New South Wales Supreme Court CITATION : Citibank Savings Limited v Caetano & Anor; Citibank Savings Limited v De Freitas; Citibank Savings Limited v De Gouveia & Anor [1999] NSWSC 711 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : 12117/92; 12120/92; 12179/92 HEARING DATE(S) : 6 July 1999 JUDGMENT DATE : 15 July 1999 12117/92 Citibank Savings Limited (Plaintiff) Agostinho De Freitas Caetano (First Defendant) Christina De Freitas Caetano (Second Defendant) 12120/92 Citibank Savings Limited PARTIES : (Plaintiff) Gabriel Jose De Freitas (Defendant) 12179/92 Citibank Savings Limited (Plaintiff) Jose Joao De Gouveia (First Defendant) Maria Gorete De Gouveia (Second Defendant) JUDGMENT OF : Master Harrison Mr Robertson (Plaintiff) Mr Katsinas (Defendants) COUNSEL : Ms Walker (for proposed Defendant Ms Moore) Mr Philips (Solicitor) (for proposed Defendant Ms Darin) Deacons Graham & James (Plaintiff) Carroll & O'Dea (Defendants - 12117/92) SOLICITORS : Spencer Whitby & Co (Defendant - 12120/92) J S Pinto & Co (Defendant - 12179/92) CATCHWORDS : Filing of amended statement of claim ACTS CITED : Contracts Review Act (NSW) Walker v Commonwealth Trading Bank of Australia (1985) 3 NSWLR 496 CASES CITED : Wardley Australia Limited & Anor v The State of Western Australia (1992) 175 CLR 514 Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 DECISION : See para 13 6 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON THURSDAY, 15 JULY 1999 12117/92 - CITIBANK SAVINGS LIMITED v AGOSTINHO DE FREITAS CAETANO & ANOR 12120/92 - CITIBANK SAVINGS LIMITED v GABRIEL JOSE DE FREITAS 12179/92 - CITIBANK SAVINGS LIMITED v JOSE JOAO DE GOUVEIA & ANOR JUDGMENT (Filing of amended statements of claim) 1 MASTER: In each of the matters referred to above the plaintiff seeks that leave be granted to file further amended statements of claim. The further amended statements of claim seeks to join solicitors Tina Mary Moore and Jennifer Darin (except in the De Freitas proceedings only Ms Moore is sought to be joined as a defendant). The solicitors who are sought to be joined as defendants oppose the motions. The solicitor appearing for Mr and Mrs De Freitas consented to the orders sought. 2 It is necessary to refer to some background. These proceedings are one of about six proceedings which arise from three advances made by Citibank Savings Limited (Citibank) to Gabriel Jose De Freitas in respect of a used car business conducted by him. In the first advance made to Mr and Mrs De Freitas, Ms Moore, a solicitor acted for Citibank and signed a certificate of independent advice. It is alleged the representations that she made in the certificate were false. In relation to the second advance made to Mr De Freitas, it appears that Mr and Mrs De Gouveia and Mr and Mrs Caetano entered into mortgages and first supplementary deed/s and sought advice from the solicitors. In relation to the third advance made by Citibank to Mr De Freitas, Mr and Mrs Caetano and Mr and Mrs De Freitas allegedly entered into second supplementary deed/s and sought advice from the solicitors. Ms Darin, a solicitor allegedly gave a certificate of independent advice in relation to the third advance. Citibank has individual proceedings against each set of husband and wife. There are separate proceedings commenced by Mr and Mrs De Gouveia and Mr and Mrs Caetano as plaintiffs against each of the solicitors who provided legal advice. 3 The court has made orders that evidence in each of the following proceedings be admitted as evidence in the other proceedings; (a) 12179 of 1992; (b) 12117 of 1992; (c) 12120 of 1992; (d) 20935 of 1995 and (e) 20914 of 1995 (collectively the related proceedings). The plaintiffs now seek to join the solicitors as defendants to these proceedings to enable all questions between the parties to be fully resolved at the hearing of the related proceedings. 4 The plaintiff has also sought leave to join defendants pursuant to Pt 8 r 8 of the Supreme Court Rules (NSW). Part 8 r 8(1) provides: "Joinder of causes of action 1 A plaintiff may, in any proceedings, claim relief against the same defendant in respect of more than one cause of action- (a) where the plaintiff claims, and the defendant is alleged to be liable, in the same capacity in respect of all the causes of action; (b) … (c) where the Court gives leave so to do. 5 and Pt 8 r 8(2) provides: "Joinder of parties generally 2 Two or more persons may be joined as plaintiffs or defendants in any proceedings - (a) where (i) if separate proceedings were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and (ii) all rights to relief claimed in the proceedings (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or (b) where the Court gives leave so to do." 6 In Walker v Commonwealth Trading Bank of Australia (1985) 3 NSWLR 496 at p 501, Needham J held that while the administration of justice requires that litigation should be completed as soon as possible and that the issues should not be re-litigated, Pt 8 r 8(1)(b) nevertheless requires that the joinder of a party be necessary for the conduct of proceedings. 7 The solicitors Ms Moore and Ms Darin who are the parties that the plaintiff seeks to join submitted that the proceedings are out of time as the essential acts relied upon by the plaintiff occurred in July 1988, October 1989 and August 1990. However the plaintiffs are taking proceedings against the first defendants in each of the three proceedings the subject of this judgment in relation to defaults made in payments due pursuant to loan transactions. It is the defendants who have sought relief under the Contract Review Act (NSW). It can be argued by the plaintiff that damage will occur only if the court makes an order that the mortgages be set aside. It will be at this point that the loss can be crystallised. 8 The plaintiff referred me to Wardley Australia Limited & Anor v The State of Western Australia (1992) 175 CLR 514 where at p 526 Mason CJ, Dawson, Gauldron and McHugh JJ sated: "When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of "loss or damage". And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired. To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an ever-present risk of undercompensation or overcompensation, the risk of the former being the greater." 9 The High Court said at p 533: "We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question." 10 The Full Court in Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 said that the question of whether claims were statute barred could only be resolved after hearing evidence in the particular case. It is my view that it is inappropriate to decide the issue of whether or not the plaintiffs' claim is statute barred prior to the hearing whether the plaintiff's claim against the solicitors is statute barred is for determination at the hearing. 11 The solicitors submitted that the delay in joining them as defendants is prejudicial because firstly 10 or 11 years have elapsed and their testamentary evidence will be stale; secondly, that determining the course of events and locating documents may be difficult and thirdly, discovery and pre-trial preparation is complete and the plaintiffs could have amended their statement of claim after the defences were filed in 1995 and 1996. All of the actions concern the same transaction and the issues which remain common in all matters is what advice was given the mortgagors and what did Ms Moore known about Mr De Freitas when she advised both Citibank and the De Freitas. If the solicitors are not joined as defendants and the plaintiff had orders under the Contracts Review Act against it, it may then seek to commence fresh proceedings against the solicitors. This would involve witnesses being called once again to give evidence, additional expense and court time. 12 It is regrettable that the parties have spent so much time skirmishing on these interlocutory disputes. It would have been far more beneficial and costs effective if the parties attempted to resolve how all these claims could best be determined by the Court. It is my view that the solicitors' submission that they suffer prejudice if they are joined as defendants is not made out. They would have already been required to locate documents in relation to the proceedings taken by the defendants against them concerning the legal advice they gave in relation to the transactions. Whether or nor the proceedings should be heard together and whether or not Citibank were to join the solicitors has been known to all the parties for a very long time yet little has been usefully done about it. It is my view that there are common transactions and overlap of witnesses that make it necessary and the solicitor Tina Mary Moore should be joined as second defendant pursuant to Pt 8 r 8 of the rules in proceedings 12120 of 1992. For the same reasons Tina Moore and Jennifer Darin should be joined as second and third defendants respectively in proceedings 11217/92 (Caetano matter) and 12179/92 (the De Gouveia matter). The plaintiff should also be granted leave to amend the statement of claim to join these solicitors as defendants and plead the case against them. The plaintiff would normally pay the costs thrown away by the amendment. However the solicitors opposed the orders being sought. It is my view that the appropriate order is that costs be costs in the cause. 13 The orders I make are: (1) In 12120 of 1992 the plaintiff has leave to join Tina Mary Moore as second defendant and to file a further amended statement of claim within 14 days. (2) In 12179/92 the plaintiff has leave to join Tina Mary Moore as second defendant and Jennifer Darin as third defendant and to file a further amended statement of claim within 14 days. (3) In 12117/92 the plaintiff has leave to join Tina Mary Moore as second defendant and Jennifer Darin as third defendant and a further amended statement of claim is to be filed within 14 days. (4) Costs of the motions be costs in the cause. ********** Last Modified: 07/15/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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