(2007) 71 NSWLR 150
- Re Dymocks Book Arcade Pty Limited [2013] NSWSC 298
- Rigato Farms Pty Ltd v Ridolfi [2000] QCA 292
Source
Original judgment source is linked above.
Catchwords
(2007) 71 NSWLR 150
- Re Dymocks Book Arcade Pty Limited [2013] NSWSC 298
- Rigato Farms Pty Ltd v Ridolfi [2000] QCA 292
Judgment (3 paragraphs)
[1]
Solicitors:
Craddock Murray Neumann (First and Second Plaintiffs)
Kekatos Lawyers (Eleventh, Thirty-Fourth and Thirty-Fifth Defendants)
File Number(s): 2016/256135 (012)
[2]
Judgment - EX TEMPORE (REVISED 25 JUNE 2019)
By Interlocutory Process filed on 1 April 2018, Mr Gino Cassaniti, Ms Ivana Cassaniti and Discobell Pty Ltd ("Discobell") applied for certain interlocutory relief, relevantly, that the Court grant leave to Mr Cassaniti to withdraw certain admissions made in his Defence filed on 22 March 2018 in certain proceedings, and grant leave to file a proposed Amended Defence. As matters have developed, the issues between the parties have narrowed, and an order is now sought by Mr Cassaniti, Ms Cassaniti and Discobell that they have leave to withdraw the admissions made in answer to paragraph 3 of the Further Amended Statement of Claim. The orders sought expand the relief sought so far as they seek leave for Ms Cassaniti and Discobell to withdraw the admission, a matter not raised in the Interlocutory Process, but Mr Faulkner, who appears for the liquidator, fairly takes no objection to that expansion.
The application is supported by an affidavit of Mr Kekatos dated 26 March 2019. Mr Kekatos is the solicitor acting for Mr Cassaniti, Ms Cassaniti and Discobell in the civil proceedings. Mr Kekatos refers to the volume of evidence filed in the proceedings, and gives evidence on information and belief from Mr Cassaniti, that Mr Cassaniti could not face up to the liquidation and did not want to know about it, and that he did not inspect the documents served by the Plaintiffs. Mr Kekatos refers to the fact that, in the Defences, Mr Cassaniti admitted that Mr Ball was the liquidator of each of the relevant Plaintiffs and he refers to Mr Cassaniti later having given instructions, apparently in early 2019, that he did not hold a meeting of the members to resolve to wind up each of the companies and he had no involvement in the appointment of the liquidator.
Mr Cassaniti in turn relies on his affidavit dated 11 April 2019 which refers to his history, to circumstances of his dealing with the relevant companies, and denies that he had a role in respect of the companies in several respects. He alleges that certain documents relating to the companies' affairs are forgeries, a matter which will ultimately need to be determined at trial. He does not address the circumstances in which he came to verify the Defences filed by him, or other persons came to verify the Defences filed by them, in respect of the proceedings.
In written submissions, Mr Cassaniti acknowledges that, by reason of r 12.6 of the Uniform Civil Procedure Rules 2005 (NSW), an admission made in a defence cannot be withdrawn except by consent or by leave of the Court. He also points to the fact that, unless and until leave is given to withdraw an admission, no evidence may be led which is contrary to the admission and no submissions can be made which are contrary to the admission: Nominal Defendant v Gabriel [2007] NSWCA 52 at [110]; (2007) 71 NSWLR 150. He acknowledges that a defendant, in seeking to withdraw an admission, must adduce clear evidence of how it was that the admission was made and why it should be permitted to be withdrawn: Rigato Farms Pty Ltd v Ridolfi [2000] QCA 292; [2001] 2 Qd R 455 at 459-460. Mr Marshall, who appears with Mr Lee for Mr Cassaniti, also submits that it may be appropriate to grant leave to withdraw an admission where it was made in circumstances where it was contrary to the actual facts or without due consideration of the relevant matters, and refers to the decision in Drabsch v Switzerland General Insurance Co Ltd (unreported, Supreme Court of New South Wales, Santow J, 16 October 1996) to which I will refer further below. He emphasises that the Court will have regard to all the relevant circumstances, with the overall question being the need for each party to receive a fair trial.
Mr Marshall submits that the admissions were made "inadvertently", where Mr Cassaniti did not wish to engage with the proceedings, and refers to Mr Kekatos' evidence in that respect. There are two difficulties with that submission, as the evidence has emerged. The first is that Mr Kekatos addresses it in evidence, but Mr Cassaniti, who is the party seeking to withdraw the admission, does not. Mr Cassaniti remains silent as to the reasons why he made the relevant admission, and I can properly infer that his evidence would not have assisted him in that respect. Second, the submission is directed to the question of the review of a large number of documents in the case, and suggests that it was only later that Mr Cassaniti recognised that a large number of documents were forged, as he now contends. However, the real difficulty here is that the admission that is sought to be withdrawn is an admission as to the allegation in paragraph 3 of the Amended Statement of Claim that Bluemine had resolved by special resolution that it be wound up voluntarily and the liquidator be appointed. It was not necessary for Mr Cassaniti to review a large number of documents to know whether he knew that allegation to be true, did not know whether it was true, or knew that it was false. That will be a matter within his knowledge, if he was a director or shareholder of the company, or otherwise it would have been a matter that he would not have known and, perhaps more significantly, would have no difficulty in knowing that he did not know.
In submissions in response, the Plaintiffs in turn refer to the case law applicable to the withdrawal of an admission. The relevant principles are set out in the judgment of Santow J in Drabsch v Switzerland General Insurance Co Ltd above, to which reference has been made in many of the subsequent cases. Those principles were in turn applied by Brereton J in Re Dymocks Book Arcade Pty Limited [2013] NSWSC 298, which quoted those principles at length, and noted the several cases which subsequently applied them. Those principles in turn have been summarised by White J (as his Honour then was) in SLE Worldwide Australia Pty Limited v Wyatt Gallagher Bassett Pty Limited [2005] NSWSC 816 at [56], where his Honour observed that:
"It is legitimate and it may be necessary to consider whether the party making the admission did so deliberately, or whether he did so in error, whether the significance of the admission has changed since it was made, for example by reason of other amendments … or whether new evidence has come to light. … Where a party, who is legally advised and does not suffer any disability, deliberately and without mistake, admits liability in whole or in part, and there are no relevant changes of circumstance, prima facie, justice or fairness to both parties does not require it be allowed to change its mind. That is why admissions made with deliberateness and formality are not ordinarily permitted to be withdrawn." [citation omitted]
In that case, his Honour also held that the existence of the reasonable argument against liability, in that case, did not provide sufficient basis to permit withdrawal of the admission. Equally, as the Full Court of the Federal Court observed in Jeans v Commonwealth Bank of Australia Limited (2003) 204 ALR 327 at [18], to which Mr Marshall refers, the question is one of the attainment of justice rather than trying to apply an artificial approach and, as the case law has also noted, the Court is "after the truth" so that, in principle, an erroneous admission should be able to be withdrawn unless other factors outweigh that factor.
In oral submissions, Mr Marshall emphasises Mr Kekatos' evidence that Mr Cassaniti did not wish to focus upon the proceedings, and submits that the admission is of limited practical significance, and that there is no prejudice to the liquidator in the withdrawal of that admission. Mr Faulkner, who appears with Mr Shepherd for the liquidator, fairly accepts that no such prejudice is established. Mr Marshall addresses the significance of this matter to Mr Cassaniti by reference to the fact that evidence is led of the circumstances of the appointment of the liquidator, and Mr Cassaniti wishes to contest that evidence. Mr Faulkner in turn refers to the absence of any evidence of Mr Cassaniti as to his engagement with the Defence, at the time he verified the Defence, or any advice that had been given by his solicitor as to the significance of that step.
It seems to me that this application is finely balanced. On the one hand, the evidence led by Mr Cassaniti provides little or no justification for the application to withdraw the admission, where the admission is of a stated fact, which Mr Cassaniti would readily have known, or known that he did not know and therefore could not admit, and where it is made in a serious way, within a Defence, which has been verified by Mr Cassaniti, by Ms Cassaniti, and by Discobell. On the other hand, the fact that the withdrawal of the admission causes no prejudice to the liquidator and would allow Mr Cassaniti to lead the evidence which he now seeks to lead, as to the circumstances of the liquidator's appointment, is of significance.
Here, it seems to me that it has not been established that Mr Cassaniti was under a disability at the time of verifying his Defence, still less that Ms Cassaniti or Discobell were under any such disability. The suggestion, in Mr Kekatos' affidavit, not repeated by Mr Cassaniti, that there was an unwillingness to focus on the proceedings, does not amount, in my view, to such a disability. There can be little doubt that Mr Cassaniti, who has training as an accountant, would understand that a Defence is a significant document, and more so where it is a document in substantial proceedings, advancing serious allegations. It seems to me that here a factor which weighs in the balance, in what is otherwise a relatively close application by reason of the absence of prejudice to the liquidator, is that there exists a prejudice to the public interest, where a serious admission is made as to a significant matter, namely the appointment of a liquidator; that admission is verified, on oath, by affidavit; and it is then sought to be withdrawn, with the only justification given that the party who made it did not, on his solicitor's account, pay any particular attention to the proceedings at the time the admission was made. That approach, it seems to me, would fundamentally undermine the requirement for verification of Defences, if it were generally used to explain an admission wrongly made by reason of a lack of attention to the Defence at the time it was verified.
I am not persuaded, in these circumstances, that the absence of prejudice to the Plaintiffs is sufficient to support leave to withdraw the admission, where the case for that withdrawal is so weak, and where there is a prejudice to the public interest in undermining the importance of a verified Defence, which is of particular significance in a case of this size and complexity. It is also important to recognise that, as a matter of fact, these proceedings have proceeded on a particular basis for a substantial period, and that basis will no doubt have affected not only the way the Plaintiffs have approached them, but the way in which multiple other parties have approached them. The proposition that there is no prejudice to the liquidator by reason of the withdrawal of the Defence does not address the position of the many other parties to the proceedings which will have been affected in the manner by which they were conducted.
For these reasons, I am satisfied that the application for leave to Mr Cassaniti to withdraw the admission, now narrowed for leave to withdraw the admission in his Defence in respect of paragraph 3 of the Further Amended Statement of Claim, should be dismissed. Mr Cassaniti should pay the Plaintiffs' costs in the application, as agreed or as assessed.
[3]
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Decision last updated: 16 December 2019