Kira Holdings Pty Ltd v Daquino [2010] NSWSC 201 | Case summary

2009/290621 Kira Holdings Pty Limited v Marianina Daquino JUDGMENT (ex tempore) 1 HIS HONOUR: In the substantive proceedings the plaintiff, Kira Holdings Pty Limited claims against the defendant Marianina Daquino orders for the removal of a caveat in respect of the plaintiff's land (other caveats in the meantime having been withdrawn by arrangement), and a declaration that the defendant has no interest in that land or its proceeds. In substance, the plaintiff's case is that, although in 1978 by a maintenance agreement made under the (CTH) Family Law Act 1975, s 87, between the defendant and her former husband Giuseppe Daquino, since deceased, it was provided that Kira Holdings would hold the land upon trust for Giuseppe and Marianina in equal shares, subsequent arrangements made between the parties in about 1992 resulted in Marianina's interest being bought out by a payment to her, and perhaps to the children of the parties, of sums of money. The defendant disputes that that is so. 2 At a directions hearing on 30 October 2009, the proceedings were set down for final hearing before me on 1 December 2009, on the basis that the case would take less than one day. On 1 December 2009, the hearing commenced but, principally due to the inadmissibility for stamp duty reasons of a document critical to the plaintiff's case, was adjourned part heard to 19 March 2010. On 12 February 2010, the plaintiff was granted leave to amend their summons by filing an amended summons, the burden of which was to address the situation that parts of the land had since been sold, but their proceeds retained. The defendant then sought to have the hearing date vacated. I declined to do so, indicating that any application to vacate the hearing date should be made with evidence and by motion. Today, the defendant by motion filed 26 February 2010 claims the following relief: 1. Leave be granted to the Defendant pursuant to UCPR 9.1 to file a Cross-Summons in these proceedings. 2. Costs. 3. Such other orders as the Court deems fit. 3 Meanwhile, the defendant and her children (who are the proposed cross-defendants), have instituted separate proceedings in this court (2010/l498) by summons filed 26 February and returnable on 23 March 2010, wherein they claim substantially the same relief. 4 The plaintiff has indicated that it does not oppose the defendants having leave to file a cross-summons claiming the relief specified in claims 1-6 inclusive and claim 14 of the proposed cross-summons, but otherwise oppose the leave sought. 5 A number of factors are relevant to consideration of this application. At the outset, I bear in mind that ordinarily the Court will permit all necessary amendments to be made that will result in the real issues in dispute being determined, so long as prejudice is not thereby occasioned to other parties. 6 First, this application for leave to file a cross-summons is very belated. The rules require a cross-summons to be filed before the first return date of the summons. These proceedings have been before the Court on several occasions, and have not only been set down for final hearing, but are part heard. In addition, the proceedings were instituted as a result of the defendant having lodged a caveat in respect of the subject land. Shortly after lodgement of the caveat, the plaintiff asked the defendant to articulate her claim. She has, at least until now, not done so; but has put the plaintiff to proof on virtually every issue in the case, including her signature on relevant documents and the authenticity of the various deeds relevant to the proceedings. Despite having been asked to articulate what her true case was at an early stage, the defendant has advanced no explanation whatsoever for not having earlier advanced the claims now sought to be raised by cross-summons. I accept that claims to have the 1992 transaction set aside or avoided for misrepresentation, breach of fiduciary duty, and/or under the (NSW) Contracts Review Act 1980 were adverted to in the directions hearing on 12 February, but so far as I am aware, that was the first time they were mentioned, and they have not before now previously appeared in any written form. 7 Secondly, it would be quite inappropriate for a case alleging misrepresentation and breach of fiduciary duty, and claiming relief under the Contracts Review Act, to proceed on an un-particularised summons. Such cases should be properly pleaded; at the very least it would be necessary to have a full statement of the nature of the case, if there were not a full pleading. If such a claim were mounted at the outset of litigation, the defect might be addressed by particulars sought and given in the course of the litigation; but when the defendant seeks the considerable indulgence of filing a cross-claim at this very belated stage, it is up to her to make sure that what she files is in a sufficiently particularised form to inform the Court and the plaintiff of the case to be answered. 8 The proposed cross-claim does not identify the alleged misrepresentation, nor give particulars of the alleged breach of fudiciary duty, nor refer to the relevant factors under the Contracts Review Act. It is simply impossible for the plaintiff, or for that matter the Court, to know from that document what is the case which the cross-defendants would have to meet. 9 The position is not advanced when one has regard to what the Court is told is the principal evidence in support of the cross-claim, namely, the affidavit of Marianina Daquino dated 11 November 2009. It is impossible to devine from it what is the alleged misrepresentation or breach of fudiciary duty. The most one can extract from it is that she says that she was not aware of the effect of the 1992 documents when she signed them. 10 In the course of argument, counsel for the defendant was asked to elaborate on the claims of misrepresentation and breach of fudiciary duty. Without descending to detail at this stage, the claim for misrepresentation appears to be one that, by failing to disclose the terms of his will in conjunction with his transfer of control of Kira to the trustee of the Daquino Family Trust of which he was the controller, Joe Daquino somehow misrepresented the benefits that Marianina and their children might derive on his eventual demise. This is, at the highest, a claim of misrepresentation by silence, but in circumstances where it is practically impossible to see what obligation Joe had to disclose the matters in respect of which complaint is made. The alleged breach of fiduciary duty appears to be that Kira did not disclose that control of Kira had been shifted to the trustee of the Daquino Family Trust; but it is very difficult to see, as presently advised, how disclosure of that matter could have been material to a decision by the defendant to accept or reject an offer of money for her beneficial interest in the land. 11 As it seems to me, on the evidence so far filed, there is no reason to suppose that the proposed cross-claim has significant prospects of success. Moreover, it is apparently accepted that the defendant and the children received payments pursuant to the 1992 arrangements which they seek to have set aside. The summons contains no offer to do equity by refunding those payments. It may be that further evidence could be forthcoming, perhaps from the children, to increase the prospects of success from those that presently appear. But if that be so, it has not been put before the Court at this stage on the application for leave to amend, and in circumstances where she seeks this indulgence, it was for her to adduce such evidence. 12 It is clear that granting leave to file a cross-claim would jeopardise the hearing date. Despite suggestions that the case may be ready by 19 March, on the view that I take of the evidence as it stands, it could only be readied by service of evidence not yet served as to the state of mind of the participants in the 1992 transactions - which the plaintiffs would then need an opportunity to answer; and the cross-examination would be much more expansive than hitherto contemplated, in a case which has been essentially a documentary one. The case could not possibly be completed on 19 March, even if it were ready to commence then. 13 All of those matters tell strongly against granting the relief sought. 14 Against that there is the fact, as I have recorded, that the defendant has already commenced separate proceedings. If not otherwise disposed of, they might ultimately come to trial. Questions may arise as to whether some type of estoppel will arise from the present proceedings, or their outcome, and the Court has been informed that Kira intends to move to have those other proceedings summarily dismissed. 15 It seems to me that the fact that, as well as seeking leave to file a cross-summons in these proceedings, the plaintiffs have, as they are entitled to, commenced separate proceedings, is not a reason to take a different view as to what should happen in respect of the proposed cross-summons in these proceedings. 16 That leaves, as the only matter significantly favouring a grant of leave, the Court's natural reluctance to preclude a party from litigating a cause of action that it wishes to litigate, especially in the circumstance where counsel for the plaintiff has not been able to articulate significant prejudice other than the costs and delay arising from loss of the hearing date. The answer to that is that, were there material before the Court that gave reason to suppose that there was substance to the proposed cross-claim, I would have been very reluctant, though I would not necessarily have refused, to allow a demonstrably viable cross-claim to be brought. But as it seems to me, as things stand, there is insufficient reason to suppose that there is substance in this cross-claim, brought as late as it is. 17 I therefore refuse leave to file the proposed cross-claim. I order that the motion be dismissed with costs.

Kira Holdings Pty Ltd v Daquino

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Judgment (11 paragraphs)

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