Santamaria v Iokimidis & Ors [2011] NSWSC 1472

Supreme Court New South Wales

Medium Neutral Citation: Santamaria v Iokimidis & Ors [2011] NSWSC 1472 Hearing dates: Monday, 21 November 2011 Decision date: 21 November 2011 Jurisdiction: Equity Division - Commercial List Before: Brereton J Decision: Proceedings adjourned. Cross-claimants granted leave to amend cross-claim. Catchwords: PRACTICE AND PROCEDURE - Defendants/ cross-claimants' pleadings do not refer to claim based in equitable estoppel - plaintiff/ cross-defendant prepares case on basis estoppel not basis of case - unsatisfactory and artificial to preclude defendants/cross-claimants advancing case based on estoppel -proceedings adjourned, leave to amend granted. Legislation Cited: (NSW) Civil Procedure Act 2005, s 26 Category: Procedural and other rulings Parties: Anthony John Santamaria (plaintiff/first cross-defendant) Tony Anastasios Iokimidis (first defendant/first cross-claimant) Glendon Charles Higgs (second defendant/second cross-claimant) Sedal Pty Limited (third defendant/third cross-claimant) AJ Santamaria Pty Limited (fourth defendant/second cross-defendant) Representation: Counsel: G L Turner (plaintiff) D D Knoll (defendants) Solicitors: Russo & Partners (plaintiff/ first cross-defendant) Konstan Lawyers (defendants/ cross-claimants) File Number(s): 2010/342429

Judgment (ex tempore) 1HIS HONOUR: The fundamental question in these proceedings appears to be whether the first defendant, in one way or another, has a beneficial interest in the assets and undertakings of or shareholding in the fourth defendant. The plaintiff contends that he does not and the defendants contend that he does. 2The defendants rely on agreement and, alternatively, equitable estoppel. They say that at the core of their case is an argument that it is unconscionable for the plaintiff now to deny that the first defendant has such an interest. 3The defendants' pleading, being their cross-claim filed on 1 August 2011, claims relief by way of the imposition or declaration of a constructive trust. A reading of the pleading of material facts discloses a case based on contract, and I do not think it can seriously be suggested, and counsel for the defendants did not seek to suggest, that reliance on a case of equitable estoppel would be apparent on perusal of the pleading. 4Counsel for the defendants says - and there is no reason to doubt him -that, in the course of a directions hearing before the Commercial List Judge, it was stated on behalf of the defendants that they relied on estoppel as well as contract, and that the Judge suggested then that it would be necessary to claim relief by way of constructive trust. Counsel for the plaintiff has no particular recollection of a reference to estoppel, although he does recall reference to a constructive trust. In any event, he says - and there is no reason to doubt him - that the plaintiff's case has been prepared on the basis of what is pleaded, which does not include a case of equitable estoppel. 5The plaintiff's outline of submissions, consistent with that approach, was served on 15 November 2011. The defendants' outline of submissions, which came to the plaintiff's counsel's notice only on Saturday 19 November 2011, makes clear that a case of equitable estoppel is propounded. The evidence relied on for that case is contained in the affidavits which have been served, and that evidence is traversed in the plaintiff's affidavit evidence. But counsel for the plaintiff says, and there is no reason to doubt, that he is taken by surprise and is not in a position to deal with the equitable estoppel case and, in particular, that the plaintiff would wish further to investigate issues of reliance and detriment which, when it was not understood that the defendants' case involved no such pleaded causes of action, were assumed not to necessitate further inquiry. 6The plaintiff's submission is that the defendants should be precluded from advancing a case based on equitable estoppel. To my mind, that has serious difficulties, as it is often unsatisfactory and artificial to exclude from the scope of consideration an alternative legal basis for relief that is already claimed and that might be available on evidence that will be admitted in any event. Moreover, if, as I accept, the defendants did advert to a case in estoppel at a directions hearing, and, as I accept, have prepared the case on the basis that the present hearing would be defined by the separate questions which have been ordered to be determined and the affidavit evidence that has been filed and served, the fact that the plaintiff's claim surprise no doubt itself comes as some surprise to the defendants. 7On the other hand, given the manifest absence of any case of equitable estoppel from the pleading, it is not unreasonable that the plaintiff has proceeded in the way and on the basis that he has in the preparation of the case for hearing. 8The circumstances are unfortunate but, in my view, a result which precluded the defendants from advancing an important part of their case is one that would be a quite disproportionate response to the present circumstances. It follows that the defendants should have leave to amend their cross-claim to plead the estoppel case, and the plaintiff must have an adjournment in which to investigate and respond to that claim. 9The defendants have suggested that rather than awaiting the outcome of the determination of the separate questions, as is presently proposed, the matter should be referred immediately for mediation. The plaintiff has not really addressed that proposition, and I will afford counsel an opportunity to do so. Counsel addressed on mediation 10My orders are: (1) Grant leave to the cross-claimants to amend their cross-claim and file an amended cross-claim pleading a course of action in equitable estoppel, such amended cross claim to be filed and served by 28 November 2011. (2) Direct that the cross-defendants file and serve their defence to the amended cross-claim and any supporting affidavits by 19 December 2011. (3) Adjourn the proceedings to 3 February 2012 before the Commercial List Judge. (4) Order that the cross-claimants pay the cross-defendants' costs occasioned or thrown away by the adjournment and by the amendment. (5) Vary the orders of 28 October 2011, by substituting for paragraph 8 the following: Order pursuant to (NSW) Civil Procedure Act 2005, s 26, that the proceedings be referred for mediation by the Registrar. The Court requests that the Registrar, if possible, appoint a date for mediation in or before February 2012. (6) Appoint 12 December 2011 at 9 am before the Registrar for return of subpoenas. (7) Adjourn the plaintiff's subpoena to 12 December 2011 at 9 am before the Registrar.