Prime Capital Securities Pty Ltd v Sydney Commercial and Governmental Floor and Wall Tiling Services Pty Ltd
[2017] NSWSC 51
•13 February 2017
Supreme Court
New South Wales
Medium Neutral Citation: Prime Capital Securities Pty Ltd v Sydney Commercial and Governmental Floor and Wall Tiling Services Pty Ltd [2017] NSWSC 51 Hearing dates: 7 February 2017 Date of orders: 07 February 2017 Decision date: 13 February 2017 Jurisdiction: Common Law Before: Harrison J Decision: (1) Vacate the hearing scheduled to commence on 13 February 2017.
(2) Grant leave to the plaintiff to file a fourth cross-claim against Charbel Boutros and BluePrint Financial Planners Pty Ltd in the form attached to the email from Kemp Strang Lawyers to Swaab Attorneys dated 6 February 2017 by no later than 14 February 2017.
(3) Order that the costs of the plaintiff’s motion, and any costs thrown away or occasioned by reason of the adjournment be costs in the proceedings.
(4) Re-list the proceedings before me for directions on 21 February 2017.
(5) Grant liberty to apply on two days’ notice.Catchwords: PROCEDURE – grant of leave to file cross-claim – order to vacate hearing – whether prejudice caused by delayed hearing – where dispute as to who should pay costs of motion and costs thrown away or occasioned by adjournment Category: Procedural and other rulings Parties: Prime Capital Securities Pty Ltd (Plaintiff)
Sydney Commercial and Governmental Floor and Wall Tiling Services Pty Ltd (First Defendant)Representation: Counsel:
Solicitors:
S Docker (Plaintiff)
D Krochmalik (First Defendant)
Kemp Strang Lawyers (Plaintiff)
Swaab Attorneys (First Defendant)
File Number(s): 2015/301995 Publication restriction: Nil
Judgment
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HIS HONOUR: Prime Capital Securities Pty Ltd advanced $200,000 to Joseph Sara and Assaf Sara in September 2014 upon the security of their property in Crinan Street, Hurlstone Park. In circumstances to which it is presently unnecessary to refer, Prime Capital obtained judgment for possession of the property by default against the Saras on 9 May 2016. That judgment was subsequently set aside by consent on 18 August 2016 at which time the matter was listed for hearing on 13 February 2017.
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On 25 November 2016, at a directions hearing before me, I made the following orders by consent:
The defendants to file and serve their defences to the amended statement of claim and any cross-claim by 2 December 2016;
The plaintiff to file and serve a defence to the cross-claim, and any reply, and its evidence by 16 December 2016;
The defendants to serve any reply by 23 December 2016;
The defendants to serve any further evidence by 23 December 2016;
The plaintiff to serve any evidence in reply by 15 January 2017.
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This timetable was not complied with by either side.
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On 12 January 2017, the Saras sought confirmation that the only affidavit upon which Prime Capital proposed to rely was that of Paul Scanlon, the sole director and shareholder of the company. On 24 January 2017, Prime Capital advised for the first time that it intended to serve affidavits from Mr Scanlon, Peter Ainsworth, Alison Antony and Charbel Boutros. It was hoped that these affidavits would be served by 30 January 2017, or what was effectively two weeks before the scheduled commencement of the hearing.
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Mr Boutros would appear on one view to be the person who gave financial or transactional advice to the Saras with respect to the wisdom or otherwise of taking a loan from Prime Capital. His role and that of a company associated with him is yet to be established. It is in that context that Prime Capital has foreshadowed a cross-claim against Mr Boutros and the company alleging that they engaged in misleading and deceptive conduct upon which Prime Capital relied in deciding to advance money to the Saras. The cross-claims filed by the Saras against Prime Capital also at one stage made reference to Mr Boutros and to his role in assisting them in the loan transaction.
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By its notice of motion dated 6 February 2017, Prime Capital seeks a series of orders including the grant of leave to file a cross-claim against Charbel Boutros and BluePrint Financial Planners Pty Ltd and an order vacating the hearing of the proceedings scheduled to commence on 13 February 2017. The matter came before me on 7 February 2017. I made these orders and reserved my decision on the parties’ consequential claims for costs of the motion and costs thrown away or occasioned by the adjournment. Joseph Sara and Assaf Sara also sought orders to take account of the alleged prejudice to them which they asserted would be caused by the resulting delay before the final hearing of the proceedings.
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Several unfortunate events have conspired in ways that have interrupted the parties’ respective readiness and preparation for the hearing next week. The inevitable prospect that Mr Boutros’ role in the relevant events will see him joined as a party leads me to the conclusion that the final hearing of this matter should not take place until that prospect is clarified. There is otherwise a possibility that inconsistent results might be generated if all issues and all parties’ responsibilities are not determined in the one set of proceedings.
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The Saras maintain that the order vacating the hearing is the inevitable consequence of failings and defaults by Prime Capital. Prime Capital maintains that there is fault on both sides and that the Saras’ failure to formulate their cross-claim in a timely way has left it with no alternative at a relatively late stage than to seek the relief that is now in question. Each party claims that the other should pay the costs of the motion.
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In my view the costs of the motion should abide the final outcome of the proceedings. Resolution of the apparent or potential fundamental differences between the parties in these proceedings is more likely fairly to represent or reflect where the costs burden of this motion should fall than the relatively minor procedural disagreements and defaults that currently underpin the parties’ respective positions on it. These are helpfully set forth in the affidavits of Michael Wirth sworn on 6 February 2017 for Prime Capital and Terence Sperber sworn on 7 February 2017 for the Saras. I have taken this evidence into account in forming my view.
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I am similarly satisfied that the costs thrown away or occasioned by the adjournment should fall to be determined on a similar basis.
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The Saras are concerned that further delay will expose them to the prospect of excessive and unfair interest on the monies claimed by Prime Capital. Although that is true if their defences and cross-claims fail, it will be otherwise if the loan agreement and the mortgage are set aside or varied to conform to what they expected. Put another way, if the bargain with Prime Capital is valid and enforceable according to its terms, the accumulation of interest at the default rate is the inevitable function of their failure to repay. Conversely, if Prime Capital is not entitled to rely in all respects upon the loan agreement or the mortgage, the Saras may suffer no loss and will not be prejudiced. I have not been pointed to any extraneous loss or other prejudice that will not be accommodated or ameliorated by this approach.
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In the circumstances I make the following orders:
Vacate the hearing scheduled to commence on 13 February 2017.
Grant leave to the plaintiff to file a fourth cross-claim against Charbel Boutros and BluePrint Financial Planners Pty Ltd in the form attached to the email from Kemp Strang Lawyers to Swaab Attorneys dated 6 February 2017 by no later than 14 February 2017.
Order that the costs of the plaintiff’s motion, and any costs thrown away or occasioned by reason of the adjournment be costs in the proceedings.
Re-list the proceedings before me for directions on 21 February 2017.
Grant liberty to apply on two days’ notice.
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Decision last updated: 13 February 2017
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