Zhang v Bonvino and Ors (Ruling)
[2015] VCC 893
•2 July 2015
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-13-05012
| FENG YAO ZHANG | Plaintiff |
| v | |
| FRANK BONVINO | First Defendant |
| ANGELO ACOSTA | Second Defendant |
| CARMEN ACOSTA | Third Defendant |
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JUDGE: | HIS HONOUR JUDGE LACAVA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 June 2015 | |
DATE OF JUDGMENT: | 2 July 2015 | |
CASE MAY BE CITED AS: | Zhang v Bonvino & Ors (Ruling) | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 893 | |
RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Application by third defendant by summons seeking order pursuant to Rule 22.15 that summary judgment for the plaintiff against her be set aside and an order pursuant to Rule 11.15 that the third defendant have leave to file and serve out of time a claim against the second defendant
Legislation Cited: County Court Civil Procedure Rules 2008, r22.15, r11.15
Cases Cited:Kostokanellis v Allen [1974] VR 596; Evans v Bartlam [1937] AC 473; Lau v Citic Australia Commodity Trading Pty Ltd [1999] VSCA 34; Westpac Banking Corporation v Perri [2013] VSC 290
Judgment: Judgment for the plaintiff dated 3 June 2014 against the third defendant set aside. Time for the third defendant to file and serve a claim against the second defendant pursuant to Rule 11.15 extended to 13 July 2015.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L E P Magowan | Canaan Lawyers |
For the First Defendant | - | - |
For the Second Defendant | - | - |
| For the Third Defendant | Mr D G Robertson QC with Ms Peek | Septimus Jones & Lee |
HIS HONOUR:
1 This is an application by the third defendant by summons dated 3 June 2015 in which she seeks an order pursuant to Rule 22.15 that summary judgment for the plaintiff dated 3 June 2014 against her be set aside and, further, an order pursuant to Rule 11.15 that she have leave to file and serve out of time a claim against the second defendant, who is her son. The summons is supported by an affidavit of the third defendant sworn 2 June 2015, together with affidavits of her solicitor, Michael Joseph Long, sworn 3 June 2015 and 26th June 2015 and an affidavit another solicitor, Rebecca Lees, also sworn 3 June 2015.
2 It is not in dispute that on 3 June 2014, his Honour Judge Anderson gave judgment for the plaintiff against each of the defendants in the sum of $188,000, together with interest and an order for costs. It is also not in dispute that the third defendant did not appear before Judge Anderson.
3
The plaintiff commenced the proceeding against the defendants by Writ on
19 September 2013. The cause of action against the first defendant was in debt, and as against the second and third defendant on the basis that they had agreed in writing in the form of a Deed of Guarantee to guarantee the performance of the first-named defendant to repay the debt.
4 The application was opposed by the plaintiff, and that opposition was supported by an affidavit of the plaintiff’s solicitor, Damen James Holmes, sworn 26 June 2015. That affidavit sets out a detailed chronology, and most of the matters in chronological order are not in dispute. I borrow from that affidavit to set out the salient chronological history.
5 On or about 20 November 2012, a deed was purported to have been entered into between the plaintiff and the first defendant, and the second and third defendants as guarantors. A copy of the Deed is exhibited as Exhibit CA-1 to the affidavit of the third-named defendant sworn 2 June 2015. The third-named defendant says that she did not sign this document and her signature was forged.
6 Canaan Lawyers have at all times acted for the plaintiff. On 14 August 2013, Canaan sent a Letter of Demand to the third defendant at 50 Foley Avenue, Preston which is where the third defendant, now, and always has lived. A copy of the Letter of Demand is Exhibit DJH1, to the Holmes’ affidavit. The Letter of Demand refers to the Deed and the alleged fact that the third defendant signed the Deed as guarantor. The Letter of Demand was delivered by registered post and the exhibit attaches to it a copy of the signed delivery confirmation which appears to have been signed by the third defendant.
7 Six weeks later, on 30 September 2013, the plaintiff issued this proceeding. A copy of the Writ which attached the Statement of Claim was served on the third defendant by a process server, Dennis Domaille, of Network Process Service personally on 16 October 2013. The Writ was served on the third defendant at her home address. Exhibit DJH2 is a copy of the Affidavit of Service of the process server.
8 On 14 November 2013, the law firm, McClure Law, wrote to Canaan Lawyers advising that it was instructed to act on behalf of the defendants. Exhibit DJH3 is a copy of that letter.
9 McClure Law filed a Notice of Appearance on behalf of each of the defendants on 15 November 2013. Exhibit DJH4 is a copy of the Notice of Appearance.
10 On 21 November 2013, McClure Law served a Defence on behalf of the third defendant. DJH5 is a copy of the Defence. In Paragraph 4 of the Defence, the first defendant denied that she had signed the Guarantee relied upon by the plaintiff in his cause of action. She gave particulars of denial in the following terms: “The third defendant is approaching 90 years of age, did not sign any documents in relation to any guarantee.”
11 On 22 November 2013, McClure Law filed on behalf of the third defendant an Overarching Obligation Certificate. That document purports to have been signed by the third defendant. It is Exhibit DJH6.
12 On 20 February 2014, Judge Anderson made orders in the proceeding pursuant to signed Minutes of Consent Orders agreed between the parties and dated 20 January 2014.
13 The plaintiff sought discovery pursuant to those orders but the defendants did not comply, and on 17 April 2014, the plaintiff issued a summons seeking, inter alia, summary judgment against the defendants, and that summons was first returnable on 15 May 2014 before her Honour Judge Lewitan who, on that day, gave leave to McClure Law to cease acting. She adjourned the application for summary judgment to 3 June 2014 at 10.30am. Her Honour’s orders included as follows:
“By 4pm on 16 May 2014 McClure Lawyers must serve a copy of this order on each of the defendants together with a copy of the Notice of Ceasing to Act by sending it by pre-paid mail addressed to their last known address.”
14 When the matter returned before Judge Anderson on 3 June 2014, none of the defendants appeared and his Honour gave judgment against them in favour of the plaintiff as I have set out above.
15 The following day, Canaan Lawyers sent a copy of the Order made by Judge Anderson to the third defendant at her address. Exhibit DJH11 is a copy of the covering letter.
16 On 20 June 2014, Canaan Lawyers sent a letter to each of the defendants demanding payment of the judgment debt in the sum of $212,466 and offering to settle the plaintiff’s costs in the sum of $38,800. Exhibit DJH12 is a copy of that letter.
17 The plaintiff subsequently forwarded another letter offering to settle his costs at a lesser sum, and that is Exhibit DJH13.
18 There followed further correspondence. On 8 September 2014, the plaintiff issued a summons for taxation of his costs against the defendants. That is Exhibit DJH14. The summons for taxation of costs was served on the third defendant by an employee of Network Process Service on 9 September 2014. Exhibit DJH15 is a report relating to service. On 12 September 2014, Canaan Lawyers sent, by prepaid post, a Costs Court notice to each defendant, including the third defendant at her home address. Exhibit DJH16 is a copy of that covering letter.
19 On 25 November 2014, Canaan Lawyers sent a letter to each of the defendants notifying them that the return date for the summons for taxation had been adjourned to 2 December 2014. That letter has been produced as Exhibit DJH17. On the return date, the costs registrar ordered the defendants to pay the plaintiff’s costs of $29,978.39. The copy of the authenticated costs order was sent by prepaid post by the plaintiff’s solicitors to each of the defendants by letter dated 11 December 2014. That letter is Exhibit DJH18.
20 On 19 December 2014, Canaan Lawyers sent a further Letter of Demand to the third defendant demanding payment of the judgment sum of $212,466.00, together with the plaintiff’s costs, by then taxed at $29,978.39. That letter is Exhibit DJH19.
21 On 20 March 2015, the plaintiff issued a Bankruptcy Notice against each of the defendants and that notice was personally served on the third defendant by Dennis Domaille, the process server, on 17 May 2015. Exhibit DJH20 is a copy of his Affidavit of Service and Exhibit DJH21 is a copy of the Bankruptcy Notice. Up until this point in time, the third defendant had not responded to the plaintiff’s correspondence until the issue of this summons which I must now decide.
22 In her affidavit sworn 2 June 2015, the plaintiff deposes to having been born on 26 November 1923 and she is now 91 years of age. She was born in the Canary Islands and her native tongue is Spanish. The second defendant, who I shall refer to as Angelo, is 54 years of age. The plaintiff deposes to having come to Australia in 1969 with two sons, and that she has resided in Australia ever since.
23 The plaintiff deposes, and it is not in dispute, that she and Angelo purchased the property where she presently resides at 50 Foley Avenue in Preston, in 1984. She has contributed to the acquisition costs of the property and to its maintenance and mortgage repayments ever since. Although there is no title search produced, it appears that the property was in joint names of the third defendant and Angelo up until 12 March 2013, when the Registrar of Titles registered a transfer of the property in Dealing No. AK241121J, which was a transfer from Angelo Acosta and Carmen Acosta to Angelo Acosta in consideration of “natural love and affection”.
24 The third defendant deposes that she has lived at this property alone after the death of her late-husband since 2000. She deposes to being unable to read or write any English at all, and she speaks and understands very little English. Her affidavit was sworn after it had been translated to her by an interpreter, Josephine Herrero. The third defendant deposes that she relies heavily on Angelo for all matters to do with the property. She deposes it was and always has been her intention to reside in the property as a joint owner until she dies.
25 She deposes to having been informed by Angelo on 25 June 2014 that a judgment had been entered against her on 3 June 2014 by the plaintiff for an amount in excess of $200,000. She also deposes that the court action by the plaintiff against her was based on a guarantee which appeared to have been given by Angelo and her under a Deed of Guarantee dated 20 November 2012. She says, in Paragraph 7(d) of her affidavit, as follows:
“Although my name appeared in the Deed as a guarantor of the obligations of Frank under the Deed, he [Angelo] knew that I had not signed the Deed and he [Angelo] had written my signature on the Deed.”
26 The third defendant deposes that on 25 June 2014, her son, Angelo, handed her a copy of the Deed. She says in her affidavit that up until this time, she had not seen or known of the existence of the Deed until it was given to her by her son.
27 The third defendant deposes that having been informed of the Deed and the judgment against her, she became concerned and arranged to take urgent legal advice from Mr Long, which he says she took with the aid of an interpreter. She says that at that time, she was shown the signature which appears on the Deed and that it is not her signature. In Paragraph 10, she swears as follows:
“I knew nothing of the existence of this proceeding, of the existence of the Deed and, in particular, of the existence of the plaintiff’s application herein, the summary judgment against me, until I was informed of it by Angelo on or about 25 June 2014. I was not served with the writ, and did not instruct solicitors to file an appearance or a defence on my behalf. I am told by Mr Long that an appearance and defence had been filed in this proceeding on my behalf. I did not authorise this or know of it until Mr Long told me.”
28 As to the property in which she lives and the transfer which I referred to above, the third defendant deposes that she recognises her signature on the transfer but she cannot read the transfer or tell what it is. She says that she was in the habit of signing any documents in relation to the property that Angelo asked her to sign and she says, inter alia, as follows:
“I have never had any intention of transferring my interests in the property to Angelo. I know that Angelo knew that I did not intend to transfer my interests in the property to him. I know this because I had said to Angelo from time-to-time over the years that I intended to keep, and live in, the property until I died. I trusted Angelo to attend to business and financial matters relating to the property on my behalf because he is my son and, as he knows, I cannot read English at all, and do not have any knowledge about business or property matters. Over the years since Angelo and I bought the property, I have signed many documents in relation to the property when asked to do so by one or other of my sons, usually Angelo. For this reason I am sure that I signed the transfer because Angelo put it in front of me and asked me to sign it.”
29 It can thus be seen that the clear evidence of the third defendant is that she did not sign the deed that forms the basis of the plaintiff’s cause of action against her. Her clear evidence is also that her son Angelo, the second defendant signed her name but she knew nothing of this until told later and she did not authorise her son to sign her name on the deed. As to the property the evidence of the third defendant is that although she appears to have signed the transfer she did not know what she was signing, that she signed what her son Angelo told her to sign and she never intended to relinquish her interest in the property.
30 It seems clear to me that, from having compared the purported signature of the third defendant on the Deed with her signature on the Transfer of Land and with the signature on the Overarching Obligation Certification, the signatures are different and there is evidence to suggest that the plaintiff’s signature on the Deed is a forgery.
31 The plaintiff denies signing the document and gives evidence that her son told her that he signed her signature. There is a further point, and that is, that the witness who signed as a witness on the Deed, one Samuel Tawfik, has told the plaintiff’s solicitors of the circumstances in which he was asked to sign the document as a witness by Angelo, and he did so when there was no-one else present. See the affidavit of Rebecca lees sworn 3rd June 2015.
32 Mr Robertson QC, who appears with Ms Peek on behalf of the third-named defendant, makes application for the judgment against the third-named defendant to be set aside under Rule 22.15 of the Rules. The rule provides the Court with a discretion, and the authorities referred to in Williams, Civil Procedure refer back to the exercise of the discretion under Order 21.07.15, and the factors to be taken into account are:
(a) whether there is an arguable defence; and
(b) why the party seeking to have judgment set aside did not appear at the hearing for summary judgment; and
(c) whether the application to set aside was made promptly after the judgment came to the attention of the summonsing party; and
(d) that the plaintiff would be prejudiced in any respect for which he could not be compensated by an order for costs.
33 He relies upon the principles in Kostakanellis v Allen,[1] where the Court approved the speech of Lord Wright in Evans v Bartlam.[2] Mr Robertson submits that it is sufficient for the plaintiff to show a prima facie or arguable case not to show a defence which is bound to succeed. In this regard he relies on Evans v Bartlam,[3] Lau v Citic Australia Commodity Trading Pty Ltd[4] and Westpac Banking Corporation v Perri.[5]
[1][1974] VR 596 at 603
[2][1937] AC 473 at 489
[3] Supra
[4][1999] VSCA 34
[5][2013] VSC 290
34 Mr Robertson submits that the plaintiff has a good arguable defence, in that she did not sign the Deed upon which the plaintiff’s claim is based. She denies that her signature is on the document, and she has sworn that her son admitted to her that he had written her signature on the document and the purported witness did not sign the Deed in the presence of the third defendant, and he also refers to the fact that the plaintiff’s signature on the Deed is different to recognised samples of her signature on the transfer and on the Overarching Obligation Certificate.
35 Mr Robertson submits that the plaintiff has a good explanation for not attending to defend the plaintiff’s application for summary judgment, because she did not know of its existence. She has sworn she was not served with the Writ and she did not instruct solicitors to file an appearance, and she did not know that the proceeding before the Court on 2 June 2013 was there to be heard.
36 Mr Robertson concedes there has been considerable delay between 25 June 2014 when the plaintiff became aware of the judgment against her at the time of bringing this application on 3 June 2013. However, he points out that the third defendant did not obtain legal advice until 27 June 2014, and her solicitors lodged a caveat to protect her position over the Title, and her solicitors obtained a copy of the Court file and then briefed counsel. The third defendant was not in funds to bring the application. It did not progress with more haste until the serving of a bankruptcy notice on her on 20 March 2015. Mr Robertson submits that there is no prejudice to the plaintiff that cannot be ameliorated by an appropriate order for costs and he concedes this in draft orders which he puts forward.
37 Mr Magowan, who appears on behalf of the plaintiff, submits that the Court should not agree to a judgment being set aside. He submits that the third defendant was made aware of the proceedings even before they were commenced because of the letter of demand, and he submits that the Court should not accept the third defendant’s evidence that she was not served with the Writ in face of the Affidavit of Service of the process server. Further, he submits that there has been a long delay in the bringing of the application which has prejudiced the plaintiff which cannot be assuaged by an order for costs. I do not accept these arguments.
38 It seems clear to me on the material before the Court that there is a strong arguable case that the document which lies at the heart of this proceeding, namely the Deed of Guarantee, contains the third defendant’s forged signature. When that is clear to the Court, in my view, the Court should not allow the judgment to stand.[6]
[6]Kostakanelliis (supra) at p 603
39 Here, although I accept the third defendant was served with a letter of demand before the proceedings and with the writ and other documents and letters soon or immediately after judgment the fact she says she has no knowledge of these matters is consistent with her having no understanding of the importance of what it was she was given. The third defendant is 91 years of age and does not speak, write or read English. She says and I accept she is totally dependent for such matters upon her son Angelo who may have forged her signature on the guarantee and taken advantage of her in securing her signature on a transfer of land in circumstances where he is the one to benefit.
40 In these circumstances, as a matter of fairness and justice, in the exercise of the discretion that I have, it is appropriate that the issues raised by the third party be properly adjudicated upon by a court at trial. In my judgment there is no prejudice to the plaintiff in adopting this course that cannot be ameliorated by an appropriate order for costs. The plaintiff still has judgment against the first and second defendants and thus far has not been able to recover against any party. Should the plaintiff succeed in her claim against Angelo on the transfer that will not prejudice the plaintiff’s position.
41 Having formed the view that the judgment should be set aside as against the third defendant, and the third defendant having indicated that she wants to commence a proceeding against the second defendant, her son Angelo, and because there are a number of issues common to both the proceeding by the plaintiff against the third defendant and the proceeding by the third defendant against her son, in my opinion, it is best to grant the third defendant the total relief that she seeks in the summons, and I will do so.
42 The Orders of the Court will be as follows:
(1) Pursuant to Rule 22.15 judgment for the plaintiff dated 3 June 2014 against the third defendant be set aside;
(2) Pursuant to Rule 11.15 the time for the third defendant to file and serve a claim against the second defendant, substantially in the form of the claim handed to the Court this day and placed on the Court file, be extended to 13 July 2015;
(3) The third defendant pay the plaintiff’s costs of and incidental to the summons dated 3 June 2015 together with any costs thrown away consequent upon the making of these orders and the setting aside of judgment against the third defendant, such costs absent agreement to be taxed by the Costs Court;
(4) The costs to be paid to the plaintiff referred to in the preceding paragraph and the costs of the third defendant’s summons dated
3 June 2015, be reserved as between the third defendant and the second defendant.
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