Safaro v Bonarrigo [2009] VSC 594

2 Since the delivery of reasons in the principal proceedings, Mr Bonarrigo has now issued a new proceeding No.SCI200910247, which I will call the new proceeding. In the new proceeding, Mr Bonarrigo, as the plaintiff, seeks payment to him of the debt which he alleges is due and payable to him by the defendant in the new proceeding, Simon Safaro.

3 The writ was issued on 20 November 2009. It had attached to it a statement of claim. The writ has not yet been formally served, although Ms Knowles, who appears for Mr Safaro in this application, advises me and I accept, that her solicitors were given a copy of the writ on 8 December 2009 and that she received a copy on 9 December 2009, yesterday.

4 The question of this debt was raised as an issue in part of the principal proceedings, namely proceeding No.5740/2009, being the claim by Simon Safaro against Mr Bonarrigo for one half of the moneys held in the common fund maintained by the Court. In that proceeding, Mr Safaro denied any entitlement of Mr Bonarrigo to these moneys.

5 Simon Safaro in that proceeding put in issue two elements of Mr Bonarrigo's claim in relation to the equitable charge which Mr Bonarrigo claimed. Mr Safaro denied any indebtedness to Bonarrigo and said further that even if there was such a debt, it was not secured by any equitable charge or lien over any part of the common fund or the property in respect of which the proceeds became the common fund.

6 In support of his first contention, Simon Safaro advanced a positive case that he was not indebted to Mr Bonarrigo and there was therefore no debt secured by any equitable charge over his half share of the moneys deposited in the common fund. The proceeding was commenced by originating motion which set out the relief claimed by Simon Safaro.

7 The originating motion was supported by affidavits. There were no pleadings delivered, however, in his affidavit dated 2 November 2008, filed in support of his originating motion. Simon Safaro included the following evidence in support of his claim that he was not indebted to Mr Bonarrigo but rather that the relevant moneys were advanced by Mr Bonarrigo to his then wife, Rosa Safaro as a gift.

8 In this respect, he swore in his affidavit as follows.

When my wife and myself refinanced the property at 37 Sydney Road, Brunswick in 2002 my wife's grandfather removed himself as a part owner of that property. The mortgage on his property at 39 Crawley Street, Reservoir was separately financed. He indicated that the money was a gift to my wife. In recognition of that gift, my wife and myself performed certain work for the grandfather.

(1) Renovation of his Rye holiday house at Dundas Street, Rye. This was carried out in 2002/2003 and I estimate labour and materials to be worth more than $40,000. Work done, included repairing and replacing weatherboards, tiling, painting of the interior and the exterior of the house.

(2) Assisted in repairing his house at 39 Crawley Street, Reservoir.

(3) Restored his Pontiac Bonneville. I estimate the work performed was worth about $10,000.

9 In that proceeding, I found in favour of Mr Bonarrigo on Simon Safaro's first contention. At paragraph 60 of my reasons in the principal proceeding, I said:

I find that the monies advanced by Francesco Bonarrigo to Rosa Safaro and Simon Safaro, secured by mortgages over his Crawley Street Property, were advanced by way of a loan to them both. Both Rosa Safaro and Simon Safaro remain jointly and severally liable to Mr Bonarrigo for the servicing and repayment of the current loan in full.

10 However, I found that Simon Safaro's second contention was made out and that no equitable charge or equitable lien arose in favour of Mr Bonarrigo over any part of the moneys deposited in the common fund, including Simon Safaro's share of that fund.

11 It is submitted by Mr Bonarrigo that this finding and the reasons does not give rise to an issue estoppel as to any debt which might be owing by Simon Safaro to Mr Bonarrigo, as the finding is not legally indispensable to the resolution of either Simon Safaro's claim to one half of the funds deposited in court nor to the rejection of Mr Bonarrigo's claim to the same funds.

12 Nevertheless he submits that given the finding this is an appropriate case to permit consolidation of the new proceeding with the earlier proceeding, No.5740 of 2009, so as to seek judgment for the debt and consequential orders for payment out of the common fund in satisfaction of any such judgment pursuant to rule 71.13 of the Supreme Court (General Civil Procedure) Rules 2005. This rule provides:

71.13 Money in court

(1) Where money is standing to the credit of the judgment debtor in court, the Court, on the application of the judgment creditor made by summons, may order that the money or so much thereof as is sufficient to satisfy the judgment sought to be enforced together with interest accrued on the judgment debt and the costs of the application be paid to the judgment creditor.

13 The applicant in this application seeks firstly that there be an order that one half of the funds in the common fund be paid out to him, that is Mr Bonarrigo, pursuant to rule 71.13. In the alternative he seeks an order that the new proceeding be consolidated with the existing proceeding, 5740 of 2009. I decline to make any order as first sought by Mr Bonarrigo, but I order that one half of the funds in the common fund be paid to him pursuant to rule 71.13.

14 As to the second application, that is for consolidation of the new proceeding with proceeding 5740, I make reference to rule 59.01 of the Rules which provides that:

The court may, at any stage of a proceeding, on the application of any party, give such judgment or make such order as the case requires notwithstanding that the judgment or order had not been sought in the originating process or other document of the party in the proceeding.

15 I decline to make such an order at this stage based on the proceeding because what is claimed in the writ that has been issued is for a sum, which on the face of it exceeds one half of the funds presently in the common fund. If I was to make any such order and the plaintiff in the new proceeding, Mr Bonarrigo, was to persist with his writ then only part of his debt so claimed would be satisfied. And it would not alleviate the probability of there being a further trial in relation to the balance of the moneys owed, namely the sum of - or the sum claimed I should say, namely the sum of $196,000 plus interest, costs and expenses which is claimed as the debt in the new proceeding.

16 In Farrow Finance Company Limited (in liquidation) v.Farrow Properties Proprietary Limited (in liquidation),[2] Hansen J at pp.634 to 637 foreshadowed the making of further orders at the time of delivery of the reasons for judgment but prior to the entry of judgment. At a later hearing the Court awarded the plaintiff equitable compensation, notwithstanding that the plaintiff had made no specific claim for that relief in the prayer for relief. And that in its closing address the plaintiff did not give the matter any attention, doing no more than mentioning it in argument. On the other hand equitable compensation in that case was found to be an obvious form of relief, and the plaintiff could not show any relevant prejudice if the claim was permitted to proceed.

17 In Farrow Finance there was no question of further evidence being called. The question of the additional relief was able to be dealt with in the light of the facts as found, and the prior conclusions expressed in the judgment. Reference is made to Smith v New South Wales Bar Association No.2,[3] where in the joint judgment of Chief Justice Brennan and Justices Dawson, Toohey and Gaudron the following was observed.

It has long been the common law that a court may review, correct or alter its judgment at any time until its order has been perfected. The power is discretionary and although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation.

Thus if reasons for judgment have been given the power is only exercised if there is some matter calling for review, and there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal.

It is important that it be understood that these considerations may tend against the reopening of a case, but they are not matters which bear on the nature of the review to be undertaken once the case is reopened, as this case was.

18 The matter involved in this case is somewhat different to the circumstances, which arose in Farrow Finance. Firstly, there was some delay in the bringing of the proposed new action and this application. As I indicated at the outset, I delivered my reasons in this matter on 13 November 2009. The writ was not issued until 20 November 2009, however it was not served, or I should say given, to the defendants' lawyers until 8 December of this year.

19 Furthermore, it is fair to say that unlike Farrow, the issue of the claim for the remedy of the debt, of payment of the debt, was not traversed even cursorily in the course of the proceeding before me, which concluded as a trial.

20 Mr Bonarrigo squarely had adequate opportunity to address the relief, which he now seeks, at the trial, but chose not to do so. Furthermore he did not, in the course of his application this morning through counsel, give any reason for not having pressed for the claim for the debt of which he now seeks.

21 Accordingly, in the course of my reasons, which were delivered on 13 November, I made no express finding as to the quantum of the debt, the interest thereon and costs and expenses, nor did I make any express finding as to the terms of the loan agreement, which would found a claim for interest, costs and expenses on the loan.

22 I was referred by Ms Knowles, who appeared for Mr Safaro, to the case of Ketteman v Hansel Properties Ltd.[4] In the course of levering judgment in that case, Lord Griffiths observed at 220 that there are matters which should be considered in the exercise of the discretion of the Court in cases such as this which go beyond merely considering whether or not those - any prejudice that might be visited upon a party, can be met appropriately by the mere payment of costs.

23 The Court, in all such cases, should be guided in the exercise of its discretion, by its assessment of where the justice lies. As Lord Griffiths noted at p.220, many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so.

24 But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore, to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.

25 Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently. We can no longer afford to show the same indulgence towards negligent conduct of litigation as was perhaps possible in a more leisured age.

26 There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads, rather than by allowing an amendment at a very late stage of the proceedings.

27 Those sentiments have, of course, been echoed by our own High Court in the relatively recent case of Aon. However, it appears to me that the interests of justice when all the factors are considered, call for the consolidation of the new proceeding with proceeding 5740 of 2009 and reopening that case to permit the trial of the issues raised in the new proceeding to proceed. I most certainly take into account in arriving at this conclusion that the principle of the Court should grant such relief as is appropriate on the facts as found even if the full terms or extent of that relief has not been expressly claimed. In this regard, reference is made to Wicks v Bennett,[5] the judgment of Higgins J. Rawson v. Hobbs,[6] the judgment of Chief Justice Dixon and TM Burke Estates Pty Ltd v PJ Constructions (Vic) Pty Ltd.[7] As Hansen J observed in Farrow Finance at 635, it is clear on these authorities that the absence of a specific claim for relief does not mean that the Court should not grant that relief.

The pleadings contained a sufficient statement of the facts though the conception of the causes of action or basis of relief may be open to criticism. The court is not confined in granting relief to that which plaintiffs have specified and in the situation which the foregoing account of the case describes the appropriate relief appears to be.

In the earlier case of Wicks, Higgins J said at 100:

It is not too much to say that it is for a plaintiff to state and prove the facts which constitute his grievance and it is for the court, having found that there is that grievance, to find the appropriate remedy and to give it. This principle is at the very root of the administration of justice.

Ms Knowles, who appeared for Mr Safaro made the valid point that what is involved in this particular application is effectively the pleading of a new cause of action which wasn't previously pleaded. She distinguished the present position from the learning that I have referred to by submitting that in the present case, a new cause of action - that is a claim founded on debt and payment of money sought pursuant to that debt was not a cause of action that was previously claimed. There is some truth in that submission however, in my opinion, the nature of the claim that is now made, even though technically a new cause of action, stems from the directly - the finding that I was compelled to make in the principal proceeding and that was as I referred to in paragraph 60 of my reasons which have been delivered.

29 A consideration in this matter is that if the new proceeding is commenced after I have delivered and entered - and judgment has been - delivered judgment and judgment has been entered in the principal is that the further action contemplated by the proceeding - new proceeding which has been issued will be the subject of an Anshun estoppel. Without expressing a final view on that point, it is clear that the action as is presently framed, if I was to enter judgment in the principal proceeding, would face the risk of it being estopped on the principles in the Anshun case. In this matter, I need to balance the interests of finality in litigation with the interests of a party to the litigation, namely, in this case, Mr Bonarrigo who has enjoyed the benefit of a finding in his favour that a debt is owed to him by Mr Safaro but which finding may be rendered negatory and ineffective if the procedures of the court were not sufficiently flexible so as to permit him to claim the debt which has been found. The Court, in my opinion, ought not to deny the fruits of the finding which it has made to Mr Bonarrigo. It is true that no evidence of any material facts which are new has been adduced. In other words, there is no material which was referred to by Mr Evans which can be said to be new which would justify the making of the application at this late stage nor has there been any explanation as to why this application is made now and not at an earlier time.

30 However, although criticism may legitimately be levied at the lawyers acting on behalf of Mr Bonarrigo for this situation, in my view there are matters which should attract the appropriate order as to costs. To alleviate any prejudice to the plaintiff in proceeding 5740/2009, namely Mr Safaro, I am prepared to make orders that the costs of the plaintiff in that proceeding, namely the costs of Mr Safaro of this application be paid by Mr Bonarrigo. I make that as a first order.

31 Secondly I will order that the trial in proceeding 5740/2009 be reopened and permit the plaintiff to file any further material in support of his contention that he owes no debt to Mr Bonariggo, but limited to the following issues: (1) the terms of the loan agreement insofar as it may have provided for the payment of interest and expenses; and (2) the quantum of the debt including interest, costs and expenses.

32 I will order that the costs of the reopened trial be reserved. I will also give directions to enable the reopened trial to proceed. I will make a formal order that the plaintiff, Francesco Bonariggo, through his lawyers, file and serve the writ with the statement of claim, amended to claim the principal sum of $196,000 together with interest, costs and expenses which should be particularised. Such writ is to be served by 4 p.m. 14 December 2009.

33 I will direct that the proceeding, so issued and served, be consolidated with proceeding No.5740/2009. I make orders for the delivery of further pleadings in the new proceeding as follows. That a defence be delivered by 4 p.m. 21 December 2009. Any reply be delivered by 4 p.m. 23 December 2009. Thus pleadings should be completed by Christmas of this year.

34 As to further affidavit material, I will permit the parties to discuss that between themselves with a view to having further affidavit material filed and exchanged by the end of January 2010. I will list this matter for further directions in the last week of February 2010, tentatively with a view to conducting a trial of the reopened case in early March 2010.

1. The costs of the plaintiff of this application be paid by the defendant.

1. The trial of this proceeding be reopened with the costs of the trial being reserved.
2. The plaintiff may file and serve affidavits upon which he wishes to rely, but limited to the following issues:
   1. The terms of the loan agreement insofar as it may have provided for the payment of interest, costs and expenses; and

b. The quantum of the debt including interest, costs and expenses.

1. In proceeding 10247 of 2009, the plaintiff file and serve the writ with the statement of claim, amended to claim the principal sum of $196,000 together with particularised interests, costs and expenses, by 4 p.m. 14 December 2009. Any defence be filed and served by 4 p.m. 21 December 2009. Any reply be filed and served by 4 p.m. 23 December 2009.

1. The proceeding 10247 of 2009 be consolidated with this proceeding 5740 of 2009.
2. The affidavits to be relied upon by the plaintiff as aforesaid, and any further affidavits relied upon by the defendant, be filed and exchanged by 29 January 2010.
3. This matter be listed for further direction on 19 February 2010 with a view to setting a trial date in March 2010.

[1] [2009] VSC 500.

[3] [1992] HCA 36; [1992] 176 CLR 256 at 267, 265.

[4] (1987) 1 AC 189.

[5] [1921] HCA 57; (1921) 30 CLR 80 at 100.

[6] [1961] HCA 72; (1961) 107 CLR 466 at 485.

[7] [1991] VicRp 33; (1991) 1 VR 610 at 617.