern any real "admission" by the daughter. Accordingly, it will not be a condition of a grant of leave to file the proposed defence to the cross-claim that that be included.

9. Next, Counsel for the son identified various parts of the existing defence to the cross-claim in which the daughter denied certain matters and then made further positive assertions. Counsel for the daughter contended that, by and large, most of these assertions were irrelevant to the pleaded case and therefore there was no utility in their being maintained in any amended defence to the cross-claim. It is difficult on an application such as this, and especially where there is some uncertainty as to the cause of action being sued upon, to state that the matters asserted are irrelevant to the case being made against the daughter. Further, even if the matters that were identified do not constitute "admissions" as such, at least the son is entitled to hold the daughter to some positive case that she has pleaded unless a proper basis for withdrawing from it is stated.

10. One matter noted by Counsel for the son was an assertion in the existing defence to the cross-claim by the daughter that "to her knowledge it was her understanding that the only agreement between the defendant/cross-claimant and the first cross-defendant after the property settlement between the first cross-defendant and the deceased was that the defendant/cross-claimant would collect rental payments for the first cross-defendant". Counsel for the daughter contends that this positive averment is being put forward in the proposed defence to the cross-claim, namely subpara 36(a)(ii), however that paragraph only pleads that as a matter of fact the son collected rental payments. Unless a proper basis for withdrawing that averment is demonstrated then the daughter should not be allowed to withdraw it. Thus it will be a condition of the grant of leave that the factual assertion in subpara 6(a) of the existing defence to the cross-claim is specifically pleaded in the proposed defence to the amended cross-claim.

11. Another matter referred to was an averment by it daughter that she was "aware that the defendant/cross-claimant would assist the first cross-defendant to secure tenants for the property". The proposed amended defence to the cross-claim contains an averment that that in fact happened, however I do not consider that to be the same as an averment that she was aware of that matter. Accordingly, the same position applies. It will be a condition of the grant of leave to file a defence to the cross-claim that it contain an averment to the effect stated in subpara 6(c) of the existing defence to the cross-claim.

12. The next matter is an averment in subpara 9(f) of the existing defence to the cross-claim where the daughter states "that she was aware that the defendant/cross-claimant would collect rental payments for the property after it was tenanted and deliver the rental payments to the first cross-defendants". For the reasons just stated, it will be condition of the grant of leave to file a defence to the cross-claim that that averment be maintained. Counsel for the son also referred to averments in subparas 9(g) and 13(a) and (b), which are to the same effect, as well as 15(a) and (b). The same observations apply, although I would add it will only be necessary for those averments to be pleaded once in the amended defence to the cross-claim.

13. Counsel for the son also sought as a condition of the grant of any leave to file an amended defence to the cross-claim that an averment in existing para 16 of the defence to the cross-claim be maintained, namely one in which the daughter "further says that the rental cheques had at all material times been made payable to the first cross-defendant". It is not entirely clear to me whether that is any admission, in that the son had pleaded that the cheques had been made payable to him. Be that as it may, as it is a positive case being put forward about a grant of leave the daughter should be held to it (unless cause is shown why it should). Accordingly, it will be a condition of a grant of leave to file an amended defence to the cross-claim that that part of existing para 16 be added as subpara 41(d) of the defence to the cross-claim.

14. Similarly counsel for the son sought to maintain an averment in para 17 of the existing defence to the cross-claim where the daughter "further says that the rental cheques at all material times be made payable to the first cross-defendant delivered by the defendant/cross-claimant directly to the first cross-defendant". The observations I have just made in relation to para 16 of the existing defence apply equally to this passage. It will be a condition of a grant of leave that it be included as subpara 42(e) of the defence to the amended cross-claim.

15. Finally, counsel for the son sought to maintain averments in para 20 of the existing defence to the cross-claim in which the daughter, in responding to a pleading concerning her alleged wrongful diversion of the rental moneys, contended that at the relevant times her only source of funds was a joint credit card for her use given to her by her mother and she accompanied her mother from time to time to deposit the rental cheques in respect of the property. This part of the pleading also includes an averment that at the relevant times the daughter was only eighteen years of age and did not have a bank account in her name, to the best of her recollection.

16. It is perhaps doubtful whether averments of that kind really should be included in a defence, but consistent with what I have stated earlier, where the daughter has set out in positive terms what her actual case was, then without good cause being shown, she not be allowed to resile from that. That said, counsel for the son only sought to identify existing subparas 20(b) to (d) as being maintained, whereas for accuracy's sake if they are to be included in the proposed defence then existing paras 20(a) and (e) should also be included. Accordingly, it will be a condition of the grant of leave to file the proposed defence to the cross-claim that the averments in existing paras 20(a) to (e) of the defence to the cross-claim be included in paragraph 45 of the proposed defence to the cross-claim. The same points are made in respect of certain averments in subparas 22(b) to (d) of the existing defence to the cross-claim. It will be a condition of the grant of leave to file an amended defence to the cross-claim that the existing subparas 22(a) to (d) be included as subparas (a) to (d) of para 49 of the proposed defence of the cross-claim.

[Counsel addressed and the Court raised the issue of mediation.]

17. The Court will order that, in the event that it is known by 14 November 2018 that leave to appeal (to the mother) has been refused, parties are to confer about a court-ordered mediation and report to the registrar accordingly on 20 November.

[Counsel addressed on costs.]

18. A question arises as to the costs of the two motions before me. The son’s notice of motion seeking to strike out the defence was filed 15 August 2018. It is common ground that the son’s solicitors received the proposed defence to the cross-claim on or around 4 September 2018.

19. A perusal of an affidavit read on the motions reveals that, from around 10 April 2018 up until the time of the filing of the motions the only matter being debated between the parties at length was the form of the existing defence to the cross-claim. As noted, it was accepted that it was defective.

20. In those somewhat unusual circumstances the costs order that I make will have to stretch, I think, to a time before the date which the notice of motion was filed. The son will receive the benefit of a costs order for the period from 10 April 2018 up to 4 September 2018.

21. In respect of the period after that, there has been a lot of genuine effort by both parties to resolve their differences. Ultimately they had mixed success, although it is to be remembered the daughter was seeking an indulgence. I think the best course in that respect is to allow the son one-third of his costs of his motion after 7 September 2018, that being three days after the receipt of the proposed amended defence. I will make no order as to costs in respect of the daughter’s notice of motion.

22. Accordingly, I make the following orders:

(1)   Stand the matter over for directions before the Registrar on 20 November 2018 at 9.00am.

(2)   In the event that it is known by 14 November 2018 that the plaintiff’s application for leave to appeal has been refused, the parties are to confer about a court-ordered mediation and report to the Registrar accordingly on 20 November 2018.

(3)   The second cross-defendant is to pay the cross-claimant’s costs of the proceedings from 10 April 2018 to 15 August 2018.

(4)   The second cross-defendant is to pay the cross-claimant’s costs of the cross-claimant’s Notice of Motion filed 15 August 2018 up to and including 7 September 2018, and one‑third of his costs of that Notice of Motion thereafter.

(5)   Make no order as to costs in respect of the Notice of Motion filed by the second cross-defendant on 6 September 2018.

(6)   Otherwise, the two Notices of Motion filed 15 August 2018 and 6 September 2018 are dismissed.

(7)   Grant leave to the second cross-defendant to file an Amended Defence to the Cross-claim prepared in accordance with the reasons for judgment delivered 3 October 2018, on or before 5.00pm on 19 October 2018.

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Decision last updated: 11 October 2018