Supreme Court New South Wales Medium Neutral Citation: Kyriacou v Makis (No 3) [2023] NSWSC 1098 Hearing dates: 9 August 2023 Decision date: 14 September 2023 Jurisdiction: Equity Before: Robb J Decision: See [127]-[131] Catchwords: CIVIL PROCEDURE – pleadings – amendment – applications for leave to amend pleadings – where first defendant makes second application seeking leave to file an amended cross claim against the plaintiff – where the second application is similar to, but in some relevant aspects different to, the first application determined by the Court – whether the Court should determine the second application without being bound by the outcome of the first application or the reasons provided by the Court in its determination of the first application – whether the proposed amendments in the second application cure the deficiencies identified by the Court upon the determination of the first application – consideration of the principles and procedures that are to be applied by the Court when a party seeks to make a new interlocutory application on a subject that has already been determined by the Court – held that the Court is not bound by the conclusions reached in respect of the first application if material changes have been made to the wording of the draft amended cross claim – held that the amended cross claim the subject of the second application suffers from the same deficiencies as the amended cross claim the subject of the first application – no justification established for the Court to depart from the rulings made in respect of the first application in the determination of the second application Legislation Cited: Civil Procedure Act 2005 (NSW) Income Tax Assessment Act 1936 (Cth), s 91 Cases Cited: Kyriacou v Makis [2021] NSWSC 60 Kyriacou v Makis (Supreme Court (NSW), Black J, 18 July 2023, unrep) Re Force Corp Pty Ltd (Recs and Mgrs Apptd) (in liq) [2018] NSWSC 896 Re Graziers Pastoral Pty Ltd [2021] NSWSC 1680 Texts Cited: Ritchie's Uniform Civil Procedure NSW (LexisNexis Butterworths, looseleaf) Category: Procedural rulings Parties: Kyriacos Kyriacou (Plaintiff/Cross-defendant) Andrea Makis (First Defendant/Cross-claimant) Tina Georgiou as Executor of the Estate of the Late George Georgiou (Second Defendant) Sam Pambris (Third Defendant) Representation: Counsel: J Darvall (Plaintiff/Cross-defendant) B May (First Defendant/Cross-claimant) Solicitors: KP Lawyers & Barristers (Plaintiff/Cross-defendant) Swan Lawyers (First Defendant/Cross-claimant) File Number(s): 2018/00081547 Publication restriction: Nil JUDGMENT 1. By notice of motion filed on 31 July 2023, Andrea Makis, who is the first defendant and the cross claimant in these proceedings, seeks leave to file an amended cross claim against Kyriacos Kyriacou, who is the plaintiff and cross defendant. The principal judgment 1. The Court published its principal judgment in these proceedings on 9 February 2021: see Kyriacou v Makis [2021] NSWSC 60 (the "principal judgment" or "J"). The Court found that Mr Kyriacou had failed in his attempt to establish that a document called the "Partnership Dissolution Agreement" was an enforceable contract. By his proceedings, Mr Kyriacou had hoped to prove that he and Ms Makis had made a binding agreement to dissolve a partnership that existed between them and to distribute the partnership property. The Partnership Dissolution Agreement was negotiated with Mr Kyriacou by Mr Ioannis Papatheodotou, the former husband of Ms Makis. I found at J [160] that Mr Papatheodotou did not have Ms Makis' authority to make an agreement on her behalf in terms of the Partnership Dissolution Agreement, without her explicit agreement. 2. Ms Makis did not file a cross claim before the hearing that led to the publication of the principal judgment. During the course of the preparation of the proceedings for hearing, Ms Makis had informed the Court that she intended to file a cross claim. Notwithstanding the adjustments to the timetable that were made to enable Ms Makis to do so, she did not file a cross claim. 3. At the conclusion of the principal judgment, I made the following observations concerning the future of the proceedings: [223] The failure of Mr Kyriacou to prove that the PDA is an enforceable agreement against Ms Makis does not finally determine the dispute between them. [224] Mr Kyriacou has not received any of the proceeds of sale of the properties in this State, and it is an arguable matter whether or not Ms Makis has received more than her proper share of the proceeds of sale of the properties that have been sold. The issue of the entitlement of the parties to the MacDonald Street Units is unresolved. [225] There is a question about whether the issues that were agreed by the parties to be determined by the Court at the hearing that has occurred deal fully with all of the issues raised by the ASOC; in particular, whether Mr Kyriacou has abandoned his conventional estoppel case. [226] As explained above, Ms Makis contends that the business ventures in which the parties engaged were part of one overriding partnership; or alternatively that at least the ventures in this country were engaged in in partnership. Ms Makis formally offered to agree to orders made in these proceedings for the dissolution of the alleged partnership, and the conducting of an account. She said, in any event, that in due course she would make an application for that relief. [227] Before an account is undertaken, there may be a need for the issue of whether there was a partnership, or more than one partnership, and the terms of any partnership, to be determined. Otherwise, there may be a real risk of wasted costs if accounts are prepared on a false assumption as to the existence and terms of any alleged partnership between the parties. [228] It may be that the failure of Ms Makis to file her proposed cross claim will thwart the obligation of the Court found in s 63 of the Supreme Court Act 1970 (NSW) (Supreme Court Act) to finally determine all matters in controversy between the parties and avoid a multiplicity of proceedings. It is also arguable that the manner in which these proceedings have been conducted has not facilitated the just, quick and cheap resolution of the real issues in the proceedings, as is required by s 56 of the Civil Procedure Act 2005 (NSW). [229] Much of the evidence that has been tendered, and many of the submissions made, arguably concern wider issues that would be relevant if the proceedings had encompassed the issue of whether there was a partnership, its terms, and the need for a partnership account. The Court has received evidence of dealings between the parties that extend much wider than was necessary to determine the issues relevant to the existence and enforcement of an agreement in the terms of the PDA. As a practical matter, there is a basis for concluding that the Court is part heard in the determination of issues that have not strictly been raised by proper initiating process. [230] Even in respect of the issue of costs, the Court has received evidence and submissions that extend wider than was necessary to determine the agreed issues, but may well be relevant to the foreshadowed partnership issues. [231] I will require the parties to confer as to what orders should be made by the Court based upon these reasons for judgment, and what, if any, further orders should be made to ensure that the Court is able to perform its obligation referred to above under s 63 of the Supreme Court Act. I will arrange for my Associate to fix a telephone directions hearing for the purpose of the consideration of the future course of these proceedings. The parties should provide to my Associate proposed short minutes of order before that hearing. Ms Makis' cross claim 1. As foreshadowed in J [226], Ms Makis filed a cross claim on 12 May 2021. This is the pleading that Ms Makis now seeks leave to amend. As will be seen, it alleges the one overarching partnership referred to at J [226]. 2. As I noted at J [229], much of the evidence that was tendered at the hearing appeared to relate to issues that would have been relevant to Ms Makis' cross claim had she filed it. I observed that, as a practical matter, there was a basis for concluding that the Court was part heard in the determination of issues that were not strictly raised by a proper initiating process. As I explained to the parties at the hearing of the notice of motion with which these reasons are concerned, I do not consider that I am strictly part heard on the cross claim. Because at the initial hearing the Court had received evidence that had been prepared by the parties, principally, Ms Makis, in anticipation that she would have filed her cross claim before the hearing, the Court was appraised of evidence and had heard submissions that might be relevant if Ms Makis subsequently filed her cross claim. However, the issues now raised in the cross claim were not formally before the Court, and it did not conduct the hearing on the basis that I would necessarily determine any cross claim that was subsequently filed. 3. Mr Kyriacou filed his defence to the cross claim on 23 June 2021. 4. The evidence in support of Ms Makis' cross claim primarily consisted of an affidavit made by Mr Papatheodotou dated 20 July 2022. Mr Kyriacou responded by his affidavit made on 29 November 2022. Reason for Ms Makis' application for leave to amend 1. The basic reason for Ms Makis to have sought leave to amend her cross claim is that, in his affidavit, Mr Papatheodotou provided evidence in support of a number of claims that were plainly outside the issues that were pleaded in the cross claim. As Mr Kyriacou responded to all of the evidence in Mr Papatheodotou's affidavit, the result was that Mr Kyriacou provided such evidence as he could concerning both the claims that were pleaded by Ms Makis and the claims that were dealt with by Mr Papatheodotou in his affidavit, although not pleaded. Ms Makis therefore sought leave to amend her cross claim to plead the additional claims that were necessary to match all of the evidence given by Mr Papatheodotou. Determination of Ms Makis' first application by Black J 1. The notice of motion filed by Ms Makis on 31 July 2023 is not, however, the first notice of motion filed by Ms Makis in which she has sought leave to amend her cross claim. Ms Makis filed a notice of motion on 17 April 2023, by which she sought leave to file an amended cross claim that was drawn in terms similar to, but in some relevant respects different to, the draft cross claim that is the subject of the notice of motion that is now before the Court. That application was made for the same reason as the present application has been made. 2. The earlier notice of motion was heard by Black J on 18 July 2023, on which date his Honour delivered an ex tempore judgment in which he dealt with Ms Makis' application. The judgment of Black J has not been published (Kyriacou v Makis (Supreme Court (NSW), Black J, 18 July 2023, unrep)). The rulings made by Black J, and his reasons for those rulings, are material to the determination of this latest notice of motion. 3. It will be convenient to set out the part of Black J's reasons that constitute his determination, as follows: It will be apparent from the observations that I have made above that I am comfortably satisfied that I should not grant leave to permit the filing of the Amended Cross-Claim in its present form. Mr May submits that, in those circumstances, I should grant leave for Ms Makis to make a further attempt to amend the Cross-Claim. I am not persuaded that I should do so. First, her ability to do so, having regard to the necessary identification of facts, matters and circumstances, is unknown; the time which would be taken to do so is also unknown; and the delay in doing so will give rise to continuing prejudice to Mr Kyriacou, and the community, so far as the hearing of this matter is further delayed, and the ability of the Court to deliver a prompt and just resolution of the issues in dispute (if that language could fairly be used in respect of a proceeding that is already five years old) will further deteriorate. I recognise that it is not possible, or appropriate, for me to seek to prevent the filing of a further notice of motion by Ms Makis, if there is a change of circumstances, to warrant that course, and the question of what happens in that respect will be a matter for the further case management of the proceedings. However, I am comfortably satisfied that I should do nothing to promote that course, given the delay in respect of the conduct of these proceedings and the risk to the delivery of justice from the continuing delay. I should add to my oral judgment that, at the conclusion of the hearing, Ms Makis, in effect, wished to reserve her position as to this judgment rather than make the limited amendments that would be permitted by this judgment. I will reserve her liberty to submit an Amended Cross-Claim, making only those limited amendments so that leave to file it can be granted to Chambers if she wishes to do so. Subject to that matter, the Notice of Motion filed 17 April 2023 is dismissed with costs… 1. It is relevant to note that Black J acknowledged that Ms Makis may become entitled to make a renewed application to amend her cross claim, although his Honour was not prepared to give Ms Makis leave to do so on the material before him. His Honour specifically observed that he should do nothing to promote that course, given what he assumed would be the delay involved in Ms Makis being able to correct the deficiencies in the draft amended cross claim that caused his Honour to reject her application. Black J also referred to the need for "a change in circumstances" to justify a new application being made. 2. Ms Makis has not availed herself of the liberty to ask Black J to make an order giving her leave to file an amended cross claim that made only the amendments that his Honour indicated in his judgment that he would permit. Rather, Ms Makis has filed the latest notice of motion, by which she seeks leave to file a new draft amended cross claim, which contains most, if not all, of the amendments that Black J would have permitted. I note that this led to a submission on behalf of Mr Kyriacou that Ms Makis should no longer be permitted to make even the amendments that Black J would have allowed, as she abandoned the opportunity accorded to her by his Honour. 3. Before I proceed to consider the latest notice of motion, I should note that in par 218 of the draft amended cross claim considered by Black J, and also in par 218 of the latest version of the draft amended cross claim, Ms Makis claimed that, on the dissolution of the partnership, she will be entitled to be paid amounts that have a total of $863,305,216.78. The Court was informed at the recent hearing on behalf of Ms Makis that this claim was made in error by some inexplicable process in the preparation of the draft pleading, and that the amount claimed by Ms Makis remained the $9,957,081.51 that is set out at par 218 of the cross claim that has already been filed. As I understand the reasons given by Black J, his Honour was not influenced by the bare quantum of Makis' claim. Relevance of Black J's judgment to present application 1. At the recent hearing, a submission was made on behalf of Ms Makis that the Court should determine the application in her 31 July 2023 notice of motion without being bound by the outcome of the application before Black J, or the reasons that his Honour gave for his determination. The position adopted by Ms Makis was not entirely clear. In par 11 of her written submissions, Ms Makis submitted that Mr Kyriacou's reliance on the fact that her earlier application had largely been rejected by Black J "is misplaced", because it involved a different pleading. Ms Makis submitted that her application must be considered on its merits, and that the Court is not bound by an earlier judgment on a different version of the pleading. 2. I was concerned at the hearing about the real intended effect of this submission. At T5.15, counsel for Ms Makis said that: "Your Honour shouldn't ignore Black J's judgment but your Honour is not bound by it". Counsel added at T5.24: "Your Honour is entitled to take the same view on any paragraph, your Honour is entitled to take a different view on any paragraph". On other occasions, counsel appears to have made unqualified submissions that the Court was not bound by any ruling in Black J's ex tempore judgments on an interlocutory motion for a former iteration of the claim: T5.34 and T17.25. Counsel went so far at T 17.39 to submit: "It may be extraordinary but that's what I want to put that at certain points your Honour would take a different view to his Honour, Justice Black and I am happy to explain why if your Honour would give me an opportunity." 3. The present application is a second application for leave to file an amended cross claim that has been revised from the draft that was the subject of Black J's judgment. I accept that, if Black J rejected a particular aspect of the draft on the basis that its wording did not comply with the rules that govern proper pleadings, I could not be bound by the conclusion reached by Black J if material changes had been made to the wording of the draft amended cross claim. Logically, it would be necessary for me to decide whether the changes had cured the vice identified by his Honour. In my view, however, it would still be proper for me to determine the adequacy of the new draft on the basis of my acceptance of the reasons given by Black J for his own ruling. 4. However, it is clear from Black J's reasons that, although he rejected many aspects of the draft cross claim because of the absence of allegations of material facts or the presence of obscurely worded allegations, his Honour was also influenced by more substantial considerations such as Ms Makis' delay in both filing her cross claim and then applying for leave to amend it, as well as the substantial lapse of time since the occurrence of the events the subject of the cross claim. Consequently, his Honour's decision to refuse leave for most of the substantial amendments was based on substantive issues and not only inadequacies in the wording of the draft pleading. 5. As the submissions made on behalf of Ms Makis progressed, it appeared to me that her submissions went much further than inviting the Court to make its own determination as to the effectiveness of the revisions in the wording of the draft amended cross claim in respect of deficiencies identified by Black J. In a substantial way, Ms Makis sought to persuade the Court to revisit conclusions reached by Black J and to make its own determination on the basis of renewed submissions, even if inconsistent with material aspects of the reasoning adopted by his Honour. 6. The principles and procedures that are to be applied by the Court when a party seeks to make a new interlocutory application on a subject that has already been determined by the Court and orders made are as set out in Ritchie's Uniform Civil Procedure NSW at [25.1.80] as follows: A further application for interlocutory relief may be made if there has been a material change of circumstances or, perhaps, if a party has discovered significant new evidence that was not reasonably available at the time of the first application: Collier v Howard (NSWSC, McLelland CJ, 23 April 1996, unreported, BC9601420); Forbes v Lindop (NSWCA, Kirby ACJ, Clarke and Sheller JJA, 17 July 1995, unreported, BC9507620) (successive applications to set aside default judgment) cited with approval in State Rail Authority v Gaudron [1998] 9 Leg Rep SL 96; BC9703533; National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315; [2002] NSWCA 273; BC200204666 (further application to set aside judgment after remedying default). In the absence of a material change of circumstances, it is not appropriate to make merely repetitive applications, especially successive applications to different judges, for substantially the same interlocutory relief: Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 All ER 745; [1981] 1 WLR 485; [1981] FSR 196; Re Delta Landscaping Pty Ltd (1990) 20 NSWLR 508; Brimaud v Honeysett Instant Print Pty Ltd (1988) 6 ACLC 942; BC8801632 (cited with approval in Amalgamated Television Services Pty Ltd v Marsden [1999] NSWCA 313; BC9906206 at [38]); Wentworth v Rogers (NSWSC, Sperling J, 28 April 1995, unreported, BC9507335). There is authority for the view that there is no absolute prohibition against repetitive applications: Nominal Defendant v Manning (2000) 50 NSWLR 139; 31 MVR 524; [2000] NSWCA 80; BC200005011 (second application to extend limitation period — unnecessary to impose rigid criteria against multiple interlocutory applications). But both general considerations, and the obligations imposed by the "overriding purpose" provisions in CPA ss 56–58, emphasise (i) the inherent undesirability of merely repeated interlocutory applications: Fletcher v Besser [2010] NSWCA 30; BC201001212 at [17] and (ii) the practical reality is that some material change in circumstances will ordinarily be required to justify departure from a previous interlocutory decision: Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170; 35 ALR 625; 55 ALJR 548; BC8100095 at [177], [178]; National Parks and Wildlife Service v Pierson (2002) 55 NSWLR 315; [2002] NSWCA 273; BC200204666 at [16] & [17]; see also the discussion at [18.1.25]. 1. Applications for leave to amend pleadings may involve considerations arising out of the pleading rules that influence how these principles and procedures should be applied. At one extreme, it would be an abuse of process for a party to seek leave to make the same amendments to a pleading that have been rejected by a different judge on an earlier application. At the other, amendments to perfect the pleading of the material facts necessary to support causes of action or defences already in the pleading and to conform the pleading with the real issues are encouraged. As the process of amending the pleadings involves the introduction of new wording, it lies in the hands of the pleader to attempt to create a material change in circumstances to justify a new application for leave to amend. The elasticity of this process calls for vigilance on the part of the Court to ensure procedural fairness for the party opposing leave to amend. Contrary to the submission made on behalf of Ms Makis, an appreciation of the reasons given by the Court for the earlier rejection of an application for leave to amend is likely to be central to the Court's judgment as to whether the grant of leave to make a different amendment would be procedurally fair. 2. It is not, however, necessary in this case for the Court to explore in any detail the procedural limits that should be imposed on repeated applications for leave to amend pleadings. That is because I respectfully agree with the reasons given by Black J as to the principles that are to be applied and as to the proper manner for the application of those principles. Although the wording of the latest draft cross claim differs from that considered by his Honour, I have reached comparable conclusions on the basis of my own reasons. 3. I should also note that the only issue that is strictly before the Court is whether Ms Makis should be given leave to make the amendments to her existing cross claim that are set out in the latest version of her draft amended cross claim. If that application is rejected, the existing cross claim will stand, and, as the Court was told that the evidence is complete, then the Court would, in the ordinary course, set down the cross claim for hearing. The Court has not been asked to address any other case management issues at this stage. However, in part because I was the original trial judge, I propose to make a number of observations concerning the future of these proceedings that arise out of my consideration of the form of the cross claim and the issues that will arise. Those observations may be relevant to future case management orders, or how the final hearing is conducted. Legal principles 1. The principles that govern applications to amend pleadings are well settled and are not in issue, and were correctly set out in the earlier reasons delivered by Black J at pages 4-7 of his judgment. In the circumstances, it will be sufficient to set out the following extract from his Honour's judgment in Re Graziers Pastoral Pty Ltd [2021] NSWSC 1680: [8] I first address the applicable principles. I must exercise my discretion whether to allow the amendments having regard to ss 56–58, 60 and 64 of the Civil Procedure Act 2005 (NSW) . In particular, s 58 of the Civil Procedure Act requires the Court to have regard to the dictates of justice when considering an order for, inter alia, the amendment of a document, and requires the Court to have regard to the provisions of ss 56 and 57 of the Act. Section 56 identifies the overriding purpose of the just, quick and cheap resolution of the real issues in dispute, and s 57 requires proceedings to be managed having regard, inter alia, to their just determination. Section 64 relevantly provides that, at any stage of the proceedings, the Court may order that leave be granted to a party to amend any document in them and, subject to s 58, all necessary amendments are to be made for the purpose of determining the real issues raised by the proceedings and avoiding multiplicity of proceedings. [9] I also have regard to the case law including Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; (2009) 258 ALR 14; [2009] HCA 27 which emphasised the significance of delay not only for particular proceedings, but for the Court system generally. The High Court there recognised, in the context of an amendment application, that a costs order cannot be treated as an automatic solution for failures to comply with case management requirements and also pointed to the strain imposed on litigants and the cost to the community of late amendment applications. In their joint judgment, five members of the Court observed (at [98]) that: Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. [10] The joint judgment also observed (at [113]) that: 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. [11] Similar views were expressed by the Chief Justice (at [35]) and by Heydon J (at [154]–[156]). I also have regard to the Court of Appeal's observations in Bi v Mourad [2010] NSWCA 17 and in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36], which emphasise the significance of case management requirements for the community and the Court system generally. [12] Subsequently, in UBS AG v Tyne as Trustee of the Argot Trust (2018) 360 ALR 184; [2018] HCA 45 , in dealing with a different question, the plurality of the High Court referred to Aon and noted (at [38]) that: As the joint reasons in Aon Risk Services Australia Ltd v Australian National University explain, the 'just resolution' of a dispute is to be understood in light of the purposes and objectives of provisions such as s 37M of the [Federal Court Act]. Integral to a 'just resolution' is the minimisation of delay and expense. These considerations inform the rejection in Aon of the claimed 'right' of a party to amend its pleading at a late stage in the litigation in order to raise an arguable claim. The point is made that a party has a right to bring proceedings but that choices are made respecting what claims are made and how they are framed. Their Honours speak of the just resolution of the dispute in terms of the parties having a sufficient opportunity to identify the issues that they seek to agitate. 1. Further, I respectfully accept the validity of the following observations made by Black J in the earlier decision concerning the Court's purpose in requiring that the proposed amended pleadings comply properly with the pleading rules: It is also important, here, to have regard to the need for procedural fairness and to identify the matters in issue for determination by the Court, which are essential criteria by which the adequacy of the Amended Cross-Claim must be assessed. It is, of course, trite to observe that the function of a pleading is to afford procedural fairness and an opportunity to meet the case that is brought against the other party: Banque Commerciale SA v Akhill Holdings Ltd (1990) 169 CLR 272 at 285, 296, 302-303. In Gunns Ltd v Marr [2005] VSC 251 at [57], which has been followed in many subsequent decisions in this Court, Bongiorno J observed that: "Not only must the pleading inform the defendants of the case that they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly." 1. Black J noted that, in the context of an application for leave to amend a pleading, where the draft pleading does not comply with these principles, the remedy is not to allow the amendment. Relief sought in proposed amended cross claim 1. It will be appropriate to start by analysing the structure of the relief claimed by Ms Makis in her latest draft amended cross claim. Relevantly, the prayers for relief are as follows (with proposed amendments underlined): 1. A declaration that Kyriacou, Makis, Anastasia, and Mr Papatheodotou were partners as from December 1995 to March 2002, in equal shares (Partnership). 2. A declaration that Kyriacou and Makis were partners in the Partnership, in equal shares from March 2022. 2A. Declarations that the following assets were assets of the Partnership: [Subpars (a) to (u) consist of short-form descriptions of 21 "assets" the meaning of which is explained in the pleadings and particulars]. 2B. Declarations that the following liabilities were liabilities of the Partnership: [Subpars (a) to (m) are 13 short-form descriptions of "liabilities" the meaning of which is explained in the pleadings and particulars]. 2C. A declaration that in or about December 1995, Makis, Kyriacou, Mr Papatheodotou, and Anastasia made the Kyriacou Loan Agreement. 3. A direction that a referee be appointed pursuant to 20.14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), and an account be taken and inquiry be made in accordance with Part 46 of the UCPR to identify: (a) what (if any) monies Kyriacou and Makis are entitled to from the Partnership, after making allowances for any contributions and withdrawals by each of Kyriacou and Makis to the assets and liabilities of the Partnership, including interest on those contributions; and (b) what (if any) monies are owed to Makis by Kyriacou as a result of the Kyriacou Loan Agreement. 4. An order, pursuant to s 35 of the Partnership Act 1892 (NSW), that the Partnership be dissolved and the Partnership business be wound up under the direction of the Court. 5. Costs. 6. Such further or other order as the Court deems fit. 1. As I have explained, the person called Mr Papatheodotou in prayer 1 is the former husband of Ms Makis. Anastasia is the former wife of Mr Kyriacou. 2. Prayers 1 and 2 reflect the primary contention of Ms Makis in these proceedings that, from December 1995 to the present, there has been one single overarching partnership, and that all transactions that were entered into involving the named partners were part of the business of a partnership that has not yet been dissolved. As stated, Ms Makis' case is that there were four partners until March 2002, and that, thereafter, the only partners have been Mr Kyriacou and Ms Makis. 3. It will be convenient to note that Mr Kyriacou has denied the claim that there was a single, overarching partnership, and that all of the transactions that Ms Makis claims were undertaken by the partnership were in fact partnership business. Mr Kyriacou accepts that, for some purposes, there were partnership agreements between the parties, but they were much more limited in scope and time than has been alleged by Ms Makis. 4. The effect of prayers 2A and 2B that Ms Makis seeks to add by her amendment of her cross claim is important. Ms Makis seeks declarations that particular assets that were in the name of one or more of the partners historically were assets of the partnership. Those assets include bank accounts, services and subscriptions, shares, real properties and even "(u) the Import and Export Business". By prayer 2B, Ms Makis seeks a declaration that 13 liabilities, all of which are loans or borrowings of one form or another, were liabilities of the Partnership. 5. The objective of the prayers for relief that Ms Makis seeks be determined by the Court is limited to bare findings that specified assets that have historically existed were assets of the partnership, and similarly, that liabilities that have historically existed were liabilities of the partnership. Ms Makis does not apply for leave to seek relief by which the Court would make any findings concerning the dealings of the partnership with the assets and liabilities, their value or quantum, or what has happened to them, or what the significance of those assets and liabilities have been to the trading performance and profit of the partnership. 6. Although further explanation will be necessary, proposed prayer 2C seeks a declaration that a particular agreement that Ms Makis calls the "Kyriacou Loan Agreement" was made in about December 1995. As will be seen, Ms Makis claims that, from time to time since that date, ad hoc arrangements have been made by which Ms Makis, or Mr Papatheodotou on her behalf, has provided funds to Mr Kyriacou, or Mr Kyriacou has unilaterally used the funds to which Ms Makis was entitled, on the basis that those funds would be repaid with interest out of Mr Kyriacou's share in the partnership assets on its dissolution. This is another form of alleged overarching agreement, albeit, in this case, a compendious loan agreement. 7. By prayer 3 of the cross claim that has been filed, Ms Kyriacou seeks a direction that a partnership account be taken to identify the present entitlements of Mr Kyriacou and Ms Makis in respect of the assets and liabilities of the partnership. Ms Makis now effectively seeks an order that the accounting be carried out by a referee appointed by the Court, and that, as well as determining partnership entitlements, the referee should also be appointed to determine any liability that Mr Kyriacou has to Ms Makis under what is called the "Kyriacou Loan Agreement". Preliminary observations on forensic issues 1. As I understand it, it is likely that the partners under the overarching partnership alleged by Ms Makis have never caused partnership financial accounts to be prepared in the conventional way. Nor, apparently, have the alleged partners ever complied with their obligation under s 91 of the Income Tax Assessment Act 1936 (Cth) to furnish annual returns of the income of the partnership. Consequently, the whole of the relevant financial affairs of the alleged overarching partnership since December 1995 will have to be reconstructed from primary evidence, being such records that may still exist and the testimonial evidence of witnesses. As Ms Makis' case is that she is entitled to preference for the payment of her capital contributions and the accumulated debt of Mr Kyriacou out of the profits of the alleged overarching partnership at the time of its dissolution, it will not be sufficient for Ms Makis merely to prove the quantum of her claims, plus interest. It will be necessary to determine the undistributed profits. That will at least require an investigation of the investments made and businesses undertaken by the partnership, the profits and losses made, the distribution of profits and the funding of losses, as well as any prior returns of partnership capital. The complexity of this exercise will depend upon the circumstances of the case and the availability of reliable records. 2. It is a conventional approach for the Court to make orders dissolving a partnership, and then to make a consequential order for the taking of partnership accounts. The order for partnership accounts will be straightforward if the partnership has kept proper financial accounts and records. Where, as is apparently the present case, that is not so, it is necessary for the Court to take into consideration the real forensic and practical issues that will be involved in recreating the partnership accounts in order to adhere to the requirements of the Civil Procedure Act 2005 (NSW) that were mentioned by Black J in Re Graziers Pastoral Pty Ltd. 3. Crucially, the objective of Ms Makis in seeking leave to amend her cross claim is to obtain declarations from the Court as to the existence of a partnership in the form claimed by her, and declarations that, in historical terms, certain assets were partnership assets and certain liabilities were partnership liabilities. If those declarations were made by the Court, as a matter of practical litigation, all remaining issues would be required to be determined by the referee. Whether or not it is decided that the procedure of the appointment of a referee is appropriate in the circumstances, it is essential that the Court address the issue of the identification of the issues to be determined at the reference, by the conventional procedure of proper pleadings and a consideration of the practical consequences of the evidence that is, or is not, available for the purpose of determining those issues. 4. While some further explanation is required, I observe that an analysis of the proposed draft cross claim shows that Ms Makis has not made all of the allegations of fact that would be necessary to enable a referee to determine all outstanding questions in the conventional way, after the Court has made the declarations sought by Ms Makis. As will be seen, Ms Makis appears to have limited her pleading and particulars to allegations that she will contend are sufficient to justify the Court in making the declarations that she seeks. As the proposed cross claim stands, virtually every other issue that will necessarily arise in the determination of the cross claim is left at large for the apparently informal determination by the referee. Pleading and particulars of proposed cross claim 1. I will now turn to a consideration of relevant aspects of the pleading and particulars in the proposed cross claim. The terms of the partnership and the Kyriacou Loan are pleaded as follows, noting that these allegations are in the existing cross claim: 26. The terms of the Partnership Proposal included: (a) the partnership would conduct an investment business using mainly borrowed funds; (b) any profits would be reinvested into the partnership business, or used to pay liabilities of the partnership business; (c) if there were to be any funds contributed to the partnership business or repayments to the partnership borrowings by any individual partner, interest would be payable on these contributions at 8.5 per cent per annum, compounded monthly, to be repaid out of profits of the partnership business at a future date; (d) any investments were to be made with the consent of all partners; (e) profits would be distributed from the sale of partnership property or assets on an ad hoc basis, if and when profit was available; (f) upon the conclusion of the partnership, all remaining partnership property would be sold, or partnership liabilities paid, and after accounting for any amounts owed to any individual partner for their contributions, plus interest, the net profit (if any) would be distributed equally between the partners. 27. During the visit in December 1995 at the First Marrickville Office, Mr Papatheodotou and Kyriacou also discussed: (a) that if a partnership was formed on the basis of the Partnership Proposal, Mr Papatheodotou and Makis would lend money to Kyriacou to assist him and his family financially; (b) these monies would be lent on an ad hoc basis, but would form one loan from Mr Papatheodotou and Makis to Kyriacou (the Kyriacou Loan); (c) any monies lent under the Kyriacou Loan would attract interest at a rate of 8.5% per annum, compounded monthly; and (d) whenever the proposed partnership was concluded and the profits of the proposed partnership were distributed, the Kyriacou Loan, including the interest that had accumulated on the Kyriacou Loan, would be deducted from any profit due to Kyriacou and Anastasia, and that amount would instead be credited to Mr Papatheodotou and Makis (the Kyriacou Loan Agreement Proposal). 1. Most relevantly for present purposes, Ms Makis has alleged that any contributions to the partnership business would be repaid out of the net profit (if any) on dissolution of the partnership, together with interest on the contributions at 8.5% per annum, compounded monthly. The same would be the case for amounts paid to Mr Kyriacou or Anastasia under the Kyriacou Loan Agreement. As those amounts will be payable only out of the ultimate profit of the partnership, if there is no profit, no amounts will be payable. 2. It is a significant feature of the cross claim that it contains no allegation that, at the time of the dissolution of the partnership, there will be a profit, or as to how that profit is to be determined. That is either because Ms Makis is not in a position to formulate the necessary allegations, or to prove them by evidence, or, alternatively, that Ms Makis has only included in her pleadings and particulars the limited allegations that she considers are necessary to establish her claim as to the existence of the partnership and the Kyriacou Loan Agreement, and as to particular assets and liabilities having been the assets and liabilities of the partnership on an historical basis. 3. As matters stand, Ms Makis' cross claim does not enable the Court to form any view – even on the basis of allegations of fact – as to whether there will be any profit and, accordingly, whether the prosecution of the cross claim will be futile. Counsel for Ms Makis responded to a request from the Court for enlightenment on this subject by observing that the proceeds from the sale of the Macdonald Street Units that were considered by the Court at J [178]-[196] would ultimately be found to be profit of the partnership. Whether or not that is so, no facts or circumstances are pleaded in the cross claim concerning the existence of a profit or how it might be determined. 4. In practical terms, this state of affairs flows from the fact that Ms Makis has only sought to prove capital contributions and the acquisition of assets and the incurring of liabilities of the partnership that she alleges, without making any additional allegations concerning the actual business of the partnership relevant to the making of profits or the incurring of losses. Claims arising out of the Costis' and Christous' involvement in the partnership 1. I will consider in detail one aspect of the cross claim that Ms Makis seeks to introduce into the proceedings by her proposed amendment, as an example of the issues raised by the application. It concerns the circumstances in which Ms Makis wishes to allege that she is entitled to be paid out of the ultimate profits of the alleged partnership sums that Mr Papatheodotou paid on her behalf in relation to transactions connected to two couples, called the Costis and the Christous, joining and then leaving the alleged overarching partnership. 2. I have selected this proposed new claim as a sample upon which to base an analysis of the relevant aspects of the proposed new cross claim in the context of the evidence given in Mr Papatheodotou's affidavit in relation to the claim. The objective will be to demonstrate why I consider that the proposed amendments to Ms Makis' cross claim to introduce this new claim are not adequately pleaded. I have elected to proceed by way of sample analysis, because I have formed the view that, to a greater or lesser extent, the way that the proposed new cross claim pleads all of the other new claims suffers from similar deficiencies. I will provide a summary analysis of all of the other proposed new claims, after I have explained in some detail why I have decided that the new claim in relation to the participation of the Costis and the Christous in the alleged partnership has not been adequately pleaded. 3. I acknowledge that, by reason of the subject matter, the following analysis is dense. Pleaded claim in revised draft amended cross claim 1. The draft cross claim contains the following allegations: Costis and the Christous join the Partnership 105A In about 1966, George and Antonia Costi, and George and Kerry Christou (the Costis and the Christous) had conversations with Mr Papatheodotou about joining the Partnership. Particulars The conversations took place in about early 1996 across two meetings, the first at the house of George Costi at Norwest, and the second at the house of George Christou at Bella Vista. 105B In about early 1996, Mr Papatheodotou had a conversation with Kyriacou concerning whether the Costis and the Christous would join the Partnership. Particulars The conversation between Mr Papatheodotou and Kyriacou in about early 1996 took place at his workplace in [address stated]. 105C Kyriacou did not object to the Costis and the Christous joining the Partnership. 105D In about early 1996, Mr Papatheodotou had a conversation with Makis about whether the Costis and the Christous would join the Partnership. Particulars The conversation between Mr Papatheodotou and Makis in about early 1996 took place at their home at [address stated]. 105D Makis did not object to the Costis and the Christous joining the Partnership. 105F in about early 1996, following the conversations between Mr Papatheodotou and Kyriacou referred to at paragraph 105B above, and, between Mr Papatheodotou and Makis referred to at 105D above, the Costis, and that Christous joined the Partnership. 105G In about early 1996, a loan in the sum of $1,000,000 was obtained from the Laiki Bank in London in the names of the Costis and the Christous (London Loan). Particulars Laiki Bank loan account number [number stated] 105H In about early 1996, the Partnership borrowed $450,000 from the London Loan (London Loan Partnership Borrowings). Particulars The London Loan Partnership Borrowings were arranged by Mr Papatheodotou on behalf of the Partnership. 105I Between 2002 and 2006, Mr Papatheodotou engaged in foreign exchange trading using the London Loan Partnership Borrowings. 105J Mr Papatheodotou undertook the foreign exchange trading referred to in paragraph 105I above on behalf of the Partnership. 105K The foreign exchange trading referred to in paragraph 105I above made a loss. 105L From about 2002, Mr Papatheodotou began to repay the London Loan Partnership Borrowings. 105M The repayments to the London Loan Partnership Borrowings referred to in paragraph 105L above were on behalf of the Partnership. 105N On a dissolution of the Partnership, and in accordance with the Partnership Agreement, Makis is entitled to return of the amount of the contributions pleaded at paragraph 105L above, plus interest. Particulars Makis refers to and repeats the matters in paragraphs 26-31 above. 1. The operative claim is that made at par 105N, that on the dissolution of the partnership, Ms Makis is entitled to the return of the amount of the contributions pleaded at par 105L plus interest. Those contributions are amounts paid by Mr Papatheodotou to repay what are called the London Loan Partnership Borrowings. The draft cross claim does not identify the amounts of the repayments or when, or by what means, they were made. 2. However, Ms Makis alleges in par 105H that the partnership borrowed $450,000 from the London Loan. It follows from par 105I that Mr Papatheodotou engaged in foreign exchange trading using the London Loan Partnership Borrowings. That trading is not specified in the draft cross claim. All that is said in par 105K is that the trading led to a loss. The amount of the loss and the reasons for the loss are not pleaded. Crucially, the fact of a loss does not necessarily mean that the whole of the $450,000 was lost. The draft cross claim does not identify the amount of the loss. If the amount of the $450,000 that was not lost was retained by Mr Papatheodotou, that amount should have been available to repay part of the $450,000 loan. Mr Papatheodotou should not have been required to repay the whole of the loan, as is implied by par 105L. If the balance was not used for that purpose, an alternative use should have been pleaded. The result is that Ms Makis has apparently claimed that she is entitled to repayment of the whole of the $450,000 plus interest. But there is an obvious gap in the pleading, because it does not allege that the whole of the $450,000 was lost, it does not identify the balance that was retained, and it does not explain why that balance was not used to repay part of the $450,000 loan. 3. Consequently, while the allegations pleaded may arguably be sufficient to support the claim in prayer 2B(b) for a declaration that the London Loan Partnership Borrowings were liabilities of the partnership, they are by no means sufficient to identify the issues that would need to be decided by the referee concerning the relevant liability of the partnership to Ms Makis on its dissolution. 4. The allegations in par 105C that Mr Kyriacou did not object to the Costis and the Christous joining the partnership, and similarly in par 105D that Ms Makis did not object, are not sufficient to support a finding by the Court that Mr Kyriacou and Ms Makis agreed to the proposal that the Costis and the Christous would join the partnership. Nor is the pleading in par 105F that the Costis and the Christous joined the Partnership sufficient to establish the claim that the Costis and the Christous become partners. The allegation as to joinder is stated in the form of a bare conclusion. 5. The draft cross claim contains allegations as to the circumstances in which the Costis and the Christous left the partnership, in the following terms: 122A In early 2002, and following the breakdown of the marriage between Kyriacou and Anastasia, George Costi and George Christou had a conversation with Mr Papatheodotou about the Costis and the Christous leaving the partnership. Particulars The conversation between Mr Papatheodotou, George Costi, and George Christou took place in about early 2002, at Mr Papatheodotou's office in Marrickville. 122B Following the conversation referred to in paragraph 122A above, the Costis and the Christous left the Partnership. 122C At the time the Costis and the Christous left the Partnership, there was still money owing by the Partnership to the Costis and the Christous under the London Loan Partnership Borrowings. 122D In satisfaction of the amount outstanding under the London Loan Partnership Borrowings, in about March 2003 the Costis and the Christous were transferred legal title to [Unit 121/3]. 122E In about March 2003, Mr Papatheodotou on behalf of Makis paid stamp duty for the transfer of [Unit 121/3] of $23,165 for a second time. 122F Upon a dissolution of the Partnership, and in accordance with the Partnership Agreement, Makis is entitled to a return of the amount of the contribution in paragraph 122B above, plus interest. 1. There is no allegation that Mr Papatheodotou had the authority of both Mr Kyriacou and Ms Makis to agree that the Costis and the Christous could leave the partnership. 2. Paragraph 122B is a bare allegation that the Costis and the Christous left the partnership, without any pleading of the facts that constituted a consensual withdrawal of those persons from the partnership. 3. Paragraph 122C alleges that, at the time, there was still money owing by the partnership to the Costis and the Christous, without even stating the amount, let alone pleading the facts that led to that amount remaining owing. 4. Unit 121/3 (as I have called it) is a property that is alleged in new par 110A to have been the subject of a payment by Mr Papatheodotou of a deposit of $61,500 for the purchase of the property off the plan by a company called KYRPAP Pty Ltd, which is alleged in par 108 to have been incorporated for the purpose of acting as a corporate vehicle by which the partnership would operate. An amendment to par 109 would allege that KYRPAP Pty Ltd agreed to purchase Unit 121/3 for the price of $610,000 in December 1996. 5. It is not clear that the allegation that the Costis and the Christous joined and then left the partnership has any legal significance to the claims in the cross claim. Those circumstances may merely be background to the transactions that led to the claims made by Ms Makis. 6. The Court was told at the hearing that the title to Unit 121/3 was never transferred to KYRPAP Pty Ltd. A new allegation at par 113A is that, in about February 2003, Unit 121/3 was transferred to the Costis and the Christous. 7. Returning to par 122C, the assignment of the benefit of the contract of sale is said to be in satisfaction of the amount outstanding under the London Loan Partnership Borrowings. 8. The draft cross claim therefore does not identify the balance of the $450,000 that was left after the trading loss that was available to repay the London Loan Partnership Borrowings. If the balance was not used for that purpose, the actual purpose is not stated. Ms Makis claims that she is entitled on dissolution of the partnership to be repaid the amount of the borrowing repaid on her behalf by Mr Papatheodotou, together with the second payment of stamp duty of $23,165, plus interest. The real amount cannot be determined on the face of the pleading, because the amount of credit given by the Costis and the Christous for the benefit of the assignment of the contract of sale of Unit 121/3 is not identified. Black J's consideration of the equivalent allegations 1. I will now consider the reasoning of Black J, on the earlier application, concerning the equivalent paragraphs of the earlier draft cross claim. His Honour stated that he would only specifically consider sample amendments to the then proposed amended cross claim. His Honour specifically rejected pars 105A-105F (equivalent to the latest pars 105A-105N). His Honour also rejected paragraphs 122A-F. In outline, his Honour did so because of the inadequacy of the allegations of fact to enable Mr Kyriacou and the Court to understand the true substance of Ms Makis' case. 2. Although the equivalent paragraphs of the latest draft cross claim may be more detailed in some respects than the equivalent paragraphs considered by Black J, in my opinion they suffer from the same deficiencies. 3. His Honour observed, at page 12, that the deficiencies could not be cured by any evidence in Mr Papatheodotou's affidavit that might, if admissible, supply detail that was not contained in the draft pleading. 4. Black J also noted, at page 2, that his Honour had been informed by counsel for Ms Makis that she had then filed all evidence on which she would rely in respect of the existing cross claim and her proposed amended cross claim. The same assurance was made to me at the hearing of the latest notice of motion. These assurances were made in the context that the basal argument put by Ms Makis was that, as Ms Makis has now served all of her evidence relevant to the cross claim as pleaded, and also all of the claims sought to be introduced by filing the draft amended statement of claim, and because Mr Kyriacou has already served all of his evidence in response to all of the claims, there was no good reason for the Court to refuse the leave sought by Ms Makis. Ms Makis' submission was that the filing of the latest draft amended cross claim would ensure that the pleadings conformed with the evidence, so that the amendments should be permitted so that the proceedings could be listed for hearing at the earliest available time. 5. That submission was made in the context that, where, during the hearing, the Court identified in a paragraph by paragraph analysis of the latest draft amended cross claim allegations that were too general and did not allege all of the specific facts necessary to make out the claim, counsel for Ms Makis resorted to taking the Court to the relevant parts of the affidavits of Mr Papatheodotou and Mr Kyriacou. To the extent that time permitted at the hearing, counsel sought to follow this course for all contested amendments to the cross claim. 6. I agree, with respect, with the observation made by Black J to the effect that deficiencies in the manner in which the necessary facts are alleged in the pleading cannot be cured by a demonstration of where the missing facts may be deposed to in the party's evidence. But putting aside that principle, it was found that the extent to which Mr Papatheodotou's affidavit was capable of supplying missing information was uneven as between the different claims pleaded in the draft amended cross claim. 7. Further, in many cases, I concluded that the evidence in Mr Papatheodotou's affidavit was not, in any case, adequate to cure the deficiency in the pleading. While I respectfully agree with the observation made by Black J, at page 3, that the admissibility of Mr Papatheodotou's affidavit is a question for the trial judge, I consider that it is a legitimate factor for the Court to take into account that, in respect of a particular proposed claim, the relevant part of the draft cross claim and the affidavit are not sufficient to establish the claim with the necessary detail. 8. When I broached this issue, counsel for Ms Makis responded on a number of occasions by saying that, if the Court made the declarations sought by Ms Makis, and referred the issues set out in prayer 3 to a referee, the referee could, where necessary, call on the parties to provide supplementary evidence to assist the referee to determine the issue: see for example T 28.25, 30.5 and 33.8. At the last-mentioned reference, counsel said: "… We want your Honour to find that they were an investment of the partnership and then we'll need to prove to a referee how much we contributed to them…" These responses led me to believe that Ms Makis was adopting inconsistent positions on the issue of whether her evidence was complete. That, in my view, is an important case management issue, because the Court should be wary of referring issues to a referee in circumstances where the position adopted by Ms Makis is equivocal as to whether her evidence is complete or not. That is also an issue for determination by the trial judge, but I consider that it has relevance at the stage where the Court is asked to give leave for the filing of an amended cross claim that does not strictly satisfy the rules of pleading, and where there is a real probability that the cross claimant does not have the evidence necessary to establish an arguable case in support of the new claim. Evidence of Mr Papatheodotou on Costis and Christous claims 1. Returning to the new claims that Ms Makis seeks leave to introduce in relation to the joinder of the Costis and the Christous to the partnership, Mr Papatheodotou dealt with the issue in his 20 July 2022 affidavit, at pars 118 to 131 and 154 to 170. 2. Mr Papatheodotou's evidence at par 127 was: "Neither Andrea nor Kyriacos objected to the Costis or the Christous joining the Partnership." Counsel for Ms Makis conceded that this was as high as the evidence went, and there was no evidence of either Ms Makis or Mr Kyriacou positively agreeing to the Costis or the Christous joining the partnership (let alone that there was no evidence of the terms on which they would join the partnership). 3. Mr Papatheodotou said at par 129, that of the $1,000,000 loan taken out in the name of the Costis and the Christous, $600,000 was used by Mr Papatheodotou "to try and make a profit by changing the currencies of the loan and the deposit account." This suggests that the reference to the amount being $450,000 in par 105H of the draft cross claim was an error. 4. Mr Papatheodotou then said at par 130: I managed to make some profit from this, and began arranging repayment of the London Losses Loan. 1. Apart from this evidence being entirely unspecific as to the amount of the profits and the amount of the repayments, it suggested that part of the repayments were made with profits. 2. Mr Papatheodotou gave evidence, in par 154, of a conversation that he had with Mr Costi and Mr Christou in 2002 concerning their desire to leave the partnership. The substance of that discussion was that the Costis and the Christous would take Unit 121/3. Mr Papatheodotou then said at par 155: It was my understanding that after this discussion, the Costis and the Christous had left the Partnership, subject to them receiving one of the Pyrmont units. 1. Mr Papatheodotou referred in par 166 of his affidavit to the transfer of Unit 121/3 by KYRPAP Pty Ltd to the Costis and Christous at Tab 39 to the exhibit to the affidavit. The significance of the acknowledgement in the transfer of KYRPAP Pty Ltd receiving consideration of $610,000 is entirely unclear. Conclusion concerning proposed Costis and Christous amendments 1. This detailed examination of the proposed new claim concerning the Costis and the Christous joining and retiring from the alleged partnership satisfies me that the Court should not grant Ms Makis leave to amend her cross claim to plead the new claim in its present form. 2. The primary reason for that conclusion is that many facts that I consider are material to the pleading of Ms Makis' claim to be entitled to be repaid amounts allegedly paid by her in relation to the involvement of the Costis and the Christous in the alleged partnership are either obscure or missing. It is not sufficient for Ms Makis to confine her proposed pleading to the alleged payments made on her behalf and the alleged liabilities incurred by the partners. That might suit Ms Makis' apparent objective of only obtaining declarations from the Court concerning the assets and liabilities of the partnership at certain historical times. But it is by no means sufficient to provide a proper basis for a referee appointed by the Court to reconstruct the accounts of the partnership in order to determine whether a profit was ultimately made, and if so, to quantify that profit. It is not sufficient for Ms Makis to prove that she made payments on behalf of the partnership and that, at the point of dissolution, there is a profit available to fund the repayment of the payments she made plus interest. It would be essential for the pleading to address the consequences of the trading operations of the partnership, and, most crucially, what capital and income distributions have been made to date. The deficiencies in the proposed amended cross claim cannot in principle be cured by the evidence offered by Mr Papandreou. But as I have attempted to demonstrate by this sample analysis, the deficiencies have not been cured by the evidence in any event. 3. As the parties to the alleged overarching partnership have not apparently prepared comprehensive partnership accounts as time has gone by, and as no such accounts now exist, the exercise that Ms Makis now seeks to impose on the proposed referee, as well as Mr Kyriacou in responding to her new claim, would be oppressive. That will be so as long as Ms Makis does not plead in advance in a comprehensive way all of the facts that are material to the ultimate determination of the partnership accounts in relation to the involvement of the Costis and the Christous in the alleged partnership. In the absence of a full and proper pleading, there is good reason for the Court to conclude that Ms Makis cannot properly reconstruct all of the facts that must be alleged to justify the Court in giving her leave to plead this new claim. If that is true, it would be procedurally unfair for the Court to permit Ms Makis to make the amendment to her cross claim that she proposes, and then to do no more than to declare that isolated payments made in the past were made for partnership purposes, and that particular assets and liabilities that existed at one time were assets and liabilities of the partnership. If that is all the Court can do, the prospect that a referee could complete the exercise of reconstructing the partnership accounts on the existing evidence, or with minimal supplementary evidence, would be an illusion and an oppressively unfair procedure to impose on Mr Kyriacou. Consideration of other proposed new claims 1. I will now consider the other new aspects of Ms Makis' proposed amended statement of claim, albeit in a more summary way than I have dealt with the proposed amendments concerning the involvement of the Costis and the Christous in the partnership alleged by Ms Makis. 2. Notwithstanding the submission made by Mr Kyriacou that Ms Makis should be treated as having abandoned the amendments already allowed by Black J, I will renew the leave given by his Honour to Ms Makis to make the amendments to her cross claim that Black J has allowed. His Honour has in my view determined those issues. 3. In the oral submissions made on behalf of Ms Makis, an attempt was made in relation to some of the new claims to justify leave to amend by taking the Court to the evidence contained in Mr Kyriacou's affidavit in response to the relevant evidence in Mr Papatheodotou's affidavit. I have already explained above my agreement with the ruling of Black J that inadequacies in the pleading of the draft amended cross claim cannot be cured by the evidence on the subject contained in Mr Papatheodotou's affidavit (which may or may not be admitted at the hearing). Ms Makis made a submission at T 20.16 that the judgment of Gleeson JA in Re Force Corp Pty Ltd (Recs and Mgrs Apptd) [2018] NSWSC 896 at [25] is authority for the "relatively uncontroversial proposition that the issues in dispute not only come from the pleadings where there are pleadings, but also the affidavits and the legal principles to be applied." In that case, Gleeson JA was only concerned with whether the Court ought to permit the issue of a subpoena, and for that purpose the Court was required to determine the issues in the proceedings to which the documents sought might be relevant. At that forensic level, the relevance of the material sought by the subpoena was an issue that could be determined by the pleadings and the evidence in the affidavits. Gleeson JA said nothing that would derogate from the principles that require the pleading of all necessary material facts with adequate particulars. 4. In respect of some of the new claims, Ms Makis sought to demonstrate that, although they would be newly pleaded if leave were given to file the draft amended cross claim, they were not new in the sense that they had been foreshadowed in Mr Papatheodotou's 20 July 2022 affidavit, and moreover, Mr Kyriacou had responded to that evidence in his 29 November 2022 affidavit. The evident purpose of these submissions was to demonstrate that, at an evidentiary level, the parties were already at issue, so, according to Ms Makis' submission, there was no procedural impediment to the Court granting the leave to amend that she seeks. Equally with Black J, I do not accept that this is a proper basis for excusing Ms Makis for her delay and the absence, where that exists, of adequate allegations of material facts and particulars in the draft amended cross claim. Consequently, I do not consider it necessary for the purpose of these reasons to examine all of the submissions made by Ms Makis concerning the significance of the evidence in Mr Kyriacou's affidavit. 5. I will now deal seriatim with the proposed amendments listed in Mr Kyriacou's written submissions as being opposed individually. The headings used record Mr Kyriacou's submissions verbatim. 6. I embarked on this task in the expectation that I would find that the drafter of the revised draft amended cross claim would have responded to the reasons given by Black J as to the inadequacies in the manner in which the version of the draft amended cross claim considered by his Honour had been pleaded by some comprehensive attempt to cure those inadequacies by the addition of the necessary allegations as to material facts and the provision of particulars. As will be seen, I was disappointed in that expectation. It increasingly became apparent that claim after claim was identical to the equivalent claim that was rejected by Black J, or that only inconsequential amendments had been made. In reality, Ms Makis has sought to persuade me to revisit issues that I consider were conclusively determined by Black J and to reverse his Honour's rulings – or as counsel for Mr Kyriacou put it at T 16.49: "it sort of sounds very much like a second bite of the same cherry, your Honour, even though it's dressed up as an amended version." While I will continue to provide reasons for the refusal of leave to amend in respect of these claims, I have abbreviated my reasons in response to the realisation that I was being called on to revisit issues that had already authoritatively been determined. 7. The new draft amended cross claim contains a substantial number of additional proposed amendments to those that are listed in Mr Kyriacou's written submissions as being opposed. I have proceeded upon the basis that it was for Mr Kyriacou to specify the amendments that he opposes, and accordingly I will only address the amendments listed by Mr Kyriacou. Para 61A Deposits 2005/6 CBA Pp 75-77 Ex IP3 Doubtful probative value 1. This amendment would add a trivial additional claim of a total of $2,096.57 to the $43,050.28 claim pleaded in pars 60 to 61. The amendment should be allowed. I will not reject a properly pleaded leave to amend on the basis of a summary judgment that Ms Makis' evidence may not establish the matter alleged. Paragraph 61B should consequently be permitted. Paras 90A-H New Claim, Shares in Cyprus 2001-2007 Pp 94-101 Ex IP3 selective point in time docs 1. This is a new claim based upon an allegation that, in January 2001, Mr Papatheodotou and Mr Kyriacou agreed that the partnership would invest in shares in Cyprus and that Mr Kyriacou would purchase the shares described in the particulars to par 90C, between 2001 and 2007. Although the names of the shares are stated, the numbers and prices and the dates of purchase are not stated. Ms Makis alleges in par 90E that Mr Papatheodotou "made contributions to account number 182-21-189330 in order for Kyriacou to purchase the Cyprus Shares". The amounts and the dates of payment are not stated. 2. Mr Papatheodotou deals with this new claim in pars 67 to 75 of his 20 July 2022 affidavit. He says in par 69 that "I recall putting funds into an account that Kyriacos gave to me", and refers to a statement at Tab 19 of his Exhibit that contains four documents that may be account statements in the name of Mr Kyriacou that appear to show the amounts paid for and the values of identified shares at various dates. In par 71, Mr Papatheodotou refers to a summary that he prepared in 2010 of the amount spent on the shares in Cyprus, and his estimate of their equivalent value in Australian dollars "based on some of the statements that were in my possession". The value stated is $849,982.69. Tab 19 of the Exhibit is a schedule apparently prepared by Mr Papatheodotou in 2010 using the four account statements. Those statements appear to be 'snapshots' of accounts at different times with different account names. There is no documentary evidence Mr Papatheodotou paid money into the accounts. 3. Ms Makis sought to make the same claim in pars 90A-90D of the proposed amended cross claim that was considered by Black J. His Honour rejected the amendment, primarily on the basis that there was no identification of the facts, matters or circumstances which were said to indicate that the particular transaction was undertaken by Mr Papatheodotou on behalf of Ms Makis in her capacity as a partner, rather than in any other capacity. Although a little more detail is pleaded in the latest version of the claim, it does not cure the deficiencies identified by Black J. I will not give leave for this claim to be pleaded in its present form in an amended cross claim. Paras 122G-122K New Claim 2004-2005 KPMV Glass Craft P/L Pp 327-343 IP3. Doubtful probative value. 1. This new claim is based upon an allegation that, in about 2004, Mr Kyriacou established a stained glass business in Cyprus on behalf of the partnership, and that, in 2004 and 2005, Mr Papatheodotou paid amounts totalling 30,000 Cyprus pounds and $133,264.01 to the company established by Mr Kyriacou "on behalf of the Partnership". 2. Mr Papatheodotou deals with this issue in pars 233 to 247 of his 20 July 2022 affidavit. Mr Papatheodotou says, in par 234, that Mr Kyriacou said that any losses suffered by the company "will come out of my share of the partnership". There is no evidence that it was agreed that the company would be a partnership business. Mr Papatheodotou gives evidence in par 237 that Mr Kyriacou used a power of attorney granted to him by Ms Makis to establish the company. He asserts in par 238 that he arranged for the partnership to give financial support to the company. This evidence would not support a finding that all of the partners agreed that the company was to be established as a partnership business. All of the supporting documents at Tab 70 of the Exhibit are in Greek, save for a request for telegraphic transfer dated 6 January 2025 that may prove that Mr Papatheodotou sent 3,000 Cyprus pounds to the company. There is nothing on the document to suggest that it was sent from a partnership account. 3. Ms Makis sought to make this claim in pars 122G-122K of the proposed amended cross claim that was considered by Black J. His Honour rejected the claim, primarily on the basis that there was no factual basis pleaded for the proposition that Mr Papatheodotou dealt with Mr Kyriacou in relation to this investment on behalf of Ms Makis in her capacity as a partner of the alleged partnership. The new pleading of this claim uses slightly different words, although it is not at all clear how the pleader could have thought that the changes would make a relevant difference to the outcome. There is merely an assertion in par 122H that the company that conducted the stained glass business was established by Mr Kyriacou on behalf of the partnership. The same allegation was made in par 122G of the earlier version of the draft amended cross claim. I will not give leave for this claim to be pleaded in its present form in an amended cross claim. Paras 122L-122N New Claim 2006 Funds borrowed for Vardakis. No evidence. 1. This briefly pleaded new claim is to the effect that, in about 2006, Mr Kyriacou borrowed 35,000 Cyprus pounds from the partnership account in Cyprus to repay a housing loan of his sister, and accordingly on the dissolution of the partnership, Mr Kyriacou is obliged to repay this amount plus interest. 2. This new claim is pleaded in exactly the same way as the claim was pleaded in the draft cross claim considered by Black J. His Honour does not appear to have dealt specifically with this claim in his judgment. Apparently, for the sake of brevity, Black J did not refer specifically to all paragraphs of the draft amended cross claim in his ex tempore judgment. As I understand his Honour's reasons, on page 13, he commenced a paragraph by saying: "Paragraphs 122A-F in turn plead the circumstances…" intending that that paragraph would explain his Honour's finding in respect of all of the amendments pleaded in pars 122A-122N. On this basis, I conclude that his Honour intended to reject this claim on the same basis as he had rejected the other new claims, where the facts material to the allegation that the transaction was a partnership transaction had not been pleaded. 3. Mr Papatheodotou deals with this issue in pars 191 to 196 of his 20 July 2022 affidavit. He refers at par 191 to an agreement with Mr Kyriacou to pay the costs of his sister's husband's funeral with partnership funds, but no claim appears to be made in relation to that payment. He says in par 194 that, in 2006, while in Cyprus, Mr Kyriacou "using funds of the Partnership, repaid the housing loan of his sister for 35,000 Cyprus Pounds". 4. Mr Kyriacou denied this claim in par 139 of his 29 November 2022 affidavit. 5. I will not give leave for this claim to be pleaded in its present form in an amended cross claim. The substantial reason for that conclusion is that, if in fact Mr Kyriacou had taken money without the authority of the partnership from a partnership account in 2006, the limitation period for the recovery of that money would have long expired. Ms Makis seeks to make the money allegedly taken recoverable by a bare assertion that the money was taken from a partnership account in Cyprus, without alleging the circumstances that would make the money in the account partnership money. Paras 168A-168B New Claim 2002. Unspecified funding. 1. Ms Makis pleads no more than, that from about 2002, Mr Papatheodotou on behalf of Ms Makis "contributed funding for the Import and Export Business". The new pleading is added to a claim in par 167 of the existing cross claim that, on 16 September 2002, the partners incorporated a company called I & K Pty Ltd for the purpose of the partnership business, and in par 168 that the partnership began conducting an Import and Export Business through the company. 2. A similar claim was sought to be pleaded by Ms Makis in pars 168A-168D of the earlier draft amended cross claim that was considered by Black J. His Honour rejected the pleading, largely on the basis that par 168A alleged that Mr Papatheodotou created summaries of the invoices for the products purchased for the Import and Export Business, and that the particulars to the paragraph stated that the summaries would be tendered at the hearing. Black J concluded that the claim was not properly pleaded, because neither Mr Kyriacou nor the trial judge could know what was claimed until the summaries were tendered. His Honour also observed that par 168C alleged that Mr Papatheodotou had arranged unidentified contributions to the funding of the Import and Export Business. 3. In the new version of this claim, Ms Makis has responded to the consequences of her earlier particulars that the summaries would be tendered at the hearing by deleting the particulars. There is now no reference at all to the amounts that Ms Makis alleges were paid on her behalf to I & K Pty Ltd. 4. When this circumstance is added to the fact that the existing cross claim only makes a bare allegation that the Import and Export Business conducted by I & K Pty Ltd was partnership business, the inadequacy of this aspect of the new proposed cross claim is patent. The essential problem is that claims that would now clearly be statute barred are sought to be enlivened by a bare assertion that the business of a company incorporated by the parties was the business of the partnership. 5. I will not give leave for this claim to be pleaded in its present form in the draft amended cross claim. Paras 170-170B New Claim 202. Repayment of Loan from Mr Pambris. No evidence, no affidavit of Mr Pambris. 1. Paragraph 170 of the existing cross claim is an allegation that, on or about 17 September 2002, a Sam Pambris loaned $80,000 to I & K Pty Ltd. The new par 170A is an allegation that Mr Papatheodotou repaid the amount Pambris loaned on behalf of Ms Makis on 17 September 2003 in the sum of $88,000, which included 10% interest. Paragraph 170B is a claim that Ms Makis is entitled to be reimbursed the payment plus interest on the dissolution of the partnership. 2. This new claim was included in the previous version of the draft amended cross claim that was considered by Black J. I am satisfied that, when his Honour said on page 14 of his judgment: "Other amendments follow in largely similar form…" his Honour meant to signify that he would reject the amendment for substantially the same reasons as he had rejected the amendments that he had previously considered. 3. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 170C-170G New Claim. 2002. Loan from and repayment to Yiannopoulos Ex IP 278-279. Doubtful probative value. No affidavit from Yiannopoulos 1. This new claim relates to an alleged borrowing in November 2002 by I & K Pty Ltd of the sum of $100,000 from a Dr Stan Yiannopoulos. Ms Makis seeks to allege that, by separate payments in May and November 2003, Mr Papatheodotou on behalf of Ms Makis repaid a total of $107,000 to the lender. 2. Ms Makis sought to make the same new claim in pars 170D-170G of the earlier version of her draft amended cross claim that was considered by Black J. 3. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 171A-171D New Claim. 2002. AP & KK P/L Unspecified contributions 1. This new claim involves an allegation that, in 2002, the partnership incorporated AP & KK Pty Ltd in Cyprus as the import company for the Import and Export Business. The name of the company was subsequently changed by Mr Kyriacou to Ozico Trading Limited. The proposed allegation in par 171C is that, on behalf of Ms Makis in her capacity as a partner of the partnership, Mr Papatheodotou contributed funding to the company for the Import and Export Business. There are no allegations of fact to support the claim that the company was incorporated on the basis that its activities would be treated as partnership business. The payments that Ms Makis alleges were made by Mr Papatheodotou on her behalf are not identified. 2. Ms Makis sought to plead an identical claim in the earlier draft amended cross claim that was considered by Black J. 3. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 174A- 174B New Claim. 2009. Unspecified payment of the Pambris PK Tiger Loan 1. In the existing cross claim, Ms Makis pleads in par 173 that, on 4 September 2006, the partners incorporated PK Tiger Investments Pty Ltd for the purpose of the partnership business, and that, on 31 July 2007, Mr Pambris loaned $60,000 to the company. Ms Makis seeks leave to plead that, on 28 May 2009, Mr Papatheodotou on behalf of Ms Makis repaid Mr Pambris $72,000 which included 10% interest for two years. 2. Ms Makis sought to plead an identical claim in the earlier draft amended cross claim that was considered by Black J. 3. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 176A-176B New Claim. 2006. Unspecified payment of the Goodger Loan. 1. In the existing cross claim, Ms Makis pleads in par 175 that, in October 2006, the partnership through PK Tiger Investments Pty Ltd borrowed $1,000,000 from James Lindis Goodyer, and in par 176 that, the partnership, through PK Tiger Investments Pty Ltd, began trading foreign currency in Cyprus using the proceeds of this loan. 2. Ms Makis now seeks to add a new allegation, in par 176A, that, from about November 2006, Mr Papatheodotou, on behalf of Ms Makis, "made repayments of the Goodyer Loan". The amounts of the repayments and the times of payment are not identified. Nothing is alleged about the consequences of the foreign currency trading. 3. Ms Makis sought to plead an identical claim in the earlier draft amended cross claim that was considered by Black J. 4. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 176C-177C New Claim. 2008. Canterbury Road Property Pleading deficits, conclusion – a claim against Pambris is available – Pambris not sought to be joined and no affidavit from Pambris 1. Ms Makis now seeks the leave of the Court to plead a new claim arising out of alleged circumstances in which, in about January 2008, Mr Papatheodotou and Mr Pambris discussed the partnership purchasing a 50% share in a property in Canterbury, being a suburb of Sydney. The allegation is that the partnership was to purchase a 50% share in the property. In par 177 of the existing cross claim, Ms Makis alleges that, in February 2008, Mr Kyriacou, Ms Makis and Mr Pambris borrowed $1,200,000 from a bank to "repay funds borrowed by the Partnership". Ms Makis now seeks to add, by a new par 177(a), that part of the purpose for borrowing the $1,200,000 was to purchase a 50% interest in the Canterbury property for $750,000. By par 177A, Ms Makis seeks to plead that Mr Pambris received $750,000 from the bank loan, by par 177B that, Mr Pambris did not transfer the 50% interest in the Canterbury property to the partnership, and by par 177C that, in about May 2013, the Canterbury property was sold by Pambris without accounting to the partnership. 2. Strangely, Ms Makis does not seek to plead any basis for Mr Kyriacou to be liable to Ms Makis on the basis that the transactions alleged were part of the business of the partnership. Ms Makis does not allege that she, Mr Kyriacou and Mr Pambris borrowed the $1,200,000 in partnership. Presumably, Ms Makis means to claim that $750,000 of the borrowing was in some way advanced to the partners, so that its loss as a result of Mr Pambris' conduct created a liability that must be taken into account on the dissolution of the partnership. This aspect of the new draft cross claim is not only inadequately pleaded, but its meaning is entirely unclear. 3. This new claim was included in the earlier draft amended pleading that was considered by Black J, but with different wording. There was an allegation, in par 178A of the earlier version, that the $1,200,000 loan was paid in full, but the 50% interest in the Canterbury property was not transferred to the partnership. There was no allegation that the loan was repaid with partnership funds (remembering that it was not alleged to have been a partnership borrowing). It is not clear how it was said that the partnership suffered a loss as a result of the transaction. Even if the partnership did suffer a loss, it would not lead to any requirement that the individual partners contribute capital on the dissolution of the partnership, unless it were established that, on an overall basis, the transaction caused the partnership to have a deficit of capital when it was dissolved. 4. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Paras 177D-177G New Claim. 2013. ANZ Personal Loan Claim Pleading Deficit – no particulars 1. This is a new claim that, on 10 July 2013, Ms Makis borrowed $45,000 from the Australia and New Zealand Banking Group Ltd, and that the amount borrowed was used to pay partnership loans. Ms Makis seeks to allege that she repaid the loan from her wages, which were contributions to a partnership liability. There is no identification of the relevant partnership loans or the times and amounts of the repayments. 2. Ms Makis sought to plead an identical claim in the earlier draft amended cross claim that was considered by Black J. 3. Ms Makis has not established any justification for the Court to depart from the ruling made by his Honour. Conclusion 1. The parties must consider these reasons and provide short minutes of order to my Associate to give effect to them. That should be done within 14 days of the publication of these reasons for judgment. 2. It will be necessary for Ms Makis to make a judgment as to the extent to which she wishes to file an amended cross claim that is consistent with the judgment given by Black J and these reasons. 3. It is likely to be true that many of the deficiencies in the new claims that Ms Makis has sought leave to plead but which have been rejected will be present in the existing cross claim. Although I have made observations above concerning the likely consequences of those deficiencies for the purposes of the conduct of the hearing and any subsequent reference, there is no application before the Court to deal with those problems. 4. It is not clear how the present state of the pleadings, even with leave being given to make limited amendments to Ms Makis' cross claim, will satisfactorily resolve the dispute between the parties. That is, however, a matter for the parties and their legal advisers to determine. 5. The parties are invited to serve and deliver to my Associate submissions on the costs of Ms Makis' notice of motion within 14 days of the delivery of these reasons for judgment. ********** Amendments 09 October 2023 - Amendment to representation on coversheet. 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: 09 October 2023