Nitopi v Nitopi

[2016] NSWSC 962

Supreme Court

New South Wales

Medium Neutral Citation:	Nitopi v Nitopi [2016] NSWSC 962
Hearing dates:	28 June 2016
Date of orders:	28 June 2016
Decision date:	28 June 2016
Jurisdiction:	Common Law
Before:	Hall J
Decision:	Plaintiff’s Notice of Motion seeking to amend Statement of Claim – granted Defendant’s Notice of Motion seeking to set aside subpoena – refused
Catchwords:	PRACTICE AND PROCEDURE – interlocutory issues – statement of claim – late amendments – alleged delay – no prejudice – new proposed causes of action fall within the existing factual substratum of the case as previously pleaded – withdrawal of certain statements made by the plaintiff not a reason to refuse amendment sought – amendments to the statement of claim allowed – PRACTICE AND PROCEDURE – interlocutory issues – setting aside subpoena – relevance – subpoena was not a substitute for discovery – was not impermissible “fishing” – it was “on the cards” that the documents sought had relevance to the loan transaction the subject of the proceedings – application refused – COSTS
Legislation Cited:	Civil Procedure Act 2005
Cases Cited:	Antoniadis v TCN Channel 9 Pty Ltd (1998) 44 NSWLR 682 Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175 Leotta v Public Transport Commission of NSW (1976) 50 ALJR 666 Trade Practices Commission v Arnotts (No 2) (1989) 88 ALR 90
Category:	Procedural and other rulings
Parties:	Cristina Pirrello Nitopi (Plaintiff) Giuseppe Nitopi (Defendant)
Representation:	Counsel: J Ireland QC (Plaintiff) H Stitt (Defendant)     Solicitors: Brander Smith McKnight (Plaintiff) Hunter Lawyers (Defendant)
File Number(s):	2015/94733

Judgment (extempore)

1. This judgment relates to two applications respectively by the plaintiff and the defendant.

2. On 17 June 2016 the defendant filed a notice of motion seeking orders as follows:

“1. That the subpoena filed by the plaintiff in these proceedings on the Australia and New Zealand Banking Group (ANZ) on 6 June 2016 be set aside pursuant to r 33.4 of the UCPR.

2.   That access to any documents produced by ANZ under the subpoena filed by the plaintiff on 6 June 2016 be stayed until the Court makes a final determination regarding this notice of motion.

3.   The plaintiff to pay the defendant’s costs.”

3. In support of the notice of motion the defendant relied upon the affidavit of Salvatore Parisi, solicitor, sworn on 17 June 2016. A copy of the subpoena to produce filed on 6 June 2016 was annexure B to Mr Parisi’s affidavit.

4. The schedule to the subpoena requires production of documents as set out in paras 1, 2, 3 and 4 of the schedule.

1.   Copies of all statement issued by ANZ Bank for all accounts of Libra Finance Pty Ltd or Libra Industrial Pty Ltd with ANZ Bank maintained or operated within all or any part of the period between January 1999 and December 2002.

2.   Copies of all statements issued by ANZ Bank for all accounts of Cristina Nitopi maintained or operated with ANZ Bank within all or any part of the period between January 1999 and December 2002 inclusive.

3.   Copies of all loan applications to ANZ Bank and any internal bank assessments or approvals by the bank of such loan applications made by Cristina Nitopi, Giuseppe Nitopi, Libra Finance Pty Ltd or Libra Industrial Pty Ltd between January 1999 and April 2006 inclusive.

4.   Copies of all loan agreements or mortgages signed by Cristina Nitopi in favour of ANZ Bank between January 1999 and December 2006 relating to funds advanced by ANZ Bank in that period.

5. I note at this point that there was no opposition to the production of documents falling within paras 2 and 4 of the schedule to the subpoena, but issues were raised in relation to paras 1 and 3, which I will return to in due course.

6. On or about 5 May 2011 the plaintiff filed her notice of motion in which she sought six orders:

1.   That the plaintiff have leave to amend the statement of claim in the form of the draft amended statement of claim annexed hereto and marked A.

2.   That the plaintiff pay the defendant’s costs thrown away by the amendment.

3.   That the plaintiff file and serve her amended statement of claim by 16 May 2016.

4.   That the defendant file and serve his defence to the amended statement of claim by 30 May 2016.

5.   That the plaintiff file and serve any reply by 8 June 2016.

6.   That the proceedings be listed for further directions on 15 June 2016.

7. The substantive interlocutory relief sought was that set out in para 1 of the Notice of Motion reproduced above.

8. During the course of the hearing of the applications a copy of the proposed amended statement of claim was made available and marked as MFI 1.

9. The two notices of motion were heard together. Mr Ireland QC appeared for the plaintiff, and Mr Stitt of counsel appeared on behalf of the defendant.

10. Mr Ireland tendered a bundle of documents which were marked as exhibit A.

11. I turn to the history of the proceedings.

12. The statement of claim was filed on 30 March 2015. The proceedings have been the subject of interlocutory applications that have been determined by Adamson J delivered on 4 December 2015, and by Wilson J in a judgment delivered on 1 April 2016.

13. Justice Adamson dealt with the proceedings which involved a show cause hearing following a direction by the Registrar extending the time for the plaintiff to serve her evidence to 3 December 2015. Her Honour made a number of orders. Order 2 is in these terms:

“Direct that the plaintiff is not without the leave of the Court to rely on any further affidavit evidence in chief beyond her affidavit, being the affidavit referred to in order 1.”

14. Justice Wilson, in her Honour’s judgment on the application by the defendant for an order for security of costs, dismissed the defendant’s application. Her Honour’s judgment conveniently sets out the history of the proceedings and certain of the background facts. Her Honour noted in para 6 that:

“The plaintiff pleads that in or about 1999 her son (the defendant) asked her if he could borrow the sum of $2 million using a property she owned in Riverstone as security. The plaintiff pleaded that her son promised to make all repayments to the bank issuing the loan such that he would be responsible for the repayment of the entirety of the loan and interest.”

15. Her Honour noted that the plaintiff pleaded in the Statement of Claim and particulars certain statements she alleged were made by the defendant.

16. In short, the proceedings relate to three loans, one granted by ANZ to the plaintiff in 1999, being a loan facility in the amount of $2 million. The plaintiff pleaded that in or around January 2009 the defendant asked her to refinance the loan, indicating he wanted or required further loans, and that came to pass with a further loan of $4.1 million from the Westpac bank. In the interim there had been a refinancing of the original ANZ loan with HSBC. As Wilson J noted, the plaintiff stated in her statement of claim that she at no stage received statements or any document or other correspondence from the above banks, believing that all such correspondence went directly to the defendant or was in some way intercepted by him. Further, the plaintiff pleaded the defendant frequently asserted that he was repaying the loan and there was nothing for her to be concerned about.

17. On or about 30 January 2009 the plaintiff pleaded that the loan facility was increased to $5 million and in August 2009 an additional $100,000 was borrowed by the plaintiff, she alleges at the behest of her son, in order to fund some development costs associated with the conduct of his business.

18. The plaintiff alleges that it was not until 2013 that she became aware that there were problems with the loan. In that year, in particular on 17 April 2013, Westpac appointed a receiver and on 16 September 2013 the Riverstone property (which secured the loan) was sold by the receiver for $6,200,000.

19. The plaintiff’s claim, in effect, relates to her claim for the loss of the property or its value.

20. The original statement of claim pleads a number of matters against the defendant, in particular alleged representations or statements by him directed to having the plaintiff utilise her property as security for loans to be granted to her for his use in relation to a business he originally acquired and later conducted and, it seems, for other reasons.

21. It is not necessary for the purpose of this application to set out in detail the precise allegations formulated in the original statement of claim but they are in line with the general description I have given and the history as recorded by Wilson J.

22. On the hearing of this application for amendment of the statement of claim Mr Ireland indicated that the amendments were required in order to plead three causes of action; one being a contract claim, the second being an action in deceit; and the third being a claim based on restitution principles. In addition, in respect of certain parts of the statement of claim the proposed amendments were intended to remove ostensibly surplus material in the nature of evidentiary statements and not in the nature of a proper pleading. In that respect, Mr Ireland referred to paras 18 and 19 in the existing statement of claim.

23. Mr Ireland relied upon the power of the Court to grant an amendment at any stage of the proceedings under s 64 of the Civil Procedure Act 2005 and, in particular, relied upon s 64(2) which provides that:

“Subject to s 58, all necessary amendments be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings.”

24. The application to amend was opposed by the defendant. Mr Stitt relied upon the affidavit evidence of Mr Parisi and, in particular, relied upon six matters.

25. The first related to the history of the proceedings, in particular the interlocutory history and the delay that has occurred and, in particular, the orders made by Adamson J. Secondly, the lateness of this application to amend, which is connected to the issue of delay. Thirdly, the nature of the proposed amendments which, it was submitted, would seek to effect significant changes to the existing pleading without explanation. In that respect, specific reference was made to paragraphs in MFI 1, being paras 7, 16, 17, 21, 22 and 27. Fourthly, that the application involved what was referred to as a changing of position or a winding back of admissions made by the plaintiff in the statement of claim filed in March 2015. Fifthly, that there is an absence of any explanation by the plaintiff as to why she has conducted the proceedings as she has to date. Sixthly, the principles established by the High Court in Aon Risk Services Australia Ltd v ANU (2009) 239 CLR 175 as a barrier for the granting of the present application.

26. On a consideration of the application to amend, the provisions of s 64 of the Civil Procedure Act provide the Court with an important power to permit amendment of pleadings. That, of course, is a power which should be read in accordance with relevant case law principles as to how the power is to be exercised.

27. The provisions of s 64 are directed primarily to ensuring that the Court documents, in particular pleadings, accurately reflect the substance of the matters that are really in issue and dispute between the parties. I refer to observations to that effect in the Aon case by the High Court, including in particular at paras 14, 27 and 30.

28. The power to order amendment of pleadings may be employed for a variety of reasons ranging from mere technical or pleading errors to the addition of substantive causes of action as well as defences.

29. In general terms, in circumstances where an application for leave to amend is made it ordinarily will be granted if the application is made in a timely manner and for a proper purpose. I refer to the decision of the High Court in Aon and to an earlier decision in Leotta v Public Transport Commission of NSW (1976) 50 ALJR 666 at 668. In particular, such an application is likely to be granted where the amendments seek to reformulate a claim in terms of causes of action that fall within the existing scope of the factual issues on the existing pleading. Amendments of that kind may be accepted as necessary to determine the real issues in dispute.

30. I refer in that respect to the decision in Antoniadis v TCN Channel 9 Pty Ltd (1998) 44 NSWLR 682 at 693.

31. In seeking to apply that principle to the present case I am mindful of the fact that there is involved a proposed withdrawal of certain statements made by the plaintiff in the Statement of Claim as to certain facts. However, that occurs within a particular factual context which, in this case, involves (i) a relationship between mother and son, and (ii) the subject matter concerning specific loan facilities. These were loans granted by three banking institutions to the plaintiff, allegedly at the behest of the defendant, in which the plaintiff alleges that the defendant undertook to deal with the administration of the loans and comply with loan obligations and that she need not concern herself about it. In other words, the existing factual substratum of the case, in my assessment, would not be altered by the amendments proposed. Rather they represent a reformulation or a reconstitution of the dispute between the parties in terms of pleaded causes of action.

32. In a case where amendments would occasion actual or significant prejudice to the opposing party then, of course, the general principles permitting amendment, to which I have earlier referred, would be unlikely to apply.

33. Mr Parisi’s affidavit, however, does not suggest any matters exist that would occasion material prejudice or indeed any prejudice to the defendant if the Court were to exercise the power to permit amendments to the statement of claim as sought.

34. Additionally, as I have indicated, the amendments, in my view, fall within the scope or ambit of the existing proceedings

35. It is necessary to say briefly that although the High Court’s judgment in Aon is accepted as being the lead judgment on the question of the power in a Court to grant amendments and the circumstances in which that power should or should not be exercised, it is important to have some regard to the context in which the Court enunciated the particular principles to be applied. That was not a case in which, before proceedings had been set down, there was an application to amend. Rather it concerned proceedings that had been listed for a four week trial and it was only during the course of that trial that the question of amendment arose. The history of the proceedings, as the High Court judgments indicate, include the fact that the proceedings were originally commenced in December 2004, that Aon, the broker, was joined to the proceedings in June 2005, and that the proceedings were listed for a four week hearing in November 2006. It was on the third day of that four week period, after a settlement had been reached between certain of the parties, that ANZ sought an adjournment of the trial of its claim against Aon and foreshadowed an application for leave to amend the claim to allege a substantially different case.

36. The circumstances of the present case could not be more distant or different from the context in which the High Court was considering whether the power to amend should or should not have been exercised and the factors to be taken into account.

37. The judgment in Aon, as I have also indicated earlier, is of material assistance in relation to other issues to which I have earlier referred.

38. I am well satisfied that there is no basis whatever upon which this application should be refused. It is in the interests of justice for the parties to bring to the Court all relevant issues arising out of the relevant factual context so that multiplicity of proceedings is avoided and all relevant issues are dealt with at one and the same time.

39. Accordingly, pursuant to s 64(1) of the Civil Procedure Act 2005, I grant leave to the plaintiff to amend the statement of claim in the form of the draft document marked as MFI 1 and the draft amended statement of claim attached to the notices of motion.

40. I will return to the question of any other ancillary or other orders after I have dealt with the next application.

41. The defendant’s application to set aside the subpoena requiring the ANZ Bank to produce documents is made pursuant to UCPR 33.4.

42. Although the notice of motion filed on behalf of the defendant seeks in order 1 that the subpoena be set aside in effect as a whole, my understanding is that, as I have earlier indicated, there are only two paragraphs of the summons which in fact the defendant seeks to have set aside. I set out the terms of the paragraphs in question as follows:

“1.   Copies of all the statements issued by ANZ Bank for all accounts of Libra Finance Pty Ltd or Libra Industrial Pty Ltd that ANZ maintain or operated within all or any part of a period between January 1999 and December 2002 inclusive.”

43. The other disputed paragraph, para 3, is in the following terms:

“Copies of all loan applications to ANZ Bank and any internal bank assessments or approvals by the bank of such loan applications made by Cristina Nitopi, Giuseppi Nitopi, Libra Finance Pty Ltd or Libra Industrial Pty Ltd between January 1999 and April 2006 inclusive.”

44. In Mr Parisi’s affidavit of 17 June 2016, in para 5, Mr Parisi records counsel’s advice in these terms:

“...Mr Stitt advised the Court that we were instructed to seek to set aside the subpoena to produce to ANZ on the basis that it is a ‘fishing expedition’ and the documents being sought after the period that is not relevant to the plaintiff’s claim is therefore overboard.”

45. It is, of course, accepted that a common ground for moving to set aside a subpoena is that it seeks to engage in impermissible fishing. As has been observed in the commentary on the UCPR rules, this description, although pejorative, has a fluid interpretation and may obscure rather than illuminate relevant principles, it being observed that the central idea is better captured by “trawl fishing” than “rod fishing”. Understood in the light of that contrast the issue of relevance arises in this case and whether or not the subpoena has been used as a substitute for discovery.

46. A subpoena may be set aside, of course, if it has no apparent relevance. On the other hand, if a document has the capacity to throw light on issues in the main case, then it may pass the test of apparent relevance or at least provide reasonable grounds for the subpoena.

47. I refer in that respect to the observations in Trade Practices Commission v Arnotts (No 2) (1989) 88 ALR 90 at 103.

48. Additionally, the criterion has been described as permitting documents that may reasonably be regarded as “on the cards”, that is, that it will materially assist in the resolution of proceedings in the case.

49. Attention has been drawn by Mr Ireland to a copy of the transfer document, being the third page in exhibit A. That relates to the transfer to the plaintiff of property from the plaintiff’s former husband, as I understand it, made pursuant to orders made by the Family Court of Australia. The transfer document is said to have been lodged by Libra Investment Co Pty Ltd of Riverstone. The transfer document was referred to as throwing some light on the relevance of the company Libra to the defendant.

50. It was accepted, as I recall by Mr Stitt, that the companies Libra Finance Pty Ltd and Libra Industrial Pty Ltd are companies within the control of the defendant. Just what the position was so far as Libra Investment Co Pty Ltd is concerned remains uncertain, Mr Stitt having observed that he is not in a position to say whether it was the plaintiff’s husband who controlled that company or whether it was the defendant or whether the defendant was involved in it at all. However, it is plain that companies of that name “Libra”, Libra Finance and Libra Industrial, have a relationship to the defendant. In that sense, production of the accounts by one or other or both of those companies, in my view, would meet the test of relevance in the sense of possibly throwing light on the issues in the main case, as referred to in the Trade Practices Commission v Arnotts case to which I have made reference above, or at least it may be “on the cards” that the companies “Libra” referred to in the subpoena, related to the defendant, appear to be companies that may or might be shown to have been in some way involved with or connected with the loan applications made by the plaintiff.

45. That, of course, cannot be determined but it is at least relevant to the test to be applied in relation to the permissible use of a subpeona.

46. Accordingly, I consider that the terms of para 1 requiring production of the statements for all the accounts of the companies referred to in the period specified are such as to require the bank to produce the statements in respect of the accounts referred to.

47. Accordingly, I refuse the application to strike out para 1 of the subpoena.

48. Para 2 is directed to loan applications to ANZ and the internal processes of ANZ in assessing and/or approving loan applications made by either the plaintiff or the defendant or one or other of or both of the Libra companies to which I have referred, in the period 1999 to 2006.

49. Again, I consider that, on the face of the pleadings, documents that deal with those matters meet the relevance text and do not constitute a fishing exercise, just as I am satisfied that para 1 is not a fishing exercise.

50. Accordingly, the order sought in para 1 of the defendant’s notice of motion filed on 17 June 2016 is refused, and the application is dismissed in that respect.

51. On the question of costs, the substantive period of time today in the hearing has been directed to the application by the plaintiff to amend the statement of claim. Submissions have been made by Mr Ireland and Mr Stitt as to the question of costs, Mr Stitt pressing that an indulgence was sought by the plaintiff to amend her Statement of Claim and she should pay the costs of that.

52. I will deal with the costs of that motion and then deal with the costs of the defendant’s motion relating to the subpoena.

53. In relation to the application to amend, whilst it is true that generally a party seeking the amendment should be expected to pay the costs of the losing party, there may arise as an exercise of discretion an order of a different kind where an amendment is sought at a comparatively early stage of the proceedings and the opposition to the amendment is not based upon or does not suggest or raise any question of prejudice. Ordinarily where an amendment is sought in relation to a pleading that is essentially within the same factual framework of existing pleadings, the parties may be expected to act reasonably and to consent to amendments unless there are, as I have stated, matters such as prejudice or any other matters of a substantive nature, such as a Limitation Act problem. That is not this case.

54. As I have indicated that although the opposition to the amendment of the same relied upon 6 or 7 matters, on analysis none of those matters was sufficient to warrant an exercise of the discretion against the application. Further, as I have indicated in the primary judgment, there was never any suggestion that the defendant would in any way be disadvantaged by the amendments that were sought. In those circumstances, it might be expected that this matter could have been dealt with on a consent basis. It was not. It was fully contested, and the defendant failed in its opposition.

55. I think, in those circumstances, that the appropriate course to follow is the one Mr Ireland advocated as his second position, that is to say, that no order for costs should be made and that each party pay its own costs of the application to amend. I so order.

56. As to the subpoena argument, the notice of motion by the defendant sought, as I have indicated, the setting aside of the whole of the subpoena. However, at the hearing the application to set aside was reduced to two paragraphs of the subpoena. In other words, the end result of today’s hearing was that the defendant challenged, unsuccessfully, two paragraphs of the subpoena. The plaintiff additionally, in effect, had the benefit of the defendant’s concession that the other two paragraphs were no longer subject to challenge.

57. In those circumstances, I consider that the appropriate order for costs shall be that each party pay its own costs of that application. I so order.

58. I also order that:

1.   The amended statement of claim be filed within seven days;

2.   The parties are to formulate a set of consent orders and directions to be filed in the proceedings, and to forward same to my associate within the next 24 hours.

65. I will, unless asked otherwise, make those orders and directions in chambers and provide copies to the parties.

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Decision last updated: 18 July 2016