PRESTL SUPREME 'A v DELANEY CouRT OF NEW SOUTH WALES — COURT OF APPEAL SHELLER JA 14 March 1996 [1996] NSWCA 435 Shelle r JA. The claimant, Joseph Anthony Prestia, applies for an order extending the time within which he may lodge an appeal from a judgment of his Honour Judge Garling given on 29 November 1995 in the District Court in proceedings brought by the opponent, Volney John Delaney, against the claimant. The opponent began the proceedings on 16 March 1995 by issuing a statement of liquidated claim. The opponent pleaded as follows: 1. On 27th June 1991 the plaintiff lent to the defendant $265,769.26 such loan being repayable 60 days from 27th June 1991 or on such further terms and conditions as may be agreed between the parties. 2. The defendant renewed the loan with the plaintiff after 60 days and has continued to pay interest on the principal since the date of the borrowing. 3. The defendant has paid to the plaintiff $50,000.00 in reduction of the principal of the debt leaving a balance of $215,769.26. Particulars. Written loan agreement and acknowledgment dated 27th June 1991 and signed by the plaintiff and the defendant. 4. On 24th February 1995 the plaintiff made written demand on the defendant for repayment of the balance of the debt. The defendant has refused and/or neglected to repay the debt to the plaintiff. . The plaintiff claims $215,769.26 together with interest thereon from 6th March 1995 to 16th March 1995 at 12% per annum in the amount of $700.37 and continuing at the daily rate of $70.93 pursuant to section 83A of the District Court Act." On 10 April 1995 the claimant filed a notice of grounds of defence and affidavit verifying. The grounds of defence were as follows: 1. Denies the contents of paragraphs 1, 2, 3 and 5. 2. Admits the contents of paragraph 4 except in so far as the Defendant denies he is indebted as alleged. 3. Further in the alternative the Defendant relies upon the Third Party Notice filed herewith. 4. Further the Defendant denies he is indebted to the Plaintiff as alleged or at all and denies the quantum of the debt as alleged. In the third party notice referred to the claimant claimed to recover $257,889.26 from Top of the Crop NQ Pty Limited (TOC). In that third party notice the claimant alleged that in July 1991 TOC had purchased certain mango farms and that the sum of $265,769.26 'was advanced to (TOC) at that time to facilitate the purchase of the property.' The following paragraphs in the third party notice are significant: 3. The principal sum was advanced to the third party by and at the direction of the Defendant from moneys advanced to him by the Plaintiff. JOBNAME: No Job Name PAGE: 2 SESS: 1 OUTPUT: Mon Feb 25 18:21:06 2008 /reports/caseml]/case/urj/96079 13 UNREPORTED JUDGMENTS 6. 7. The Defendant has made payments of interest on the principal sum to the Plaintiff to the sum of $42,120.00. The Defendant made written demand to the third party for repayment of the balance of the principal sum and interest paid. The third party has refused and/or neglected to repay this amount to the Defendant. The Defendant claims $257,889.26 together with interest thereon from 6 April 1995 at 12% per annum and continuing at the daily rate of $84.79 pursuant to Section 83A of the District Court Act. On 11 July 1995 the opponent filed a notice of motion for summary judgment in the amount of $215,769.26 together with interest from 1 January 1995. This application was supported by an affidavit by the opponent to which was annexed a document signed by the claimant and dated 27 June 1991. Paragraphs 1 and 2 of that document were as follows: I, JOSEPH ANTHONY PRESTIA of 5 Mamre Road, Kemps Creek in the State of New South Wales, Company Director, hereby acknowledge the following: 1. That Volney John Delaney (hereinafter referred to as 'The Creditor') of Lot 1 Hungry Head Road, Hungry Head in the State of New South Wales, Retired, has this day advanced to me the sum of two hundred and sixty five thousand seven hundred and sixty nine dollars and twenty six cents ($265,769.26) (hereinafter referred to as the 'Principal Sum') by way of a loan and that the principal sum will be deposited into the Trust account of my Solicitors, Messrs Marsdens Solicitors of 49 Dumaresgq Street, Campbelltown on Monday Ist of July, 1991. That the loan is repayable sixty (60) days from the date hereof together with interest at the rate previously agreed between myself and the Creditor notwithstanding that at the expiry of the said period of sixty (60) days the loan may be renegotiated for a further term and on such terms and conditions as may be agreed between myself and the Creditor."'The document went on to provide that the principal sum must be used in connection with the purchase of certain properties by TOC, then known as Perfection Agricultural Holdings Pty Limited. On 29 September 1995 the Court gave the claimant leave to file an amended verified defence which took the following form: 1. 3. The Defendant admits that the loan was renewed after sixty (60) days as alleged in paragraph 2 in the Statement of Claim but denies that he has continued to pay interest on the principal since the date of borrowing as alleged in the said paragraph. The Defendant denies that he has paid the sum of $50,000.00 in reduction of the said principal debt and says that the sum of $50,000.00 was paid by the Third Party by way of reduction of the principal debt. In answer to the whole of the Statement of Claim the Defendant says: (a) That the funds alleged in paragraph 1| of the Statement of Claim were deposited to the trust account of Marsdens solicitors in trust for the Third Party, then known as Perfection Agricultural Holdings Pty Limited. (b) The said funds were applied to the purchase of certain properties in Queensland by the Third Party. (c) In or about November 1993 the Defendant agreed with the Third Party, inter alia, that the Third Party would be responsible for all liabilities under certain loan agreements including the agreement alleged in paragraph 1 of the Statement of Claim. URJ PRESTIA v DELANEY (Sheller JA) 3 (d) The Third Party renewed the loan agreement with the Plaintiff. 4. The Plaintiff accepted payments of principal and interest from the Third Party in respect of the said debt. 5. The Plaintiff is estopped and precluded from denying that it renewed the loan with the Third Party.""On 24 November 1995 Judge Garling gave judgment on the application for summary judgment. In his reasons his Honour referred to those parts of the amended defence wherein the claimant averred that the principal sum was advanced to the third party 'by and at the direction of the [claimant]' and that the claimant had made payments of interest on those moneys and to the document of 27 June 1991 wherein the claimant acknowledged that the opponent had advanced the principal sum to him. His Honour pointed to the fact that in the original verified defence the claimant relied upon the third party notice acknowledging that he had received the loan. In the amended verified defence there was no denial of the loan. His Honour said: The simple fact is that the defendant has no defence. It is clear that he borrowed the money from the plaintiff and agreed to repay them [sic]. He has since sworn two conflicting defences, he signed an agreement acknowledging the loan and whilst he may have an argument with the third payment in relation to the payment of the debt he would appear to have no argument with the plaintiff. I agree with counsel for the plaintiff that there is no basis in law on fact for the defendant's assertion that the plaintiff is estopped from recovering this debt from the defendant. I am not of course trying the issues in this case, I do not need to analyse the evidence given before me, the agreement speaks for itself and the defendant is clearly liable to repay this debt to the plaintiff. His Honour went on to deal with arguments that the principal moneys were paid on or before the agreement was signed. He said that the only defence was that the third party renewed the loan agreement with the opponent and there was simply no evidence of that allegation. He did not regard the estoppel defence as having any merit. The claimant submitted to him that he should allow all proceedings to go ahead together even if satisfied that the claimant had no real defence to the opponent's claim. However his Honour saw no disadvantage to the claimant or any reason why the proceedings between the opponent and the claimant and the third party proceedings should be runtogether. His Honour entered summary judgment for the opponent against the claimant. The claimant's proposed grounds of appeal set out in a draft notice of appeal are: 1. His Honour erred in failing to allow the proceedings commenced by the Respondent to be heard at the same time as the proceedings commenced by the Appellant against the First Third Party and Second Third Party in District Court Proceedings No 1867 of 1995. 2. His Honour erred in failing to hold that the Appellant had an arguable defence to the Respondent's claim in District Court Proceedings No 1867 of 1995 in circumstances where his Honour held he did not try the issues of the case. JOBNAME: No Job Name PAGE: 4 SESS: 1 OUTPUT: Mon Feb 25 18:21:06 2008 /reports/caseml]/case/urj/96079 13 UNREPORTED JUDGMENTS 3. Alternatively, his Honour erred in failing to apply a Third Party stay in relation to the Respondent's claims in the Proceedings between the Appellant and the Respondent in District Proceedings No 1867 of 1995. 4. His Honour erred in finding that an amount of $226,621.55 was payable by the Appellant to the Opponent in the District Court Proceedings No 1867 of 1995. In support of his application for an extension of time within which to file a notice of appeal the claimant made an affidavit on 29 February 1996. He said that between July and November 1995 he conversed with the opponent on the telephone. The opponent invited him to consent to judgment and is alleged to have said that he would never 'bankrupt you and put you out on the street'. After summary judgment was obtained the claimant said he had a conversation with the opponent in December 1995 in which the opponent said that he needed some money, there was interest due on the loan and his wife was sick 'so can you get the interest sent over to me'. The claimant said: Vol you know I don't owe the money and I'm not responsible for interest. The loan isn't with me so speak to Johnson. ''m worried about you having a judgment against me. to which the opponent is alleged to have replied: Joe you know I would never bankrupt you and see you and your family out on the street. The claimant said that as a result of these discussions he did not believe the opponent would take any steps to enforce the judgment against him in the District Court and would wait until the third party notices were heard. Accordingly he did not instruct his solicitors to take any steps in respect of the judgment as he believed the matter would resolved once the third party notices were heard. He was surprised when on 15 January 1996 he received the bankruptcy notice. Upon receipt of that document he instructed his solicitors to take steps to appeal. The claimant was not cross examined. Nor was the opponent who made an affidavit on 5 March 1996 in which he denied using words or phrases such as 'I will never bankrupt you and put you out on the street if my debt is not paid.' The opponent said that in all his conversations with the claimant he had asked him for repayment of the money. He denied ever having had any conversation with the claimant wherein he mentioned that he would not enforce any judgment obtained. In all conversations he pressed the claimant for repayment. He never indicated to the claimant that he would await the outcome of any proceeding he may have taken against any other person or company before he enforced the judgment. After obtaining judgment against the claimant he instructed his solicitor to seek to enforce it. 'At all times I have instructed my solicitor to take immediate action to recover the money lent by me to the [claimant] in 1991 as acknowledged by the [claimant's] acknowledgment of loan dated 27 June 1991.' He denied the conversation in December 1995 and said that his wife was not sick at that time. URJ PRESTIA v DELANEY (Sheller JA) 5 Counsel for the both the claimant and the opponent furnished me with helpful written submissions which I have read. I am not satisfied that the claimant has adequately explained the delay in filing a notice of appeal. I regard it as highly unlikely that the opponent would have indicated to him that he did not intend to enforce the judgment or that he did not intend to take bankruptcy proceedings. On 11 July 1995 the opponent filed a notice of motion for summary judgment and that the defence be struck out. On 18 September 1995 he filed a notice of motion for an order that the amended notice of grounds of defence dated 29 August 1995 be disallowed or struck out. On 29 November 1995 the claimant applied to Judge Garling for a stay, which the opponent opposed and the judge refused. According to an affidavit by the opponent's solicitor the opponent instructed her on 29 November 1995 to enforce the judgment. On the same day she made an application to the District Court for the issue of a certified copy of the judgment and on 21 December 1995 applied for the issue of a bankruptcy notice. On 31 January 1996 the claimant applied to the Federal Court to extend the time for compliance with the bankruptcy notice. On 22 February 1996 Registrar Quinn refused to extend time for compliance and refused to set aside the notice. The solicitor received no indication or correspondence from the claimant or his solicitors after 29 November 1996 until she received the summons seeking leave to appeal dated 31 January 1996. Before that date she had never received any indication from the solicitors acting for the claimant that he intended to appeal. I do not accept that the claimant believed that the opponent would not take any steps to enforce the judgment against him and would wait until the third party notices were heard. I do not regard the appeal has having any prospects of success. The claimant signed a document acknowledging the loan. He filed two verified, yet contradictory, defences. In the first, while on the one hand denying the loan, he obliquely, by reference to the third party notice, conceded it was made tohim. In his amended defence he conceded that the loan was made. In my opinion his Honour Judge Garling was correct when he said that the simple fact was that the claimant had no defence. Like his Honour I do not think the so called estoppel defence has any merit. Nor do I think any error has been shown in his Honour's decision to enter summary judgment on the claim and allow the third party proceedings to be heard separately. I was informed that these had been set down for hearing in July 1996. Accordingly I do not think any purpose would be served by extending time for the filing of a notice of appeal. The application for an extension of time within which to lodge an appeal is dismissed with costs. Orders accordingly.