The Moneys Claims Proceedings were commenced by Mega-Top Cargo in the Local Court variously in late 2018 and March 2019 against Nanevski Developments (and were transferred to this Court on the application of the Nanevski parties by Darke J on 1 July 2019). At the time the various Moneys Claims Proceedings were commenced, Mega-Top Cargo was represented by other solicitors from those now acting for the Slaveski parties. The claims brought in the Moneys Claims Proceedings were for relatively small amounts (hence the jurisdiction in which they were commenced).
The Partnership Proceedings were commenced in this Court initially by summons filed on 16 May 2019 in the duty list on an application by Nanevski Developments for the extension of caveats it had placed on two properties (to which I will refer as the Riverside Drive property and the Vista Street property), each being contended to be partnership property. The matter then continued by way of pleadings and was transferred to the Real Property List. Later, the matter was transferred back to the general equity list. At present, the existing pleadings in this matter are comprised of an amended statement of claim filed on 4 October 2019 by Nanevski Developments and an amended defence filed on 21 January 2020 by the Slaveski parties. (As adverted to above, part of the relief sought by the Slaveski parties on their present applications is leave to file a cross-claim in the Partnership Proceedings against the Nanevski parties.)
The particular notices of motion now before me are: an amended notice of motion filed 14 April 2020 in the Partnership Proceedings by the Slaveski parties seeking leave to withdraw an alleged admission in their existing defence (though they do not concede that there is any such admission) and leave for the filing of a proposed further amended defence and a cross-claim in the proceedings; and separate notices of motion in each of the respective Moneys Claims Proceedings (those notices of motion being filed variously on 2 and 3 April 2020), by the Slaveski parties seeking leave to amend the original statements of claim filed in the Local Court and an order for the consolidation of the said claims (the latter it is said, being to simplify case management and to minimise the Slaveski parties' filing costs).
The underlying dispute between the parties in the Partnership Proceedings relates to the circumstances in which a property in Riverside Drive, San Souci (the Riverside Drive property) was acquired in February 2015 in the name of Mr James Slaveski. It was acquired at auction for the sum of $2.7 million. The registered proprietors are now Mr James Slaveski (as to 99%) and his father, Mr Ken Slaveski (as to 1%) as tenants in common.
At the time that the Riverside Drive property was acquired, Mr Ken Slaveski and his neighbour, Mr Tom Nanevski, were together involved in business dealings in relation to a nursing home development being constructed by Nanevski Developments at Lawson Street, San Souci (the Lawson Street development). As I understand it, Mr Ken Slaveski (or more precisely his company, Mega-Top Cargo) was involved in the provision of freight and import services in respect of steel or formwork for the windows in the Lawson Street development.
The Nanevski parties contend that there was a partnership between Nanevski Developments and the Slaveski family members in relation to the acquisition of the Riverside Drive property. In its amended statement of claim in the Partnership Proceedings, Nanevski Developments alleges (at [8]), that the parties entered into a partnership agreement in or about January 2015 (the Partnership) for the development of properties. The particulars to [8] of the amended statement of claim include that: the Partnership was partly oral and partly in writing; and, to the extent that it was oral, it was made up of conversations between Mr Tom Nanevski, on behalf of Nanevski Developments, and Mr Ken Slaveski on behalf of himself, his son (James) and his wife (Biljana) (see particulars (a) and (b) to [8] of the amended statement of claim).
Paragraph 9 of the amended statement of claim pleads a number of express terms of the Partnership agreement. In summary, it is alleged: at 9, that Nanevski Developments as to 50% and Mr Ken Slaveski and/or his family members as to 50% would be equal owners of properties purchased and developed; at 9, that Nanevski Developments as to 50% and Mr Ken Slaveski and/or his family members as to 50% would be equally liable for expenses of the purchase of properties purchased and developed and liabilities associated with ownership; at 9, that Nanevski Developments and Mr Ken Slaveski and/or his family would be named as the registered proprietors of the properties purchased and developed; at 9, that Nanevski Developments would be the builder engaged for the development works, with the costs of those building works to be contributed to in equal amounts by the parties and accounted for in the Partnership; at 9, that Nanevski Developments' contribution to the costs of development works could be in the form of building works and Mr Ken Slaveski and/or his family would contribute in cash; and, at 9, that profits would be split equally between Nanevski Developments and Mr Ken Slaveski and/or his family.
The amended statement of claim then goes on, under the heading "[p]erformance of partnership agreement" to make allegations as to the purchase of the Riverside Drive property in February 2015 (see at [10]-[15]); the purchase of the Vista Street property in March 2015 (see at [16]-[23]); and then as to the development of the Riverside Drive property (see at [24]-[33]) and the Vista Street property (see at [43]ff).
In essence, what Nanevski Developments alleges is that there was a breach of a written building contract entered into in respect of the development of the Riverside Drive property (see from [34]-[41]) or in the alternative, if no partnership is found and no building contract is found as alleged, then it is claims a reasonable sum for the development works in respect of that property (see at [42]).
At [53] of the amended statement of claim there is an allegation as to breach of the Partnership agreement by the Slaveski parties (among other things by failing to recognise Nanevski Developments as partner in the ownership of the respective properties and by causing Mega-Top Cargo to commence the Moneys Claims Proceedings); and at [54]-[56] there are allegations of breach of fiduciary obligations allegedly owed by the defendants as partners (the "defendants" seemingly including Mega-Top Cargo although it is not alleged that it was a party to the partnership agreement).
The position of the Slaveski parties, broadly speaking, is that the arrangement between the parties in relation to the Riverside Drive property was that the Riverside Drive property was to be bought for Mr James Slaveski; that two townhouses were to be built on the site; and that, if Mr Tom Nanevski provided 50% of the funds for the project and assisted in the construction of the two townhouses, he would share in the profits.
[2]
Alleged admission
As noted above, the Slaveski parties filed an amended defence on 21 January 2020, denying the alleged Partnership agreement (see at [8] of the amended defence).
Relevantly, for present purposes (since this is what the Nanevski parties contend amounts to an admission), at [11] of the amended defence the Slaveski parties respond to the allegation made as to the payment of the sum of $135,000 "towards the deposit for Riverside".
What is alleged at [11] of the amended statement of claim is that:
11. On 7 February 2015 Nanevski Developments paid $135,000 towards the deposit for Riverside.
Particulars
Raine & Horne Sans Souci Trust Account receipt numbered 10712 dated 7 February 2015 in the sum of $135,000
Bank Cheque Westpac 9 Feb 2015 $67,500
The response at [11] of the amended defence is that:
11. In response to paragraph 11, the first and third defendants [Ken and James Slaveski]:
a. State that the purchase price of the property was $2.7 million;
b. Deny that the alleged cheque of $135,000 dated 7 February 2015 was ever presented for payment by Raine & Horne Sans Souci by Tom (or Tom on behalf of Nanevski Development); and
c. Admit that on or about 9 February 2015, Tom gave Ken a bank cheque for $67,500; and
d. Admit that Ken applied the $67,500 towards the deposit cheque for $135,000 he wrote and gave to Raine & Horne Sans Souci on exchange of contracts to purchase the property on 9 February 2015; and
e. State that in the premises, at exchange of contracts, Tom or Nanevski contributed 50% of the five percent 5% %135,000 deposit required to purchase the property; and
f. The second and fourth defendants (Biljana and Mega-Top) do not traverse the pleading because they do not know the facts alleged nor were either of them a registered proprietor of the property the subject of those allegations.
Thus, on their amended defence as it presently stands, the existence of the alleged partnership agreement is denied by the Slaveski family members (Mega-Top Cargo does not plead to [8]); but each of Ken and James Slaveski admits that Mr Tom Nanevski gave to Mr Ken Slaveski on or about 9 February 2015 a bank cheque for $67,500 and that this amount was "applied" by Mr Ken Slaveski towards the deposit cheque for $135,000 which Mr Ken Slaveski wrote and gave to the real estate agent on exchange of contracts for the Riverside Drive property. There is also, relevantly, a positive assertion that "in the premises" at exchange of contracts either Mr Tom Nanevski or Nanevski Developments contributed 50% of the 5% deposit required to purchase the property.
The present position of the Slaveski parties, as explained in oral submissions on the present application, is that they do not accept that a $135,000 cheque written by Mr Nanevski was paid to Raine & Horne (which is consistent with their denial at 11) but they do accept that the sum of $67,500 was paid by Mr Tom Nanevski to Mr Ken Slaveski. The real dispute now between the parties is whether that amount was used by Mr Ken Slaveski (with $67,500 of his own money) to pay the $135,000 deposit on 9 February 2015 for the Riverside Drive property. It is said that on the existing pleading the Slaveski parties "deny the partnership but … do admit that Mr Tom Nanevski paid the $67,500 to [Mr Ken Slaveski] and contributed that back to [the] property" (T.10.40). As I understand it, the Slaveski parties say that the effect of the existing pleading is that, in substance, Mr Tom Nanevski or his company (Nanevski Developments) had paid or contributed half of the deposit for the Riverside Drive property by giving that sum to Mr Ken Slaveski who then applied those funds towards the amount paid to the agent by way of deposit. As will be seen shortly, Mr Ken Slaveski now says that he has discovered that the funds paid by Mr Tom Nanevski were not used for the purposes of the deposit but were in fact retained in a "suspense account" held by Mega-Top Cargo.
[3]
History of the respective proceedings
As noted, the first set of proceedings commenced in this Court was the Partnership Proceedings (though by that stage the Moneys Claims Proceedings were already on foot in the Local Court). The Partnership Proceedings were commenced by way of summons filed on 16 May 2019.
On 20 May 2019, when the matter was before Pembroke J in the duty list, it appears that the Slaveski parties consented to the extension of the caveat that Nanevski Developments had lodged over the Riverside Drive property. They say that this was expressly without admission as to the validity of the Nanevski parties' claims to an equitable interest in the property. It appears that there may have been some confusion at the time as to the particular property in respect of which it was recorded in the notes to the orders made by Pembroke J that they were without admission (see T 42.20ff). In particular, the Slaveski parties maintain that order 5 of Pembroke J's orders did not reflect the Slaveski parties' expressed intentions (and there was correspondence to that effect on 3 June 2019). Nothing here turns on this (other than that it highlights a concern raised by the Nanevski parties as to whether they would now be exposed to the risk of an application for the withdrawal of that caveat if the alleged admission is permitted to be withdrawn - see below).
At the time that the matter was before Pembroke J in the duty list, orders were made for the filing of a statement of claim by 27 June 2019 and the matter was transferred to the Real Property List. On 3 June 2019, a statement of claim was filed (in the Equity General List). A defence was filed on 28 June 2019.
An amended statement of claim, joining Mega-Top Cargo as the fourth defendant then appears to have been filed on-line (as an amended summons) in the Court on 4 July 2019.
Separate proceedings were then commenced in the Corporations List seeking to set aside a statutory demand that had been issued by Mega-Top Cargo in relation to the debts claimed in the Moneys Claims Proceedings. That application came before Rees J on 16 July 2019. Her Honour set aside the statutory demand.
An amended defence seems to have been certified on 19 July 2019, though it is not clear whether it was filed at that time.
The matter came before Darke J in the Real Property List on 4 October 2019, on which occasion his Honour, by consent, made orders (on the application of Nanevski Developments as I understand it but with the consent of the Slaveski parties) for the transfer of the respective Moneys Claims Proceedings to this Court from the Local Court and removing the matter from the Real Property List to the Equity General list.
By consent, Darke J made orders for the filing and service by Mega-Top Cargo of its amended statement of claim in each of the Moneys Claims Proceeding, and for the filing of a cross-claim in the Partnership Proceedings, by 18 October 2019; and for the filing and service by Nanevski Developments of its defence or amended defence in respect of the Moneys Claims Proceedings, and it defence to the cross-claim in the Partnership Proceedings by [sic] 1 October 2019 (a date which cannot logically be correct since it pre-dates not only the filing of the pleadings to which there was here ordered to be a response but also pre-dates the date of the orders themselves) and made orders for the filing and service of evidence. Leave was granted for Nanevski Developments to file in Court on that occasion the amended statement of claim that had been filed online as an amended summons on 4 July 2019. The mattes were stood over for directions in the Registrar's List on 28 November 2019.
On 28 November 2019, Registrar Walton made directions for the service of any proposed further amended defence and any proposed cross-claim in the Partnership Proceedings, together with any proposed amended statement of claim in the (transferred) Moneys Claims Proceedings by 13 December 2019; and made directions that, absent consent, any notice of motion to file such amended pleading be filed and served by 24 January 2020; that all evidence in support of any such motion be served by 24 January 2020; and that the proceedings and any motions be listed for directions on 17 February 2020. The Nanevski parties note that Registrar Walton also made the following notation at that time:
Note that if the [Slaveski parties] do not strictly comply with [these orders], the Court will proceed on the basis that no further application will be made by [them] for any further amendment to their pleadings in any of the proceedings, or for the filing of any Cross-Claim in proceedings 2019/00153341, and directions will be made on 17 February 2020 for the service of evidence on the basis of the pleadings as currently filed.
The Nanevski parties say that Registrar Walton ordered the Slaveski parties to pay the Nanevski parties' costs of that directions hearing.
The Slaveski parties maintain that there was compliance with the direction to serve the proposed cross-claim by 13 December 2019. No consent seems to have been given to the filing of that document. On 21 January 2020, the amended defence that had been certified on 19 July 2019 appears to have been filed.
On 24 January 2020, the Slaveski parties filed a notice of motion in the Partnership Proceedings, seeking leave to file a further amended defence, leave to file a cross-claim, and leave in each of the Moneys Claims proceedings to file an amended statement of claim. An amended notice of motion was e-filed on 14 April 2020, seeking leave for the filing of the further amended defence and for the filing of the cross-claim but also (see prayer 1) seeking leave pursuant to r 12.6 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to withdraw any admission by the amendments in the paragraphs at 11, (d), (e), (f), 12, 12A,(c) and [14B] of the proposed further amended defence.
On 2 April and 3 April 2020, variously, notices of motion were filed in each of the Moneys Claims Proceedings seeking the leave that had been sought in the 24 January 2020 notice of motion in relation to those proceedings.
At this stage, no evidence has been served going to the substantive disputes in the respective proceedings; nor (unsurprisingly) has any hearing date been set. Hence the Slaveski parties say there is no obvious (or irremediable) prejudice to the Nanevski parties if the leave sought is granted (and obvious prejudice to the Slaveski parties if leave is not granted).
[4]
The alleged admission and request for leave to withdraw it
The Nanevski parties contend that the effect of the amendments contained in 11, (d), (e), (f), 12, 12A, (c) and [14B] of the proposed further amended defence is to withdraw an "admission" or "a matter that operates for their benefit" within the meaning of r 12.6(2) of the UCPR. The Slaveski parties do not accept that there is any such admission but their position is that, in the event that this be wrong and leave is required, they seek leave for the amendment.
The relevant amendment is to that part of the Slaveski parties' defence to the Nanevski parties' claims as to the payment of $135,000 towards the deposit for the purchase of the Riverside Drive property on 7 February 2015 (see as extracted earlier). The Slaveski parties say that whether the Nanevski parties contributed to the purchase of the Riverside Drive property is a material fact in issue and central to the success or failure of their claim about that property.
Complaint is made by the Slaveski parties that there is an internal inconsistency between the two particulars to [11]; and that it is unclear what is alleged with respect to the bank cheque for $67,500 (i.e. to whom it was given or payable). (The Nanevski parties say that there is no confusion, arguing that there is no evidence that those making the admissions were confused, but in any event they say that the impugned paragraph means what it says: that Nanevski Developments paid $135,000 towards the deposit for the Riverside Drive property. It is said that what Nanevski Developments alleges is that it contributed $135,000; and the Nanevski parties say that Mr Ken Slaveski and Mr James Slaveski have here conceded that Nanevski Developments contributed half that amount.) The Nanevski parties say that there is a clear admission as to the $67,500 and that it operates to the benefit of Nanevski Developments because it concedes that Nanevski Developments has an equitable interest in the title of the Riverside Drive property.
The Slaveski parties say that it is common ground that contracts for the purchase of the Riverside Drive property were exchanged on 7 and/or 9 February 2015, and that the Nanevski parties were not parties to those contracts for sale. There seems no dispute as to this. (Subsequently 1% of the legal ownership was transferred to Mr Ken Slaveski.)
On the present application, the Nanevski parties tendered extracts of an affidavit sworn 15 May 2019 by Mr Ken Slaveski in separate proceedings (the Statutory Demand Proceedings) (see proceedings no 2019/00121042), at [24] of which Mr Slaveski deposes that on 9 February 2015:
Tom [Nanevski] gave me a bank cheque from Westpac for $67,500 being 50% of the deposit. I gave that cheque to my financial controller, Ms Grace El-Turk, and I understand that Grace deposited that cheque into the defendant's [Mega-Top Cargo's] bank account that day.
It is noted that Mr Slaveski annexed a copy of the deposit slip and bank statement to that affidavit.
The Nanevski parties also tendered extracts of an affidavit sworn by Ms Grace EI-Turk on 15 May 2019 in the Statutory Demand Proceedings, in which Ms El-Turk deposes to records held for Mega-Top Cargo which it is said show that Mr Nanevski's contribution to the purchase of the Riverside Drive property was $69,150, inclusive of the $67,500 Westpac bank cheque.
It is said for the Slaveski parties that the above evidence of Mr Slaveski and Ms El-Turk in the Statutory Demand Proceedings is consistent with the second particular to [11] of the amended statement of claim but inconsistent with an allegation that the cheque was given to Raine & Horne (which is what the Slaveski parties say is the logical construction of the allegation in that paragraph of the amended statement of claim). It is said that the Statutory Demand Proceedings were contested but proceeded without cross-examination of Mr Slaveski and Mr Tom Nanevski (and hence their evidence was not challenged in this regard).
The Slaveski parties say that that evidence of Mr Slaveski is also consistent with 11, (d), (e), 12 and 12A and (c) of the amended defence filed on 21 January 2020; which the Nanevski parties contend is the "admission" or "matter for their benefit" within the meaning of r 12.6 of the UCPR which is now sought to be withdrawn.
On the present application, the Slaveski parties sought to read [13] of an affidavit of Mr Tom Nanevski sworn on 18 April 2019 and filed in the Statutory Demand Proceedings, as evidence of what Mr Tom Nanevski deposed to in the Statutory Demand Proceedings. I read this paragraph subject to relevance as being evidence of that to which Mr Tom Nanevski had deposed in the Statutory Demand Proceedings (see T 8.25). In that paragraph, Mr Tom Nanevski deposed to the payment by him of the deposit cheque for the Riverside Drive Property without any reference to a $67,500 bank cheque.
The Slaveski parties here rely on an affidavit sworn 27 March 2020 of Mr Ken Slaveski, specifically at [16] and [19]-[35]. It is said that the effect of that evidence is as follows.
First, that with the benefit of time since the Statutory Demand Proceedings concluded, and in preparation of the cross-claim, Mr Slaveski has reviewed documents and discovered a business record (which is annexed to his affidavit) that shows that the $67,500 cheque was received from Mr Tom Nanevski on 9 February 2015 and deposited into Mega-Top Cargo's bank account and then held in a "suspense account" and not paid to Raine & Horne or towards the deposit for Riverside on or about 9 February 2015.
Second, that on 9 February 2015, Ms El-Turk lent Mr Slaveski $67,500 which was combined with $67,500 of Mr Slaveski's money in the Mega-Top Cargo bank account to pay the $135,000 (EFT) payment to Raine & Horne for the deposit for the Riverside Drive property on 9 February 2015 (Mr Slaveski annexing a contemporaneous bank statement to the affidavit).
Third, that the explanation for Mr Nanevski's cheque being held in "suspense" is that there were a number of other commercial transactions between Nanevski Developments and Mega-Top Cargo at the time and Mr Tom Nanevski did not tell Mr Slaveski what the cheque was for, so that it was held in "suspense" until he did (which, the Slaveski parties allege, Mr Tom Nanevski still has not). It is said that evidence of those other transactions is now in the three Moneys Claims Proceedings.
[5]
Is there an admission within the meaning of r 12.6 of the UCPR?
The first issue, logically, is whether the statements contained in 11, (d), (e), 12 and 12A and (c) of the amended defence are "admissions" or "a matter that operates for the benefit of" the Nanevski parties for the purpose of r 12.6 of the UCPR. The Slaveski parties maintain that the assertions contained in those paragraphs were not made formally in accordance with rr 17.2-17.5 of the UCPR, and hence say that they are not admissions within the meaning of those rules.
It is noted that the assertions made in the amended defence do not address a specific allegation about the $67,500 cheque being given by Mr Tom Nanevski to Mr Slaveski, who gave it to Raine & Horne. It is noted that [11] of the amended statement of claim only pleaded there was payment by the Nanevski parties of $135,000 towards the deposit for the Riverside Drive property; the reference to the bank cheque for $67,500 being a bare particular of that alleged fact (from which it is said that it can only be inferred that Mr Tom Nanevski gave that cheque to Raine & Horne, not Mr Slaveski).
The Slaveski parties say that it was not alleged (nor is it implied) that Mr Tom Nanevski gave the bank cheque to Mr Slaveski, who paid it to Raine & Horne. It is said that [13] of Mr Nanevski's affidavit sworn 18 April 2019 is consistent with [11] of the amended statement of claim and omits anything about the bank cheque; and it is noted that the Nanevski parties have not filed a reply to the amended defence.
The Slaveski parties point to their denial of the allegation in [11] of the amended statement of claim. It is said that their use of the word "admit" (in 11 and (c) is in relation to facts not alleged in [11] of the amended statement of claim; and therefore they say that the statements are not an admission for the purposes of r 12.6 of the UCPR.
The Slaveski parties further do not concede that the statements amount to a matter that operates for the benefit of the Nanevski parties pursuant to r 12.6 of the UCPR. They say that the assertions in question were part of an affirmative case in the amended defence that there was no partnership agreement as alleged and that any interest of the Nanevski parties in the Riverside Drive property arising from payment towards the purchase price was limited to a cash contribution by the Nanevski parties of 50% of the 5% deposit.
It is said that the making of the assertions in question did not render it more likely that the Nanevski parties would obtain the relief they seek in the claim (referring to Sergi v Sergi [2019] NSWSC 865 (Sergi v Sergi) at [25], per Darke J). Rather, it is said that, properly construed, they reduced the Nanevski parties' prospects of success on their main claim. It is submitted that, viewed objectively, the assertions should not be found to be a matter that operates for the benefit of the Nanevski parties (again referring to Sergi v Sergi at [27], per Darke J); rather that they are a matter that operates to the detriment of the Nanevski parties.
[6]
Position if leave is required
The Slaveski parties say that, if leave is required to withdraw the alleged admission, that leave should be granted.
The Slaveski parties point to Mr Ken Slaveski's evidence in his affidavit sworn on 27 March 2020 that: the assertions were consistent with his belief and understanding at the time ([16]) and that, in considering his cross-claim he also considered the defence and reviewed business documents revealing payments received and made at relevant times ([19]), which review included the two documents he annexed as annexures A and B to that affidavit. It is noted that the evidence at [21]-[32] of Mr Ken Slaveski's affidavit is much more specific than the extracts of his affidavit in the statutory demand proceedings relied on by the Nanevski parties and it is noted that it was not prompted by or in response to any new evidence or pleading of the Nanevski parties in those earlier proceedings or these proceedings. The Slaveski parties argue that the evidence at [34] provides a rational and appropriate explanation for the desire to withdraw the assertions and it is submitted that the evidence at [35] demonstrates a thoughtful approach to this application. It is submitted that an adequate explanation has been put forward for the application for leave to withdraw the alleged admission.
The Slaveski parties say that the documentary evidence that the sum of $67,500 was held in a "suspense" account raises the following material questions of fact central to the Partnership Proceedings: whether the $67,500 bank cheque was paid by Mr Tom Nanevski to Raine & Horne; whether Mr Ken Slaveski used Mr Nanevski's money or his own (and Ms El-Turk's) to pay the deposit for the Riverside Drive property when he paid the $135,000 cheque to Raine & Horne on 9 February 2015; and whether if the cheque for $135,000 given to Raine & Home on 7 February 2015 was debited from a bank account under Mr Nanevski's control, the Nanevski parties contributed anything towards the purchase price of the Riverside Drive property.
Again, it is noted that the amended statement of claim does not allege Mr Tom Nanevski gave the $67,500 cheque to Mr Ken Slaveski. It is noted that Mr Nanevski's affidavit of 18 May 2019 omits anything about it; and that no reply to the defence or amended defence has been filed by the Nanevski parties.
It is said that, in opposing this application, the Nanevski parties have not led any evidence of their own to clear up the ambiguity in [11] of the amended statement of claim and Mr Nanevski's earlier affidavit or to challenge the affidavit of Mr Ken Slaveski sworn on 27 March 2020 (notwithstanding that there was an opportunity that was clearly available to do so).
It is said that the assertions and the circumstances that underpin the Slaveski parties' application for their withdrawal go to the heart of the Nanevski parties' allegations about the existence of a partnership in respect of the Riverside Drive property and the defence to that; that the competing evidence on this application demonstrates that there are material facts to be found about that; and that the proper forum for them to be decided is during a trial of all of the issues (in which each party can test any inconsistency in each other's earlier evidence form the statutory demand proceedings, which this interlocutory hearing would not achieve).
It is submitted that it would be an unfair disadvantage to the Slaveski parties and an unfair advantage to the Nanevski parties if leave were not to be granted.
[7]
Leave to file the proposed further amended defence and cross-claim
[8]
The defence
It is noted that the proposed further amended defence is the first substantive amendment to the initial defence filed (because the amended defence "basically clarified" the various Slaveski parties' positions in response to the amended statement of claim and did not add substantive new pleadings).
The proposed further amended defence pleads additional particulars of existing defences; and pleads in the alternative that if there is a partnership, then an account needs to be taken so the contributions and losses can be equalised between the parties. It is said that those amendments add to the existing defence rather than adding a new defence. It is said that they are also consistent with the relief the Slaveski parties seek in the cross-claim. The Slaveski parties say that the additions to the defence can be seen to have arisen from the decision to file the cross-claim after the conclusion of the statutory demand proceedings. Reference is made to the affidavit of Mr Ken Slaveski sworn 27 March 2020 (at [13]-[15], [19], [36]-[38] and [50]-[51]) which it is said includes an adequate explanation for the delay in seeking the amendments.
The Slaveski parties say there is no evidence from the Nanevski parties of any irremediable prejudice to them by the proposed amendments and note that there is no cross-application for relief in respect of the perceived pleading deficiencies. It is said that the proper outcome of any submissions of deficiencies in this pleading by the Nanevski parties through the present application is a trial of all of the issues.
The Slaveski parties say that the timing of this application to amend is not "late" within that meaning in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon); nor will it result in a hearing being abandoned (referring to my discussion of Aon in Dymocks Book Arcade Pty Ltd v Capral Ltd [2011] NSWSC 1423 at [55]-[56]). It is submitted that there is an adequate explanation for the delay; that there will be limited if any presumptive prejudice; and that it is in the public interest that the real issues in the proceedings are ventilated.
Hence it is submitted that the power to permit the amendments pursuant to sub-ss 64(1)(b) and (2) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) should be exercised.
[9]
The Cross-claim
It is noted that the application with respect to the cross-claim is not one to amend but, rather, to file the pleading. It is noted that the power to make an order that the cross-claim be filed or grant leave to file it is in r 2.1 of the UCPR, in accordance with the dictates of justice in s 58 and having regard to ss 56 and 57 of the Civil Procedure Act.
It is said that the application arises because the Slaveski parties did not comply with a consent order for the filing of the cross-claim so that the Nanevski parties now contend that the Slaveski parties need leave to file the cross-claim.
The Slaveski parties address those circumstances in Mr Slaveski's affidavit sworn 27 March 2020 (at [36]-[39]), which they maintain is an adequate explanation. It is noted that the Nanevski parties adduce no evidence of their own; and that they bring no cross-application for relief in respect of pleading deficiencies. It is again submitted that the proper outcome of any submissions of deficiencies in this pleading by the Nanevski parties through this application is a trial of all of the issues.
[10]
The Moneys Claims
As to the notices of motion in respect of each of the Moneys Claims proceedings, all of which have been transferred from the Local Court, the Slaveski parties note that the Nanevski parties' submissions on their application for the proceedings to be transferred was that if the proceedings were not transferred and all four proceedings were to be heard separately, there would be a risk of inconsistent findings, and so a likely waste of costs and risk of duplication. The Slaveski parties say that Darke J agreed and made orders to that effect in an ex tempore judgment on 1 July 2019.
The Slaveski parties point to Mr Ken Slaveski's affidavit sworn 27 March 2020 (at [46]-[47]) to the effect that the amendments have arisen from a consolidation of legal representatives and the current legal representatives' preference for them being amended to be more particular. Mr Slaveski's evidence at [48] is that the amendments have become more extensive and particular because of inter-parties' discussions by their counsel.
It is noted that there is no affidavit evidence from the Nanevski parties about this application. It is said that there is no cross-application by them from which it could be inferred that there is any criticism of the pleadings that would need to be analysed before the amendments are permitted. It is submitted that the proper outcome of any submissions of deficiencies in these pleadings by the Nanevski parties is a trial of all of the issues.
Again, it is said that the timing of this application to amend is not "late" within that meaning in Aon; that it will not result in a hearing being abandoned; that there is an adequate explanation for the delay; that there will be limited if any presumptive prejudice; and that it is in the public interest that the real issues in the proceedings are ventilated. Hence, it is submitted that the power to permit the amendments pursuant to sub-ss 64(1)(b) and (2) of the Civil Procedure Act should be exercised.
[11]
Consolidation and Fees Waiver
Each of the notices of motion seeks an order that each of the Moneys Claims be consolidated with the Partnership Proceedings pursuant to sub-r 28.5(c) of the UCPR. It is submitted that the reality facing the Slaveski parties is that for these amendment applications, they have had to prepare three separate motions and pay three further filing fees.
The Slaveski parties refer to [49] of Mr Ken Slaveski's affidavit sworn 27 March 2020, as to the payment of the filing fees. It is said (as is self-evident) that paying three further filing fees in this Court (for the separate motions) is more expensive than the Local Court; and it is submitted (which is less self-evident) that this is obviously unfair considering that it was the Nanevski parties' application to transfer the proceedings to this Court.
As I understand it, an application for fee relief was made in the Registry at the time the motions were filed but it was not dealt with then. The application is here made directly to the Court within its general power.
It is submitted that there is no reason in principle why there should not be an order that the Partnership Proceedings and Moneys Claims be tried together (and that does not appear to be disputed). The Slaveski parties seek to be relieved of paying more than one fee for applications "formally made", or when the Moneys Claims' hearing fees have to be paid.
[12]
Nanevski parties' submissions
In summary, Nanevski Developments describes itself as the "unfortunate target" of litigation instigated by its former business partners (the Slaveski parties). The Nanevski parties oppose the joinder of Mr Tom Nanevski to the Partnership Proceedings (on the basis that no party makes any allegation that Mr Tom Nanevski was a partner to anything); they complain as to the proposed filing of the new statements of claim in the Moneys Claims proceedings (which they say amount to entirely new statements of claim abandoning all of the pleadings and most of the causes of action relied on thus far); and as to the filing of what they refer to as "a discursive and embarrassing cross claim" in the Partnership Proceedings; and they oppose the withdrawal of what they say are verified admissions the Partnership Proceedings.
The Nanevski parties say that the just, quick and cheap resolution of the applications requires that the applications be substantially refused because the proposed amended pleadings are: "variously confused and confusing, circular, contradictory, inconsistently referenced, legally hopeless and otherwise fall well short of the pleading standards required by the UCPR". In other words, the Nanevski parties are highly critical of the amendments which they say "seek to dish up a 'soup' of submissions, evidence and quasi-legal propositions - sprinkled with irrelevant and non-material 'facts' - which do nothing to advance the real issues in dispute". They maintain that, if filed, the pleadings would all be liable to be struck out; and that, if not struck out, they would result in an enormous and undue waste of time.
The Nanevski parties complain of multiple defaults by the Slaveski parties in compliance with Court orders, and say that there is obvious prejudice to Nanevski Developments "which has had its partnership suit becalmed for the best part of a year while the Slaveski parties have had control of all the partnership property".
It is said that leave to withdraw the admissions made by Mr Ken Slaveski and Mr James Slaveski should be refused because the requisite full and proper explanations for the making of the admissions have not been provided (noting that Mr James Slaveski gives no evidence on his withdrawal application at all), and because the Slaveski parties have failed to satisfy the burden of showing that the admissions are actually wrong.
Leaving aside the many complaints made by the Nanevski parties as to the written submissions filed by the Slaveski parties, in substance the Nanevski parties raise the following matters in opposition to the relief now sought by the Slaveski parties.
[13]
Repeated defaults of this Court's orders and unexplained delay
The Nanevski parties maintain that there has not been an adequate explanation for delay in the present case (citing Aon at [103], per Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is noted that the absence of a full and satisfactory explanation for delay may be critical to the determination of an amendment application. Complaint is here made that the Slaveski parties do not address Aon other than to submit that their amendment applications are not "late" within the meaning in Aon (and without there being any definition of "late" in Aon). Reference is made to what was said in Kelly v Mina [2014] NSWCA 9 per Barrett JA at [47], with whom Leeming JA and I both agreed, as to the Court being required to take into account a combination of the factors identified in Aon. The Nanevski parties say that Aon is not restricted to "late" amendments, "whatever they are contended to be", and argues that amendments sought to be made after multiple opportunities to make them have not been taken up (and when any period allowed by the UCPR has expired) are certainly "late" for the purpose of the exercise of the discretion.
The Nanevski parties in their submissions then proceed to identify the following three "unsatisfactorily explained" defaults: the first, being the failure of the Slaveski parties to file and serve "any defence and cross claim" by 27 June 2019 (referring to the orders made by Pembroke J on 20 May 2019), the second being the failure to file and serve any amended statement of claim in the Moneys Claims proceedings and any cross-claim in the Partnership proceedings by 18 October 2019 (referring to the orders made by Darke J on 4 October 2019); and the third being the failure to comply with the orders made by Registrar Walton on 28 November 2019 (to which I have referred above).
As to the first, it is said that Mr Ken Slaveski in his affidavit sworn 27 March 2020 deposes in effect that he did not give instructions to file a cross-claim until July 2019, with no explanation for that delay (characterised by the Nanevski parties as "wilful non-compliance").
As to the second, the Nanevski parties point out that the orders made by Darke J on 4 October 2019 to transfer the matters to the Equity General list were made nearly three months after Rees J had set aside the Slaveski parties' statutory demand. The Nanevski parties say that the explanation now proffered by Mr Ken Slaveski (that it took longer to consult with his legal team than he expected) explains nothing about why that was so, what role the Slaveski parties played in the four month delay, or what Mr Ken Slaveski's expectation actually was, why he had the expectation, and why it was not met. It is said that this explanation is "inadequate in nearly every possible respect" (and it is noted that the solicitor for the Slaveski parties does not give any evidence to support or explain the contention).
As to the third, it is said that the Nanevski parties complain that the Slaveski parties did not comply, let alone "strictly comply", with any of the orders of Registrar Walton. It is said that although draft pleadings were served on 13 December 2019 (which I interpose to note would appear on its face to be compliance with the timetable so ordered), the Slaveski parties have since "resiled" from those drafts (including by adding what they concede to be at least one new cause of action), noting that the latest versions of the proposed amended pleadings are dated 27 March 2020 (some three and a half months in default of Registrar Walton's orders). Second, it is said that, although a notice of motion was filed in the Partnership Proceedings on 24 January 2020 (again, I interpose to note, seemingly in compliance with the orders), no notices of motion were filed in any of the Money Claim proceedings until 2 and 3 April 2020 (well over two months in default of Registrar Walton's orders). (Pausing here, the explanation for this seems to be that there was an attempt to include this relief in the notice of motion filed in the Partnership Proceedings.) Third, it is said that, although over half their submissions on these applications are directed to the withdrawal of admissions, the notice of motion in the Partnership Proceedings was not amended to seek any such relief until 15 April 2020 (nearly three months in default of Registrar Walton's orders); it being noted that such relief must be specifically sought by motion. Fourth, it is said that the affidavit evidence relied upon in support of the motions is Mr Ken Slaveski's affidavit sworn 27 March 2020 and his solicitor, Ms Valentina O'Regan's affidavit (which it is noted is "purportedly" sworn 27 March 2019 - presumably a typographical error - but served with Mr Ken Slaveski's affidavit). It is noted that this is a further default of over two months in compliance with Registrar Walton's orders.
Thus, the Nanevski parties take issue with the submission for the Slaveski parties that "[o]n 28 November 2019, a new Court order was made that the documents be served on 13 December 2019. That happened …", insofar as the submission suggests that there was compliance with Registrar Walton's 28 November 2019 orders.
The Nanevski parties say that no satisfactory explanation for any of these defaults has been given. In particular, it is said: first, that Mr Ken Slaveski's attempt to blame the coronavirus for the many delays is remarkable (the Court being invited to take judicial notice that there was little impact on commerce in Sydney during the relevant time); second, that it is no answer to the defaults to contend that the four month period from 28 November 2019 was spent in a "revision process", drafting and re-drafting the proposed pleadings (in what the Nanevski parties pejoratively describe as "an attempt to make them less atrocious"); and, third, that the submission that "[t]he Slaveski Parties missed the date ordered for the finding of their cross-claim by 1 November 2019" does not take into account that no order was made giving the Slaveski parties leave to file a cross-claim after the leave granted by Darke J expired on 18 October 2019; and no order was made that the Slaveski parties do anything by 1 November 2019.
[14]
Proposed further amended defence in Partnership Proceedings - Unopposed amendments
The Nanevski parties do not oppose the amendments to the amended defence insofar as they assert that any losses ought be shared on the taking of the partnership accounts, add further particulars, or seek to correct spelling, typographical, cross-referencing or other non-material errors. The other amendments are opposed for the following reasons.
[15]
Proposed withdrawal of admissions: Amendments sought to or by 10A, 11, 11, 11, 11, 12, 12A, 12A, 12, [14B] and [33A]
It is said that concessions to the effect that Mr Tom Nanevski and/or Nanevski Developments contributed towards the deposit of the Riverside Drive property are also made in 10A, 12, 12A and 12A of the amended defence.
It is noted that by their proposed amendments to all the above-mentioned paragraphs (including the addition of proposed new 11 and [14B] of the proposed further amended defence), Mr Ken Slaveski and Mr James Slaveski now seek to assert that Nanevski Developments or Mr Tom Nanevski did not financially contribute at all towards the deposit on the Riverside Drive property. It is said that, in doing so, they seek to resile from a "matter that operates for the benefit of another party", namely multiple verified concessions that $67,500 was contributed by Nanevski Developments or Mr Tom Nanevski (being someone in Nanevski Developments' camp). It is submitted that whether as a strict admission on pleadings or simply as a matter operating for the benefit of another party), r 12.6 of the UCPR is engaged.
The Nanevski parties say that, as a matter of logic, the status of the paragraphs as admissions cannot be altered by analysis of the particulars to the amended statement of claim or by the Nanevski parties' evidence or by the presence or content of any reply. (I accept that in principle that is so, but it begs the question here to be determined.)
[16]
Uncontested legal principles
It is noted that where leave to withdraw an admission is sought, a full and proper explanation for the making of the admission is required. It is said that the explanation must be a sensible one, based on evidence of a solid and substantial character; and that the party seeking to withdraw the admission must adduce clear evidence of how it was that the admission was made and why it should be permitted to be withdrawn.
[17]
Mr James Slaveski's admissions
The Nanevski parties submit that the fact that Mr James Slaveski has not filed any affidavit evidence on this application means that he has therefore not put forward the required "clear evidence" of how it was that he made his admissions in a pleading he verified by his affidavit on 19 July 2019 (see the affidavit appended to the amended statement of claim as filed on 4 October 2019). It is submitted that in those circumstances (he being the incoming registered proprietor of the Riverside Drive property and prima facie the person best able to give evidence as to the true source of the deposit for it), it can comfortably be inferred that Mr James Slaveski's evidence would not have assisted him on this application. (As to the inference I am here invited to draw, that does not seem to me to sit comfortably with the material before me, on which it appears that Mr Ken Slaveski was the moving party, albeit for the benefit of his son, in relation to the acquisition of the Riverside Drive property.)
In any event, the Nanevski parties submit that admissions "deliberately and formally made" should not be permitted to be withdrawn unless sufficient cause is shown why they should be, and that it was incumbent on Mr James Slaveski to give a full and proper explanation for the making of the admissions. In circumstances where Mr James Slaveski has shown no cause and provided no explanation, it is said that his application to withdraw his admissions must fail in limine.
[18]
Mr Ken Slaveski's admissions
As to Mr Ken Slaveski's submissions, the Nanevski parties say that the test as to whether leave should be granted to withdraw the admissions is not as to whether there is a triable issue in respect of their subject matter. It is said that Mr Ken Slaveski must establish that sufficient cause is shown for the admissions to be withdrawn. In particular, it is said that it is insufficient to show only that it was reasonably arguable that the admission be wrong for that purpose; rather, that Mr Ken Slaveski must satisfy the Court on the balance of probabilities that what he admitted was actually wrong. It is said that to be satisfied on the balance of probabilities of the existence of a fact, the Court must feel an actual persuasion of the existence of that fact; and that Mr Ken Slaveski bears the onus of persuading the Court that the admitted matters are wrong, and the proposed amendments are correct.
The Nanevski parties point to the following matters in support of their submission that the evidence adduced by Mr Ken Slaveski on this application would not give rise to an actual persuasion that either Nanevski Developments did not contribute $67,500 to the deposit on the Riverside Drive property or that he paid the whole amount himself.
First, they say that Mr Ken Slaveski's affidavit evidence "belatedly disclaiming" Nanevski Development's $67,500 contribution is entirely comprised of speculative hearsay. The Nanevski parties submit that this evidence is either inadmissible in its entirety or, at best, of very little weight.
Second, they say that the bank statement annexed to Mr Ken Slaveski's affidavit sworn on 27 March 2020 in fact shows that Nanevski Development's funds were included in the deposit. It is said that the bank statement clearly shows the credited cheque from Nanevski Developments (which Mr Ken Slaveski deposes is part of the credited sum of $74,697.47) being paid into the account on the same day as, and before, the deposit for the Riverside Drive property is withdrawn. It is said that Mr Ken Slaveski does not attempt to explain how the bank statement is relied upon to prove the opposite position.
Third, they say that what Mr Ken Slaveski's affidavit evidence does say about the bank statement is obviously wrong when compared with the statement itself. It is noted that he twice says that the deposit on the Riverside Drive property was provided by a "cheque" which he either arranged to be drawn (if his evidence in [23] of his affidavit of 27 March 2020 is to be believed) or drew himself (if his evidence in [24] is to be believed); whereas the payment was not made by a cheque at all (the bank statement shows it was an "Internet Transfer").
Fourth, they say that Mr Ken Slaveski adduces no direct evidence from his financial controller (Ms El-Turk) about how what the bank statement says could not be correct, notwithstanding that it is her "speculation" that he credits as the source of this withdrawal application. It is submitted that it can be inferred that Ms El-Turk would not have said anything to contradict the terms of the bank statement.
Fifth, they say that Mr Ken Slaveski adduces no evidence from Mr James Slaveski who, as the incoming registered proprietor of Riverside would be the person best able to give evidence as to the true source of the deposit for it. It is said that it may be inferred that this evidence also would not have assisted Mr Ken Slaveski.
Sixth, they say that the "general ledger 'suspense account'" document which Mr Ken Slaveski annexes to his affidavit is not a ledger "and proves nothing". It is said that no suggestion is made that the $67,500 from Nanevski Developments was removed from the bank account to which he swears it was paid, either before the $135,000 deposit transfer was made or at all. It is submitted that "[i]f $67,500 had really been sitting idle in an account since 9 February 2015 it might be thought that a document or two would exist to evidence that".
Seventh, they say that even if Mr Ken Slaveski's evidence were to be "completely accepted", it would only go as far as proving that, for internal purposes, Mega-Top Cargo chose to characterise the Nanevski Developments' payment of $67,500 in a particular way (and not tell the Nanevski parties about it until five years later on this application). It is said that this does not prove that Nanevski Developments did not contribute $67,500 to the deposit on the Riverside Drive property.
Finally, the Nanevski parties say that Mr Ken Slaveski's evidence that he took a short term loan from his own financial controller for $67,500 does not assist him on this application because his admission is only in respect of $67,500 of the $135,000 deposit. The Nanevski parties say that it may be accepted on this application that he did take such a loan and that it formed part of the deposit; but that this still leaves the other half as coming from the Nanevski parties, which it is said is precisely what he has admitted.
The Nanevski parties are staunchly critical of the evidence adduced on the present application and maintain that it is contradicted by the evidence adduced from both Mr Ken Slaveski and Ms El-Turk by Mega-Top Cargo in the Statutory Demand Proceedings (Mr Ken Slaveski's affidavit sworn 15 May 2019, and Ms El-Turk's affidavit sworn 15 May 2019). On the present application, the Nanevski parties tendered various paragraphs of those affidavits as evidence of what had been deposed to in those earlier proceedings (referring in this regard to Bank of Western Australia Ltd v Coppola [2011] NSWSC 1326). It is submitted that this affidavit evidence establishes precisely the position admitted in the amended defence, namely that the cheque for $67,500 was provided by the Nanevski parties and used as a contribution to the purchase price of the Riverside Drive property. It is noted that Mr Ken Slaveski and Ms El-Turk each annexed to his or her affidavit and relied upon the same bank statement in the Statutory Demand Proceedings to prove Nanevski Developments' contribution that Mr Ken Slaveski now seeks to rely on for the contrary position.
Finally, it is said that in the Statutory Demand Proceedings, Ms El-Turk's evidence of the Nanevski Developments' contribution to the purchase price was given by reference to her "records". It is submitted that that reference (to her records) assists in the reliability of that evidence, whereas no reference to such records is made by Mr Ken Slaveski in asserting the opposite position to that which was earlier deposed to by Ms El-Turk, nor are any such records adduced in evidence. The Nanevski parties maintain that an adverse inference is available in this regard.
Thus, it is submitted that Mr Ken Slaveski has not established sufficient cause for his admissions to be withdrawn; that he has not established his change in position; nor has he given a full and proper explanation for the making of the admission "based on evidence of a solid and substantial character". Accordingly, it is submitted that leave to withdraw the admissions should be refused.
[19]
Other proposed amendments to amended defence
As to the remaining proposed amendments to the amended defence, the Nanevski parties oppose the following amendments: the proposed amendment at 12, on the basis that it seeks to introduce a matter that is not a material fact on the claim or its defence; the proposed amendment at 12A, on the basis that the final twelve words seek to roll up an unparticularised repudiation and breach; the proposed amendment at 14, on the basis that the final fourteen words are a submission; and the proposed insertion of [44A], on the basis that this seeks to introduce an unparticularised set-off agreement.
[20]
Proposed cross-claim
As to the proposed cross-claim against Nanevski Developments and Mr Tom Nanevski, the Nanevski parties emphasise that Mr Tom Nanevski is not a party to any of the proceedings. They say that he is joined to the amended notice of motion as a non-party respondent; and that the amended notice of motion seeks no relief against him and includes no order in terms for his joinder. Filing of the cross-claim is opposed. Apart from the delay, the Nanevski parties raise the following matters in opposition to the filing of the proposed cross-claim.
Paragraphs 1-18 (proposed claim for an account against Mr Tom Nanevski)
It is noted that these paragraphs of the proposed cross-claim seek orders for accounts of the partnership (or what the Slaveski parties refer to as a "joint endeavour that failed"). The Nanevski parties say that leave to file the pleading in its current form should be refused, for two reasons.
First, that to the extent that the proposed pleading contends that "no contributions" were made by Nanevski Developments to the Riverside Drive property, this is contrary to the admissions in the amended defence. (To that extent, therefore, the Nanevski parties' opposition turns on success in opposing the leave for the filing of the proposed further amended defence.)
Second, that the proposed cross-claim seeks a contingent order for an account in respect of the Riverside Drive property if it is found that the Slaveski parties were in a partnership or joint venture with Nanevski Developments and Mr Tom Nanevski. The Nanevski parties say that this wrongly asserts that this is the position alleged by Nanevski Developments in its amended statement of claim (i.e., that there was a partnership between the Slaveski parties and both Nanevski Developments and Mr Tom Nanevski in respect of the Riverside Drive property). The Nanevski parties say that, in respect of the Vista Street property, the Slaveski parties seek an account for any partnership or joint venture found to exist between them and Mr Tom Nanevski only (but this position is contrary to the pleaded partnership which is with Nanevski Developments only).
The Nanevski parties say that Nanevski Developments makes no allegation that Mr Tom Nanevski was a party to the alleged Partnership agreement; and they note that the Slaveski parties make no such allegation in their proposed cross-claim (rather, it is said, they expressly eschew it).
It is submitted that, in circumstances where no party claims that Mr Tom Nanevski is a party to any partnership or joint venture, his joinder to the proceedings to seek an account against him in respect of such a partnership is neither necessary nor proper. It is submitted that there is no reasonable possibility that a finding will be made (not contended for by any of the parties) that he is a partner; and that leave to rely on these paragraphs should be refused.
Paragraphs 19-67 (headed Mega-Top Loans to Nanevski of $590,000)
Issue is taken by the Nanevski parties with the preface to these paragraphs, namely the statement that they are in "further answer to paragraph 30 of the Further Amended Defence"; on the basis that it is not the role of a cross-claim to answer the cross-claimants' own defence. In any event it is noted that at [19], what is pleaded is a denial to the amended statement of claim.
Insofar as the claim in these paragraphs relates to three alleged oral loans, it is noted that the first is pleaded as an agreement but particularised as a representation, and the second and third are not particularised at all. It is submitted that almost all of the 49 paragraphs sought to be relied upon fail to plead material facts and instead relate "a mixture of submissions, evidence and a factual deluge which pays no regard to materiality or even relevance".
Reference is made, by way of example, to the matters alleged at [21] (reference to "a nursing home for the elderly"); [22] (a security interest to the Commonwealth Bank, which it is said does not form part of the claim); [23] (a further representation said not to be sued upon); [24]-[25] (an introduction to an introducer for the purpose of arranging a loan which is alleged to have resulted in a conditional offer of finance not further referred to in the pleading; [26] (another representation said not to form part of the cause of action; and which it is noted is particularised by reference to an affidavit made in other proceedings); and at [27] (described as a "curious" submission about motive).
The Nanevski parties say that the remainder of these paragraphs plead to such "non-material matters" (this being said not to be intended as an exhaustive list) as: the alleged convening of directors' meetings and the "causing" of resolutions (at [29], [49], [54]); arguments about repaying the Commonwealth Bank (at [31]-[52]); allegations about Nanevski Developments' capacity to repay the Commonwealth Bank (at [33]); "rolled-up commentary" on alleged banking transactions (at [36]-[39]); allegations (said to be more akin to a tort pleading) about what Mr Tom Nanevski "knew and or ought to have known" (at [41]); credit balances in bank accounts (at [46], [51]); further representations said not to be sued up on (at [47], [52]); "unspecified" alleged understandings (at [48], [53]); some text messages (at [57]-[59]); a statutory demand (at [64]); set aside proceedings (at [65]) and the result thereof (at [66]).
It is contended that the proposed pleading does not meet the standard required of a pleading to recover an alleged loan of $590,000. It is submitted that if Nanevski Developments were required to answer it, it would require the investigation of, and reply to, numerous non-material facts causing unnecessary expense and delay; and that leave to rely on those paragraphs should be refused.
Paragraphs 68-82 (headed Ken and Biljana's Claim for Trespass by Nanevski's Materials)
Again complaint is made that these paragraphs are prefaced by the allegation that they are in further answer to the proposed cross-claimants' own proposed further amended defence, repeating various paragraphs thereof before "finally purporting to really answer [sic]" the amended statement of claim (at [68]).
Complaint is made that the first substantive paragraph ([69]) pleads an apparent breach of a materials storage agreement which is neither pleaded nor particularised, and is described as "the agreement in paragraph 66 above" (whereas at [66] there is nothing said about an agreement and instead allegations are made about proceedings to set aside a statutory demand).
It is noted that the following paragraph (at [70]) pleads four separate sets of instructions Mr Ken Slaveski claims he gave to his solicitors (said to be a non-material fact), and pleads demands said to be made "by way of written letters" said to concern the building material "referred to in paragraph 67 above" (whereas it is noted that at [67] there is an allegation as to the calculation of interest on a loan agreement and nothing about building materials).
As to the claim (at [80]) under the Uncollected Goods Act 1995 (NSW) (Uncollected Goods Act), the leave of this Court is necessary for this claim to be prosecuted in this Court (see s 18 of the Uncollected Goods Act). Complaint is made that: the proposed pleading impermissibly rolls up a number of allegations (including that building materials were "uncollected goods" for the purposes of the Uncollected Goods Act, without specifying that they are bailed or which of the three separate limbs of the definition of that phrase in s 5 of the Uncollected Goods Act is relied upon); and that they were "unlawfully dumped" without identifying the law (it being noted that the concept of "dumping" does not appear in the Uncollected Goods Act).
It is said that if the claim of unlawful dumping is intended to convey some alleged breach of the Protection of the Environment Operations Act 1997 (NSW) (Protection of the Environment Operations Act), then that is a serious allegation of potential criminality and cannot be made in such a shorthand way (and would require the pleading of the material facts relied upon). It is said that such an allegation should not be made at all because it is not an element of a cause of action that is alleged. It is said that alleged remedies and rights are referred to without identifying their source (see at [81]-[82]).
Hence it is submitted that leave to rely on those paragraphs should also be refused.
Paragraphs 83-106 (headed Ken and James' Misleading and Deceptive Conduct Claim - Riverside Drive)
It is noted that these paragraphs seek to plead a "First Representation" (which is particularised by reference to repeating other representations pleaded elsewhere in non-identical terms) (see at [83]), and a Second and Third Representation said to be made by Mr Tom Nanevski "for and on behalf of"' Nanevski Developments (see at [85], [87]), but for which Mr Tom Nanevski is later alleged to be a primary contravenor ([104]).
It is further noted that loss and damage is pleaded as being suffered by Mr Ken Slaveski and Mr James Slaveski (see at [105]), but it is instead claimed by Mr Ken Slaveski and Ms Biljana Slaveski (see at [106]). It is noted that the particulars of the loss and damage are stated to be as incorporated into a forensic accountant's report (see at [106]). Complaint is made that this appears more like a solicitor's note about workflow than a pleading, and it is said that this is hardly a matter to which the Nanevski parties can sensibly plead. Issue is taken with the fact that the solicitor certifies that the claim is not one for damages at all.
The Nanevski parties say that the representation claims are confusing and imprecise in an area where clarity and precision of allegation are "vitally important". It is submitted that leave to file this part of the cross-claim should also be refused.
[21]
Proposed amendments to Local Court Moneys Claims
Complaint is made that the Slaveski parties now seek to replace the short form "admirably concise" Local Court Moneys Claims (in which Mega-Top Cargo seeks repayment from Nanevski Developments for amounts allegedly rendered by, or paid by, Mega-Top Cargo in the course of the partnership), to which Nanevski Developments has filed defences to the effect that any amount due is an expense or debt of the partnership, with proposed amended pleadings of considerably greater length.
It is said that the proposed amendments now mostly seek to abandon the cause of action in debt and to and replace the claims with claims for breach of contract, and in restitution and quantum meruit. Complaint is made that the proposed pleadings are "discursive, embarrassing, circular, confusing, legally hopeless and otherwise fall far short of the pleading standards required by the UCPR."
The Nanevski parties say that the concessions by Counsel for the Slaveski parties (both as to the existence of a good cause of action on the current pleadings and as to the reason for the proposed amendments - namely that they have arisen from a consolidation of legal representation and the preference for the claims to be amended to be more particular) are relevant to the exercise of the discretion to grant leave. It is said that the interests of justice and the determination of the real issues in dispute will not be served by an "enormously expanded" amendment which is not said to be necessary to protect a right, but rather only "nice to have". Insofar as Mr Ken Slaveski (in his affidavit sworn 27 March 2020) describes the amendments as variously to make the pleadings "more particular", "more specific", "easier ... to understand", and "more extensive", it is emphasised that Mr Ken Slaveski does not swear that they are necessary (and nor does his solicitor).
It is noted that the time within which Mega-Top Cargo could have made such amendments without leave expired 28 days after the filing of the claims in the Local Court (and criticism is again made of the submission that the amendment applications are not "late" within the meaning in Aon without further elaboration).
The Nanevski parties also raise specific complaints as to the separate Moneys Claims as further reasons why leave to file the amended statements of claim should be refused.
[22]
Matter 2018/00357790: "windows claim"
In this claim, Mega-Top Cargo seeks payment for "logistic services" rendered as per four identified invoices totalling $24,000. It is noted that the invoices state that the services relate to the importation of some Greek windows and that Nanevski Developments has filed a defence and has taken no issue with the pleading in its current form.
It is said that, by the proposed amendments, Mega-Top Cargo now seeks to abandon any claim in respect of one of the four invoices, and introduces "discursive and embarrassing" new contractual and equitable claims (the quantum meruit claim increasing the amount claimed from $24,000 to over $100,000).
The Nanevski parties say that if the amended pleading were filed it would be liable to be struck out or, if not struck out, it would lead to a great deal of wasted time on non-material or hopeless matters and would inhibit rather than advance the resolution of the real issues in dispute. Having regard to the statutory imprimatur in the Civil Procedure Act, it is submitted that the discretion ought to be exercised to allow the amendments only insofar as they abandon the current pleading.
Particular complaint is made as to the following matters.
It is noted that in the proposed amendments, [1]-[25] of the current statement of claim are replaced with a new contractual claim for breach of what is said to be a partly express and partly implied agreement for the collection and shipping of the windows made on or about 22 March 2017 (see at [8]). It is submitted that the proposed new contractual claim is obviously hopeless since a claim for loss for breach of contract claim necessary sounds in damages, but that damages, while pleaded in [24], are not claimed as relief (and Mega-Top Cargo's solicitor has certified that the claim is not one for damages - which the Nanevski parties point out means that Mega-Top Cargo is not subject to the restrictions on commencing proceedings for damages without reasonable prospects of success).
As to [9]-[10] of the proposed amendments, complaint is made that these paragraphs seek to plead what the express terms were "partly comprised" of without explaining what other source the express component of the contract was "partly comprised" of; and it is noted that Mr Ken Slaveski gives no evidence in support of these new pleaded "conversations" in his affidavit in support of the amendments (sworn 27 March 2020).
As to [11] of the proposed amendments, which seeks to imply an agreement from "facts, matters and circumstances", it is noted that these are particularised as entirely post-dating the alleged formation date of the contract. It is said that such matters cannot be grounds on which a term can be implied into a contract that is alleged to have already been formed.
As to [12] of the proposed amendments, it is noted that this seeks to plead that the entirety of Mega-Top Cargo's "standard trading terms and conditions were express terms of the agreement", rather than pleading the material effect of such parts of that document as are sought to be relied upon (cf r 14.9 of the UCPR). It is noted that the terms provided comprise 22 paragraphs "(plus sub-paragraphs and sub-sub paragraphs) of closely typed text dealing with wide-ranging matters including multiple warranty and exclusion clauses". It is said that the relevance of each and any of these to the claim is "quite unclear".
As to [13] of the proposed amendments, it is noted that this pleads that these express written standard trading terms were actually implied terms (an allegation that the Nanevski parties say would be legally remarkable).
As to [14] of the proposed amendments, it is noted that this pleads an express term but without particularising "from which part of the soup the express term is alleged to be fished". It is said that the particulars provided on request only particularised what the terms is alleged to be "partly comprised of".
As to [15] of the proposed amendments, it is noted that this seeks to plead that the implied terms are implied "to give business efficacy to the agreement". Complaint is made that this is far from sufficient to imply a term (having regard to BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266 at 283, 286, per Lord Simon of Glaisdale, Viscount Dilhorne, Lord Keith of Kinkel; and Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 346, per Mason J, Stephen, Aickin, Wilson and Brennan JJ agreeing on this point; [1982] HCA 24). It is said that what is sought is legally embarrassing.
As to [18] of the proposed amendments, it is noted that this interposes an allegedly entirely new oral contract said to be a "Storage Agreement" (but no separate complaint is made about this).
As to 26 of the proposed amendments, it is noted that this seeks to make an alternative claim in restitution without pleading any qualifying or vitiating factor necessary to establish relief (citing Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 at [30], per French CJ, Crennan and Kiefel JJ). As to 26, it is noted that this seeks to make a case in quantum meruit notwithstanding all of the attempts to plead a contract.
As to [28] of the proposed amendments, which seeks to plead a market rate for storage by non-exclusive reference to what three competitors of Mega-Top Cargo charge, it is said that this is not a material fact and that it would be near impossible for Nanevski Developments to plead to it.
As to [29]-[33] of the proposed amendments, which plead the charges claimed under [28], it is said (somewhat emotively) that [32]-[33] "appear to introduce a sui generis concept of a 'living invoice'"; that is an invoice which is said to be issued for $16,800 (confirmed by the invoice itself) "but which later somehow becomes due in the amount of [$26,400] though an unexplained magic process".
[23]
Matter 2019/00095013: "steel importation claim"
The second of the three Moneys Claims, as currently pleaded, is a debt claim particularised in respect of eight allegedly unpaid invoices relating to steel importation, totalling $60,000. It is noted that Nanevski Developments has filed a defence and has taken no issue with the pleading in its current form.
It is noted that, by its proposed amendments, Mega-Top Cargo seeks to reduce the quantum of its claim from $60,000 to $7,000 (abandoning its debt claim entirely and introducing new "defectively pleaded" contractual and equitable claims). The proposed amendments would expand the pleading from two paragraphs to twenty-four paragraphs. It is said that the proposed pleading suffers from all of the issues identified in relation to the windows claim, but also from the following further matters.
As to the abandonment of the cause of action in debt, it is noted that, in the proceedings before Darke J, Mr Ken Slaveski conceded that three of the eight invoices totalling $53,000 in fact had been paid (including one in the amount of $51,000 which he deposed to receiving before the commencement of the proceedings on 1 May 2017), and blamed an "inadvertent accounting error" in that regard. The Nanevski parties complain that, whatever characterisation may be put on that evidence, Mr Ken Slaveski has subsequently done nothing to correct the error and says nothing about it in his affidavit (sworn 27 March 2020) on this application.
The Nanevski parties do not appear to quarrel with the abandonment of the claims in respect of the three invoices which Mega-Top Cargo now accepts have been paid (they say it should have done so long ago), but what the Nanevski parties contend is that the matter should proceed to hearing in respect of the balance of the claim (as presently pleaded).
The Nanevski parties identify the following further difficulties with the proposed pleading. First, that [16] of the proposed amendments seeks to plead the further implication of the express standard trading terms, arising from Nanevski Developments' use of other services from Mega-Top Cargo. However, the Nanevski parties note that the key invoices pleaded for those other services are dated after the alleged contract is said to be formed. It is said that the invoices themselves confirm that they are for services rendered after the contract is alleged to have been formed in July 2015 (referring by way of example to invoice S00007556/G dated 9 October 2015, in respect of goods estimated to depart China on 11 September 2015; invoice #S00064081 dated 7 October 2015, with its only line item being a charge for storage "for the month of October 2015").
Second, that [20] of the proposed amendments seeks to plead that "in the premises of [18] and [19] above" Nanevski Developments has been liable since the date of the issue of each invoice. The Nanevski parties note that those paragraphs say nothing about when and how liability is said to arise; and it is said that the invoices provided do not assist (and in fact suggest the opposite conclusion), in that each of them has the terms "cash on delivery" and states the "amount due" as "AUD 0.00".
Third, that [21] of the proposed amendments seeks to plead the payment of invoices which are not sued on, and the existence and payment status of which could not be a material fact in the cause of action now sought to be maintained.
It is submitted that the proposed amendments should not be permitted other than to abandon the present claims.
[24]
Matter 2019/00095876 "formwork claim"
The third of the three Moneys Claims was commenced in the Small Claims Division of the Local Court as a debt claim in respect of two invoices totalling $7,000. It is noted that the proposed amendments seek to expand that to five invoices totalling approximately $14,000, and that the pleading is sought to be increased from two paragraphs to 64 paragraphs claiming five new contracts and abandoning the original debt claims are sought to be entirely abandoned.
Again, it is said that the proposed new pleading suffers from all of the deficiencies identified in the other matters above "and more". The Nanevski parties expressly eschew an exhaustive analysis of all the deficiencies. They say that the appropriate order is for leave to be refused to make the amendments except to the extent they abandon the existing claims.
[25]
Consolidation
As to the claim for consolidation of the respective proceedings, the Nanevski parties accept that all proceedings ought to be heard together. The Nanevski parties say that it would be most undesirable for separate hearings to occur for each of the proceedings in light of the significant overlapping of subject matter, and that all parties will benefit from having all issues determined in the one court in the one hearing; and that this is the very reason the Nanevski parties applied for the Moneys Claims to be transferred to this Court in the first place.
Insofar as the Slaveski parties seek a further (and, it is said, more unusual) order for consolidation, the Nanevski parties say that this position appears directly contrary to the evidence given by Mr Ken Slaveski before Darke J (and said to have been rejected by his Honour) that: "[t]he invoices sued on by the Mega Top (sic) in [the] Local Court Proceedings [...] do not relate to the [Riverside and Vista St] properties or to any partnership or joint venture that is alleged to have existed between the parties in these proceedings. Rather, each of the Local Court Proceedings relates to business dealings between Mega Top and Nanevski Developments. These dealings are exclusive to any alleged partnership agreement or joint venture between the parties in these proceedings". It is noted that Mr Ken Slaveski repeats on this application his assertion that the facts of the Local Court proceedings and the partnership proceedings "do not overlap" (citing [45] of Mr Ken Slaveski's affidavit, sworn 27 March 2020).
That said, the Nanevski parties do not wish to be heard against an order for formal consolidation (as opposed to the hearing together of the proceedings) if that be considered appropriate.
[26]
Proposed further amended defence in Partnership Proceedings
The first issue to be determined in this regard is as to whether the proposed further amended defence amounts to a withdrawal of an admission or of a matter that operates to the benefit of the Nanevski parties within the meaning of r 12.6 of the UCPR (since although leave is required in any event for the further amendment to the amended defence, the test for withdrawal of an admission differs from that applicable when the issue is simply as to whether leave should be given to amend per se).
Rule 12.6 of the UCPR relevantly provides that:
(1) A party raising any matter in a defence or subsequent pleading may withdraw the matter at any time.
(2) Despite subrule (1), a party may not withdraw any admission, or any other matter that operates for the benefit of another party, except with the consent of the other party or by leave of the court.
…
A similar issue arose for consideration in Sergi v Sergi to which the Slaveski parties here refer (and place reliance on for their contention that there are no relevant admissions being sought to be withdrawn). There, Darke J considered whether the proposed deletion of the allegation (contained in [9] of a cross-claim) of a partnership at will (and its incorporation by reference into the defence) amounted to a withdrawal of an admission, or other matter that operated to the plaintiffs' benefit, within the meaning of r 12.6(2) of the UCPR, such that leave was required for its withdrawal. The contention of the plaintiffs in that case was that no adequate explanation had been given for the change in course; that the evidence given in support of the new allegations was not satisfactory; and that the circumstances suggested that the change in course is a tactical device designed to defeat the plaintiffs' claims under s 66G of the Conveyancing Act 1919 (NSW), and to avoid summary judgment on those claims (at [15] of Sergi v Sergi).
His Honour referred at [22] to Gzell J's statements at [1]-[2] in Khouri v National Australia Bank Ltd [2007] NSWSC 987 (Khouri) and, though expressing some doubt as to whether r 12.6(2) applies to pleadings other than defences or subsequent pleadings, proceeded on the basis that it could apply to a cross-claim. Darke J nevertheless concluded that the pleading in the cross-claim (that the partnership was a partnership at will) was not an admission within the meaning of r 12.6(2) of the UCPR (at [23] of Sergi v Sergi). His Honour said:
23. … In the context of pleadings, an admission by a party can arise in response to an allegation made by an opposite party (see UCPR r 14.26). That is not the case where a party makes an assertion that is contained within a statement of claim or a statement of cross-claim.
His Honour went on to note (at [24]) that, outside of pleadings, a party could make formal admissions in various ways (referring by way of example to rr 17.2-17.5 of the UCPR), but that the admission made in the cross-claim was not an admission of that character. His Honour also concluded (at [25]) that the relevant pleading (that there was a partnership at will) there was not a matter which operated for the benefit of another party within the meaning of 12.6(2) of the UCPR. His Honour said:
25. … The assertions made about the existence of the partnership, as contained in paragraphs 8 to 13 of the Cross-Claim, form part of an affirmative claim advanced within the proceedings. The proceedings had hitherto contained no issue about the existence of any partnership. The making of the assertion of a partnership at will did not itself render it more likely that the plaintiffs would obtain the relief they sought. Viewed objectively, the assertion ought not be considered to be a matter that operates for the benefit of the plaintiffs (or the first plaintiff).
His Honour considered that it was not sufficient to overcome that conclusion that the plaintiffs might have been content to resist the cross-claim on the basis that the alleged partnership at will existed, saying that unless and until the plaintiffs made an admission to that effect, the assertion of the alleged partnership remained a matter capable of being in issue on the cross-claim (at [26]). Further, his Honour did not consider it sufficient that the first plaintiff might have acted on the basis of the assertion of the partnership at will by giving a notice of dissolution, saying that (at [27]):
… the question whether a matter operates for the benefit of another party within the meaning of UCPR 12.6(2) must be determined objectively by viewing the matter in its context as part of the pleadings. That is to say, whether a matter in a pleading should be regarded as one that operates for the benefit of another party must be objectively apparent from the pleadings themselves.
By way of example of such matters, his Honour referred to statements of the following kinds: that liability is admitted for breach of a contract or breach of a duty; that an available defence under a limitation provision or a Statute of Frauds provision will not be relied upon; or (assuming the rule applies to statements of claim and statements of cross-claim) that a credit or allowance would be given in the calculation of a claim or an amount alleged to be due. His Honour did not consider it to be objectively apparent that the allegation in the cross-claim concerning the existence of a partnership at will was a matter that operated for the benefit of one or more of the plaintiffs, stating (at [28]) that "[t]he matter can be seen to form part of a claim to be asserted by the active defendants, and in the context of that claim as formulated is not in the nature of a concession".
Thus, his Honour held that leave was not required for the withdrawal of the relevant allegation in the cross-claim, and that the same conclusion followed in respect of the relevant paragraph of the defence insofar as it could be read as incorporating the terms of the cross-claim (at [29]).
In obiter, his Honour said (at [30]) that, had leave to withdraw been necessary, he would have declined to give leave (not being satisfied that adequate explanations had been proffered as to how the apparently deliberate assertion of a partnership at will had been made and as to why it would now be appropriate to allow a different case to be advanced - there referring to Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455; [2000] QCA 292 at [27], per McPherson JA). (I consider this issue, i.e. when leave will be granted to withdraw an admission, in due course.)
Returning to the alleged admission(s) in the present case, the relevant pleading in the amended statement of claim, filed 4 October 2019, to which the alleged admissions respond is at [11] (which I have extracted above). There, Nanevski Developments pleads that on 7 February 2015 Nanevski Developments paid $135,000 towards the deposit for Riverside and then particularises a trust account receipt and a bank cheque.
Pausing here, it is certainly the case that there is no requirement to plead to particulars (see my discussion in Brand v Monks [2009] NSWSC 1454 from [406], and the authorities there cited). Therefore, strictly speaking, all that the Slaveski parties were required to plead to was the allegation that, on 7 February 2015, Nanevski Developments "paid" $135,000 "towards" the deposit for the Riverside Drive property. (I have adverted above to the dispute now between the parties as to whether that allegation of itself was confusing.)
To the extent that the Slaveski parties chose to go further than what might have been required (for strict pleading purposes) does not of itself lead me to conclude that no admissions were made by or in the course of them so doing. In that regard, the submission to the effect that the Slaveski parties were not pleading to an allegation made against them when they responded in their amended defence to the allegation at [11] seems to me to be difficult to maintain.
At 11-(e) of their (existing) amended defence filed 21 January 2020, the Slaveski parties (as noted earlier but I repeat this here for convenience) plead as follows:
c. Admit that on or about 9 February 2015, Tom [Nanevski] gave Ken [Slaveski] a bank cheque for $67,500; and
d. Admit that Ken [Slaveski] applied the $67,500 towards the deposit cheque he wrote and gave to Raine & Horne San Souci on exchange of contracts to purchase the property on 9 February 2015; and
e. State that in the premises, at exchange of contracts, Tom [Nanevski] or Nanevski [Developments] contributed 50% of the five percent 5% $135,000 deposit required to purchase the property.
Whether or not strictly required to respond to the matters raised by the allegation made at [11] of the amended statement of claim, filed 4 October 2019 (and not the particulars thereto), what appears at 11-(d) of the amended defence is certainly couched as an admission (since it is expressed as such) as to particular facts - namely, the giving by Mr Tom Nanevski to Mr Ken Slaveski on or about 9 February 2015 of a bank cheque for $67,500 and that this amount was applied towards the deposit cheque that Mr Slaveski wrote and gave to the real estate agents on exchange of contracts on 9 February 2015. What then follows, at the existing 11 of the amended defence, appears to be a conclusion, drawn from the admitted facts as to the provision of the cheque and the application of that amount to the deposit, asserted by the Slaveski parties as to this amounting to a contribution by Mr Tom Nanevski or Nanevski Developments of 50% of the deposit required to purchase the property. That conclusion appears to be in the context of raising (or to presage the raising of) an affirmative case, namely that any contribution to the purchase price by Mr Tom Nanevski (or perhaps by Nanevski Developments) was (or was no more than) 50% of the deposit (which might then have consequences for the amount, if any, that the Nanevski parties might be able to recover, or as to the interest one or more of them might have in the Riverside Drive property).
I consider that the position in the present case can be distinguished from that in Sergi v Sergi because here the alleged admissions were on their face made in the context of responding to an allegation made by the opposing party. In simple terms, the allegation made in the amended statement of claim is that the sum of $135,000 was paid "towards" (or, in other words, contributed) to the deposit in relation to the purchase; the response to that allegation is that a bank cheque for $67,500 was applied and that amount was applied towards the deposit.
I consider that those first two sub-paragraphs do amount to admissions of fact (even if these are not formal "admissions" as such because, as the Slaveski parties contend, they were not raised in response to an allegation in the amended statement of claim, as such).
To the extent that the further assertion at 11 of the amended defence appears to amount to an acceptance that there had been thereby a "contribution" by Mr Tom Nanevski or Nanevski Developments to the deposit in the amount of $67,500, and this raises an affirmative case, then it may well be that there is no admission in this sub-paragraph (on the approach in Sergi v Sergi); but that, to my mind, does not answer the position as to the allegations at 11-(d) of the amended defence.
In Dovuro Pty Limited v Wilkins (2003) 215 CLR 317; [2003] HCA 51, Gummow J (McHugh and Heydon JJ agreeing) drew a distinction between admissions on the pleadings and admissions outside of pleadings, in the context of considering a statement made on behalf of a corporation that it had "failed in its duty of care", saying at [69]:
Admissions on the pleadings are one thing. Modern rules of court commonly provide that a party may, by its pleading, raise any point of law. That which is so raised may be admitted. But that is not the present case. Certainly a party may admit the facts from which a conclusion of law may then be drawn. The detailed statement made in support of the primary application under the Real Property Act 1900 (NSW) by the defendant in Allen v Roughley, as to the history of the occupation of the land in question, may be an example. The real significance of the admission made in Allen v Roughley was, as Kitto J pointed out, that, following Lustre Hosiery Ltd v York, it was properly received in evidence notwithstanding that the defendant had no direct knowledge of all of the facts and had relied upon the statements of others.
[Emphasis added; citations omitted]
That illustrates the difficulty with the so-called admission at 11 of the amended defence. This appears to me to amount to an assertion as to the conclusion (and ultimately a conclusion of law - see below) as to the import of the contribution there admitted to have been made. I consider that this is a matter that operates for the benefit of the Nanevski parties in that there is an acceptance there that there was a contribution by Mr Tom Nanevski to the purchase price. It does not seem to me to be to the point that it does not objectively advance the principal claim by Nanevski Developments, if it operates to the Nanevski parties' benefit by admitting the conclusion to be drawn from particular facts on which it may have an entitlement as against the Slaveski parties. (What that "admission" or concession amounts to at the end of the day is more problematic - the facts as "admitted" in the contentious paragraphs would be equally consistent with a sum of money being received by Mr Ken Slaveski and then applied in a particular way; i.e., not being provided for the purpose of contribution by Mr Tom Nanevski to the deposit for the purposes of any partnership or joint venture but rather the provision of some form of financial accommodation by Mr Tom Nanevski which was then used in a certain way by Mr Ken Slaveski and the "admission" at 11 of the amended defence would seem to me also capable of bearing a meaning of that kind.)
Pausing here, even if not permitted to be "withdrawn", the evidentiary significance of the so-called admission(s) could still be the subject of contest at the hearing. It has been suggested that admissions made otherwise than in the formal course of proceedings have merely an evidentiary significance and that the "admitting" party is entitled to dispute the accuracy of the admission (by evidence that it was influenced by mistake, misunderstanding or ignorance, or that it is otherwise inaccurate or unreliable) (see Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [113], [144], per Campbell JA, Hodgson JA agreeing). To the extent that the so-called "admissions" are here raised in the course of an alternative or contingent affirmative case, that logic would also seem here to apply.
I have concluded that leave is required pursuant to r 12.6(2) for the admissions contained in the relevant paragraphs of the amended defence to be withdrawn.
[27]
Applicable principles for leave to withdraw an admission or other matter that operates for the benefit of the opposing party
The second relevant issue is, on the basis that I have concluded that leave to withdraw is required, whether leave should be granted.
As to the applicable principles for leave to be granted on such an application, in Sergi v Sergi, Darke J referred to: SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816 (SLE Worldwide) at [55]-[56], per White J (as his Honour then was); In the matter of Dymocks Book Arcade Pty Limited [2013] NSWSC 298 at [8]-[13], per Brereton J (as his Honour then was); and Fabrizio v Wickham Hill Investment Pty Ltd [2018] NSWSC 612 at [68]-[69], per Robb J.
In their written submissions on the present application, the Nanevski parties referred to the approach of Brereton J, as his Honour then was, in Stafford v Kekatos (No 2) [2008] NSWSC 1044 (Stafford). In Stafford, Brereton J referred to his own then recent consideration of the relevant principles on such an application in Hill End Gold Ltd v First Tiffany Resource Corp [2008] NSWSC 866, and to the observations of Young CJ in Eq (as his Honour then was) in Sirius Shipping Corporation v The Ship Sunrise [2006] NSWSC 164, and For the Good Times Pty Ltd v Coltern Pty Ltd [2007] NSWSC 108, noting that the question is one of the attainment of justice rather than trying to apply an artificial approach according to any fixed set of rules (see at [14]). At [14]-[15] of Stafford, Brereton J, referring to the observations of Young CJ in Eq in the cases referred to above, said:
14. … His Honour emphasised that the Court is after the truth, and that in principle an erroneous submission should be able to be withdrawn unless outweighed by other factors, the chief of which is prejudice to the other party. His Honour added that there must be some evidence as to how the admission was made, and there must be some material to show that it was erroneous.
15. In Hill End Gold, I identified the essential questions for the court as being: First, was the admission wrongly made? That is, was the admission erroneous? Secondly, was the admission made inadvertently and is there an adequate explanation for it? That is, in essence, was the process which led to the admission one which resulted from mistake, confusion or inadvertence rather than a deliberate course of conduct? And thirdly, where does the balance of prejudice lie? Those considerations I think sufficiently inform the approach to be taken on the present application.
His Honour went on to emphasise at [16] that it was undesirable that the case be decided on a false issue, which might be the case if the defendants were held to an admission wrongly made. At [17], his Honour said:
17. I turn then to the first question: was the relevant admission wrongly made? In this respect I observe that, in For the Good Times, Young CJ in Eq referred to an erroneous admission (not an admission that might merely be arguably erroneous) (at [3]). Similarly, in SLE World Wide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816, White J emphasised (at [57]) that admissions deliberately and formally made should not be permitted to be withdrawn unless sufficient cause is shown why they should be and, in particular, that it was insufficient that it was reasonably arguable that the admission be wrong for that purpose.
[Emphasis added]
In Le Meilleur Pty Ltd v Jin Heung Mutual Savings Bank Co Ltd (2011) 256 FLR 240; [2011] NSWSC 1115 (Le Meilleur), I had cause to consider whether there had been an implied admission made by Counsel in submissions. Although no application had been made there to withdraw the alleged implied admission, I noted there (at [307]) that there have been two competing policies, at least, identified in relation to the withdrawal of formal admissions: first, that an admission should not be permitted easily to be withdrawn, so as to make the procedure for formal admissions meaningless; but second, on the other hand, not to discourage parties from making admissions out of fear that once given they cannot be withdrawn (citing Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 (Panfida Foods) per Rogers CJ). I referred to the decision in McFadden v Snow (1952) 69 WN (NSW) 8, where Kinsella J applied the approach discussed in Ell v Hunter District Water Supply and Sewerage Board (1927) 27 SR (NSW) 437; 44 WN (NSW) 140 (Ell v Hunter District Water Supply) by Street CJ at 440-441, who had in turn cited the following passage from Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710:
Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace.
Street CJ went on in Ell v Hunter District Water Supply at 441 to say:
We are not told how it was that this admission came to be made, or, if a mistake was made, why it was that this was not discovered sooner, but there can, of course, be no question of bad faith or anything of that kind in the matter … Is there any reason therefore why it should not be allowed to repair the error which it made? I can see none. The mistake has not brought about any alteration in the position of the plaintiffs, which will prevent them from getting justice done, and any injury that they may have sustained by reason of it can be compensated for by costs. I think therefore that the Board should be allowed to withdraw its admissions …
Examples given in Ritchie's Uniform Civil Procedure NSW (Ritchie's) (at [17.2.7]) (to which I referred in Le Meilleur at [311]) as to when it will not usually be appropriate to grant leave to withdraw an admission) include where, among other things: the admission has been made after obtaining relevant advice and is deliberate and clear (for example, Panfida Foods at 745 and 748); or the party with the benefit of the admission is likely to be prejudiced by the withdrawal, either as a result of having changed its position in reliance upon the admission (H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694; 1 All ER 934) or as a consequence of the unavailability of evidence, or likely significant deterioration in its quality, as a result of the delay (SLE Worldwide at [57]-[59], per White J, as his Honour then was); or where the application is made at a late stage of the proceedings (Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309; (2003) 204 ALR 327 (Jeans) at [32], per Hill, Madgwick and Conti JJ; Essex Securities Pty Ltd v Lunt [2006] WASC 58 at [14], [29] and [34], per Newnes M). Conversely, I noted the reference in Ritchie's (at [17.2.9]) to the recognition that leave to withdraw an admission may be appropriate where the admission was made inadvertently or without due consideration of material matters (Khouri at [12], [18], per Gzell J).
In Jeans, the Full Court of the Federal Court (Hill, Madgwick and Conti JJ) (at [32]) noted that the question whether to permit withdrawal of an admission was ultimately one of "the attainment of justice" (citing the observations of Dawson, Gaudron and McHugh JJ in State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 at 154; [1997] HCA 1), involving a balancing of all relevant circumstances including the prejudice which must attach to one party or the other.
In the present case, there has been an explanation given for the making of the so-called admissions. Broadly speaking, Mr Ken Slaveski's position is that, until there was a more complete review of the documents in preparation of the case, it was not appreciated by him that the $67,500 that he admits was paid to him in February 2015 had been placed (by Ms El-Turk) in a so-called "suspense" account (and on that basis could not have been used as part of the deposit paid on 9 February 2015). If that evidence is accepted, then the admission must clearly be incorrect. The fact that the explanation comes from Mr Ken Slaveski and not from Mr James Slaveski does not lead me to draw any adverse inference in circumstances where it seems apparent that Mr Ken Slaveski was the moving party in the transaction. Nor would I draw any adverse inference from the absence of direct evidence from Ms El-Turk or the reference in her earlier affidavit to "records" not before the Court on the present application.
The Nanevski parties maintain that the authorities to which I have referred above require that there be evidence that persuades the Court to the level of actual satisfaction on the balance of probabilities that the admission is incorrect. I have difficulty with the suggestion that the Court is here required to make, or should, on an interlocutory application of this kind make, a final decision on the merits of a disputed contention (which may ultimately turn on the credit of one or more of the witnesses). True it is that the authorities say that there must be something more than that it be reasonably arguable that the admission be incorrect (or, which to my mind is perhaps a different question to the question as to whether the admission was wrongly made - although that may be mere semantics). However, in the present case, there is in evidence the bank statement that records the receipt of the $67,500 cheque and there is now evidence that, on its face, records that this amount was placed in a "suspense" account; with an explanation as to why that was so (albeit only presented by Mr Ken Slaveski and by reference to a discussion with Ms El-Turk). The fact that Mr Ken Slaveski had previously been aware of the very same bank statement does not gainsay the explanation given for the discovery of the ledger document.
In those circumstances, I am satisfied on the balance of probabilities that the admission that the sum of $67,500 was "in the premises" paid as a contribution to the deposit was "wrongly made", because I accept that if the money was held in a "suspense account" at the relevant time then it cannot logically have been applied to the payment of the deposit (and there is evidence that there were funds sufficient to meet that deposit without recourse to the bank cheque provided to Mr Ken Slaveski). In saying this, I make clear that I am not here making any finding as to the underlying (disputed) facts; I am simply addressing the contention by the Nanevski parties that it be necessary that I feel an actual persuasion on the balance of probabilities that the admission was incorrect (or, as I would prefer to phrase it, that the admission was wrongly made).
As to the balance of the matters required to be established for the withdrawal of an admission or other matter in a pleading that operates for the benefit of the opposing party (namely, whether the admission was made inadvertently; whether is there an adequate explanation for it (i.e., was the process which led to the admission one which resulted from mistake, confusion or inadvertence rather than a deliberate course of conduct); and where the balance of prejudice lies), I consider that the evidence does establish that (though made with the benefit of legal advice being available to the Slaveski parties at the time), on the evidence now put forward the admission was the result of an incomplete review of the documentary material and hence resulted from a mistake in that sense. As to the explanation for delay, I consider that question below in the context of the disputes raised as to the pleading amendments more generally.
As to the balance of prejudice, with one qualification (to which I refer below), this is not a case where it has been shown that the party with the benefit of the admission (Nanevski Developments) is likely to be prejudiced by the withdrawal as a result of the delay, either as a result of having changed its position in reliance upon the admission, or as a consequence of the unavailability of evidence, or likely significant deterioration in its quality; nor, despite the vociferous complaints as to delays in the proceedings and non-compliance with court orders, is it the case that the application is made at such a late stage of the proceedings as would warrant refusal of the application (the matters not yet having been set down for hearing).
The qualification I here make is as follows. One aspect of prejudice which was raised in oral submissions was that the Nanevski parties say that, since the initial filing of the defence on 28 June 2019, they have had the benefit of an admission that Nanevski Developments has a caveatable interest in the Riverside Drive property (and that, if the admission is now permitted to be withdrawn, then they are at risk of an application to strike out its caveat over the property - noting that Darke J transferred the matter to the general equity list on the basis that no issue remained as to the caveat) (see T 33.25ff). Leaving aside the confusion to which the Slaveski parties have referred as to the particular property about which it was noted that the consent to the extension of the caveat was without admission, it was accepted that there would be potential prejudice arising from the withdrawal of the admission if the Nanevski parties were at risk of an application to remove the caveat over the Riverside Drive property pending the hearing of the matter. The Slaveski parties (following reservation of judgment in this matter) confirmed that if they were granted leave to file the proposed further amended defence, they would undertake not to seek to lapse the caveat presently registered on the title of the Riverside Drive property until the conclusion of the proceedings. That to my mind adequately meets this aspect of the prejudice to which the Nanevski parties have pointed.
On balance, I am persuaded that leave should be granted for the admissions in question to be withdrawn (and hence for the proposed further amended defence to be filed with the amendments proposed to [11] of the existing amended defence).
[28]
Other complaints as to the proposed further amendment of the amended defence in the Partnership Proceedings
Leaving aside the complaint as to the withdrawal of the admissions, there is opposition to various aspects of the proposed further amendment of the amended defence in the Partnership Proceedings (as well as to the proposed filing of the cross-claim, and the amendments sought to the statements of claim in the Moneys Claims Proceedings). Unsurprisingly, the Nanevski parties do not object to amendments to the amended defence that operate in their favour, and it is not necessary here to consider those.
The general principles applicable to the question of leave for the amendment of the pleadings (here sought in respect of both the defence in the Partnership Proceedings, and in the filing of amended statements of claim in the Moneys Claims Proceedings) or for the filing out of time of the cross-claim in the Partnership proceedings, can be set out at the outset. As has been set out above, the Nanevski parties have raised a raft of pleading issues (and were, to put it mildly, not complimentary of the drafting efforts in this regard).
Section 64 of the Civil Procedure Act provides, relevantly:
64 Amendment of documents generally (cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)
(1) At any stage of proceedings, the court may order -
(a) that any document in the proceedings be amended, or
(b) that leave be granted to a party to amend any document in the proceedings.
(2) Subject to s 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.
…
In Aon, French CJ (at [14]) noted the distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy (the latter engaging with the authority conferred on the court to make amendments of its own motion).
Subject to any rights to amend without leave given to the parties by the court rules, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power, which must be in accordance with s 64(2) of the Civil Procedure Act and must adhere to the "dictates of justice" (ss 56, 57 and 58 of the Civil Procedure Act). In Aon, the factors to be weighed in the exercise of this discretion were said (at [102], per Gummow, Hayne, Crennan, Kiefel and Bell JJ) to include: the nature and importance of the amendments to the applicants; the effect of the proposed amendments on the defendants; the delay in making the amendments; and, where there is delay in applying for amendment, whether an adequate explanation for the delay has been given.
In the present case, it must be noted that there has been not insignificant default in compliance with court orders (albeit that some of the complaint as to unsatisfactorily explained delays is somewhat tendentious). However, the present application is made at a much earlier stage of the proceedings than was the case in Aon. Therefore, whatever the complaint by the Nanevski parties as to the uncertainty as to what was meant by "late" in the context of the Slaveski parties' submissions, it seems to me that the present case bears little resemblance to that considered in either Aon or, another case of unacceptable delay, Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; (2016) 332 ALR 199 (Tamaya Resources Full Court).
Relevantly, the issues here to be considered are those of delay (including whether a full and satisfactory explanation for the delay has been given), and as to whether, if leave be granted, the pleading would nevertheless be liable to be struck out (which raises the question of the raft of pleading deficiencies identified by the Nanevski parties).
As to delay, the well-known passages from Aon are instructive (at [102]-[103], [113]-[115], per Gummow, Hayne, Crennan, Kiefel and Bell JJ):
[102] The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.
[103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in JL Holdings (202). Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.
…
[113] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.
[114] Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided.
In the present case, I am of the opinion that there has been a sufficient explanation for the delay in question; the gist of it is that there was ongoing discussion between the legal representatives in an attempt to narrow the issues in dispute on the pleadings, and longer time than expected was taken to settle the pleadings. No doubt the change in legal representation during the course of the Moneys Claims Proceedings would also not have assisted.
Of course it is on one view unsatisfactory (indeed, it may be acknowledged that at one level any delay is unsatisfactory - not least because of the requirement for the "just, quick and cheap resolution of the real issues in dispute" [my emphasis]). However, if there were never any delay then the need for an explanation in the context of applications of this kind would not arise (much as there would not need to be relief against forfeiture of a lease were there not to have been a breach justifying termination). And on one view an explanation of the kind here proffered is also unsatisfactory to the extent that it may suggest failures or inefficiency in the preparation of the case as between client and legal representatives (but that, unfortunately, is hardly unprecedented).
What is important to my mind is that there has been an explanation by Mr Ken Slaveski (in some detail) for the delay, and an apology on oath from both Mr Ken Slaveski and the solicitor with the conduct of the matter. Criticism is made of many aspects of the explanation that has been given. Some of that criticism, insofar as it might suggest that Mr Ken Slaveski or his solicitor should have explored there areas covered by legal professional privilege when proffering an explanation for the delay (such as the complaint that there is no explanation for the expectation that Mr Ken Slaveski says he first had as to the time needed to consult with his legal team and to settle the pleadings (see at [38] of his affidavit sworn 27 March 2020)), is redolent of an attitude of seeking to find fault. Further, the fact that some aspects of the explanation can be criticised as an incomplete excuse or might be perceived as being a matter of convenient timing (such as the reference to the "recent highly publicised implications of the coronavirus" - see at [42] of Mr Ken Slaveski's affidavit sworn 27 March 2020) does not gainsay that there has been an explanation for the delay. (I do not propose here to delve into the delays associated with the ongoing pandemic, save to note that, by 27 March 2020, when the affidavits were sworn, social distancing measures and at least a partial lockdown was already in place in this State.)
Moreover, some of the complaints now made as to unexplained delay (such as the complaint as to the Slaveski parties "resiling" from the pleadings served in accordance with Registrar Walton's orders on 13 December 2019) seem to elevate form over substance. I accept that there was not strict compliance with all of the timetable set by Registrar Walton (in that the evidence in support of the notice of motion was not served by 24 January 2020 as required) and that there has been an unfortunate history of delay; but there is no doubt that there was compliance with a number of aspects of those orders (such as the service of a draft amended pleading within the time required; and the filing and service of the notice of motion; albeit not the evidence relied upon in support thereof).
As to the complaint that Mr James Slaveski has not himself put on evidence explaining the delay from his perspective, I am prepared to infer that the conduct of the proceedings has principally fallen to (and the main protagonist in the disputes from the Slaveski parties' perspective is) Mr Ken Slaveski. In those circumstances, it may be inferred that Mr James Slaveski might have little to add to his father's explanation for the delay. I would not treat the absence of an affidavit from Mr James Slaveski as determinative of the present application (nor do I consider that further costs should be expended in requiring him now to file an affidavit of his own explaining the delay).
There is much to be said for the proposition that, unsatisfactory as elements of the preparation and conduct of the proceedings to date have been, the parties are now at a time when the proposed amended pleadings have been finalised and the Nanevski parties are well and truly apprised of those pleadings and have had the opportunity to seek particulars thereof. It is time that the parties focus on the preparation of the substantive proceedings, rather than spending some months (and additional cost and court time) in debate as to whether the substantive disputes should be heard at all.
As to the pleading issues, it is worth noting at the outset the following passages from Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82; [2006] WASC 281 (Barclay Mowlem) per Martin CJ (at [4]-[8]; [10]):
[4] It is, I think, important when approaching an issue of that kind to bring to mind the contemporary purposes of pleadings. The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.
[5] In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; first, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; second, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; third, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourth, the exchange of chronologies; and fifth, the exchange of written submissions.
[6] Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met.
[7] In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
[8] Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.
…
[10] In many cases, consideration and determination of each objection would give rise to precisely the type of time and resource wasting forensic exercise which the Commercial and Managed Cases List was created to discourage. That is not to say that buried within those voluminous objections there might not be a criticism that should be properly be seriously entertained, but having looked myself at the statement of claim, it is my view that any lawyer looking at that pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, would have no difficulty in ascertaining those matters.
The relevant principles as to what is required of a pleading are well-known (see, for example, as summarised in Watiwat v Dixon [2017] NSWSC 360). In Banque Commerciale SA, En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279; [1990] HCA 11, Mason CJ and Gaudron J said the following as to the function of pleadings, namely that (at 286):
[t]he function of pleadings is to state with sufficient clarity the case that must be met … In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision.
That passage was cited with approval by Ipp JA in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Market Ltd (2008) 73 NSWLR 653; [2008] NSWCA 206 (Ingot) at [422] (and see also what was said by Jessel MR in Thorp v Holdsworth [1876] 3 Ch D 637 at 639).
A pleading must state all material facts, those being the facts which are necessary for the purpose of formulating a complete cause of action or defence thereto (see Bruce v Odhams Press Limited [1936] 1 KB 697 at 712-713, per Scott LJ; see also Mitanis v Pioneer Concrete (Vic) Pty Ltd [1997] FCA 1040 at 9, per Goldberg J; Wride v Schulze [2004] FCAFC 216 at [25], per Spender, Tamberlin and Bennett JJ). The requirement that all material facts constituting the cause of action be plainly stated in the pleading has been described as one of the plainest and most fundamental of all the rules of pleading (Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 at 75-76, per Scott LJ). Rule 14.8 of the UCPR requires a pleading to be as brief as the nature of the case allows; nevertheless it must be clear from the pleading what the cause of action is and the material facts upon which that cause of action is based.
It is also well-established that a pleading is liable to be struck out if it is embarrassing or "obviously futile" (see Meckiff v Simpson [1968] VR 62 at 70, per Winneke CJ, Adam and Gowans JJ; Tamaya Resources Limited (in Liq) v Deloitte Touche Tohmatsu (A Firm) [2015] FCA 1098 (Tamaya Resources First Instance) at [142]-[143], per Gleeson J; Caason Investments Pty Ltd v Cao (2015) 236 FCR 322; [2015] FCAFC 94 (Caason Investments) at [21], per Gilmour and Foster JJ; ACN 074 971 109 (as Trustee for the Argot Unit Trust v The National Mutual Life Association of Australasia Ltd [2010] VSC 186 (Trustee for the Argot Unit Trust) at [29], per Croft J; Research in Motion Ltd v Samsung Electronics Australia Pty Ltd (2009) 176 FCR 66; [2009] FCA 320 (Research in Motion) at [21], [23], per Kenny J; Allstate Life Insurance Company v Australia & New Zealand Banking Group Ltd (1995) 58 FCR 26 (Allstate Life Insurance Co) at 36, per Lindgren J, Lockhart and Tamberlin JJ agreeing). What is meant by an embarrassing pleading, in the context of an application such as the present, relates to whether the pleading can serve the function of a pleading under the rules; i.e., whether it puts the defendant properly on notice of the real substance of the claim made against it and enables the defendant to know what case it is that the defendant has to meet. A pleading is embarrassing if it is unintelligible, ambiguous or imprecise in its identification of material factual allegations so as to deprive the opposing party of proper notice of the real substance of the claim or defence (Gunns Limited v Marr [2005] VSC 251 at [14]-[15], per Bongiorno J), or if it contains inconsistent, confusing or irrelevant allegations (Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 at [18], per Tamberlin J).
Leave to amend a pleading will not be granted where the subject matter of the proposed amendment would be liable to be struck out had it appeared in the original pleading (see Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 310; McGuirk v University of New South Wales [2009] NSWSC 1424 at [18], per Johnson J). Leave to amend will therefore not be granted in respect of a pleading, or amendment, likely to be struck out as embarrassing (referring to Tamaya Resources First Instance at [142]-[143], per Gleeson J; Caason Investments at [21], per Gilmour and Foster JJ; Trustee for the Argot Unit Trust at [29], per Croft J; Research in Motion at [21], [23], per Kenny J). (See also Allstate Life Insurance at 36, per Lindgren J, Lockhart and Tamberlin JJ agreeing.) In HFPS Pty Limited (Trustee) v Tamaya Resources Limited (In Liq) (No 2) [2016] FCA 446, for example, Foster J said (at [56]) that it would be a wrong exercise of the Court's discretion to allow an amendment for which there was no arguable basis in fact.
That said, one must also bear in mind the admonition by the High Court that a plaintiff should not be denied the right to prosecute a claim unless it is clearly demonstrated that there is no arguable cause of action (see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 (General Steel) at 129, per Barwick CJ; [1964] HCA 69; and Dey v Victorian Railways Commissioners (1949) 78 CLR 62 (Dey) at 91, per Dixon J; [1949] HCA 1). Further, the plaintiff's case should be taken at its highest on a pleading application such as an application for leave to amend (see S1 v The Trustees of Marist Brothers [2016] NSWSC 970 (S1) at [11], per Harrison AsJ).
It has been said that leave to re-plead ought be granted unless the court takes the view that the proceeding is frivolous or vexatious or no reasonable cause of action is disclosed (see Steiner v Strang [2016] NSWSC 9 at [26]-[27], [49], per Lindsay J; S1 at [51]-[52], per Harrison AsJ); or that the case sought to be put is "hopeless" or "manifestly groundless" (see Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 536, per Kirby P, Hope and Samuels JJA agreeing; and Commonwealth Bank of Australia v ZYX Learning Centres Limited [2014] NSWSC 1676 at [51]-[52], per Hamill J). So, for example, in CA & CA Ballan Pty Ltd v Oliver Hume (Australia) Pty Ltd (2017) 55 VR 62; [2017] VSCA 11 at [24], the Victorian Court of Appeal (there composed of Redlich, Tate and Ferguson JJA) said that leave to re-plead will only be refused if the amendments raise a claim that has no prospects of success, in the sense of being fanciful, in accordance with the criteria for summary dismissal set out in the Civil Procedure Act 2010 (Vic) (the Court there recognising (at [27]) that evidence adduced at trial may shape the case in ways that have not been anticipated despite the best efforts of litigants and their lawyers).
In Young v Tieco International [1995] SASC 5173 (which was approved by McDougall J sitting at first instance in Ingot v Macquarie [2004] NSWSC 1136 at [46]), Lander J said (at [21]) that a Court ought to approach a consideration of the adequacy of a pleading by seeking to answer the ultimate question whether the pleading gives fair notice of the case to be made against the other party at trial, thus minimising the risk of injustice resulting from surprise.
Turning then to the particular complaints made as to the proposed further amendments to the amended defence, I am of the following view.
The complaint as to the proposed amendment at 12 of the proposed further amended defence is that it proposes to introduce a matter that is not a material fact on the claim or its defence. What is sought here to be pleaded is that:
[12] …
(e) To the extent that Ken paid the purchase price on behalf of James, he secured that by way of a Loan Agreement, Unregistered Mortgage and Caveat over Riverside Drive in favour of Ken and his Wife, Biljana (second defendant) to secure the repayment of those funds;
…
On its face, the insertion of this allegation is to plead the existence of a loan agreement as between Mr Ken Slaveski and his son, Mr James Slaveski, in respect of the provision of the purchase price by Mr Ken Slaveski, as well as a claimed caveatable interest by Mr Ken Slaveski in the Riverside Property by reference to the unregistered mortgage to secure the repayment of those funds. To the extent that Nanevski Developments claims an interest in the property that may be inconsistent with that claimed equitable interest, it is not inappropriate that the proposed further amended defence make clear that Mr Ken Slaveski is asserting an equitable interest in the Riverside Drive property. I would allow this amendment.
The complaint as to the proposed amendment at 12A is that the final 12 words seek to roll up an unparticularised repudiation and breach. Paragraph 12A (as proposed to be amended) would plead as follows:
[12A] In the premises of the facts in paragraphs 8, 8A, 10, 10A, 11 and 12 above, the first and third defendants state that:
(a) An agreement for Tom and Ken to become 50 / 50 partners for the redevelopment of the Riverside Drive was never reached; and
(b) Alternatively, by Tom's failure to contribute towards the purchase price of the Riverside Drive property, the terms of any agreement, implied by law or fact, were never satisfied and or were repudiated and or breached by Tom and or Nanevski.
[Emphasis added; the complaint here being as to the italicised words]
As I read 12A, what is here being alleged by the concluding 12 words is that the alleged failure by Mr Tom Nanevski to contribute towards the purchase price of the Riverside Drive property (see the allegation now at 12) amounted to a repudiation by Mr Tom Nanevski and/or Nanevski Developments (and or in the alternative a breach by Mr Tom Nanevski and/or Nanevski Developments) of any agreement which may be found to be implied by law or in fact to the effect of the agreement denied at 12A; i.e., if there is found to have been an agreement (which the Slaveski parties say was never reached) for Mr Tom Nanevski and Mr Slaveski to become 50/50 partners for the redevelopment of the Riverside Drive property, then it is alleged that that agreement was breached or was repudiated by Mr Nanevski and or Nanevski Developments by reason of the failure of Mr Tom Nanevski to contribute towards the purchase price of the Riverside Drive property. So understood (and this could readily be clarified with the Slaveski parties), it seems to me that the allegation is perfectly comprehensible and puts the Nanevski parties on notice of the defence that is being raised to their claim. If the complaint is that it is an unparticularised allegation, particulars can be sought, but the material facts alleged are clear on the face of the paragraph (namely, Mr Tom Nanevski has failed to contribute towards the purchase price; and that failure amounts to a breach and/or repudiation of any agreement that might be found to have been reached for he and Mr Slaveski to become 50/50 partners for the redevelopment of the Riverside Drive property). I would allow the amendment.
The complaint as to the proposed amendment at 14 is that the final 14 words are a submission. The proposed amendment (with the final fourteen words italicised by way of emphasis below) is:
14. The first and third defendants deny paragraph 14 and state that:
…
(b) A total of $354,726 has been contribute [sic] by Ken towards the interest and principal repayments charged by NAB of the loan for Riverside, thereby reducing the amount of the loan outstanding, with ongoing contributions by him having to continue until conclusion of these proceedings;
…
I suspect that the complaint is as to the final 13, not 14, words but in any event I do not regard the inclusion of those words (even if they strictly amount to a submission) as giving rise to a difficulty in terms of the pleading. What is clearly here being asserted is that Mr Slaveski has contributed the total sum there pleaded in payment of interest and principal repayments in respect of the NAB loan; and that there is a continuing obligation to make payments in respect of the NAB loan. I would allow the amendments.
The complaint as to the proposed insertion of [44A] is that it seeks to introduce an unparticularised set-off agreement. The relevant paragraph is:
[44A] State that in the premises of Tom's and or Nanevski's failure to contribute any more than approximately 15% of the purchase price of the property, the works were not carried out pursuant to any partnership agreement but instead were carried out pursuant to an implied agreement or on the quantum meruit basis by which it would be paid a fair and reasonable amount for work performed, less any amounts Nanevski is fount to owe to the first and second defendants under the amounts claimed by them in the First Cross-Claim.
If the complaint is that there is an allegation that there is an implied agreement the material circumstances for which have not been pleaded, then that can be addressed by a direction that this paragraph be re-pleaded. If it is a complaint (as it appears to be) that there is a set-off claimed but not expressly pleaded, then again this can be addressed by a re-pleading of [44A]. I will allow the proposed amendment but direct that the further amended defence, when filed, make clear the allegations made in regard to the claimed set-off (i.e., whether it is pursuant to an implied agreement, and the material facts relied upon in relation to that agreement; or otherwise is claimed as a set-off at law, or an equitable set-off, or otherwise the basis of the claimed reduction).
[29]
Proposed cross-claim
As already noted, the Nanevski parties have pointed to the delay in compliance with orders for the filing of a cross-claim over a period of some months, which they say is unexplained. The prejudice to which the Nanevski parties point in relation to the filing of a cross-claim at this stage of the proceedings seems largely to be arising out of that delay in that they are out of their money (having contributed, on their case, somewhere between $200,000 and $900,000 in respect of the two properties in question) (see T 34).
I am not persuaded that the prejudice there identified is sufficient to outweigh the prejudice to the Slaveski parties if the real issues in dispute cannot properly be ventilated at this point.
As to the pleading complaints here raised, I make the following comments.
As to the complaint as to [1]-[18] of the proposed cross-claim, these relate to the proposed claim for a partnership account to be taken as against Mr Tom Nanevski (which presupposes that he was a partner to a partnership in relation to the Riverside Drive property). In essence the complaint by the Nanevski parties is that there is no claim for relief premised on a cause of action against him personally and it is said that there is no reasonable possibility that a finding will be made that he is a partner (as it is not contended for by any of the parties). Hence, they say, these paragraphs should not be permitted to be introduced (and, by extension, Mr Tom Nanevski should not be joined as a party to the proceedings).
The relief expressly sought against Mr Tom Nanevski (who is named as the first cross-defendant in the proposed cross-claim) is, broadly speaking, premised on a finding that there is a partnership or joint venture found to exist between the Slaveski parties on the one hand (or at least Mr Ken Slaveski and Mr James Slaveski) and Mr Tom Nanevski (and/or Nanevski Developments) on the other hand - see the relief claimed in prayers 1-6 of the proposed cross-claim; and prayer 7 (which is premised on Mr Tom Nanevski having an unregistered proprietary interest of some kind in either of the Riverside Drive and Vista Street properties).
The proposed cross-claim denies that there was a partnership agreement for the development of the Riverside Drive property (see at [4]); but appears to incorporate the allegations in the proposed further amended defence as to a joint endeavour that failed (see [6] of the proposed cross-claim). In particular, reference is made to [14] and [14A] of the proposed further amended defence to the effect that the extent of any proprietary interest of Mr Tom Nanevski or Nanevski Developments in the Riverside Drive property is limited to an equitable charge in respect of their contributions to the amount by which their monthly principal and interest repayments to the NAB reduced the amount of money owing to the NAB (see at [5] of the proposed cross-claim).
The allegation at [7] of the proposed cross-claim is expressly predicated on a finding "despite the matters pleaded" by the Slaveski parties at [4]-[6] of the proposed cross-claim (i.e., despite their denial of a partnership agreement and despite the allegation that any proprietary interest on the Nanevski parties' part is limited to an equitable charge) that there is a finding that there was a partnership or joint venture with respect to the Riverside Drive property to which the Slaveski parties and Nanevski Developments and Mr Tom Nanevski were party.
As to how there would there be such a finding if (as seems to be the case) there is no issue raised on the pleadings to that effect, the position of the Slaveski parties as explained in oral submissions was that (in circumstances where the Slaveski parties deny that it was Nanevski Developments which was a party to any partnership that might be found to have come into existence) it was Mr Tom Nanevski who sought to obtain an interest personally in the Riverside Drive property. (A similar issue arises in relation to the claims made in relation to the Vista Street property, although there the pleading does not seem to assert that Mr Tom Nanevski was a party to any partnership or joint venture that might be found to have arisen.)
Paragraph 8 of the cross-claim then appears to be premised on a finding as contemplated by [7], and in those circumstances it is alleged that Nanevski Developments will be liable to the Slaveski parties to equalise the parties' respective contributions to the project's loss.
I accept that, if there was an allegation that any partnership or joint venture that is found to have come into existence was one to which Mr Tom Nanevski was personally a party, then Mr Tom Nanevski would be a necessary party personally to be joined to the proceedings (because he would then clearly have an interest in being heard). Similarly, if his proprietary interests might be affected by the outcome of the proceedings (say if he held an interest in the property that might be superseded or extinguished by findings sought by the Slaveski parties). (See, for example, the discussion by the High Court in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corporation Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [132]-[133], per French CJ, Gummow, Hayne, Heydon and Kiefel JJ as to those whose rights or liabilities may be directly affected by orders made or proposed to be made by a court being necessary parties who ought be joined to proceedings.) However, there is no little force to the proposition that it is unlikely that a finding of partnership involving Mr Tom Nanevski will be made if none is here contended for; it being well-established that matters fall to be determined on the issues as framed by the pleadings (at least where the matter is conducted by way of pleadings) (see Ingot, to which I have already referred, where Ipp JA at [424], considering the authorities and principles relevant to whether a party would be allowed at trial to depart from its pleaded case, noted that, "[a]part from cases where the parties choose to disregard the pleadings and to fight the case on additional issues chosen at the trial, the relief that may be granted to a party must be founded on the pleadings").
The Slaveski parties apparently wish in their pleading to cover the alternative case; i.e., not only do they say that was there no partnership agreement with Nanevski Developments, but they want to say that, if there was a partnership agreement, then it was with Mr Tom Nanevski (or, perhaps, that if there was a partnership agreement then it was with either Nanevski Developments or Mr Tom Nanevski in the alternative), and in that alternative case they want an account taken against whoever is found to be party to the partnership.
What the Slaveski parties say, in effect, is that all the conversations relied upon by Nanevski Developments to establish the alleged partnership were between Mr Ken Slaveski and Mr Tom Nanevski (and that the conversations were only ever on behalf of Mr Tom Nanevski himself). However, it seems to me that for there to be reliance in the proposed cross-claim on a contingent finding that there was a partnership to which Mr Tom Nanevski was personally a party (and who would be liable on a partnership account), it would be necessary for the Slaveski parties to be able to source an allegation to the effect that Mr Tom Nanevski was personally a party to the alleged partnership agreement (or joint venture) somewhere in the defence or in the cross-claim itself. (For present purposes it seems to me to be immaterial whether that allegation were to be located in the defence or in the cross-claim.)
There was some debate in the course of oral argument about this and I was taken to various parts of the existing and proposed pleadings. Certainly, at [8] of the proposed further amended defence there is the pleading of a representation by Mr Tom Nanevski, and as to the adoption by the Slaveski parties of an expectation or assumption based on this representation that is said to have given rise to the understanding pleaded at 8A (and the allegation at [8B] to similar effect in relation to the Vista Street property - though there the arrangement is limited to one with Nanevski Developments). However, it is not clear that this leads to any pleaded estoppel claim as such against Mr Tom Nanevski or that it gives rise to a direct cause of action against Mr Tom Nanevski (nor that it would give rise to findings against him that might support a partnership account being taken of any partnership arrangement to which he might be said to have been a party).
As presently pleaded, therefore, I am not persuaded that the proposed cross-claim (at least in these paragraphs) pleads a cause of action against Mr Tom Nanevski and I would not give leave for the cross-claim to be filed (at least as presently framed) joining him as a party.
What seemed to be put was that this was a pleading for more abundant caution against the possibility that Nanevski Developments was not successful in its claim (in effect to contend that if there was a partnership with Mr Tom Nanevski he would not have a "live claim") (see T 47.30ff). With respect, I do not fully understand that proposition. The nub of the claim sought to be made against Mr Tom Nanevski personally seems to be that, if (though any partnership agreement at all is denied) there were found to be some partnership agreement with Mr Tom Nanevski (as opposed to his company), then an accounting with Mr Tom Nanevski would have to be carried out as to the partnership losses. If so, then I would have thought there would need to be a cause of action properly pleaded against Mr Tom Nanevski (albeit one pleaded contingently, given that the Slaveski parties deny any partnership at all) and then he would properly be joined as a cross-defendant to the cross-claim.
Therefore, unless there is an amendment to the proposed cross-claim to allege (albeit contingently) that Mr Nanevski was a partner in or party to any partnership agreement that may be found to have come into existence in relation to the Riverside Drive property, so as to ground the basis on which relief is sought against him personally, I would not allow these paragraphs as presently framed.
The complaint as to [19]-[67] of the proposed cross-claim is as to the pleaded loans of $590,000.
Apart from a seemingly point-scoring complaint as to whether the role of a cross-claim is to answer the cross-claimants' own defence (referring to the prefatory words to these paragraphs), and complaint as to the introduction into these paragraphs of material said to be irrelevant or non-material (such as [21] and [22], which may well have been included simply to set the factual context in which the alleged loans were made), the nub of the complaint here is as to how the three alleged oral loans are pleaded (see earlier at [91]ff).
Looked at in simple terms, what seems to be pleaded is that there were requests made orally by Mr Tom Nanevski as to whether he or his company could borrow money (see at [27], [47], [52] of the proposed cross-claim); Mr Slaveski agreed that Mega-Top Cargo would lend certain amounts on certain terms ([28], [48], [53]); those amounts were paid ([30]; [50]; [55]); those amounts have not been repaid (despite requests); and interest has accrued thereon.
Whether or not this is a model of good pleading, it seems to me adequate for the purpose and I do not accept that there has been shown to be a real risk that it would give rise to "unnecessary expense and delay". Leave will be granted for the filing of the proposed cross-claim in this regard.
The complaint as to [68]-[82] of the proposed cross-claim is as to the claim for trespass.
The nub of this claim is that Nanevski Developments has stored building material for the Lawson Street project on the Vista Street property without approval (as pleaded it is said that this is contrary to the agreement pleaded at [66] but this must be a typographical error since this relates to the Statutory Demand Proceedings); that despite requests, the material has not been removed and that the failure to remove the material amounts to a trespass for which damages are claimed. I see no difficulty (other than the cross-referencing) with the allegations there made.
A complaint is made further in the alternative that the goods (which have been removed and stored elsewhere) are uncollected goods. Pursuant to s 18(3) of the Uncollected Goods Act, when deciding whether to grant leave the court may have regard to the value of the uncollected goods, the complexity of the legal issues involved, any related issues for which the Local Court does not have jurisdiction, and any other related matter. The discretion must also have to be exercised with regard to the overriding statutory mandate provided by s 56 of the Civil Procedure Act.
The value of the goods in question is said to be in the order of about half a million dollars (see T 22.4) (well in excess of the Local Court's monetary jurisdiction but within the jurisdiction of the District Court). There does not on the face of the pleading appear to be any legal issue of any real complexity involved in this claim. However, it is highly relevant that this is part of a suite of disputes between the same parties (most of which the parties seem to accept should be heard together). Therefore, there is a sensible basis on which one might expect leave to be granted to pursue the uncollected goods claim in this Court. It is not necessary (or appropriate, on the making of an application for leave to file the pleading) here to make any determination as to whether leave should be granted in this respect. Suffice it to say that it cannot be said that such leave would inevitably be refused. The claim should be allowed to go ahead at least to the stage of the filing of the cross-claim in this regard.
The complaint about the reference to unlawful dumping seems to me to be an overreaction. There is no suggestion that breach of the Protection of the Environment Operations Act is alleged. The reference to "unlawful dumping" seems to me to be no more than an allegation concerned with the trespass by reference to the leaving of materials on the property. This was clarified in the course of submissions by the Slaveski parties (it being said that the claim is for trespass by reason of the materials that were left on the property and a claim under the Uncollected Goods Act for which it is conceded that leave is required to bring the claim in this Court). As to the course taken of seeking leave to bring the claim in this Court (by the proposed cross-claim) the Slaveski parties say (and there is force to this) that just as the Nanevski parties sought to have the Moneys Claims Proceedings transferred to this Court so all matters could be heard together, so is leave being sought to bring the uncollected goods claim in this Court.
Subject to tidying up the pleading in relation to certain of the cross-references, I would allow this part of the proposed cross-claim to be filed.
The complaint as to [83]-[106] of the proposed cross-claim is as to the new allegation concerning misleading or deceptive conduct.
It is said that this claim is confusing. It seems to me to be quite simple - the allegation is that Mr Tom Nanevski made certain representations to Mr Ken Slaveski (see at [83], [85]; [87]) - namely that: if the two bought the Riverside Drive property together, Mr Nanevski would use his company to do the construction works there referred to and estimated the cost at approximately $800,000; that the constructions works were $749,000-$850,000, or approximately $800,000; and that Nanevski Developments was licensed and or insured within the requirements of the Home Building Act 1989 (NSW) to carry out the works. The first representation is alleged to have been oral; the second is said to be comprised by the Home Building Contract entered into; and the third to be implied from the matters there pleaded. It is alleged that the representations were made in trade and commerce; that the first and second were representations as to future matters; that the representations conveyed or would be understood by a reasonable representee to mean certain things; and that, in reliance thereon, the Riverside Drive property was purchased and the Home Building Contract was entered into with Nanevski Developments. It is alleged that the representations were misleading and deceptive; and it is alleged that loss and damage have been suffered as a result. The claim is brought under sch 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law).
It seems to me that the pleading is adequate.
[30]
Proposed amendment to Moneys Claims Proceedings pleadings
The issues relating to delay are broadly the same as those considered above and I remain of the view that the delay to date is not sufficient to outweigh the prejudice of not permitting all disputes between the parties to be dealt with once and for all. However, the issue as to prejudice is put on the basis that the Nanevski parties would be unfairly prejudiced in having to respond to new claims which raise "an enormous number of irrelevant and subsidiary issues", in circumstances where complaint is made that the Slaveski deponents have not identified that the amendments to the Moneys Claims Proceedings are "necessary".
It seems to me that the explanation for the amendments to the pleadings in these three proceedings makes sense. There was a short form pleading in respect of small money counts in each of the claims. There has been a review of the matter and it has been accepted that some of those claims are not able to be maintained but that there are other claims that relate to the same subject matter of each of those proceedings. As noted above, there is obviously an interest in all the disputes between these parties finally being able to be resolved.
The Slaveski parties say that the delay in the filing of the motions seeking amendments to the pleadings in those proceedings was not in making the application per se but in having to correct the procedural form in which it was made (see T 37.9). It is said that almost every document requested in the particulars to the Moneys Claims Proceedings has been provided to the Nanevski parties so that the documentary case is already known (T 37.25).
I do not accept that there is a proper basis for complaint in circumstances where it is evident that the disputes between the parties will occupy court time and expense and it makes sense not to leave out of the overall suite of proceedings the claims that have now emerged on a review of the documentary records nor to preclude the Slaveski parties from pleading those claims properly.
I will give leave for the filing of the amended statements of claim in those proceedings. (It would make sense for the separate statements of claim to be consolidated in one proceeding but I am concerned that this will simply increase the cost for little benefit.)
[31]
Consolidation of proceedings (and the fee waiver application)
There is no dispute between the parties that it is sensible for the respective matters to be heard at least consecutively. An order to that effect will be made. As to the application for fee waiver, the Registry is better placed to deal with such an application (and it is not a sensible allocation of court time for a judge to be pressed with such an application). My inclination, were I to have determined this part of the application, would have been to say that it was the choice of the Slaveski parties to commence the separate proceedings as they did; and, if they now bear additional costs as a result of that forensic decisions, so be it.
As for the hearing fees, if the three Moneys Claims Proceedings were consolidated into one proceeding, then that might well obviate unnecessary fees, but it would no doubt be at the cost of preparation of a consolidated pleading. If the separate claims can be dealt with as severable parts of the one overall hearing then it may be that hearing fees can be set accordingly. I leave that for the Registry to determine, at least in the first instance.
[32]
Conclusion
For the reasons set out above, subject to one qualification, I will grant leave for the filing of the proposed further amended defence and for the filing of a cross-claim in the Partnership Proceedings (albeit with the re-pleading of [53] of the proposed further amended defence and such amendments as are necessary to correct cross-referencing or typographical errors in that or the proposed cross-claim); and for the filing of the amended statements of claim in the Moneys Claims Proceedings; and I will direct that the matters be heard consecutively. The qualification I make is that I am not persuaded that there is a cause of action pleaded against Mr Tom Nanevski personally that would warrant his joinder as a party to the cross-claim (nor does he appear to be a necessary party to be joined unless it can be said that his interests may be affected by a determination of the dispute other than in his capacity as the director and shareholder of Nanevski Developments). Therefore, unless a cause of action is pleaded that would sustain the relief sought against him personally in the proposed cross-claim, leave to file the proposed cross-claim will not extend to those claims for relief and he should not be joined as a party.
As to costs, the Slaveski parties have in the main succeeded on their motions and in the ordinary course one would expect that costs would follow the event. However, leave was necessary for the withdrawal of the admissions and there is much to be said for the view that the position in which the Slaveski parties were in was one that was largely of their own making in terms of the forensic decisions made as to earlier pleadings and delay in compliance with court orders. That said, the largely intransigent (and intemperate) stance of the Nanevski parties no doubt contributed to the cost of the present applications. I quite understand the frustration of the Nanevski parties in the course of this matter. However, it is incumbent on legal practitioners to work co-operatively in order to comply with the statutory mandate for the just, quick and cheap resolution of the real issues in dispute and the tone of the submissions made on this application suggests that there may have been an unhelpful adoption of fixed stances in this matter. Therefore, I propose to order that the costs of the notices of motion be the defendant's costs in the respective causes.
[33]
Orders
I make the following orders in the respective proceedings:
[34]
Partnership proceedings (2019/00153341)
1. Pursuant to r 12.6 of the UCPR, grant leave to the defendants to withdraw the admissions made at [11] of their amended defence by the filing of the further amended defence (Further Amended Defence) in the form annexed to the defendants' amended notice of motion filed 14 April 2020.
2. Grant leave to the defendants to file and serve the Further Amended Defence but with amendment to plead specifically the facts, matters and circumstances relied upon for the allegation at [53] of the proposed further amended defence; and direct that a verified copy of the Further Amended Defence be filed and served within seven days.
3. Grant leave to the defendants to file and serve a cross-claim in the form of the cross-claim annexed to the defendants' amended notice of motion filed 14 April 2020, but with amendment to correct typographical or cross-referencing errors and to take into account the reasons insofar as the claims for relief against Mr Tom Nanevski personally are concerned.
4. Order that the defendants pay the plaintiffs' costs thrown away by the amendment to the amended defence.
5. Otherwise order that the costs of the defendants' amended notice of motion filed 14 April 2020 be the defendants' costs in the cause.
6. Order that this proceeding be listed at the same time (for directions and for hearing in due course consecutively) as the following matters (2018/00357790; 2019/00095013; and 2019/00095876).
7. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
8. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
[35]
Windows proceeding (2018/00357790)
1. Grant leave to the plaintiff to file and serve the amended statement of claim annexed to the plaintiff's notice of motion filed 3 April 2020.
2. Order pursuant to rule 28.5(c) of the UCPR, that this proceeding be listed at the same time (for directions and for hearing in due course consecutively) as the following matters (2019/00153341; 2019/00095013; and 2019/00095876),
3. Remit to the Registry the application for waiver of the plaintiff's fees for the filing of the plaintiff's notice of motion filed 3 April 2020.
4. Order that the costs of the plaintiff's notice of motion filed 3 April 2020 be the plaintiff's costs in the cause.
5. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
6. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
[36]
Steel importation proceeding (2019/00095013)
1. Grant leave to the plaintiff to file and serve the amended statement of claim in the form annexed to the plaintiff's notice of motion filed on 2 April 2020.
2. Order pursuant to rule 28.5(c) of the UCPR, that this proceeding be listed at the same time (for directions and for hearing in due course consecutively) as the following matters (2019/00153341; 2018/00357790; and 2019/00095876),
3. Remit to the Registry the application for waiver of the plaintiff's fees for the filing of the plaintiff's notice of motion filed 2 April 2020.
4. Order that the costs of the plaintiff's notice of motion filed 2 April 2020 be the plaintiff's costs in the cause.
5. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
6. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
[37]
Formwork proceeding (2019/00095876)
1. Grant leave to the plaintiff to file and serve the amended statement of claim annexed to the plaintiff's notice of motion filed on 2 April 2020.
2. Order pursuant to rule 28.5(c) of the UCPR, that this proceeding be listed at the same time (for directions and for hearing in due course consecutively) as the following matters (2019/00153341; 2018/00357790; and 2019/00095013).
3. Remit to the Registry the application for waiver of the plaintiff's fees for the filing of the plaintiff's notice of motion filed 2 April 2020.
4. Order that the costs of the plaintiff's notice of motion filed 2 April 2020 be the plaintiff's costs in the cause.
5. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
6. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
[38]
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: 22 May 2020
n the cause.
5. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
6. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
Formwork proceeding (2019/00095876)
1. Grant leave to the plaintiff to file and serve the amended statement of claim annexed to the plaintiff's notice of motion filed on 2 April 2020.
2. Order pursuant to rule 28.5(c) of the UCPR, that this proceeding be listed at the same time (for directions and for hearing in due course consecutively) as the following matters (2019/00153341; 2018/00357790; and 2019/00095013).
3. Remit to the Registry the application for waiver of the plaintiff's fees for the filing of the plaintiff's notice of motion filed 2 April 2020.
4. Order that the costs of the plaintiff's notice of motion filed 2 April 2020 be the plaintiff's costs in the cause.
5. Stand the matter over for directions before me on 26 May 2020 at 8.30am.
6. Refer the matter to court-annexed mediation on a date to be fixed on 26 May 2020.
Catchwords: CIVIL PROCEDURE - Pleadings - Form and content of pleading - Pleading material facts - Defects - Striking out - Tendency to cause prejudice, embarrassment or delay - Amendment - Late application for amendment
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 64
Civil Procedure Act 2010 (Vic)
Competition and Consumer Act 2010 (Cth), Sch 2
Conveyancing Act 1919 (NSW), s 66G
Home Building Act 1989 (NSW)
Protection of the Environment Operations Act 1997 (NSW)
Uncollected Goods Act 1995 (NSW), ss 5, 18
Uniform Civil Procedure Rules 2005 (NSW), rr 2.1, 12.6, 14.8, 14.9, 17.2-17.5, 28.5
Cases Cited: ACN 074 971 109 (as Trustee for the Argot Unit Trust v The National Mutual Life Association of Australasia Ltd [2010] VSC 186
Allstate Life Insurance Company v Australia & New Zealand Banking Group Ltd (1995) 58 FCR 26
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Bank of Western Australia Ltd v Coppola [2011] NSWSC 1326
Banque Commerciale SA, En Liquidation v Akhil Holdings Limited (1990) 169 CLR 279; [1990] HCA 11
Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82; [2006] WASC 281
BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266
Brand v Monks [2009] NSWSC 1454
Bruce v Odhams Press Limited [1936] 1 KB 697
CA & CA Ballan Pty Ltd v Oliver Hume (Australia) Pty Ltd (2017) 55 VR 62; [2017] VSCA 11
Caason Investments Pty Ltd v Cao (2015) 236 FCR 322; [2015] FCAFC 94
Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24
Commonwealth Bank of Australia v ZYX Learning Centres Limited [2014] NSWSC 1676
Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738
Cropper v Smith (1884) 26 Ch D 700
Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1
Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; [2003] HCA 51
Dymocks Book Arcade Pty Ltd v Capral Ltd [2011] NSWSC 1423
Ell v Hunter District Water Supply and Sewerage Board (1927) 27 SR (NSW) 437; 44 WN (NSW) 140
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7
Essex Securities Pty Ltd v Lunt [2006] WASC 58
Fabrizio v Wickham Hill Investment Pty Ltd [2018] NSWSC 612
For the Good Times Pty Ltd v Coltern Pty Ltd [2007] NSWSC 108
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69
Gunns Limited v Marr [2005] VSC 251
H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694; 1 All ER 934
HFPS Pty Limited (Trustee) v Tamaya Resources Limited (In Liq) (No 2) [2016] FCA 446
Hill End Gold Ltd v First Tiffany Resource Corp [2008] NSWSC 866
Horton v Jones (No 2) (1939) 39 SR (NSW) 305
In the matter of Dymocks Book Arcade Pty Limited [2013] NSWSC 298
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Market Ltd (2008) 73 NSWLR 653; [2008] NSWCA 206
Ingot v Macquarie [2004] NSWSC 1136
Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309; (2003) 204 ALR 327
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corporation Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
Kelly v Mina [2014] NSWCA 9
Khouri v National Australia Bank Ltd [2007] NSWSC 987
Le Meilleur Pty Ltd v Jin Heung Mutual Savings Bank Co Ltd (2011) 256 FLR 240; [2011] NSWSC 1115
McFadden v Snow (1952) 69 WN (NSW) 8
McGuirk v University of New South Wales [2009] NSWSC 1424
Meckiff v Simpson [1968] VR 62
Mitanis v Pioneer Concrete (Vic) Pty Ltd [1997] FCA 1040
Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52
Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72
Research in Motion Ltd v Samsung Electronics Australia Pty Ltd (2009) 176 FCR 66; [2009] FCA 320
Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455; [2000] QCA 292
S1 v The Trustees of Marist Brothers [2016] NSWSC 970
Sergi v Sergi [2019] NSWSC 865
Shelton v National Roads and Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278
Sirius Shipping Corporation v The Ship Sunrise [2006] NSWSC 164
SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816
Stafford v Kekatos (No 2) [2008] NSWSC 1044
State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 at 154; [1997] HCA 1
Steiner v Strang [2016] NSWSC 9
Tamaya Resources Limited (in Liq) v Deloitte Touche Tohmatsu (A Firm) [2015] FCA 1098
Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; (2016) 332 ALR 199
Thorp v Holdsworth [1876] 3 Ch D 637
Watiwat v Dixon [2017] NSWSC 360
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wride v Schulze [2004] FCAFC 216
Young v Tieco International [1995] SASC 5173
Texts Cited: Ritchie's Uniform Civil Procedure NSW
Category: Procedural and other rulings
Parties: Proceedings 2019/00153341
Nanevski Developments Pty Ltd (Plaintiff/Cross-defendant/Second Respondent on motion)
Ken Slaveski (First Defendant/Cross-claimant/Applicant on motion
Biljana Slaveski (Second Defendant/Cross-claimant/Applicant on motion)
James Slaveski (Third Defendant/Cross-claimant/Applicant on motion)
Mega-Top Cargo Pty Ltd (Fourth Defendant/Cross-claimant/Applicant on motion)
Tom Nanevski (First Respondent on motion)