Tripathi v Tiwary & Anor (No. 2) [2023] NSWDC 633

District Court New South Wales

Medium Neutral Citation: Tripathi v Tiwary & Anor (No. 2) [2023] NSWDC 633 Hearing dates: 22-24, 28 March 2023 Date of orders: 28 March 2023 Decision date: 28 March 2023 Jurisdiction: Civil Before: Neilson DCJ Decision: Ruling under Civil Procedure Act 2005 (NSW), ss 64 and 65 not required. Catchwords: CIVIL – PRACTICE AND PROCEDURE – AMENDMENT OF PLEADINGS. Legislation Cited: Civil Procedure Act 2005 (NSW) Supreme Court Act 1970 (NSW) Cases Cited: DJZ Construction Pty Ltd v Paul Pritchard trading as Pritchard Law Group (No. 2) [2009] NSWSC 215 Young v Queensland Trustees Ltd (1956) 99 CLR 560 Texts Cited: AF Rath QC, Principles and Precedents of Pleading in the Supreme Court of New South Wales at Common Law (Law Book Company of Australasia Pty Ltd, 1961) Carter and Harland, Contract Law in Australia 2nd Ed. (Butterworths, 1991) Category: Principal judgment Parties: Plaintiff - Dev Tripathi First Defendant - Neni Vijayant Tiwary Second Defendant - Gargi Tripathi Representation: Counsel: Plaintiff – Mr Woodbury Defendants – Mr Edwards

Solicitors: Plaintiff – DCE Lawyers First & Second Defendants – Carneys Lawyers File Number(s): 2021/00003715 Publication restriction: Nil.

Judgment 1. HIS HONOUR: Last Friday, 24 March 2023, I granted leave to the Plaintiff to file and serve a document which was eventually intituled "Further Amended Statement of Claim." It was filed in court on that day. These proceedings were commenced by a Statement of Claim filed on 5 January 2021. There was an Amended Statement of Claim filed on 21 May 2021, but it made no substantive change to the pleadings. It merely corrected the name of the first defendant and renumbered some misnumbered paragraphs. The decision to file the Further Amended Statement of Claim last Friday was based on a consideration of the evidence of the plaintiff contained in Exhibit A, an affidavit sworn by him on 4 November 2021. 2. The pleading in the originating process, that was filed on 5 January 2021, is this: "PLEADINGS AND PARTICULARS 1. On or about 9 November 2015 the Plaintiff agreed to advance various payments by way of loan to the Defendants from time to time, to be repaid on demand (Loan Agreement). Particulars The Loan Agreement was oral and arose out of a conversation between the plaintiff and the defendants at the house of the first defendant on or about 9 November 2015. 2. On various dates between November 2015 and April 2017, a total amount of $207,200.00 was advanced to the Defendants by way of loan (Advances). Particulars 9 November 2015: Payment of $50,000 9 November 2015: Payment of $50,000 25 January 2016: Payment of $30,000 8 February 2016: Payment of $20,000 12 September 2016: Payment of $20,000 8 March 2017: Payment of $5,000 27 November 2017: Payment of $16,000 4 December 2017: Payment of $8,000 27 April 2017: Payment of $7,000 3. In of about January 2020 the Defendants acknowledged the Loan and the Advances. Particulars Conversation between the Plaintiff and the First Defendant in or about January 2020 pursuant to which the First Defendant: a) admitted the Loan and the Advances; and b) undertook to arrange his financial affairs to confirm a repayment date. 4 On or about 8 September 2020 the Plaintiffs made a demand for repayment of the Loan. Particulars Letter dated 8 September 2020 from the Plaintiff's legal representatives to the Defendants. 6. The Defendants have failed to satisfy the Demand or make any repayment of the Loan or Loan Amount. 7. The Plaintiff has received no benefit or consideration for the Advances from the Defendants. 8. Further or in the alternative, the Advances are money had and received to the use of the Defendants. 9. In the circumstances pleaded at paragraphs 1 to 8 above, the Plaintiff claims repayment of the loan in the sum of $207,200.00 and interest under section 100 of the Civil Procedure Act 1995 (NSW). In the Amended Statement of Claim filed on 21 May 2021, paragraphs numbered 6, 7, 8 and 9 of the initiating process were renumbered 5, 6, 7 and 8. 1. What arises from the amendment is the application of ss 64 and 65 of the Civil Procedure Act 2005. However, the question remains whether the Further Amended Statement of Claim filed on 24 March 2023 raises new causes of action. That brings into stark relief the ancient difference between an action in debt and an action for breach of contract. 2. In Carter and Harland, Contract Law in Australia, 2nd Ed, (Butterworths, 1991), commencing at [2201] the authors point this out: "Reasons for distinguishing debt and damages The action to recover a debt due or payment has a longer history than the action to recover damages for breach of contract. Moreover, although development of the action for breach has made the distinction between debt and damages less important than formerly, for two main reasons it is still important. First, there are procedural advantages in recovering a sum payable as a debt due. Generally, a plaintiff will be able to invoke a procedure under which judgment can be obtained with a minimum of support in specifying the amount claimed and advising the defendant that judgment will be signed by default if the defendant fails to defend the matter. By contrast, if a plaintiff wishes to recover more than a nominal sum by way of damages, the plaintiff usually produce detailed evidence of loss, market values and so on. There is also a difference in the onus of proof. Where a plaintiff alleges that a debt is due, but the defendant denies this and pleads a defence of payment, the onus is on the defendant to establish the defence. It was explained earlier that a plea of tender may answer the claim that there was a breach on the part of the defendant, but the plea of tender does not answer, that is provide a defence to, the plaintiff's claim in debt. A plaintiff who seeks damages for breach must provide breach and the loss in respect of which compensation is sought. And in many cases where the defendant raises a defence, such as frustration of the contract, the onus remains with the plaintiff. Second, the common law 'does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit'. This means, for example, the rules dealing with the mitigation of loss do not apply where the plaintiff is seeking to recover a debt due under the contract, whereas they frequently apply to actions for damages." 1. In the same work [2203] is this: "[2203] Nature of the action. Historically, the action to recover a liquidated sum under the contract was framed at common law in debt. The disappearance of the 'forms of action', and the fusion of law and equity by legislation in all States, makes it a little anachronistic to speak today of an action 'in debt'. Nevertheless, it must be appreciated that an action to recover a debt due does not involve specific performance of the contract, and the action is therefore not subject to the exercise of a judicial discretion in favour of the plaintiff and based on equitable considerations. For example, where a seller of goods recovers the price due under the contract, the order of the court is not one for specific performance and the equitable defences, such as laches, are not relevant. In some cases a decree of specific performance may lead to the recovery of a liquidated sum, as where the court decrees specific performance of a contract for the sale of land. However, recovery of the liquidated sum is here merely an incident of the decree." 1. The decision largely relied upon by the authors is Young v Queensland Trustees Ltd (1956) 99 CLR 560. In that case a lady, who had died, had appointed the respondent in the High Court as her executor. When the executor searched the lady's records, he found receipts made by the appellant acknowledging loans made by the lady to the appellant. According to the headnote, the lady died on 14 July 1952 and probate of her will was granted to the respondent in the High Court on 8 January 1953. The appellant, by his defence in the Supreme Court of Queensland, filed on 4 September 1953, admitted that each of the loans alleged by the plaintiff had, in fact, been made to him by the deceased, but he claimed that they had been repaid to her by him in her lifetime. 2. The action was tried by a judge sitting without a jury. Having heard the evidence, his Honour entered judgment in favour of the respondent in the High Court for the amount claimed, as he disbelieved the appellant's evidence as to the repayment of the amounts lent to him. From that decision, the defendant appealed to the High Court upon the ground that his uncontradicted testimony as to the repayment of the loans ought to have been accepted, and that in any event there was no evidence to disprove repayment, the burden of disproof lying upon the respondent, that is, the trustee. 3. The High Court (Dixon CJ, McTiernan and Taylor JJ) delivered a unanimous written judgment. It canvassed at some length the ancient system of pleading and how it had developed. Commencing at page 569, their Honours said this: "A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of a kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove. It is, too, a mistake to suppose that the general issue was always a plea doing no more than negativing the essential ingredients in the plaintiff's prima facie cause of action. For a long period before 1834 it had come to be a plea denying that at the commencement of the suit a cause of action subsisted in the plaintiff, whether because having existed it had ceased to exist or because it had not come into existence or was incomplete. The law was and is that, speaking generally, the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness in respect of an executed consideration." 1. A little later, at page 570, their Honours said this: "Once it is seen that the burden of proving payment falls upon a defendant setting it up as a defence the present appellant's case assumes a different aspect. It means that it is impossible for the appellant to support his appeal on the ground that, on the footing that his testimony is rejected as untrustworthy, there nevertheless remains no sufficient affirmative evidence to support a satisfactory positive conclusion that the loans had in fact never been paid. The appeal can only succeed on the ground that Philp J ought to have accepted enough of the appellant's story to authorise a finding that he had not repaid the loans." 1. The matter can be seen clearly in the work of AF Rath QC (as his Honour then was) in Principles and Precedents of Pleading in the Supreme Court of New South Wales at Common Law (Law Book Company of Australasia Pty Ltd, 1961) a book written about pleading in New South Wales prior to the commencement in 1973 of the Supreme Court Act 1970. Commencing at [59], the learned author commenced to discuss indebitatus counts. He wrote this: "[59] In a special count on contract the basis of the contractual right alleged must be shown. Thus, in an action based on simple contract, it is necessary to allege not only the breach of the promise relied upon but also the promise and the consideration for it; and in an action on a deed it must be alleged that the contract was by deed. But in actions upon simple contracts, where the consideration has been executed and has resulted in a present debt, a short form of declaration is applicable, called an indebitatus count. An indebitatus count alleges a debt presently due and payable by the defendant to the plaintiff and the consideration for that debt. The short form of count does not explicitly state the contract or the breach of it, as these matters are implied in the allegation of the present debt. [60] The allegation of a present debt is made by the form of words 'money payable by the defendant to the plaintiff'. The mode of stating the consideration is shown in the following example, which is the common indebitatus count for goods bargained and sold: A by X his attorney sues, B for money payable by the defendant to the plaintiff for goods bargained and sold by the plaintiff to the defendant. [61] The indebitatus counts are also known by the names of money counts or common counts. The expression 'common counts' is properly reserved for those of the money counts which are most frequently employed. The phrase 'money payable' supersedes an older expression to the effect that the defendant was indebted to the plaintiff in a certain sum. The general issue plea, namely 'never indebted as alleged', applicable to the money counts echoes the older mode of expression. Formerly, there were also counts known as the quantum meruit and quantum valebant counts, which were adopted where there was no fixed price in the contract for the work that was done or the goods that were sold. In these last-mentioned counts the introductory words were to the effect that the defendant was indebted to the plaintiff in a reasonable sum. This has now disappeared and the money counts in the form of 'money payable by the defendant to the plaintiff for' etc, are applicable in all circumstances of debts arising on simple contract, whether the debt is the price fixed by the contract or implied by law as reasonable. As the money counts are applicable only in the case of debts it follows that they are not to be adopted where the plaintiff's claim is for unliquidated damages. The reasonable price which the law says is payable for work done or goods sold, where the contract fixes no price is not unliquidated damages but is regarded as an ascertainable sum of a liquidated kind and hence capable of giving rise to a debt." 1. The learned author then comments on the eight money counts. The fourth discussed by him was for "Money lent". He wrote this: "This count lies to recover a debt arising out of a loan of money on a simple contract. Money deposited by a customer with a banker may be thus recovered. The form of the count is: Money payable by the defendant to the plaintiff for money paid by the plaintiff to the defendant at his request. Evidence of an IOU or of a cheque alone will not support this count." 1. At [67] the learned author pointed out that the general issue appropriate to a declaration framed on a money count was known as a plea of nunquam indebitatus and its form was this: "The defendant by his attorney says that he never was indebted as alleged." The plea clearly indicates that what was not being alleged was contract. The plea for the general issue in respect of a contract was non assumpsit, that is the person had not promised as alleged. This learning can be found, again, distilled under the title "Money Lent" in Section 73 of Bullen, Leake, and Jacob Precedents of Pleadings 13th edition, Sweet & Maxwell, 1990. Bullen, Leake, and Jacob's confirms the claim for money lent in short form, a claim for money lent with interest in short form, and a claim for money lent in long form. The common count for money lent can still be pleaded: UCPR r 14.12(1)(d). 2. When one considers the initial pleading, one can see that the plaintiff was claiming nine separate lendings to the plaintiff on the dates specified. The lendings made on 9 November 2015 were divided into two because that was the limit that the plaintiff could draw down from his account at any one time. One sum of $50,000 was drawn down on 7 November, and the other was drawn down on 8 November, and the bank processed each $50,000 sum on 9 November. The plaintiff on first day of the hearing withdrew the claim in respect of the payment alleged to have been made on 27 April 2017 for $7,700, acknowledging that payment was in respect of work done by the defendant for the plaintiff and was not the subject of any lending. 3. One can see in the originating process a number of payments made by way of loan to the plaintiff. One can see, albeit in not a very graceful manner, an attempt to plead the count of money lent in par 8 of the original pleading. In an action in debt, the only thing that it needs to be pleaded is the lending, which necessarily means the amount lent and the date of the lending. All of those matters were pleaded initially. In my view, it is not necessary for me to make any ruling under s 64(3) or under s 65(3) of the Civil Procedure Act 2005, because all the necessary facts were initially pleaded, albeit ungracefully. 4. However, even if it were necessary to make any order under s 64(3) or s 65(2)(c), it appears to me that in the exercise of discretion, I should make such an order, because all of the lendings relied upon by the plaintiff were initially pleaded. This, in my view, is a clear case for the exercise of discretion, a discretion which was discussed by Schmidt AJ in DJZ Construction Pty Ltd v Paul Pritchard trading as Pritchard Law Group (No. 2) [2009] NSWSC 215 and the cases there cited. ……. 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