ANZ v Mio Amico Pty Ltd

Procedural history 15After the proceedings commenced on 1 February 2010 a Defence was filed by the Defendants' then solicitors Clinch Long Letherbarrow on 31 May 2010. 16There was a directions hearing on 19 July 2010 where directions were made in relation to discovery and the service of evidence. The matter was stood over to 29 November 2010. On 26 November 2010 Bransgroves Solicitors wrote to the Court saying that they had just been retained and they wanted a week's adjournment to review the files when obtained. 17On 6 December 2010 Directions were made for the service of the draft of a proposed cross-claim by the Defendants, with supplementary directions relating to the filing of that cross-claim if agreed by the Plaintiff, directions in relation to discovery and directions in relation to the service of evidence. 18Presumably the Plaintiff did not agree to the filing of the cross-claim forwarded in draft because the Defendants filed a Notice of Motion to do so. However, the Notice of Motion was not filed until 31 May 2011. 19On 6 June 2011 leave was given, apparently by consent, for the filing of the Cross-Claim. Further directions were made in relation to discovery and the service of evidence. The Plaintiff was to serve its evidence by 19 September, 2011 and the Defendants by 17 October 2011. The Plaintiff served its evidence by 20 September (only one day late) but the Defendants did not serve their evidence by the due date or at all. 20On 19 October 2011 the Registrar made orders in Chambers appointing a further date for the Defendants to serve lay and expert evidence being 4 November 2011. The Defendants failed to comply with that order. Subsequently the Registrar made further orders in Chambers extending the time for the Defendants to serve their lay and expert evidence to 2 December 2011. That order was complied with by the Defendants. 21There were then delays by the Plaintiff in serving its evidence in reply, with that only being completed on 3 September 2012. 22On 4 June 2012 Bransgroves served a Notice of Intention to File a Notice of Ceasing to Act. Such a Notice of Ceasing to Act was filed on 12 June 2012 and except for very short periods of time (which I will mention presently) the Defendants have been unrepresented since that time. In the meantime, on 5 June 2012 the Registrar made further directions and adjourned the proceedings to 7 August 2012. 23On 2 August 2012 Norton Rose, the solicitors for the Plaintiff, wrote to the Defendants enclosing a copy of a proposed Amended Statement of Claim. The letter summarised the changes that were intended to be made and asked for the consent of the Defendants to the filing of that document. There were only two changes of substance. First, better particulars were provided of the loan facility. Secondly, more particulars were provided in relation to various defaults by the Defendants including their failure to repay the Facility on its expiry date, a date which had occurred after the filing of the original Statement of Claim. 24The following day (3 August) the Second Defendant wrote to Norton Rose on behalf of both Defendants saying this: I have been and remain unwell and I am simply not in the position to give proper consideration to your letters and given my health and the fact that I do not at present have legal representation and at the moment the former lawyers are refusing to hand over the files to me I request that the proceedings be stood over for a month to enable me to have an opportunity to give proper consideration to your requests and for me to proceed with the litigation. 25The Defendants wrote to the Registrar on 6 August 2012 saying that they were in dispute with Bransgroves and asking for a month's adjournment to "give us enough time to engage a new lawyer representative". That letter enclosed the correspondence with Bransgroves, and that correspondence disclosed that the reason the files had not been handed over was that, despite Bransgroves having sent tax invoices to the Defendants totalling $30,615.80, the amount remained outstanding to Bransgroves. 26The Letter of 6 August also enclosed a copy of a medical report from the Second Defendant's general practitioner Dr Marinucci. That report of 6 August 2012 said this: Ollie Olivieri was seen by me on 31/5/12; 7/6/12; 19/6/12, 21/6/12, 12/7/12 and during this time initially he was suffering from a severe respiratory tract infection with bronchitis and chest infection and later on he developed severe lower back pain where he needed a cortisone injection to his lumbar spine ordered by his specialist. He still has ongoing symptoms. 27On 7 August 2012 the proceedings were mentioned before the Registrar. There was no appearance for the Defendant. The Registrar suggested that the Second Defendant should see the Duty Solicitor and he adjourned the proceedings to 4 September 2012, presumably in response to the Defendants' request for a month's adjournment. 28On 3 September 2012 the Defendants wrote to Norton Rose saying this: We wish to advise that Mr Olivieri remains ill and has not been in a position to engage new legal representation. Upon engaging new legal representation further evidence will be prepared in response to the Plaintiff's affidavits. We enclose a doctor's certificate dated 3rd September 2012 in support of our application for a further adjournment. 29The further report was from Dr Marinucci who said this: Mr Olivieri suffers from Lumbar spine degenerative disease, which has necessitated surgery including spinal fusion. He had a fall on the 25/06/2012 aggravating his spine, the fall caused a loosening of a (R) sided prosthesis at L4. He also suffers from a muscular condition Mitochondrial Myopathy. Both of these conditions prevents Mr Olivieri to move about freely, severely restricting his ability to do very much at all. Due to the aggravation of Mr Olivieri's current medical condition special consideration should be made for him to have his case adjourned, as his condition will take at least a further 3 months to improve. 30On 4 September 2012 the proceedings came before the Registrar who fixed the matter for hearing on 3 June 2013. He directed the Plaintiff to advise the Defendants within three days of his orders and he granted liberty to restore on three days' notice. 31On 7 February 2013 Norton Rose wrote to the Defendants referring to their letters of 2 and 9 August 2012 which they enclosed (the letter of 9 August was not in evidence). They reminded the Defendants that the matter was fixed for a four day hearing commencing 3 June 2013 and noted that they had not received any response to the proposed Amended Statement of Claim. They again summarised the effect of the amendments and asked the Defendants to confirm that they would consent to the filing of the Amended Statement of Claim by 22 February 2013. The letter said that if they did not received a response by that date they would make application to the Court for leave to file the amended Statement of Claim. 32No response was received and on 14 March 2013 the Plaintiff filed a Notice of Motion seeking leave to amend the Statement of Claim in the form of the draft that had earlier been sent to the Defendants. 33The Motion came before the Registrar on 25 March 2013. There was no appearance for the Defendants. The Registrar directed the Court to advise the Defendants that the matter had been stood over to 3 April 2013 and that the Plaintiff's Motion would be dealt with on that day. 34On 2 April 2013 the Second Defendant wrote to the Registrar saying that he objected to the Plaintiff's Notice of Motion, to the Amended Statement of Claim and to the affidavit served in support of the Notice of Motion, until I have had legal advice from a new lawyer to be appointed by the First and Second Defendant, to which I need to present to the Court a further four to five affidavits before the hearing. With all due respects, I would like to ask the Court to give the opportunity to the First and Second Defendants more time to prepare the proper defence as I have been unable to do so because of ill health, as the Court has been made aware. 35When the matter came before the Registrar on 3 April 2013 the Second Defendant appeared. He informed the Registrar that he had been unwell and that he had not obtained representation or legal advice. The Registrar again advised the Second Defendant to see the Duty Solicitor the following day so as to obtain a solicitor. The proceedings were stood over to 11 April 2013. 36At the directions hearing on 3 April Mr Warwick from Norton Rose said that he spoke with the Second Defendant. The following conversation ensued: Mr Olivieri: I am engaging new solicitors. I will then have further affidavits prepared and served on you. Mr Warwick: Mr Olivieri, this matter is listed for hearing commencing on 3 June 2013. Your former solicitors have served evidence on your behalf and our client is preparing for the upcoming hearing based on that material. I recommend that you secure legal representation as soon as possible given the impending hearing date. 37The following day the Second Defendant filed a Notice of Motion seeking pro bono legal assistance. The affidavit in support said that he was on a pension and could not afford legal representation. It said he was not eligible for a grant of Legal Aid (the accompanying letter from Legal Aid said that it was not available for commercial and investment transactions) and he said he was able to understand English but had poor skills in writing and needed assistance with the matter before the Court. That Motion was returnable on 11 April 2013. 38The proceedings were before the Registrar on 11 April and a Mr Muir appeared for the Second Defendant. Mr Muir said he had just received instructions. The Registrar directed that a Notice of Appearance be filed on behalf of the Second Defendant by close of business on 12 April 2013. The Registrar also dismissed the Notice of Motion for pro bono assistance, presumably because Mr Muir was appearing for the Second Defendant. The Registrar also adjourned the Plaintiff's Motion to amend the Statement of Claim to 23 April 2013. 39At the directions hearing on 11 April 2013 Mr Warwick spoke to the solicitor who appeared for the Second Defendant in these terms: Mr Olivieri's solicitor: We have only received instructions yesterday evening. We want an adjournment to consider the amendment application for four weeks. Mr Warwick: Are you aware that this matter is listed for final hearing on 3 June 2013 and the matter is otherwise ready for hearing. Mr Olivieri's solicitor: No, I was not aware of that. We are taking instructions on the matter generally. Mr Warwick: Here is my card. Mr Olivieri has all the documents in the matter, but if you need any additional copies, let me know and I will get them across to you once your firm goes on the record. 40No Notice of Appearance was filed by Mr Muir and he never again appeared. 41On 22 April 2013 the Defendants again wrote to the Registrar saying this: My apologies to the Supreme Court and the Principal Registrar, that the two above Defendants are unable to attend court on 23 April 2013. Following is Dr Marinucci's certificate, which is self explanatory. Would you kindly adjourn the above case until I am able to attend Court, approximately two (2) to three (3) weeks. 42The accompanying medical certificate from Dr Marinucci said this: Ollie Olivieri is suffering from respiratory tract infection which has aggravated his underlying mitochondrial myopathy. This makes him unfit for Court on 23/4/13. 43The proceedings again came before the Registrar on 23 April. There was no appearance for the Defendants. The Plaintiff was granted leave to amend the Statement of Claim and was directed to file it by close of business on 26 April. The Plaintiff was directed to advise the Second Defendant of that order within seven days. The Registrar also granted liberty to apply on three days' notice. 44On 8 May 2013 Norton Rose wrote to the Defendants enclosing a copy of the Amended Statement of Claim filed on 26 April 2013 as directed by the Registrar. The letter went on to remind the Defendants that the matter was listed for a four day hearing commencing Monday, 3 June 2013. The letter then set out the procedural requirements that needed to be dealt with prior to the hearing including compliance with Practice Notes SC CL6 and SC Gen 4 as well as r 35.2 UCPR. The letter said that the Plaintiff would oppose any adjournment application unless there were exceptional reasons and the application was supported by admissible evidence. The solicitors drew the Defendants' attention to clauses 42 to 44 of the Possession List Practice Note which related to adjournments. The letter further noted the four affidavits that had been served by the Defendants and said that they would prepare their case on the basis that those affidavits were to be read. They also drew attention to the part of the Practice Note that dealt with a tender bundle. 45The letter concluded by saying in bold type and underlined: We strongly recommend that you obtain legal representation in order to be adequately prepared and assisted prior to and during the hearing. Please forward us the contact details of any representation that you do obtain. 46The letter enclosed copies of the Practice Notes and r 35.2 UCPR. 47On 24 May 2013 Norton Rose wrote again to the Defendants referring to the letter of 8 May 2013. They again reminded the Defendants that the matter was listed for a four day hearing commencing Monday, 3 June 2013. They enclosed a draft of a Joint Statement of Issues of Fact and Law that they considered were in dispute and asked for the Defendants comments on that draft. They enclosed a copy of submissions that the Plaintiff intended to rely on at the hearing and asked for the Defendants' submissions. The letter said that as Norton Rose had not heard from the Defendants or any solicitors on their behalf Norton Rose had prepared a Court Book in accordance with the Practice Note and asked the Defendants to contact the office to collect the Court Book or to have it delivered. The letter concluded in exactly the same way as the letter of 8 May had recommending legal representation. 48On 31 May 2013 (that is, the business day before the date for the commencement of the hearing) my Associate received a letter from a firm of solicitors called Koffels. The letter said this: We refer to the above matter and have been approached by Mr Ollie Olivieri, who is the Defendant in the proceedings, by telephone yesterday. Mr Olivieri will be attending our office late this afternoon. We have been instructed that Mr Olivieri has been unrepresented for some time and he informs us that due to illness he has been unable to prepare his case and that he will instruct us to seek that the hearing dates, 3 June 2013 to 6 June 2013, be vacated. As Mr Olivieri has been unrepresented he was unaware that he should have informed your Honour about an application to vacate the hearing dates or make a formal application to the Court. We have been informed by Mr Olivieri that about one (1) month ago, he advised the solicitors for the Plaintiff of his proposed application to vacate the hearing dates. At this time, we have not seen any documents but felt it was prudent to advise your Honour about Mr Olivieri's position. We have not been formally retained to represent the client at the hearing as we have not yet had the opportunity to meet him. 49On the adjournment application on 3 June 2013 Mr Koffel read an affidavit from the Second Defendant which said that both Defendants had been unrepresented since June 2012. The affidavit then said this: 4. I have been unable to prepare my case for this matter as I have been unwell. 5. In November 2012 (sic) where the matter was set down for hearing I was not present due to my illness. Had I had the opportunity of being present, I would have informed the court that the matter was not ready to be set down as my evidence was not complete. (I note that directions had been made on a number of occasions for the Defendant's evidence to be filed and served, the last date for which was 2 December 2011.) 50The affidavit then said this: 7. I have had ongoing health problems that have resulted in me being unable to properly prepare my case for hearing and organise appropriate legal representation to represent me. ... 14. As a result of my illness I have not been able to comply with the requirements that are to be dealt with prior to the hearing and in this regard a tender bundle of documents has not been prepared nor have any other documents been prepared on which I wish to rely when the hearing proceeds. Further no submissions have been prepared and no objections to affidavits prepared. 15. I do not believe that all the relevant evidence on which the Defendants wish to rely has therefore been placed before the Court. 16. It will take time for any new solicitor appointed by the Defendants to place themselves in a position where they could proceed with the hearing and therefore seek that the hearing dates be vacated. 51The Second Defendant annexed four medical reports from Dr Marinucci. I have already set out three of these earlier in the judgment (paragraphs [26], [29] and [42]). 52The fourth report is dated 22 May 2013 and it says this: I have been local GP of Ollie (Italiano) Olivieri since 17/5/05. He has had surgery to his lumbar spine and now has recurrence of his lower back condition. He also has osteoarthritis of his knees. At present he is being considered for revision surgery to his lower back and surgery to his knees which would put him out of action for a while. He also suffers from a chronic condition mitochondrial myopathy causing muscular muscles (sic) but with no known treatment. 53One of the matters put to me by Mr Koffel was that the Second Defendant had made allegations to him that the Second Defendant's signature had been forged on the Bank documents. Mr Koffel said that he understood that that was something which had never been raised in the proceedings previously. It was certainly correct that it had never been raised and it was completely inconsistent with what appears in the Defence and Cross-Claim where the Defendants admit to entering into the loan agreement, signing the mortgage and signing the guarantee. Further, and most significantly, there was nothing contained in Mr Olivieri's affidavit suggesting that he wished to assert that his signature had been forged on any documents. 54I said to Mr Koffel that I was not satisfied with the material that had been presented to justify an adjournment. However, I said I was prepared to give the Defendants until 10.00 am on 4 June to obtain further and satisfactory evidence. 55When the matter came before me on 4 June 2013 Mr Koffel read an affidavit that he had sworn which, in substance, simply annexed a further report from Dr Marinucci of 3 June 2013. That report said this Mr OIlie Olivieri was seen by me today at home as he was unable to get out of bed. He is suffering from an aggravation of a severe lower back condition, that he is suffering from. He is bed bound and is unable to attend Court from 3/06/13 to 7/06/13 inclusive. Since June 2012 Mr Olivieri has suffered from a severe lumbar spine degenerative disease which has necessitated surgery including spinal fusion. Surgery was only partly successful. He had a fall on 25/06/2012 aggravating his spinal condition, the fall causing a loosening of (R) sided prosthesis at L4. He also suffers from a condition Mitochondrial Myopathy which causes muscle weakness and pain. There is no treatment for this condition. He also suffers from Type2 Diabetes Mellitus and hypertension for which he takes his medication. As I understand it his court case needs a lot of intensive work to brief his solicitor, but taking all his conditions into account Mr Olivieri has not had the energy to prepare his court case. I believe that with the help of his solicitors there is a possibility over the next 3 months he might be able to prepare his case.

Legal principles 56Section 66 of the Civil Procedure Act 2005 ("the Act") gives the Court a wide power to adjourn proceedings. However, that wide power is to be governed by s 58(1) which in turn makes reference to ss 56 and 57 of the Act. Section 58 provides: 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: ... (ii) any order granting an adjournment or stay of proceedings, and ... (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) ... (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. 57Section 57 provides: 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58Principles discussed in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 should be applied analogously to applications for adjournment. In that regard it is not only the interests of the parties to the instant proceedings which ought to be considered. An adjournment necessitating a further appointment of a hearing date will inevitably delay other parties from obtaining a hearing. It is partly to that end that s 57 is directed. 59Further, the notion that amendments and adjournments can simply be met by an appropriate costs order is no longer an acceptable approach: Aon at [99] - [101]. In any event, there is reasonably compelling evidence in the present case that the Defendants would not be able to meet any costs order made against them on the basis that an adjournment was granted. 60The general rule is that when a case is brought on for trial by the proper process the Plaintiff is entitled to have it heard and determined: Short v Short [1960] 1 WLR 833 at 849; Watson v Watson (1968) 70 SR (NSW) 203 at 206. 61An adjournment for the purpose of obtaining additional evidence that should have been obtained earlier will ordinarily not be allowed: Watson at 206-207; Kingsway Group Ltd (Formerly Known As Willis and Bowring Mortgage Investments Ltd) v Belramoul and Ors [2009] NSWSC 345 at [12]-[15]. That is the more so where the nature of the further evidence is not disclosed: EG & H Nominees Pty Ltd v General Mutual Insurance Co Ltd (in liq) (1976) 50 ALJR 460. 62An adjournment will not normally be granted simply because there has been a late withdrawal of legal representatives, especially where the withdrawal relates to a fee dispute: Squire v Rogers (1979) 27 ALR 330 at 333, 337-338; or where there is a late retaining of legal representatives even for the reason of an inability to pay for them earlier: Dawson v Deputy Commissioner of Taxation (1984) 56 ALR 367 at 368-370; Kingsway Group at [11].

Adjournment not warranted 63There was no indication given on the application for adjournment what the extra evidence would be that the Second Defendant wished to adduce, nor was there any explanation why it had not been served in the times specified by the Registrar's directions. 64I do not consider that the matters in s 58(2)(b)(ii), (iii) and (iv) of the Act operate in the Defendants favour. Rather the lack of expedition shown by the Defendants and their failure to honour the overriding purpose of the Act set out in s 56 tells against them. The Defendants were in default a number of times in serving evidence in support of their Defence and Cross-Claim and, on the basis of what the Second Defendant has asserted from April 2013, there has been a serious non-compliance with directions because of the Defendants desire to serve evidence some 18 months after the last date on which all their evidence was to be served. 65It is significant that this is the fourth occasion when, immediately before the proceedings were before the Court, a letter is forwarded by or on behalf of the Defendants asserting that the Second Defendant is too ill to attend Court and needs a further adjournment. 66In addition, the medical evidence put forward on each occasion has lacked the specificity required for the Court to be satisfied that the Second Defendant is in fact unable to attend Court. I note in this regard that in the Second Defendant's affidavit of 31 May 2013 he refers to an "illness" on a number of occasions without actually specifying what that illness is. The Doctor's report attached to that affidavit makes reference to surgery that he had had on his lumbar spine (no date specified), the fact that he was being considered for revision surgery and surgery to his knees (no date specified) and a reference to mitochondrial myopathy which the Defendant has apparently suffered from at least since 2012. 67In ordinary parlance a back problem or back pain is not described as an illness. Nowhere in his affidavit does the Second Defendant refer to being disabled or incapacitated by the back problems of which Dr Marinucci speaks. If the illness to which the Second Defendant refers is mitochondrial myopathy that is a condition which has various manifestations, not all of which would prevent the Second Defendant from being able to engage lawyers nor to attend Court. Dr Marinucci does not suggest that this condition or illness is what is preventing the Second Defendant from attending court, nor that it has prevented him having been able to prepare his case since last September. 68Indeed, there is almost no evidence explaining why the Defendants have not been able to engage lawyers since Bransgroves ceased to act for them in June 2012. Certainly, on two occasions, the present application being one, the Defendants were able to engage lawyers to attend Court for them, albeit on both occasions they were retained just before the relevant appearance thereby necessarily resulting in applications for an adjournment. There was no evidence from the Second Defendant of efforts that he or anyone on his behalf had made to obtain lawyers although on a number of occasions he had indicated in letters and orally that he would be doing so. 69The proceedings were set down for hearing nine months in advance of the hearing date. That was ample time for the Defendants to engage lawyers or to be prepared to conduct the proceedings themselves. I have regard to clauses 42 - 44 of the Possession List Practice Note which says that proceedings fixed for trial will not normally be adjourned unless special circumstances have arisen which could not have been foreseen. The evidence on the present application does not identify any circumstances, let alone special circumstances that have arisen which could not have been foreseen. 70The Second Defendant was apparently able to prepare, perhaps with some assistance, a Notice of Motion and affidavit which he filed in April 2013. His affidavit was witnessed by a solicitor whom, it may reasonably be inferred, he consulted even if only for the purpose of swearing the affidavit. He was not, therefore, incapable of attending upon a solicitor. 71On two occasions during the course of this year he has attended at Court. 72I also have some regard to what Mr Koffel informed me he had been told by the Second Defendant, namely, that he alleged to Mr Koffel that his signatures had been forged on the documents. An allegation of forgery made, not in an affidavit, some three years after the proceedings had been commenced and in circumstances where admissions have been made about the documents and their signing and where the money was undoubtedly paid to the First Defendant to enable it to purchase the security property, causes me to have suspicions about the Defendants' motives in seeking the present adjournment. 73There is a further matter. The evidence discloses that the security property is valued between $595,000 and $670,000 depending on whether there is a forced sale or a sale in the ordinary course. The evidence also discloses that the debt exceeds $3,000.000. A delay as a result of an adjournment would result in actual prejudice to the Plaintiff in recovering its debt. 74In all the circumstances, it would not be fair to the Plaintiff to adjourn these proceedings. As presently advised it would not be possible to obtain a further hearing date until at least August or September 2013. Neither would an adjournment be fair to other litigants in the Court. Nor would it be consistent with the provisions of ss 56, 57 and 58 of the Act for an adjournment to be granted in the present circumstances.

The Plaintiff's claim 75On 13 September 2007 the Plaintiff by letter of that date offered a commercial bill facility to the First Defendant in an amount of $1,740,000. The acceptance of that offer was made by the Second Defendant as the sole director of the company on 26 September 2007. On the same day the Second Defendant signed a guarantor acknowledgment to that letter. 76The First Defendant executed the mortgage in favour of the Plaintiff over the property being purchased on 26 September 2007. That mortgage incorporated the Memorandum of Common Provisions No 2433990 filed in the Department of Lands, Land and Property Information Division. That Memorandum provided in Part 7 what a default was. A default included the situation where the borrower did not pay any part of the secured money when it was due or breached any other provision of the mortgage. A default gave the Bank the right to take possession of the property. 77The Guarantee executed by the Second Defendant on 26 September 2007 was limited to a principal amount of $2,225,000 in addition to fees, charges, interest and expenses as set out in cl 2.2 of the Guarantee. 78The facility involved a 30 day bill which was rolled over at the end of each month with a rollover charge and interest being debited to a nominated account of the First Defendant. It was necessary, therefore, for the First Defendant to maintain that account in such a way that funds were available to meet the bill charges and interest at each rollover period. 79It appears that the nominated account went into debit on 25 November 2008 when a cheque for $20,000 deposited into the account bounced. The position was restored for a short period of time and then the account again went into debit on 12 December 2008 when the rollover charge was withdrawn. It remained in debit until 27 January 2009. It again went into debit during February and from 12 March 2009 it remained in debit leading to a letter from the Plaintiff on 5 May 2009 requiring the excess in the nominated account to be cleared within five days or an event of default would occur. 80The excess on the nominated account was not cleared and on 13 May 2009 the Plaintiff wrote a further letter to the First Defendant saying that an event of default had occurred and that the Plaintiff was entitled to exercise its rights under the agreement. 81The position did not improve after that time but in fact became worse with an increasing debit balance on the nominated account. 82By reason of the defaults a termination notice was issued by the Plaintiff, as it was entitled to do, and the facility was terminated on 14 September 2009. 83As mentioned earlier, a s 57 notice was issued on 17 November 2009 and was not complied with. The indebtedness at that time was $1,920,454.04. 84On 17 November 2009 the Bank sent a letter of demand to the Second Defendant making demand under the guarantee. The demand was not met. 85Regardless of the ongoing defaults the facility expired on 12 October 2010. The First Defendant failed to repay the amount of the loan or any moneys. 86Even if regard is had to what appears in the Defence and Cross-Claim, I am satisfied that the First Defendant entered into the loan agreement and the mortgage. I am satisfied that an advance of $1,740,000 was made by the Plaintiff to the First Defendant. I am satisfied that the Second Defendant executed the guarantee which guaranteed that the First Defendant would pay to the Bank all the guaranteed money and perform the guaranteed arrangements as defined in the guarantee. 87I am satisfied that the First Defendant defaulted under the terms of the mortgage and that the Bank is entitled to an order for possession of the security property. 88Clause 9.9 of the mortgage and clause 19.1 of the Guarantee enable a certificate to be given by the Bank concerning (inter alia) how much is owed under the mortgage and the Guarantee. Certificates have been tendered showing that as of 3 June 2013 each of the Defendants was indebted to the Bank in the sum of $3,297,798.67. Subject to what follows concerning the Defence and Cross-Claim the Plaintiff is entitled to judgment for possession and to judgment against each of the Defendants in that sum. 89Rule 29.7(3) UCPR permits the Court in a claim for a liquidated sum to give judgment against the Defendants without proceeding to trial if the Defendant does not appear where there is evidence of the amount then due to the Plaintiff in respect of the cause of action for which the proceedings were commenced. The Plaintiff's claim, to the extent that it involves a judgment for a sum of money, is a liquidated claim, being a claim for debt. 90Although the Defendants were not present to advance the Cross-Claim, the Cross-Claim was inextricably linked with the Defence. In fairness to the Defendants' position I should say something about the Defence and, therefore, the Cross-Claim. 91In the Cross-Claim the Plaintiff is said to have entered into two agreements with the Defendants which the Plaintiff did not keep. The first was on 20 September 2007 when the Plaintiff is supposed to have agreed to lend the sum of $2,225,000. The breach is said to be that only $1,740,000 was lent. The making of the first contract and its breach are said to give rise to statutory remedies involving misrepresentation and unconscionable conduct. The Defendants point in particular to the terms of the guarantee which contained a limit of $2,225,000 plus interest, costs and fees. 92The second contract is said to have been made in about January 2009 when the Plaintiff is supposed to have agreed to lend the First Defendant the further sum of $850,000 which would be secured by the existing mortgage and guarantee. The Plaintiff is said to have breached that second contract by not lending any further money to the First Defendant.

The first alleged contract 93To understand this aspect of the Defence and Cross-Claim it is necessary to set out what led up to the Letter of Offer. 94The broker acting for the Defendants had sought two loans, the first for $1,725,000 and a second loan of $500,000. It was requested that the first loan be approved for immediate use and that there be pre-approval for the second loan for development a little later. 95Mr Rogerson, the Relationship Manager dealing with the Defendants, prepared his credit memorandum for approval for the two loans. In that document he recommended as security a guarantee for the sum of the two loans requested. 96Mr Rogerson's superior, Claudine Kimber, conditionally approved the application for $1.75 million. The approval dated 4 May 2007 went on to say: EOI [Expression of Interest] to be provided for development funding, LVR of 75% based on TOC valuation, acceptable tabled costings, understanding of contingency limits, document where client will source funds to meet costs overruns and satisfactory CTS. 97Mr Rogerson subsequently lodged an amended credit memorandum dated 10 September 2007 which included the valuations that the Bank needed. In return he received from Credit Assessment Network Credit Operation (CANCO - the Bank's credit assessment department) a reply dated 11 September 2007 which said this: In response to ACM 10/09/2007 and in terms of approval 4/5/2007, FR CBAD (3 yrs) facility $1740k is approved. Noting LVR 70% (MV $2500k) and Interest Cover 1.67x (please note that Interest Cover is calculated as Net Rentals $200k + Surplus Income $67k divided by Interest Paid). All previous approval conditions and financial covenants to apply please. Before additional funding of $500k can be considered we need to gain an understanding of TOC and rental income. In terms of previous approval 4/5/2007 any funding for construction of additional strata units on the property is subject to: *panel valuation to confirm TOC (based on approval plans), construction costings/contingencies and market rental able to be achieved; *satisfactory CTS; *compliance with financial covenants ie LVR and Interest Cover; *Corporate Model property eCart to confirm CCR 6 or better; *controls around the construction ie progress valuations, progress draws etc. A non-binding indicative term sheet may be issued to customer outlining our requirements to assess this construction funding request. 98The Letter of Offer was then given to the defendants on 13 September, 2007. 99Whilst those internal Bank communications do not themselves disprove that Mr Rogerson told the Second Defendant that more money would be lent and that the $1.74m was a first draw down, Mr Rogerson has denied in his affidavits that he ever said those things. Particularly for the reasons which follow I accept those denials. 100Apart from the request for the two loans and the limit recommended on the guarantee the evidence in relation to the first contract is entirely dependent upon conversations said to have taken place by the Second Defendant in his affidavit. Material in a number of relevantly contemporaneous documents strongly suggests that there was no agreement for a second or further advance. 101First, the Letter of Offer signed by the Second Defendant for both Defendants says nothing about any further advances. In addition, the purpose of the facility limit was to assist in the purchase of the property. There is nothing in that document about development or renovation of the property nor mention of the need for further advances. The diary note made by the Relationship Manager, Paul Rogerson, who took the documents to the Second Defendant for signing at his house in Concord contains nothing to suggest that further advances were raised by the Second Defendant. That diary note relevantly says: Client has advised that settlement should proceed in the next week or two as his solicitor has advised that it should not be too far off. He has advised his solicitor of our details so he will be in contact in the next few days to arrange settlement. We proceeded to look through Letter of Offer and security documents, client seemed happy with all documents and has signed similar documents in the past. He was given documents to seek independent legal advice to which he declined and freely signed all documentation in my presence. 102Secondly, in early 2008 CANCO became aware of a breach of the LVR condition of the commercial facility. The detail of that is not relevant. It led to Mr Rogerson visiting the Second Defendant at his Concord residence on 10 March 2008 to discuss that issue. Mr Rogerson's contemporaneous diary note of the meeting says this: Client advised that he has spent considerable funds on the property since he purchased it and the property now has a tenant with 5 x 5 lease in place, generating around $18kpm in rent. He believes that the property is worth around $4m as when it was valued it was not tenanted and did not have some simple utilities attached to the property. Ollie advised that he would like us to get a new valuation on the property as he will be looking at doing a commercial development on the property in the near future. 103As Mr Rogerson noted in his affidavits, Mr Olivieri did not at that meeting express any concerns or complaints about the Bank not providing him with any additional funding before construction despite referring to having spent money on the property and saying that he intended to develop it further. 104Thirdly, Mr Rogerson again visited the Second Defendant at his Concord property on 7 January 2008. The Second Defendant advised Mr Rogerson that he had been travelling to Chile and Brazil putting together a deal to export iron ore to China. The Second Defendant requested that the Plaintiff deliver him statements fortnightly because he wanted to be sure that the rent was going into the account and it would not become overdrawn. The diary note went on to say: He is happy with current service levels and has advised that he is willing to refer business as long as he gets a referral fee, he has advised that he has referred business to Bank west (sic) in the past and they have paid him a referral fee for the business. I advised that I would look into this and advise him if ANZ would be willing to do the same. ... Rang client to advise of the outcome and forward applicable paperwork, Ollie advised that he has relative that is looking at funding a commercial property deal worth around $3 million and he will have him contact me to discuss his requirements. 105Again, nothing was said by the Second Defendant about any further money that had been promised. 106Fourthly, on 13 May 2008 Mr Rogerson again went to the Second Defendant's Concord home with Mr Stortenbeker from the Plaintiff. The purpose of the visit was to discuss a proposal of the Second Defendant to purchase a motel which he would own and run with his family. The Second Defendant had a quarry that he could offer as security and said he would have some cash to put into the purchase of the business. He said that he had considerable external income to assist in the serviceability of the proposal and would provide all relevant financial information if the Plaintiff was able to lend up to 70% on the property. The First Defendant said that he could raise the funds through other institutions but out of loyalty he was requesting the Plaintiff's assistance. 107Two things emerge from that discussion. First, the Second Defendant claimed to have funds elsewhere which could be needed for various projects. Secondly, nothing was said again about the non-provision of the money he now claims the Plaintiff promised to lend him. 108Fifthly, by the end of 2008 Phuong Tram had become the Defendant's Relationship Manager. She visited the Second Defendant at his Concord residence on 7 January 2009 and made a contemporaneous diary note of the visit. 109The purpose of the visit was first to introduce Ms Tram as the new Relationship Manager. Secondly, the Second Defendant was seeking $850,000 additional facility to renovate the property and to create another four factory units. The diary note said: Customer have (sic) requested for Bank to assist in the funding to complete the project. Customer also advised that due to internal renovation, DA is not required. Listing of works to be completed has been provided by Wetherill Park constructions for $850,000. Mentioned to customer that a new valuation will be required based on the project being completed as current valuations will not have sufficient equity. 110Once again, nothing was said by the Second Defendant about moneys which had been promised for the very purpose for which he was now asking for a fresh facility or an increase in the existing facility much in excess of what he now alleges had been promised in 2007. 111Sixthly, Ms Tram spoke to the Second Defendant on 20 January 2009 regarding the shortfall in the nominated account. The Second Defendant's contemporaneous diary note discloses that the Second Defendant said that his tenants were in arrears with the rent. The Diary note then records this: Customer has advised that he is upset with management by ANZ and given the economic environment we should be more lenient with the account. There was no complaint about more funds not having been provided. 112Seventhly, on 7 April 2009 Ms Tram met again with the Second Defendant about the shortfall in the account. The Second Defendant again referred to the difficulties he was having with his tenants. Ms Tram's contemporaneous diary note then records: Mr Olivieri seeks bank assistance of $100k overdraft facility to assist with working capital requirements. He has spent $30k to purchase plumbing supplies for the property in Goulburn. 113The diary note also discloses that the Second Defendant, through another of his companies Olivieri Corporation Pty Ltd was looking to borrow $500,000 to purchase machinery in relation to a subdivision. Ms Tram said that the Bank needed more information about the companies, and after the contract was signed (presumably for the development) the application could be assessed. 114Ms Tram had a follow up telephone conversation with the Second Defendant on 29 April partly about the state of the account but mostly about the request for an overdraft and the loan for Olivieri Corporation. Her contemporaneous diary note says: RM [Ms Tram] explained to Mr Olivieri that Bank needs to have a clear understanding of the company structure of related entities to further assist with any increase lending. Mr Olivieri was quite frustrated that Bank needs this information or will not proceed with application and has requested this be documented so he will raise it with our Head Office to make a complaint. 115Ms Tram rang the Second Defendant again on 7 May 2009 chiefly about the state of the account. Her contemporaneous diary note says: Customer again showed his frustration to the Bank and advised if the $100k overdraft was provided as per his request then the account would not be in excess. ... 116All of the above occasions were precisely the times when one would have expected something to be said by the Second Defendant if a promise had been made in September 2007 that a further $500,000 would be available to assist in the renovation, refurbishment or development of the property. This is the more so when (1) on 7 April he referred to spending money on things to be used in a renovation and was seeking a new loan in addition to an overdraft, and (2) on 29 April he was contemplating making a complaint to the Bank about the information it was requiring concerning the contemplated loan but not, it should be noted, about any failure to provide money which had already been promised. 117The failure of the Second Defendant to raise the matter on these occasions provides strong support for Mr Rogerson's denial of ever having promised that further sums would be lent.

The Second Alleged Contract 118The particular difficulty for the Defendants in relation to the allegation of a contract to lend $850,000 in January 2009 is found in the terms of the letter sent to them on 9 January 2009. The letter relevantly says this: Further to our meeting on Wednesday 7th January 2009, I am pleased to enclose our Non Binding Indicative Term Sheet for discussion purposes. As you will appreciate, we will require further information from you to enable us to complete a full assessment of the arrangements under consideration. Accordingly, this letter only provides an indication of the type of facilities and conditions that may be available. 119The document that was enclosed was headed "Non Binding Indicative Term Sheet". Underneath that heading it said this: This Non Binding Indicative Term Sheet ("ITS") is provided for discussion purposes only... The conditions detailed in the ITS are not exhaustive, are not unnecessarily general in nature and are subject to further change in refinement. If the details contained in this ITS are acceptable in principle to you, they will broadly form the basis of a submission for formal credit approval by ANZ. No warranty or representation is made or given by ANZ the credit approval will be granted on the terms set out in this ITS. 120The security stipulated was a guarantee by the Second Defendant limited to $2.5m, the existing mortgage over the property, a registered mortgage debenture over all the assets and undertakings of the First Defendant and "any other securities deemed appropriate after further credit assessment". 121At the end of the document there was a page headed "Acknowledgement" which said this: We acknowledge this Non Binding Indicative Term Sheet does not represent an offer of facilities but We (sic) now ask ANZ to undertake a formal credit assessment for the facilities detailed and work toward a formal letter of offer. 122If the heading was not enough to inform the Defendants that what was contained in the letter was not an offer, those passages set out put the matter beyond any doubt. 123In any event, the conditions relating to security were never fulfilled. The Second Defendant did not provide a guarantee up to a limit of $2.5m, nor was a registered mortgage debenture over the assets and undertakings of the First Defendant given. 124The ITS contained a number of other conditions concerning the building contract including that it had to be a fixed price contract for no more than $850,000 and that there had to be development approval and that the drawdown was subject to receipted invoices for works completed on the property and progress inspections by a panel valuer. 125Further, what is contained in the diary notes of 20 January, 7 and 29 April and 7 May regarding new request for money and complaints is entirely inconsistent with any agreement having been reached in January 2009 for a loan of $850,000 or any amount.

Conclusion 126There are other diary notes made by officers of the Plaintiff detailing meetings and discussions with the Second Defendant including one of 10 September 2009 where, in addition to blaming his tenants for the problems the Second Defendant said that he intended refinancing the debt. In none of these is there a complaint or assertion of other promised moneys as now forms the basis of the Defence and Cross-Claim. These meetings and discussions, where the Plaintiff was pressing for the affairs of the Defendants to be brought into order, were where such complaints or assertions would be expected. That they were not made enables an inference to be drawn that the assertions in the Defence and Cross-Claim are a recent invention. 127In my opinion, the contemporaneous material makes it clear beyond argument that there were no further agreements to lend $500,000, $850,000 or any other amount. I find that no representations were made in September 2007 or at anytime that a further $500,000 would be made available to the Defendants. 128The Plaintiff tendered certain paragraphs of an affidavit sworn by the Second Defendant to show that he had made admissions with regard to signing the various documents forming the basis of the Plaintiff's claim, and also to demonstrate that even if there were agreements to lend further money any losses claimed by the Defendants were not causally connected with any breaches by the Plaintiff. Additionally, the Plaintiff tendered the report of the Plaintiff's Quantity Surveyor on the issue of causation. 129By reason of the conclusions I have reached regarding the absence of any contract or representations to lend any further sums, it is strictly not necessary to consider the issue of causation of loss. However, the documents indicate that the Defendants would have had significant problems in establishing causation. The following matters are relevant:

• The contract to perform the renovations was not executed until 16 October 2008;
• The fixed price of the contract was $850,000 not including builders profits/overheads, professional fees and contingency;
• The Plaintiff's Quantity Surveyor, Michael Dakhoul, estimated the cost of the intended work at $1,113,400 as at June 2008;
• The Second Defendant always asserted that the cause of the Nominated Account falling into arrears was the failure of the tenants to pay the rent;
• There was no evidence of Development Approval for the work by the Council.
• There was no evidence of compliance with other requirements or conditions associated with the Non-Binding Indicative Term Sheet such as a valuation of $4m of the property. 130Even if the Defence and Cross-Claim are taken into account the matters asserted in those pleadings are not established. The Plaintiff is entitled to judgment for possession of the land and for the debt owing. 131I am satisfied that the requirements of r 6.8 UCPR have been complied with and that no other persons were in occupation of the land. 132Accordingly, I make the following orders: (1)Judgment for possession of the whole of the land described in Certificate of Title, Folio Identifier Lot 91 in Deposited Plan 1119204, the postal address of which is 35 Ross Street, Goulburn NSW 2580; (2)Judgment for the Plaintiff against the First and Second Defendants in the sum of $3,297,798.67. (3)Leave to the Plaintiff to issue a writ of possession to enforce the judgment. (4)Dismiss the Cross-Claim. (5)The Defendants are to pay the Plaintiff's costs of the proceedings.

Amendments 20 June 2013 - Decision date of 13 June 2012 corrected to read 13 June 2013 Amended paragraphs: Coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 June 2013