Mr and Mrs Constantinidis must be given leave to replead
29The principles discussed in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 must be applied, when considering a submission that a pleading does not plead an arguable case. Having that test in mind and given what transpired at the hearing and subsequently, there can be no question that Mr and Mrs Constantinidis must have an opportunity to replead their case.
30It is apparent that Mr and Mrs Constantinidis' case against Mr Tsolakis is very different to that which they sought to pursue against Ms Kehagiadis. They do not, for example, seek to advance claims in respect of a duty of care pursuant to the Revised Professional Conduct and Practice Rules 1995. It is various breaches of retainer, as well as allegations of negligence in relation to advice given about the acquisition of the unit, obtaining security and pursuit of litigation by and against them, which they seek to pursue. I cannot see that the statement of claim does not plead an arguable case in relation to these matters.
31The case presently sought to be advanced, does not concern a mere failure to lodge an adequate caveat, but rather failure to ensure that Mr and Mrs Constantinidis had adequate security in respect of the payment of $180,000 which they made under the Landcorp contract; the failure to take proceedings as instructed in respect of the contract breached in 2004; the failure to inform them of various crucial matters, including that proceedings which they had instructed be pursued, had not had been commenced and that proceedings had been brought against them; as well as other allegations of misrepresentation and misconduct, including in relation to $60,000 which Mr Tsolakis received in October 2005.
32Davies J found in Kehagiadis that from the outset, a mortgagee had priority over Mr and Mrs Constantinidis' interests. That lies at the heart of their complaints against Mr Tsolakis. It is claimed that he did not take steps necessary in the circumstances, to ensure that their interests were protected and he thereafter further failed them, in relation to their pursuit of the breach of their contract and the ligation brought against them. That is quite a different case to that which they sought to advance against Ms Kehagiadis.
33Also necessary to be considered, however, is the impact of the Limitation Act on the case which they seek to pursue. Section 14 of that Act imposes a limitation period of six years in respect of claims advanced in relation to both a cause of action founded on contract and in tort. Section 55 operates to extend that limitation period in certain circumstances. Mr and Mrs Constantinidis seek to rely on that provision and it is conceded that it may be available to them in respect of at least some of their claims.
34It was on 4 October 2005 that Mrs Constantinidis inspected the Court's file in relation to the proceedings brought against them, on their case for the first time learning that day various relevant things, as to what Mr Tsolakis had done and failed to do and how he had misled them. It was on 5 October 2005 that his retainer came to an end. On their pleadings it seems that they had, however, earlier learnt that Mr Tsolakis had not brought proceedings on their behalf, as he was instructed to do. Even earlier, they had learned about Landcorp's breach of contract. It is difficult to see in those circumstances, that even the provisions of s 55 of the Limitation Act, can assist them in respect of all of the claims they seek to pursue.
35It follows from Mr Tsolakis' concessions, that the proceedings may not be struck out, but that Mr and Mrs Constantinidis must be given leave to replead. Which of their current claims can by repleading, be brought within time, even given a reliance on s 55 is a matter which they must consider carefully and address adequately in their amended pleadings, because pursuit of any claims which are beyond time and have been extinguished by operation of s 63(1) of the Limitation Act, will inevitably face further strike out applications.
36This is the result of the operation of provisions of the Limitation Act. Relevant to consider are s 14(1), s 55 and s 63. They relevantly provide:
"14 General
(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:
(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,
(b) a cause of action founded on tort, including a cause of action for damages for breach of statutory duty,
(c) a cause of action to enforce a recognizance,
(d) a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
55 Fraud and deceit
(1) Subject to subsection (3) where:
(a) there is a cause of action based on fraud or deceit, or
(b) a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealed,
the time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment.
63 Debt, damages etc
(1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt damages or other money is, as against the person against whom the cause of action formerly lay and as against the person's successors, extinguished.
(2) Where, before the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, an action is brought on the cause of action, the expiration of the limitation period does not affect the right or title of the plaintiff to the debt damages or other money:
(a) for the purposes of the action, or
(b) so far as the right or title is established in the action.
(3) This section does not apply to a cause of action to which section 64 or section 65 applies."
37Also relevant to considered is s 36 of the Interpretation Act 1987 which provides:
"36 Reckoning of time
(1) If in any Act or instrument a period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall be reckoned exclusive of that day or of the day of that act or event.
(2) If the last day of a period of time prescribed or allowed by an Act or instrument for the doing of any thing falls:
(a) on a Saturday or Sunday, or
(b) on a day that is a public holiday or bank holiday in the place in which the thing is to be or may be done,
the thing may be done on the first day following that is not a Saturday or Sunday, or a public holiday or bank holiday in that place, as the case may be.(3) If in any Act or instrument a period of time is prescribed or allowed for the doing of any thing and a power is conferred on any person or body to extend the period of time:
(a) that power may be exercised, and
(b) if the exercise of that power depends on the making of an application for an extension of the period of time - such an application may be made,
after the period of time has expired."
38In Segal v Young [2001] NSWCA 141, the operation of s 14 was considered. There it was observed:
"19 On a common sense approach, the issue is not one of subtlety. The paramount principle is that the statutory period limitation period is six years and a plaintiff is entitled to the full period within which to bring proceedings. Anything less than the full six year period will result in a plaintiff not being granted the time afforded by the statute. At common law, a day is not divisible and fractions of a day are not recognised: Prowse v McIntyre. Thus, if a limitation period expires on a given day, the cause of action is regarded as having been extinguished as from the next day.
20 The approach that I propose is in accord with the principle that "[a] limitation provision, because it derogates from the ordinary rights of individuals, should be strictly construed" (per Mason CJ, Deane, Toohey and Gaudron JJ in Australian National Airlines Commission v Newman (1987) 162 CLR 466 at 471). In accordance with this principle, where ambiguity exists, limitation statutes are construed favourably to plaintiffs."
39In Mr and Mrs Constantinidis' case, s 55 operates in respect of the s 14 limitation period in relation to any claim where there was relevant fraud, deceit or concealment on Mr Tsolakis' part. In that event, the period before the date on which they first discovered, (or with reasonable diligence could have discovered) his fraud, deceit or concealment, does not count. On their case, that date, in relation to at least some of their claims, was 4 October 2005. No later date has been relied on.
40The provision made in s 36(1) of the Interpretation Act, that a period of time, dating from the day from which the s 14 limitation period ran, is reckoned exclusive of that day, does not apply to the day on which the extended period provided in s 55 expires. In this case, that date is 3 October 2005, it being 4 October when Mr and Mrs Constantinidis discovered what Mr Tsolakis had done and failed to do in relation to various litigation, upon Mrs Constantinidis' inspection of the Court file. By s 55 the period before 4 October, that is the period ending on 3 October does not count for the purpose of the limitation period.
41As discussed in Young v Segal, fractions of a day are not recognised either at common law, or in these statutory provisions, so that Mr and Mrs Constantinidis submission that it was only late in the afternoon of 4 October that they learned of what Mr Tsolakis had done in relation to the litigation, is not of relevance.
42It follows that but for the operation of s 36(2) of the Interpretation Act, in respect of 3 October 2011, which was a public holiday, the extended limitation period flowing on the facts in this case would have expired on 3 October 2011. Because of the effect of that provision, the limitation period expires on 4 October 2011.
43In the circumstances it is plain Mr and Mrs Constantinidis must have an appropriate opportunity to replead. In doing so they must restrict themselves to a pursuit of claims which have not been extinguished by operation of s 63(1) of the Limitation Act. That is any claims in respect of which there is no argument available that the 6 year limitation period was extended to 4 October 2005.
44As I understand the case they seek to advance, that precludes, at least, their pursuit of the claims in relation to Mr Tsolakis' negligence in relation to the original transaction, because those claims accrued before 4 October 2005. There is no claim as to the original transaction, that Mr and Mrs Constantinidis only learned of what Mr Tsolakis had done and failed to do, when Mrs Constantinidis inspected the Court's file in relation to the proceedings brought against them by Landcorp on 4 October 2005. In that event, that claim was statute barred, when the proceedings were commenced on 4 October 2011, the provisions of s 55 of the Limitation Act not being available to be relied on.
45Otherwise, as I have said, Mr and Mrs Constantinidis must take care to ensure that their pleadings are restricted to those of their claims which were not statute barred on 4 October 2011, when the proceedings commenced.