Supreme Court New South Wales Medium Neutral Citation: Prime Capital Securities Pty Ltd v Calleja; Calleja PJC Furniture Freighters Pty Ltd v Prime Capital Securities Pty Ltd [2017] NSWSC 116 Hearing dates: 15 February 2017 Date of orders: 15 February 2017 Decision date: 15 February 2017 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders that: (1) Leave is granted to file an amended statement of claim, an amended cross claim and the affidavits of Elizabeth Calleja dated 13 February 2017 and 15 February 2017 and the affidavit of Michael Calleja dated 13 February 2017. (2) An adjournment is granted and the trial date is vacated. (3) Calleja PJC Furniture Freighters Pty Ltd and Elizabeth Calleja are to pay the costs thrown away on an ordinary basis. (4) The matters are stood over to 23 February 2017 at 9.00 am before the Registrar for directions. Catchwords: PROCEDURE – leave to amend granted – amended statement of claim – amended cross claim – Civil Procedure Act Legislation Cited: Australian Securities and Investment Commission Act 2001 Civil Procedure Act 2005 ss 56, 57, 58, 64, 66 Uniform Civil Procedure Rules 2005 (NSW) reg 19.1 Category: Procedural and other rulings Parties: 2016/155378 Prime Capital Securities Pty Ltd (Plaintiff) Elizabeth Ann Calleja (Defendant) 2016/260959 Calleja PJC Furniture Freighters Pty Ltd (Plaintiff) Prime Capital Securities Pty Ltd (Defendant) Representation: Counsel: 2016/155378 MW Young SC (Plaintiff N Obrart (Defendant) 2016/260959 N Obrart (Plaintiff) MW Young SC (Defendant) Solicitors: 2016/155378 Summer Lawyers (Plaintiff Atticus Lawyers (Defendant) 2016/260959 Atticus Lawyers (Plaintiff) Summer Lawyers (Defendant) File Number(s): 2016/155378; 2016/260959 Publication restriction: Nil Judgment 1. HER HONOUR: On the morning of the trial counsel for the Calleja interests sought to rely upon an amended cross claim, amended statement of claim, the affidavits of Elizabeth Calleja dated 13 February 2017 and 15 February 2017 and the affidavit of her husband Michael Calleja dated 13 February 2017. If leave was granted to the Calleja interests to rely on these documents, it necessitated an adjournment being granted. Senior counsel for Prime Capital objected to leave being granted for the Calleja interests to amend their pleadings and file affidavits. 2. There are three matters to be determined by the Court. They are: (1) The claim by Prime Capital Securities Pty Ltd v Elizabeth Ann Calleja ("Prime Capital") in proceedings 2016/155378 for possession of Ms Calleja's property at Heatherbrae ("the land"). (2) The cross claim by Ms Calleja in the same proceedings seeking declaratory relief that she has no liability to Prime Capital and orders that Prime Capital's mortgage and a general security deed executed by her in favour of Prime Capital be set aside. (3) The claim by Calleja PJC Furniture Freighters Pty Ltd ("Calleja PJC") v Prime Capital Securities Pty Ltd in proceedings 2016/260959. The proceedings were originally commenced in the District Court and then transferred to this Court. Calleja PJC's claim is that it owes nothing to Prime Capital but instead has overpaid Prime Capital. It is seeking a refund of the alleged overpayment and an order setting aside the general security deed granted by Calleja PJC. 1. For convenience, from now on I shall refer to Calleja PJC Furniture Freighters Pty Ltd and Ms Calleja as the "Calleja interests". 2. I shall briefly set out the matters that give rise to these proceedings. 3. The parties entered into a loan agreement setting out the terms of the loan from Prime Capital to Calleja PJC. It is executed by Calleja PJC and Prime Capital and also by Elizabeth Calleja and Michael Calleja as guarantors. 4. Under the loan agreement, Prime Capital agreed to make available to Calleja PJC a loan facility with a limit of $360,000. The facility limit was however, apparently later reduced. 5. The loan agreement provided that interest was payable at 4% per month, reduced to 2% per month if there was no default. It provided that if the agreement was not terminated earlier, it would terminate (and the loan be repayable) 12 months after the initial advance. 6. The loan agreement is undated, but the evidence suggests it was entered into sometime between 12 January 2015 and 17 April 2015, being the period the other documents related to the transaction were executed. 7. Other documents executed during the same period included: (a) A deed of guarantee executed by Elizabeth Calleja; (b) A deed of guarantee executed by Michael Calleja; (c) A general security deed executed by Elizabeth Calleja; (d) A general security deed executed by Michael Calleja; (e) A general security deed executed by Calleja PJC; (f) A mortgage over the land executed by Elizabeth Calleja, incorporating by reference memorandum number AG588734; and (g) An authority executed by Calleja PJC authorising Prime Capital to proceed to advance the monies available under the facility. 1. The mortgage over the land has since been registered. 2. Each of the general security deeds provided that the liabilities of the named grantor to Prime Capital were charged over all of the property of the grantor. Prime Capital does not seek in these proceedings to enforce any of the general security deeds, but Ms Calleja and Calleja PJC are seeking orders effectively setting aside each of the two general security deeds they executed. 3. It is common ground that in late April 2015 or early May 2015 Prime Capital made payments of an amount of around $292,000 in purported advance of the loan to Calleja PJC. On Prime Capital's case, those payments totalled $292,000 and were as set out in the settlement sheet dated 17 April 2015. Of the moneys paid, either $41,056.50 (as per the settlement sheet) or alternatively $34,676.50 (that Elizabeth Calleja says was in fact received) was paid into the bank account of Calleja PJC. The largest payment made was $152,496.44 to BankWest, the registered mortgagee of the land. The next largest payment was of $62,877.61 to Baycorp Collections PDL Australia Pty Ltd, being the debt-recovery agent of a secured creditor of Ms Calleja, being Capital Finance Australia Ltd, who had lodged a caveat over the land. Her affidavit identifies this debt as being owed by Calleja PJC. (Aff, 13/2/2017 [2]). 4. It is also common ground that between 3 June 2015 and 31 May 2016 Calleja PJC made loan repayments to Prime Capital. Calleja PJC says in its claim that they totalled $87,140 (Prime Capital says $81, 700). Those amounts were similar to the amount required for interest at the lower rate of 2%, and hence did not effect any significant repayment (if any at all) of the principal advanced. Pleadings prior to amendment 1. Calleja PJC's statement of claim pleaded that payments made by Prime Capital were made without authority. They sought firstly, a declaration that the purported debits to the Calleja's facility on or about 5 May 2015 were without authority and of no effect; secondly, a declaration that the loan facility agreement is terminated by reason of Prime Capital's repudiation which had been accepted by the Calleja interests; thirdly, a declaration that Prime Capital holds the sum of $87,140, or alternatively, the overpayment, on trust for Calleja; fourthly, an order that Prime Capital take all necessary steps to discharge the registration of the general security deed on the personal property securities register forthwith; fifthly, damages for repudiation; and sixthly, restitution of the sum of $87,140, or alternatively, the overpayment. 2. The Calleja's cross claim in relation to Ms Calleja's guarantee sought orders (1 to 5) on a similar basis as pleaded in the statement of claim. Leave to amend - general principles 1. Sections 64 of the Civil Procedure Act 2005 (NSW) apply to amendments generally. It relevantly reads: "64 Amendment of documents generally (cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4) (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. …" 1. Rule 19.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") deals with an amendment of a statement of claim. It relevantly reads: "9.1 Amending a statement of claim (cf SCR Part 15, rule 12, Part 20, rules 2 and 2A; DCR Part 17, rules 2 and 2A; LCR Part 16, rule 2) (1) A plaintiff may, without leave, amend a statement of claim once within 28 days after the date on which it was filed, but, unless the court otherwise orders, may not amend it after a date has been fixed for trial. (2) If a plaintiff amends his or her statement of claim under subrule (1) after the defendant has filed a defence, the defendant may amend his or her defence at any time within 14 days after service of the amended statement of claim. …" 1. I also take into account ss 56, 57 58 and 66 of the Civil Procedure Act. They relevantly read: "56 Overriding purpose (cf SCR Part 1, rule 3) (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) (Repealed) (4) … 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58 Court to follow dictates of justice (1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and … (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case. 66 Adjournment of proceedings (cf Act No 11, section 75) (1) Subject to rules of court, the court may at any time and from time to time, by order, adjourn to a specified day any proceedings before it or any aspect of any such proceedings. (2) ...." The proposed amendments 1. The amended statement of claim seeks two additional types of relief, namely a declaration that the facility agreement is void ab initio or further or alternatively such other order pursuant to s 12GM of the Australian Securities and Investment Commission Act 2001 (Cth) ("the ASIC Act") and damages pursuant to s 12GM of the ASIC Act. It now also pleads misleading or deceptive conduct, on the bases of two misrepresentations, the first is the "facility misrepresentation"; and the second is a "facility term representation" and then there is an allegation of unconscionable conduct. 2. The amended cross claim adds a further claim for relief namely, a declaration that the mortgage signed by Ms Calleja in favour of Prime Capital is void or liable to be discharged pursuant to s 12GM of the ASIC Act and pleads claims for relief as set out in the amended statement of claim. In my view these new pleadings deal with the real issues in dispute. 3. Prior to the hearing, the Calleja interests had relied on an affidavit of Elizabeth Calleja dated 29 September 2016. She is the director of Calleja PJC. She now relies on her two further affidavits and that of her husband Michael Calleja. Prime Capital relies upon two affidavits of its major witness Paul Scanlon dated 7 September 2016 and 14 October 2016. It was Ms Calleja's husband and Frank Bugeja of Calleja PJC who had the conversations concerning the loan with Paul Scanlon of Prime Capital. So far as the unauthorised payments allegation is concerned, Mr Scanlon deposes that he spoke to Frank Bugeja who authorised the payment to be made to BankWest. (Aff, Scanlon 7/9/2016 [20]). There is no evidence from Mr Bugeja. There is a substantial dispute as to the content of the conversations that occurred between them and the resolution of these factual disputes is central to the relief now claimed. 4. There are two other witnesses who were involved in the transactions, Peter Ainsworth and a solicitor Mr Robert Shacklady who signed the "Certificate of Independent Advice to Guarantors". Both Ms Calleja and Mr Calleja give evidence on this topic. The loan agreement and variations 1. So far as the loan agreement is concerned Mr Calleja deposes in his affidavit dated 13 February 2017 that he and Ms Calleja first received a letter of offer from Prime Capital on about 29 October 2014. Between November 2014 and January 2015, he recalls that Peter Ainsworth met with him, Ms Calleja and Frank Bugeja on at least two occasions at their company's Chullora office. At the first meeting, he says that he had a conversation with Peter Ainsworth in words to the following effect: Mr Ainsworth: Prime Capital is offering a facility with a limit of $450,000. Mr Calleja: We don't want that sort of money, we only need $150,000 at the most to buy a couple of second hand trailers. Mr Ainsworth: We can give you the limit and you just take what you need, if you don't take it you don't have to pay it back. Me: We can't do it in 12 months, we need at least 3 years to pay it back. Mr Calleja: Yeah yeah, that shouldn't be a problem, I'm sure it'll be right, I just need to speak to Paul about it. 1. In mid November 2014, at their second meeting with Mr Ainsworth, Mr Calleja says that Mr Ainsworth had the facility offer and showed it to him. Mr Calleja noticed that it still said that the term of the facility was 12 months. Mr Calleja then had a conversation with Mr Ainsworth in words to the following effect: Mr Calleja: I've already told you that we can't pay it back in 12 months. We won't sign, anything unless it is for 3 years. Mr Ainsworth: That's no problem, I can just handwrite it on the document. 1. Mr Calleja says that he then saw Mr Ainsworth write on the document, but he did not show Mr Calleja what he had written, but Mr Calleja assumed that it stated that the facility would roll over for two years after the 12 month period. 2. According to Mr Calleja, Mr Ainsworth then gave him the pages that required his signature to sign and they had a conversation in words to the following effect: Mr Calleja: The changes need to be written up properly, handwritten isn't good enough. Mr Ainsworth: Yeah no worries, I'll get it all fixed up when I get back to the office. 1. Mr Calleja asserts that when it came to signing the document after Mr Ainsworth had made the change, Mr Ainsworth only handed Mr Calleja the signature part to sign, which he signed. However, Mr Ainsworth's evidence is that he only met with the Callejas on one occasion. 2. Mr Calleja says that they were never given a copy of the signed offer document. He was unaware that Mr Ainsworth had only written "with the option to rollover for a further 12 months" until he saw the document. (Aff, Scanlon 7/9/2016, Ex 17-29). 3. Mr Calleja says that in about December 2014, the facility documents were sent directly to the Calleja's family solicitor, Lea Smith. Lea Smith had refused to sign the documents for the Callejas. 4. When Mr and Ms Calleja received the loan agreement, it still referred to a term of 12 months and did not make mention of any rollover. On around 27 January 2015, Mr Calleja telephoned Peter Ainsworth and had a conversation in words to the following effect: Mr Calleja: Hi Peter, it's Mike Calleja. Mr Ainsworth: Hi Mike. Mr Calleja: Peter, there are some things in the loan agreement that we don't agree with, like that it says that we have to pay the money back in 12 months. We only agreed to this because you said it would be rolled over and we would get 3 years. And it says the facility limit is $360,000. We don't want that much. Mr Ainsworth: Remember, you don't need to draw down all the funds Mike, you just take what you need and leave the rest. You only pay interest on what you draw down. And as long as you're up to date with your payments, it will rollover. Mr Calleja: I need that in writing Peter. Can you please email me that. Mr Ainsworth: Sure, I'll email you to confirm. 1. Mr Ainsworth sent an email to Mr and Mrs Calleja. (Aff, Ms Calleja 29/9/16, Ex EAC-1). Because of his discussion with Mr Ainsworth on the telephone, Mr Calleja believed that the rollover referred to in Mr Ainsworth's email was referring to a further two years. 2. During the period that the loan documents were signed, Mr Calleja says that Peter Ainsworth was calling him almost daily, asking Mr Calleja when he would receive the signed contracts. 3. Mr Calleja cannot remember exactly when, but possibly in February or March 2015, Peter Ainsworth called him and they had a conversation in words to the following effect: Mr Ainsworth: Hi Mike, it's Pete Ainsworth. Mr Calleja: Hi Pete. Mr Ainsworth: How are you going getting the loan documents executed? Mr Calleja: Not good. Our solicitor won't sign them and she's telling us not to sign them because it's a bad deal. Mr Ainsworth: She doesn't know what she's talking about. I can get you a solicitor. 1. Mr Calleja believed that he and Ms Calleja would have control over the amount of money they drew down to purchase trailers and that they had three years to repay the loan. He accepted Peter Ainsworth's offer to send a solicitor out to witness the documents. Certificate of independent advice to guarantors 1. About a week later, a man dressed in a shirt and jeans came to the Chullora office and identified himself as the solicitor who would sign the documents for them. Ms Calleja, the solicitor and Mr Calleja signed all the documents, and then the Callejas paid him $300 cash and he left. Mr Calleja had never met that man before and has not met him since. He understood that his name was Robert Shacklady. (Aff, 13/2/2017 [4] to [18]). 2. Both Ms and Mr Calleja say that Mr Shacklady did not explain the documents to them, he simply signed them and asked them to do the same. He did not give Mr Calleja or show him any documents other than the ones they signed that day. (Aff, 13/2/2017 [20]). This evidence is corroborated by Ms Calleja. 3. Ms Calleja says that either that afternoon, being a Friday, or on the following Monday, they took the signed documents to Gadens offices in Sydney CBD. They waited at reception for a short time, and then a lady came down and took the documents from them and asked for their drivers licence. They then left the Gadens office but were not given copies of the documents they had just delivered. Until these proceedings commenced, Ms Calleja says that she had never received a copy of any of the documents she signed relating to the loan facility. (Aff, 13/2/2017 [23]). 4. Paul Scanlon claims that between 12 January 2015 and 17 April 2015 "a variety of documents in relation to the Facility were executed" by Ms Calleja, Mr Calleja and Calleja PJC at different times and that further documents were executed on 4 May 2015 (Aff, Scanlon, 7/9/2016 [10] and [27]). 5. Ms Calleja has been shown a copy a document titled "Certificate of Independent Financial Advice to Guarantors". She admits that the document bears her signature. She does not deny that she signed that document, but she says that had never received any financial advice in respect of the loan documents or the guarantee. (Aff, 13/2/2017 [25]). 6. A few days after Mr Shacklady went to the Chullora office to witness the documents for them, Mr Calleja says that Peter Ainsworth called him again. They had a conversation in words to the following effect: Mr Ainsworth: Hi Mike, it's Pete Ainsworth. Mr Calleja: Hi Pete Mr Ainsworth: Mike we need those documents back urgently. When do you think you'll get them to us? Mr Calleja: There's a document here that our accountant needs to sign, and I haven't been able to get a hold of him. Mr Ainsworth: I can get an accountant to come out, we can organise all that for you. Mr Calleja: Ok thanks. 1. Mr Calleja says that about a week after his conversation with Peter Ainsworth, a man came out to the Chullora office and signed the financial advice document for them. He did not give them any financial advice or look at the documents, he just filled out the documents and gave them back to the Callejas. Mr Calleja thinks they might have posted the signed documents back to Prime Capital or Gadens, but he cannot recall. (Aff, 13/2/2017 [20] to [21]. 2. On 5 May 2015, Paul Scanlon emailed Mr Calleja the settlement statement showing how the funds had been disbursed. Mr Calleja had never seen this document before. He realised for the first time that among other payments, Prime Capital had paid off a loan the company had for one of its vehicles to Capital Finance Australia. The company had been making its repayments on the truck and only had $6,805.97 left to pay. Mr Calleja was very angry, but he waited a few days to calm down and then tried to call Mr Scanlon again. Mr Calleja called him a number of times and he did not answer his phone. He also tried to call Peter Ainsworth, but he did not answer his phone either. 3. Mr Calleja says that no one from Prime Capital answered or returned his calls and he did not know what to do. He says that he never told anyone at Prime Capital that they had authority to pay out any of the company's debts or the debts of Ms Calleja. If Mr Calleja had known that the facility was going to be used to pay off the company's debts and some of the money owing on the Callejas' home, he says he would never had signed any of the loan documents. 4. The money the Calleja's received from Prime Capital was not enough to pay for any second hand trailers and they continued to hire trailers for use in the business. 5. Mr Calleja referred to Paul Scanlon's affidavit (7/9/2016 [24]) where Mr Scanlon deposes to a conversation he claims to have had with Mr Calleja on 17 April 2015. He says that this conversation never occurred. Mr Calleja says that he has only ever spoken to Paul Scanlon once in his life, and that was on or around 13 May 2015. After weeks of trying to call Paul Scanlon he then realised that funds had been paid from the loan facility without the company's authorisation. He also says that no conversation occurred on 17 April 2015 and that he did not know that any funds had been drawn down from the facility until around 5 May 2015. (Aff, 13/2/2017 [25] to [30]). 6. I should emphasise, at this stage, this is mainly the Callejas' version of events and it is disputed. This disputed evidence can only be determined at trial. Explanation for lateness of amendments 1. Ms Calleja has provided an explanation for the pleadings being amended at this late stage. She explained that between June 2015 and June 2016, the Calleja PJC paid $87,140 to Prime Capital. These payments made it difficult for the company to keep up to date with its usual business expenses, such as the rent of the company's depot and wages to its staff. 2. The Callejas only pay themselves a wage if there were funds left over after paying all other staff and expenses. More often than not, they did not get paid and if they did they only received $500 per week between the two of them. 3. Ms Calleja explains that these proceedings have put further strain on both her and Calleja PJC's finances and they were unable to pay their solicitor's invoices. On 21 November 2016, their solicitor filed a notice of intention to file notice of ceasing to act. 4. In January 2017, their solicitor agreed to continue acting for Ms Calleja and Calleja PJC despite invoices remaining outstanding. (Aff, 15/2/2017 [3] to [6]). 5. Ms Alexandra Doig, the plaintiffs' lawyer gave evidence and was cross examined. I accept her evidence as being truthful. She said that the firm ceased work around October 2016 as they were not able to undertake any work during that period when their fees were outstanding. In mid January 2017, Ms Doig received instructions to appear at the final hearing. On 16 January 2017, she sent a lengthy letter to Samantha Parsons, Prime Capital's lawyer (Ex 1 CB, Tab 26 covering a number of issues including the settlement of the loan statement, calculation of interest, authenticity of loan agreement document produced, rollover facility and amounts charged following termination. On 20 January 2017, an email reply was received. The result being that none of these questions were answered. Two notices to produce were issued by the Calleja interests to Prime Capital and as I understand it one document will be provided in answer to the latter notice to produce. 6. Ms Doig briefed new counsel, Ms Obrart. Ms Obrart received the brief on 6 January 2017. Ms Doig explained (T17.22-31): " … it might not look like it based on how many documents are in the Court Book, but it's actually sort of a fairly involved [process] in terms of working out what actually happened, the factual background, understanding the documents and also obviously we have worked out quite a lot of interest calculations. So I met with counsel. I came up to Sydney last week on the 9th and we were still going through the documents at that point, so it wasn't until I had managed to take counsel though all of the material and explain everything, which is quite complicated and confusing, then after that we decided that it would be appropriate to amend the pleadings, so that wouldn't have been until the end of last week, so around the 10th." 1. The lawyer who is based in Melbourne and the Callejas met with counsel on Friday 10 February 2017 at counsel's chambers in Sydney to obtain further evidence on the pleadings and obtain more background. There were still a few matters that did not seem to make sense so they needed to meet with the client and go through that detail. (T17. 43-45). 2. In cross examination the following exchanged took place (T20.37-47): "Q. You instructed counsel Mr James Wheeldon, who appeared in the directions last year, to obtain the longest timetable possible in directions to try to delay the hearing of this matter as long as possible, isn't that right? A. No, I don't think it's in the interest of my clients to have it delayed any longer. We attempted to get order for mediation but that wasn't agreed to so. Q. When you sought to put on further affidavits and to amend the pleadings you knew didn't you that in all likelihood that would lead to the abandonment of the hearing this week, is that right? A. No. We wanted to be heard this week, absolutely wanted to be heard this week. We're not seeking an adjournment." 1. Senior counsel for Prime Capital submitted that if costs of the adjournment were awarded on an indemnity basis, he is not in a position to prove that there will be a shortfall in the mortgage. 2. This is the first adjournment of the trial and it is undesirable. However, there were going to be difficulties in Prime Capital's camp as well. Their main witness was not available on the first day of the trial (it was only listed for one day) and its only other witness was skiing in Aspen and his evidence would have been by way of video link. The trial will now take four to five days. 3. The amendments to the pleadings and the additional affidavit evidence deal with the real issues at trial. The Calleja interests have explained the reasons for the delay in making these amendments. In my view, in order to do justice between the parties, the Calleja interests should be granted leave to amend the statement of claim and cross claim and file the affidavits of Elizabeth Calleja dated 13 February 2017 and 15 February 2015 and the affidavit of Michael Calleja dated 13 February 2017. These documents have already been served and an adjournment should be granted. As I have granted leave to the Calleja interests, it has now become necessary for Prime Capital to consider whether it wishes to call any further witnesses or put on further evidence from the deponents. In order to do so an adjournment is necessary. I accept that a need for the adjournment arises because of the late service of the amended pleadings and further affidavits. 4. Prime Capital sought its costs of the amendments and adjournment on an indemnity basis. The Callejas sought that the costs thrown away by the amendments and adjournment should be costs in the cause or reserved. It is my view that as Prime Capital was not completely ready with its witnesses, Prime Capital should have its costs but they should not be awarded on an indemnity basis but on an ordinary basis. The Court orders that: (1) Leave is granted to file an amended statement of claim, an amended cross claim and the affidavits of Elizabeth Calleja dated 13 February 2017 and 15 February 2017 and the affidavit of Michael Calleja dated 13 February 2017. (2) An adjournment is granted and the trial date is vacated. (3) Calleja PJC Furniture Freighters Pty Ltd and Elizabeth Calleja are to pay the costs thrown away on an ordinary basis. (4) The matters are stood over to 23 February 2017 at 9.00 am before the Registrar for directions. ********** Amendments 02 March 2017 - Removed additional semi colon from coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 March 2017