Educational and Computing Software Pty Ltd v Kumar

Limitation Act 1969 LEGISLATION CITED : Property (Relationships) Act 1984 Residential Tenancies Act 1987 Uniform Civil Procedure Rules 2005

Ashmore v British Coal Corp [1990] 2 QB 338 Commonwealth v Verwayen (1990) 170 CLR 394 CASES CITED : Maryska v Mason [2007] NSWSC 1222 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590

PARTIES : Educational and Computing Software Pty Ltd (Plaintiff/Cross Defendant) Pam Kumar (Defendant/Cross Claimant)

COUNSEL : M Broun QC (Plaintiff/Cross Defendant) A Canceri (Defendant/Cross Claimant)

SOLICITORS : Broun Abrahams Burreket (Plaintiff/Cross Defendant) Byles Canceri Lawyers (Defendant/Cross Claimant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION PROGRESSIVE LIST

13399 of 2006 Educational and Computing Software Pty Ltd v Pam Kumar

JUDGMENT 1 By its amended statement of claim filed 18 July 2006 the plaintiff seeks an order for possession of premises at 38/43 Northam Avenue, Bankstown ("the premises"). The plaintiff is the registered proprietor of the premises and the defendant went into occupation of them in about January 1998 in circumstances described below. 2 Benedict Bede McNamara ("Mr McNamara") is a director of the plaintiff. Mr McNamara and the defendant established the company in about 1989. Each became a director of the plaintiff and a co-signatory on its cheque account. 3 In about 1993 the defendant secured employment with Interpro CRI Pty Ltd ("Interpro") as a senior recruitment consultant. The defendant recruited people for jobs in the information technology industry. In about 1994 the defendant established a company called Softlink Solutions Pty Ltd ("Softlink"). On 9 March 1994 Softlink entered into a consultancy agreement with Interpro pursuant to which the defendant's personal services were offered to Interpro through Softlink. The defendant thereafter no longer worked as an employee of Interpro but was employed by Softlink, which contracted with Interpro for the provision of the defendant's services. 4 Between April 1994 and May 1995 the defendant made numerous payments to the plaintiff so that it could purchase software and hardware products and paid various bills and accounts at the request of the plaintiff so that it could continue its business. The money was advanced to the plaintiff on the condition that the plaintiff would repay the defendant when it was financially able to do so. The defendant recalls Mr McNamara saying to her at about that time, "I need more money to continue to pay for the software and hardware products being used by [the plaintiff] as well as for research and development. If you can help by lending money and paying the bills [the plaintiff] will pay you back when it has the money". This sum amounted to $22,725.17. Between November 1994 and January 1995 the defendant advanced the sum of $3563 to the plaintiff at its request. On each occasion when money was advanced to the plaintiff Mr McNamara would say to the defendant, "The company will pay you back when it is able to do so". 5 Just before the end of the financial year in 1995 Mr McNamara said to the defendant: "There is no point in you having your own personal accounting with Ryan and Rankmore. All money from Interpro can go directly into [the plaintiff] and Terry Ryan can handle the lot. You can write out cheques on behalf of [the plaintiff]. The [plaintiff] is going to make millions. If you keep putting the money in you will be repaid." 6 On 3 August 1995 the plaintiff and Interpro signed an agreement dated 1 July 1995. From that time onwards Interpro made payments directly into the account of the plaintiff. The services being provided by the plaintiff were the same as those that had previously been provided by the defendant to Interpro on behalf of Softlink. Between 1 July 1995 and 31 December 1997 Interpro paid the plaintiff a total of $208,878.89 in consultancy fees.

7 In 1994 and 1995 the plaintiff was involved in developing an operating system for graphics-based computer applications. On 3 June 1994 and 9 September 1994 the plaintiff lodged trademark applications for certain of its products. In about late 1995 or early 1996 it came to the plaintiff's attention that the Microsoft Corporation had been infringing the plaintiff's trademarks. Accordingly, the plaintiff sought legal advice and subsequently commenced proceedings in the Federal Court of Australia. 8 Around the time when the plaintiff sought legal advice concerning the trademark infringement, Mr McNamara requested that the fees earned by the defendant through consulting continued to be paid to the plaintiff in order to ensure that it had sufficient funds to finance the litigation against Microsoft. In about 1996 Mr McNamara said to the defendant: "Can you make sure that your consultancy fees keep getting paid into the [plaintiff]. We need the money to meet legal fees. We will win this case and you will get your money back and then some. Just keep making more money so that we can pay the legal fees." 9 In early 1997 the defendant had a meeting with Mr McNamara at 31 Shenton Avenue, Bankstown. The defendant said: "Why don't we finalise everything. I want to talk about splitting the money from the court case. When the case is over you can give me 35 per cent - 40 per cent of the settlement."

"I think what I've done is worth that much. Most of my wages have gone into the [plaintiff]. Mr McNamara said:

10 Several months later the defendant had another conversation with Mr McNamara. They had just attended a meeting with a solicitor at 67 Castlereagh St, Sydney. Following the meeting they were standing at a bus stop when the following conversation took place: Mr McNamara said:

"Yes, but I want to finalise our agreement. You said before that you wouldn't give me 40 per cent but you would talk about it later. We need to work out an agreement".

"Well if you keep working so that we can pay the legal fees I'll split the settlement monies with you 70/30".

"I think what I've done in keeping the [plaintiff] going and paying the legal costs is worth more than 30 per cent, but okay I agree". 11 In about August 1997 the defendant became pregnant to Mr McNamara. On 31 May 1998 the defendant gave birth to a daughter. Mr McNamara attended the birth. The defendant had continued working at Interpro up until one month prior to the birth of her daughter. 12 On about 20 November 1997 the plaintiff and Microsoft Corporation reached a settlement of the litigation. On 28 November 1997 the plaintiff received two amounts totalling $954,706.36 in respect of the settlement. 13 By the end of 1997 the defendant had still not received 30 per cent of the moneys received by the plaintiff in settlement of the litigation. In early 1998 the plaintiff purchased three strata title units in Bankstown. Two of the units were purchased for cash. The third unit, being the premises, was purchased with finance secured by a mortgage. About this time the defendant signed a guarantee at the request of the plaintiff in the following circumstance. Mr McNamara said:

"Can you sign a guarantee? The [plaintiff] has bought some units".

"You will get your money but until you do you can move in and stay in one of the units. The [plaintiff] will pay all the rates and levies". 14 One or two days later the defendant attended the Commonwealth Bank at Macquarie Street, Liverpool and signed a Form of Guarantee. In July 1998 the defendant and her daughter moved into the premises where they have resided ever since. 15 The defendant said that following settlement of the litigation she has repeatedly asked Mr McNamara to cause the plaintiff to pay her the moneys that it owes. For example, the defendant said she has often said to Mr McNamara, "When are you going to have the company pay me the money which it owes? I've been waiting for a while now". The defendant said that in response to such questions Mr McNamara always gave her the following response: "Don't worry. I will pay you. You can keep living in the unit until I have paid you in full". 16 At the time when the defendant went into occupation of the premises she was a director of the plaintiff. The defendant ceased to be a director of the plaintiff on 28 October 2005. On 12 December 2005 the plaintiff caused a notice to be delivered to the defendant terminating her licence to occupy the premises. 17 In defence of the plaintiff's claim the defendant says that the plaintiff is not entitled to recover possession of the premises in this Court because the premises constitute "Residential Premises" and the defendant occupied the premises pursuant to a "Residential Tenancy Agreement" as defined in s 3 of the Residential Tenancies Act 1987 ("the Act"). The defendant says that the present proceedings have been commenced contrary to the prohibition contained in s 71 of the Act. 18 The defendant has also filed a cross claim in which she seeks a declaration that she is entitled to occupy the premises and a declaration that the plaintiff is indebted to her in the sum of $312,700.07. By its amended defence to the cross claim the plaintiff admits that the defendant made purchases for the benefit of the plaintiff to the value of $23,181.41 and admits that deposits were made to the account of the plaintiff by the defendant in the sum of $3565 but denies that anything was done at the request, or with the consent, of the plaintiff. The plaintiff admits that moneys were paid to it pursuant to an agreement between the plaintiff and Interpro but denies that the moneys were paid pursuant to the terms of the consultancy arrangement. The plaintiff denied the agreement for the payment to the defendant of 30 per cent of the proceeds of the Microsoft litigation. The plaintiff admitted that the defendant commenced to occupy the premises in about July 1998 but said "that occurred by reason of the personal relationship between the [defendant] and [Mr McNamara]." 19 In further defence of the cross claim the plaintiff contended that the moneys claimed by the defendant were debts that did not accrue within six years before the filing of the cross claim commencing the action and were accordingly statute barred. Furthermore, the plaintiff pleaded that the debts "[had] been repaid in part or in full". No particulars of that contention are given. Finally, the plaintiff alleged that the defendant was estopped from raising her claim in contract on the grounds that she had commenced proceedings in the Equity Division of this Court seeking orders against Mr McNamara pursuant to be Property (Relationships) Act 1984 and that her claim in contract is so closely connected with the subject matter of those proceedings that it was to be expected that she should have raised it in the earlier proceedings. Those proceedings were dismissed on 1 May 2006. 20 Finally, in reply to the plaintiff's allegation that the defendant's claim in contract was barred by s 14 of the Limitation Act 1969 the defendant contended that the plaintiff was estopped from relying upon such a defence for the reason that the defendant relied to her detriment upon Mr McNamara's statements that the plaintiff would pay her the moneys she claims and that she could remain in occupation of the premises until it did so. 21 Apart from some documentary material that became exhibits in the proceedings before me, the evidence consisted of two affidavits sworn by Trevor Patrick McNamara on 30 January 2007 and 19 November 2007 on behalf of the plaintiff and two affidavits sworn by the defendant on 6 September 2007 and 15 January 2008. Trevor McNamara was cross-examined. The defendant was not cross-examined. Although Mr McNamara had sworn an affidavit in the proceedings it was not read, as he was unable to attend for cross-examination due to ill health. The defendant did not consent to the affidavit being read in Mr McNamara's absence. No application was made on behalf of the plaintiff for an adjournment or for any other accommodation in those circumstances. The Residential Tenancies Act defence 22 Section 3 of the Act contains the following definition: " Residential tenancy agreement " means any agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence:

(a) whether or not the right is a right of exclusive occupation,

(b) whether the agreement is express or implied, and

(c) whether the agreement is oral or in writing, or partly oral and partly in writing, . . ." 23 Section 71 of the Act is in the following terms: " 71 Prohibition on certain recovery proceedings in courts

No proceedings in the Supreme Court, the District Court or a Local Court to obtain recovery of possession of residential premises subject to a residential tenancy agreement shall be commenced by a landlord against a tenant or former tenant of the landlord." 24 The defendant submitted that the plaintiff granted her a right of occupation "for value". The right of occupation was granted in exchange for the plaintiff signing a Deed of Guarantee guaranteeing the plaintiff's loan from the Commonwealth Bank. The right of occupation was also granted in exchange for the defendant forbearing to enforce recovery of a number of loans or payments made by her to, or for the benefit of, the plaintiff. The plaintiff argued that "for value" in the definition of "residential tenancy agreement" must refer to some value in the nature of a periodic payment or some other identifiable benefit. I was referred to no authorities specifically dealing with the meaning of the expression "for value" as used in the context of the Act. 25 Forbearing to sue has long been recognised as valuable consideration in the law of contract. The only evidence before me suggests that the plaintiff was unable, when requested by the defendant, to pay, or to repay, to the defendant the moneys that ultimately became the subject of the defendant's cross claim against the plaintiff in these proceedings. The extension of time given by the defendant to the plaintiff within which it would be required to repay her was clearly valuable and my opinion falls within the expression "for value" as used in the Act. The execution of the guarantee in favour of the Commonwealth Bank at the request of the plaintiff falls into the same category. (It was not suggested by the plaintiff in argument before me that the defendant's forbearance was not valuable because it also coincided with, and for that reason was offset by, the defendant's corresponding valuable entitlement to occupy the premises). 26 In Maryska v Mason [2007] NSWSC 1222, Palmer J said: "[30] Section 71 of the Residential Tenancies Act makes it clear that proceedings could not have been commenced in this Court to recover vacant possession of the house from Mrs Maryska. The position, therefore, is that this Court should not make an order for possession of the property pursuant to a Cross Claim improperly commenced in this Court. If vacant possession of the property is sought, it must be sought in the tribunal which administers the Residential Tenancies Act .

[31] Accordingly, I will not make an order for the giving up of vacant possession of the property as sought in the Cross Claim. If there is further resistance to the giving of vacant possession, the Defendant will have to seek an order from the Tenancy Tribunal." 27 The position is no different in the present case. The plaintiff's claim for possession of the premises fails. The cross claim 28 The defendant claimed a total of $312,700.07 from the plaintiff pursuant to what was described in the cross claim as "the purchase agreement" ($22,725.17), "the loan agreement" ($3563) and "the consultancy agreement" ($285,922 25). The plaintiff raised three defences to this claim. Total or partial satisfaction by payment 29 The affidavit of Trevor McNamara sworn 19 November 2007 contained a series of schedules prepared by him. The information contained in these schedules would appear to relate to be plaintiff's defence to the cross claim alleging that the moneys claimed by the defendant had been paid to her "in part or in full". There are, however, a number of difficulties with this contention. 30 For example, the schedule set forth in paragraph 3 of Trevor McNamara's affidavit is preceded by the words, "I have considered a list of payments made by [the plaintiff] in the period 4 December 1996 to 30 April 1998 that was prepared by [the defendant]". Trevor McNamara continues, "I have identified from that list the following payments made for [the defendant's] direct benefit". The schedule then lists payments made to the defendant in ways described predominantly as "repayment of loan to business", "wages", "ATO personal tax" or "superannuation". Otherwise unexplained, all of these descriptions suggest legitimate payments made by the plaintiff to the defendant wholly unrelated to a reduction by the plaintiff of its obligation to pay her the moneys now claimed in the cross claim. It goes without saying that none of these payments to the defendant is in terms explained as a payment made in reduction of the moneys alleged to be owing to the defendant or in cognate terms. A similar schedule set forth in paragraph 5 of Trevor McNamara's affidavit is wholly referable to wages paid to the plaintiff. 31 A schedule set forth in paragraph 8 of Trevor McNamara's affidavit purports to be a list compiled from cheque butts said to have been drawn on the cheque account of the plaintiff "that were not drawn from the cheque books to which [Mr McNamara] had access". This list totals $85,834.20. If it is plaintiff's case that the defendant drew these cheques on the plaintiff's account that were either unauthorised by the plaintiff or were otherwise for the acquisition of goods or services by the defendant, or for the satisfaction of the defendant's obligations, that were unrelated to the plaintiff, but solely for the benefit of the defendant, Trevor McNamara does not say so. Nor is that inference otherwise available on the evidence. The cheque butts were tendered and became exhibit A. The plaintiff did not attempt in evidence or in submissions to relate the cheque butts to the schedule in paragraph 8 of Trevor McNamara's affidavit or to provide anything approaching a cogent explanation in support of the contention that the plaintiff should have credit for the sum of $85,834 20, or some part of it, in defence of the cross claim. 32 Paragraph 9 of Trevor McNamara's affidavit contained what purported to be a list of payments of credit card accounts. In cross-examination, counsel for the defendant took Trevor McNamara to two entries in the schedule. A credit card bill for $409.74 became exhibit 4. A credit card bill for $228.22 became exhibit 5. The items on each bill were referable to purchases made in Orange where Mr McNamara resided at the time. The defendant did not live in Orange at the time. Once again, the plaintiff did not attempt by any detailed or cogent explanation or by evidence to demonstrate that the amounts listed on the credit card bills were wrongfully or inappropriately incurred by the defendant with the use of a credit card issued to her by the plaintiff. On the contrary, the limited cross-examination of Trevor McNamara on the schedule, and particularly with reference to exhibits 4 and 5, suggests that Mr McNamara was responsible for incurring the credit card debts. The state of the evidence certainly did not permit an inference unfavourable to the defendant to be drawn by reference to the balance of the items in the schedule. 33 The total of the amounts referred to in the schedules in Trevor McNamara's affidavit was $159,674.39. The plaintiff has not satisfied me that any part of that sum should be set off against, or credited to, the defendant's claim for the amounts said to be owing to her by the plaintiff. The Statute of Limitations defence 34 It is not in dispute that the relevant limitation period for the commencement of the defendant's claim for the moneys said to be owing to her by the plaintiff is six years in accordance with s 14 of the Limitation Act 1969. It is also not in dispute that the cross claim was filed on 22 August 2006, in each case more than six years after the defendant's moneys were advanced to or for the benefit of the plaintiff. The plaintiff contends that the defendant's cause of action is therefore not maintainable. 35 Paragraph 54 of the defendant's affidavit sworn 6 September 2007 is in the following terms: "[54] To date, the plaintiff has not paid to me the moneys I have claimed in the Statement of Cross Claim filed in these proceedings on 22 August 2006. I have accepted and relied upon his [sic] representation that he will cause the plaintiff to pay the moneys owed to me and that I can continue to reside in the unit until the moneys have been paid. I have not taken legal action sooner to recover the moneys owed to me on the basis of the said representation. Accordingly, I have continued to reside in [the premises]". (See par [15] above). 36 The defendant submitted that Mr McNamara represented to her on behalf of the plaintiff that the plaintiff would repay the moneys it owed her and that, until this occurred, she could continue to reside in the premises. She submitted that she had clearly relied upon this representation in not taking legal action to recover the moneys sooner. If her claims have become statute barred, the defendant has relied upon the plaintiff's representation to her detriment. She submits in those circumstances that it would be unconscionable for the plaintiff to be permitted to resile from its representation and to be permitted to rely upon a statute of limitations in response to her claim. 37 The plaintiff's response to this argument was that the policy behind the Limitation Act was clear and that the commencement of proceedings within the limitation period was a necessary precondition to successfully avoiding a defence based upon the statute. Assurances given by debtors to creditors about when payment might be expected may be disregarded unless amounting to a confirmation coming within the terms of s 54 of the Limitation Act, which for presently relevant purposes would require writing: s 54(4). There is no suggestion that the plaintiff confirmed the defendant's cause of action in writing at any time within six years prior to the filing of the cross claim.

38 In support of her argument the defendant relied upon statements in Commonwealth v Verwayen (1990) 170 CLR 394. However, as is well known, that was a case in which the Commonwealth initially advised a prospective plaintiff that it did not intend to rely upon a defence based upon the relevant statute of limitations, a representation upon which the plaintiff relied. In due course, as a result of a change of government policy, the Commonwealth purported to rely upon that defence but it was held that it was estopped from doing so upon the basis that the plaintiff had refrained from commencing proceedings within the relevant limitation period and had thereby changed his position to his detriment in reliance upon the Commonwealth's representation.

39 In the present case the representation upon which the defendant relies is to be derived from the words, "Don't worry. I will pay you. You can keep living in the unit until I have paid you in full". Alternatively or in addition, the defendant points to the conversation she had with Mr McNamara in which he said, "You will get your money but until you do you can move in and stay in one of the units. The [plaintiff] will pay all the rates and levies".

40 Those words do not contain either an express or implied representation about the plaintiff's attitude to whether or not it would rely upon a limitation defence if sued by the defendant. I agree with the submission of counsel for the plaintiff that simple promises or assurances cannot, without more, operate as a representation which trumps a statute of limitations, even if a creditor changes his or her position detrimentally by refraining from suing, or neglecting to sue, to recover the debt within time. Nor, if relevant, would I consider the conduct of the plaintiff as described by the defendant to be relevantly unconscionable. 41 The words do, however, describe an agreement pursuant to which the defendant agreed to forbear from suing the plaintiff for the amounts she alleged were owing to her in consideration of the grant to her of a licence to occupy the premises. For as long as the defendant remained in occupation of the premises in accordance with the terms of that agreement, the plaintiff acquired and continued to enjoy the significant benefit that it was not obliged to repay any of the moneys that the defendant now claims are owing to her. However, for as long as the defendant remained in occupation of the premises she was correspondingly unable to sue the plaintiff for the amounts which she claims. Those are the terms of the bargain struck between the plaintiff and the defendant and they have not been contradicted. As I have earlier indicated, the defendant was not cross-examined to suggest that her version of the contract was wrong or inaccurate. There is no evidence to the contrary. 42 The defendant's cause of action for the moneys owing to her by the plaintiff did not accrue, or perhaps more accurately had been postponed, until the happening of one or other of two events. It was agreed between counsel appearing for the parties that the nature of the defendant's interest in the premises was as an occupier pursuant to a licence terminable at will or upon the giving of reasonable notice. In the event that the plaintiff sought to terminate the defendant's occupation of the premises by notice, as it did in the present case, it thereby rendered itself immediately liable to repay the defendant's moneys. Alternatively, the defendant could have ceased to occupy the premises of her own motion, in which case she would have become entitled to sue the plaintiff for the moneys that it owed her. In the events that occurred, on this analysis, the relevant statute of limitations did not commence to run until 12 December 2005 when the plaintiff caused a notice to be delivered to the defendant terminating her licence to occupy the premises. 43 It follows, in my opinion, that the plaintiff's reliance upon s 14 of the Limitation Act 1969 fails because the defendant had, by agreement with the plaintiff, postponed her right to sue the plaintiff for the moneys owing to her until the happening of a particular event. In the circumstances of the present case, that event occurred on 12 December 2005 and importantly within six years of the date of the filing of the cross claim.

The Anshun defence 44 By an uncontested amendment to its defence to the cross claim, the plaintiff sought to rely upon what is commonly described as an Anshun estoppel: see Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Exhibit B is a copy of a Statement of Claim filed on behalf of the defendant as a plaintiff in the Equity Division of this Court on 9 February 2005 by which she sued Mr McNamara pursuant to the Property (Relationships) Act 1984 alleging the existence of a de facto relationship between them from 1985 until approximately 1997 ("the de facto proceedings"). The de facto proceedings were dismissed at the request of the defendant (in this case) pursuant to UCPR 12.8 on 1 May 2006. 45 The plaintiff was not a party to the de facto proceedings. However, the Anshun principle can apply in favour of a person who was not a party to the original proceedings: Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581 at 590; Ashmore v British Coal Corp [1990] 2 QB 338. 46 Application of the principle requires consideration of two related questions. The first is whether the new matter is sufficiently closely related to the earlier proceedings that it could, and should, have been raised in them. The mere fact that the new matter is closely related to the earlier proceedings is not sufficient to give rise to an Anshun estoppel. The second is the reasonableness of the failure to raise the matter in the earlier proceedings. In this last respect the court retains an overriding discretion to permit the later proceedings to continue unless it is satisfied that they constitute an abuse of process in all the circumstances. 47 In the present case, all of the circumstances include the fact that the Anshun defence to the cross claim was never raised on the pleadings until the plaintiff's application to file an amended defence to the cross claim at the commencement of the hearing before me. The question of whether or not that late amendment would have been allowed if it had been opposed remains moot. 48 In my opinion, the cross claim does not constitute an abuse of process in all of the circumstances. First, when the de facto proceedings were commenced, the defendant's cause of action against the plaintiff had been postponed by the agreement to which I have earlier referred. In other words, in the events that occurred, the defendant did not have a cause of action that she could have included in the de facto proceedings until 12 December 2005. It would, of course, have been possible to apply to amend the statement of claim after 12 December 2005. There was no evidence or submissions before me with respect to the likelihood of such an amendment being accepted or surviving until a final hearing, given the relatively specialised, not to say specific, nature of the de facto proceedings. 49 Secondly, I am not aware of whether or not Mr McNamara was required, or chose, to take any step in the de facto proceedings, such as the filing of a defence, before they were dismissed in May 2006 or whether or not he incurred costs or suffered any prejudice of a different kind. None has been suggested to me. 50 Thirdly, I am not aware of the relationship, if any, between the dismissal of the de facto proceedings and the filing of the statement of claim by the plaintiff in these proceedings some 10 weeks later on 14 July 2006. I am not aware of whether or not a cross claim of any sort had been filed by Mr McNamara in the de facto proceedings. 51 Finally, I have received no submissions from the plaintiff to suggest that it has suffered any general or particular prejudice in the circumstances. 52 I am also of the view that the plaintiff could, or at least should, have been in little doubt when it commenced the present proceedings that the defendant would seek to claim the moneys that she alleges are owing to her. The agreement upon which the defendant relies, and the postponement of her entitlement to sue for it, is intimately connected to the plaintiff's claim to be entitled to possession of the premises. The very essence of the agreement made between the defendant and the plaintiff is that the two are interdependent. Indeed, the subject matter of the cross claim is significantly closer to the plaintiff's claim than it is (or was) to the subject matter of the de facto proceedings. The cross claim does not in my opinion amount to an abuse of process and the defendant should not be prevented from litigating it in these proceedings. Orders 53 My present view is that the following orders should be made: 1. Dismiss the amended statement of claim with costs.

2. Declare that the cross defendant is indebted to the cross claimant in the sum of $312,700.07.

3. Order the cross defendant to pay the cross claimant's costs. 54 However, I shall hear the parties with respect to any further or other orders for which either of them contends at a time suitable to the parties to be arranged in consultation with my Associate.

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