Paneras v Eastern Suburbs Property Developments Pty Ltd

[2008] NSWSC 110

CITATION:	Paneras v Eastern Suburbs Property Developments Pty Ltd [2008] NSWSC 110
HEARING DATE(S):	19 February 2008
JUDGMENT DATE :	26 February 2008
JUDGMENT OF:	Malpass AsJ
DECISION:	Amended defence struck out; entry of judgment for the plaintiffs against the second defendant in the sum of $1,297,819; second defendant to pay the costs of the claim brought by the plaintiff against him.
CATCHWORDS:	COMMON LAW - striking out defence and judgment
CATEGORY:	Principal judgment
PARTIES:	Emanuel Paneras (First plaintiff) Leah Pailas (Second plaintiff) Eastern Suburbs Property Developments Pty Ltd (First defendant) Socrates Scott Kitas (Second defendant) John Katerinis (Third defendant) Anthony Burns (Fourth defendant)
FILE NUMBER(S):	SC 10784/07
COUNSEL:	JS Drummond (Plaintiffs) J McIntosh (Second defendant)
SOLICITORS:	Bateman Battersby (Plaintiffs)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Associate Justice Malpass

Tuesday 26 February 2008

2007/10784 Emmanuel Paneras & Anor v Eastern Suburbs Property Developments Pty Ltd & Ors

JUDGMENT

1 HIS HONOUR: These proceedings were commenced by a Statement of Claim which named four defendants. The first defendant was a company that has been deregistered (on 16 June 2006). The second, third and fourth defendants were directors of that company.

2 The case for the plaintiffs is that a loan in the sum of $440,000 was made by them to the first defendant and that there has been total default under the Deed of Loan which governed the transaction. It is further alleged that the payment of money due under the Deed of Loan was guaranteed by the second, third and fourth defendants (by Deed of Guarantee and Indemnity). The plaintiff sought judgment in a monetary sum.

3 The second defendant filed a defence (he now relies on an Amended Defence) and what is headed “Statement of Cross-Claim”. Neither the third nor the fourth defendant have filed a defence.

4 Neither the Deed of Loan nor the Deed of Guarantee and Indemnity express the day or the month of their respective making. Both express 2003 as the year of their making. The plaintiffs allege that both were made in May 2003.

5 The Amended Defence admits the signing of those documents by the second defendant but denies that they were entered into in May 2003. It is conceded that the second defendant has not paid any money to the plaintiffs. There is an assertion that the Deed of Guarantee and Indemnity is void. There is no express assertion as to the basis of the alleged voidness. There is an allegation of reliance upon the facts and assertions as set out in the Cross-Claim.

6 A perusal of the Cross-Claim does not provide any further assistance on the question of this allegation. What it alleges is an oral contract and oral representations made in or about February or March 2003. Largely, the allegations as to both the contract and the representations are in similar terms. Presumably, the alleged causes of action were intended to be put in the alternative (inter alia they contain certain conflicting allegations). There is an allegation of the suffering of loss and damage (by reason of breach of contract and contravention of statute) and a claim for damages is advanced.

7 The alleged contract is one said to have been made between the first defendant and the plaintiffs. Although the second defendant seeks damages for breach of that contract, it is not alleged that he is a party to it.

8 The second defendant alleges that he acted in reliance upon the representations in or about early May 2003. It is further said that in acting in reliance upon the representations at that time, he formed the first defendant and signed the two deeds.

9 The plaintiffs brought an application for the striking out of the Amended Defence and the entry of judgment.

10 A special fixture was allocated on 15 November 2007. The hearing date was fixed for 19 February 2008. The hearing took place on that day.

11 Spanko Soulos & Co had represented the second defendant. These solicitors ceased to act prior to the hearing. Counsel (Ms McIntosh) had been retained by them.

12 At the commencement of the hearing, counsel appeared before me to directly represent the second defendant. The second defendant was not present in court to instruct counsel. The plaintiffs were concerned at the lack of an appropriate appearance and the potential consequences as to costs. Because she could not get instructions from her client, counsel then sought leave to withdraw, which was granted.

13 The plaintiffs then proceeded ex-parte. A number of affidavits were read (including one from the third defendant, as well as affidavits for the plaintiffs). There was also the tender of documents. Counsel for the plaintiffs then made his submissions in chief.

14 Counsel for the second defendant had been in Court for much of this time and apparently made communication with her client. The Court was informed that he intended to attend Court and enable the appropriate documentation to operate as a Notice Of Appearance to be executed. Subsequently, a document which was suitable to the plaintiffs was both tendered and filed in court. The second defendant was not sighted in court and presumably left to attend to other matters.

15 The hearing continued. Counsel for the second defendant did not seek to cross-examine any of the deponents of the affidavits relied on by the plaintiffs. She did not seek to lead any evidence. She handed up written submissions which were supplemented by oral argument.

16 The problem confronting the second defendant was that the Amended Defence did not raise any matter which could throw up an arguable defence to the claim brought by the plaintiff on the guarantee.

17 The Amended Defence was dependent upon the contents of the Cross-Claim. Whilst the content of the latter did not advance the second defendant’s case (inter alia, it did not plead any matter which would support the allegation of voidness) it did have material that made it untenable. At best, it merely advanced either a claim in damages arising out of the alleged contract to which the second defendant was not a party or a claim based on representations both of which preceded the documentation relied on by the plaintiffs.

18 I have earlier mentioned that there were conflicting allegations emerging from the content of the Cross-Claim. The alleged cause in action framed in contract alleges that the first defendant made the oral agreement in or about February or March 2003. The alleged cause of action founded on the representations alleges that the first defendant was not formed until in or about early May 2003. The allegation that he came to enter into the two deeds acting in reliance upon the alleged representations at that time stands in conflict with the denial made in respect of that matter in the Amended Defence.

19 The alleged oral contract and the alleged representations relate to the same subject matter as what was dealt with by the two deeds. Whatever happened in February or March 2003 (and there is no evidence that deposes as to these matters) was overtaken by the subsequent execution of the deeds. There are allegations made in the Cross-Claim which are in conflict with the content of the subsequent deeds. It is not said that the content of the deeds gives rise to ambiguity. There is no claim for rectification.

20 The affidavits relied on by the plaintiffs demonstrate a prima facie entitlement to relief. As earlier mentioned, the material relied upon includes an affidavit sworn by the third defendant. It deposes to, inter alia, the execution of the documentation relied on by the plaintiffs and the making of the advance in the sum of $440,000. As earlier said, the content of this affidavit was not challenged by cross-examination.

21 Despite the lack of cross-examination, futile attempts were made during submissions to challenge material contained in the affidavits. There were other futile matters that were presented. One concerned an allegation that there were serious questions of fact to be determined. The problem that this submission faced was that the second defendant did not give evidence and the other material did not throw up any such questions. It appears that the first defendant may not have been incorporated until 7 May 2003. This matter also excited submissions which appeared to be devoid of force (save as to their unintended impact upon the Cross-Claim).

22 It was later put that what the Court should do is make an order that the second defendant furnish further and better particulars. Why this was thought to be appropriate remained unclear. The plaintiffs have not sought further and better particulars and have brought no application for an order that they be furnished. Their stance was that what had been pleaded did not provide an answer to their claim.

23 The plaintiffs ultimately seek judgment against the second defendant in the sum of $1,297,819. This relief may be granted whether or not the Amended Defence is struck out. Summary relief may be granted without striking out the Amended Defence. In this case, the plaintiffs have the options of either summary judgment or default judgment.

24 I am satisfied that the plaintiffs are entitled to have the Amended Defence struck out. As earlier indicated, in my view it does not disclose a reasonable defence to the claim of the plaintiff. In these circumstances, the plaintiffs are entitled to move for default judgment.

25 Summary relief is only granted in what might be described as clear cases. In the circumstances, I am satisfied that this is one of those clear cases.

26 The Court has not been asked to strike out the Cross-Claim. Accordingly, no order is made in relation to it. However, it is obvious from what has been earlier said that this document has its problems and may be liable to be struck out either in whole or in part.

27 The Amended Defence is struck out. I direct the entry of judgment for the plaintiffs against the second defendant in the sum of $1,297,819. The second defendant is to pay the costs of the claim brought by the plaintiff against him. The exhibits may be returned.

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