Nigro v Parisi [2004] NSWSC 1177

New South Wales Supreme Court

CITATION : Nigro v Parisi [2004] NSWSC 1177 14/09/04, 15/09/04, 16/09/04, 17/09/04, HEARING DATE(S) : 21/09/04 Written submissions: 21/09/04, 27/09/04, 29/09/04 JUDGMENT DATE : 10 December 2004 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Finding of contractual terms as contended for by plaintiffs. Short minutes or written submissions to be brought in as to damages, interest and terms of declaration

CATCHWORDS : CONTRACTS - determining terms of oral contracts - credibility of witnesses - whether adverse inference should be drawn from unavailability of one plaintiff for cross-examination Haines v Bendall (1991) 172 CLR 60 CASES CITED : Jones v Dunkel (1959) 101 CLR 298 NRMA v Morgan (No 3) [1999] NSWSC 768 Ruby v Marsh (1975) 132 CLR 642 Antonio Nigro - First Plaintiff Maria Incoronata Nigro - Second Plaintiff PARTIES : Vincenzo Pirrello - Third Plaintiff Carmela Pirrello - Fourth Plaintiff Filippo Parisi - First Defendant Domenica Rosa Parisi - Second Defendant FILE NUMBER(S) : SC 5245/02 COUNSEL : Mr M.B.J. Lee/Mr A. Crossland - Plaintiffs Mr A.M. Gruzman - Defendants SOLICITORS : Levitt Robinson - Plaintiffs Atkinson Vinden - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

FRIDAY, 10 DECEMBER 2004

5245/02 – ANTONIO NIGRO & 3 ORS v FILIPPO PARISI & ANOR JUDGMENT

1 These proceedings are brought by Antonio ("Tony") Nigro and his wife Maria Nigro and Vincenzo ("Vince") Pirrello and his wife Carmela Pirrello against Filippo ("Phillip") Parisi and his wife Domenica Parisi. Together with Bartolo ("Bob") Parisi and his wife, and Giovanni ("John") Parisi and his wife, the parties conducted certain business operations through various corporate vehicles. 2 The husbands were the more active parties in the business ventures. In the narrative that follows, I shall, for convenience, refer to the husbands alone, except where it is necessary to refer particularly to the wives. Moreover, because some of the husbands share the same family name, I shall, for convenience, refer to each by the first name by which he is familiarly known. 3 It is accepted by the parties that, prior to 1996, each couple held a 20% beneficial interest in "the business". There were two arms to the business. First, there was the bathroom and kitchen component, primarily involving the importation and sale of Italian bathroom and kitchen fittings and the sale of local bathroom and kitchen products. This part of the business was carried on through five corporate entities: Gieffe Imported Pty Ltd, Gieffe Pty Limited, Gieffe Tiles Pty Limited, Bezipark Pty Limited and Parisi Industries Bathroomware Pty Limited. The second component of the business entailed property development. It operated through Australian Assurance Agencies Pty Limited ("AAA") and undertook an unsuccessful joint venture development in Drummoyne. This aspect of the business was a more recent addition to the established bathroom and kitchen component. 4 Capital was raised for the business by loans secured over the properties owned by the business (in that they were owned by one of the several companies). These properties were at 63-65 Pyrmont Bridge Road Camperdown, 198-200 Norton Street Leichhardt and 202-204 Norton Street Leichhardt. Capital was also raised by loans secured over the family homes of Tony Nigro, Vince Pirrello, Bob Parisi and John Parisi and that of Vito Nigro (Tony Nigro's father). The indebtedness secured over the family homes of Tony Nigro and Vince Pirrello consisted of a portion of personal debt, being monies obtained by way of home loan to assist the purchase of the home, and a portion of business debt, being monies obtained for and applied to the business. The loan secured over Vito Nigro's home was wholly business debt in this sense. I shall say more in due course about how the loans giving rise to the business debt secured on the homes were advanced. 5 Through the mid 1990's, the business experienced financial difficulties. Loans repayments were not made on time and recovery proceedings were brought by various financial institutions. One of the causes of this was the failure of the Drummoyne development. In 1996, the parties decided to go their separate ways. It was agreed that Tony Nigro and Vince Pirrello would transfer their interests to Phillip Parisi and would no longer have any involvement in the business. 6 The sole issue in this case involves identification of the terms upon which it was agreed by the parties in 1996 that Tony Nigro and Vince Pirrello would no longer hold an interest in the business. The controversy is quite narrow. Tony Nigro and Vince Pirrello contend that, in return for their interest in the business, Phillip Parisi would accept sole responsibility for all debts, actual and contingent, referable to the business. This was said to include responsibility for the "business debt" portion of the loans secured over the Nigro and Pirrello family homes and the loan secured over Vito Nigro's home. Furthermore, the plaintiffs say that it was a term of the agreement that upon the sale or refinancing of the three properties owned by the business, Phillip Parisi would arrange for payment of those amounts. 7 Phillip Parisi does not deny that an agreement was struck in 1996 under which he acquired the interests of Tony Nigro and Vince Pirrello in the business. Nor does he deny that he agreed to accept responsibility for debt of the business, including that secured over the properties owned by the business. But he says that he never agreed to accept responsibility for any debt secured over the family homes of Tony Nigro and Vince Pirrello and that of the home of Vito Nigro. 8 It is common ground that the properties owned the business were either sold or refinanced by June 1998. The case that Tony Nigro and Vince Pirrello seek to make is that from this date Phillip Parisi has been in breach of the 1996 agreement for failure to pay the outstanding business debt secured over the Nigro and Pirrello family homes and the debt secured over Vito Nigro's home. 9 The 1996 agreement was never reduced to writing. Evidence was largely given by Tony Nigro and Phillip Parisi, with some testimony from Bob Parisi and John Parisi. Vince Pirrello did not testify for reasons that I will come to in due course. The terms for which the parties contend 10 Although the terms of the agreement of December 1996 were never reduced to writing, the parties have, of necessity, set out in written form for the purposes of these proceedings the respective versions for which they contend. Those versions are as follows: