Verner v Giannaros &Ors

HIS HONOUR: This is an application to strike out an amended statement of claim in its entirety, or alternatively to strike out particular paragraphs. The essence of the defendants' complaint is that the statement of claim does not contain sufficient particularity.

The approach to such an application today where proceedings are or should be case managed and orders are made for the service of the parties' evidence in advance of the hearing is aptly described by Martin C J in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281. His Honour was there dealing with objections to statement of claim and noted that the list of objections ran to some 40 pages. His Honour said (at [4]-[8]):

I said something similar in Hillig v Darkinjung Pty Ltd [2007] NSWSC 683 at [35]-[36].

I had thought that that approach to pleadings had become part of the culture of the conduct of at least commercial litigation in this State decades earlier. This case might indicate that my expectation is misplaced. If so, it is high time that that approach to pleadings and as outlined by the Chief Justice of Western Australia and to case management did become part of the culture in which litigation in this State is conducted in all types of cases. So much is required by s 56 of the Civil Procedure Act 2005 (NSW) which requires that litigation be conducted with a view to facilitating the just, quick and cheap resolution of the real issues in the proceedings.

In this case the plaintiffs' claim is not straightforward but the allegations made, as articulated in the amended statement of claim, are quite clear enough for the defendants to know the case that is made against them and to be able to respond to it, both in pleadings and in their preparation of evidence.

The plaintiff sues by his tutor, his sister. Through his tutor he pleads that since childhood he has suffered from significant mental health issues including issues with anger, depression, gambling and alcohol addiction, that from the time he was a young adult he has been unable to live with his family due to violent episodes and an inability to respect house rules, that has he faced difficulties sustaining a stable home life and has faced difficulties as an adult in maintaining stable employment because of his mental disorders. Later he was diagnosed with schizophrenia. It is pleaded that since adolescence he exhibited irrational thoughts and so forth.

The pleading, in other words, sets out in some detail why it is said that the plaintiff suffered significant disadvantage. It is pleaded that the plaintiff's late father and his father’s friend, the late Mr Ross Giannaros had conversations, including in the presence of the first and second defendants, (they being the children of the late Mr Giannaros), about details of the plaintiff's behavioural and psychological issues and concerns the plaintiff's father held about care for the plaintiff for the future.

It is pleaded that in 1985 the plaintiff's father transferred a property at Dulwich Hill to the plaintiff, and that this property was rented to commercial tenants.

It is pleaded that before and after the transfer of that property the plaintiff's father assisted the plaintiff with his personal living arrangements and personal needs, and assisted him with managing his finances and financial affairs, to the extent the plaintiff's condition and behaviour permitted. It is pleaded that the plaintiff relied on his father to supervise and manage his finances and financial affairs.

It is pleaded that the plaintiff's father assumed responsibility for managing the plaintiff's financial affairs so far as they related to the Dulwich Hill property, including by collecting the rents.

It is pleaded that Mr Giannaros senior assisted the plaintiff's father in providing care and assistance to the plaintiff with his personal needs, and with management of the Dulwich Hill property, including the carrying out of repairs and maintenance.

It is pleaded that prior to August 1994 Mr Giannaros senior recounted to the first and second defendants the substance of discussions he had had with the plaintiff's father about how continuing care and assistance for the plaintiff could be secured.

It is pleaded that, following those discussions, Mr Giannaros senior and the plaintiff's father proposed to those defendants that a 50 per cent interest in the Dulwich Hill property would be transferred from the plaintiff to the first and second defendants, at the direction of Mr Giannaros senior, in exchange for his undertaking the care and oversight of the plaintiff until the plaintiff's father's death, that the rental income will be paid to the plaintiff's father, that the first and second defendants would pay for any necessary repairs and maintenance to the Dulwich Hill property during the life of the plaintiff's father, and that on his death they would hold their 50 per cent interest in the Dulwich Hill property absolutely and free from all conditions.

It is pleaded that this transaction proceeded and that a 50 per cent interest in the Dulwich Hill property was transferred to the first and second defendants for a nominal consideration of $10.

It is pleaded that at the time of that transaction Mr Giannaros senior and the plaintiff's father were providing care and assistance to the plaintiff, including with the management of the Dulwich Hill property and the plaintiff's finances and financial affairs, and that because of the plaintiff's mental disabilities he was unable to protect his own interests, but was dependent upon them to make decisions for him in relation to his property and financial interests.

It is then pleaded that this transfer was improvident to the plaintiff.

It is pleaded that the plaintiff's father and Mr Giannaros senior procured the plaintiff to execute the transfer, and that in doing so they were in breach of fiduciary duties that they owed to the plaintiff.

It is pleaded that the first and second defendants knew, or were on notice of the factors vitiating the efficacy of the first transfer as previously pleaded, or must be taken to be fixed with the knowledge of Mr Giannaros senior who, it is said, acted as their agent in procuring the execution of the transfer.

It is pleaded also that the defendants knew or were on notice of the plaintiff's special disadvantage, or that they must be fixed with the knowledge of their father who, again, it is said acted as their agent in procuring the execution of the transfer. It is said that the defendants unconscionably took advantage of the plaintiff's special disadvantage in accepting the transfer.

Further allegations are made in relation to this and to other transactions, including a later transaction in 2005 pursuant to which the plaintiff transferred his remaining 50 per cent interest in the Dulwich Hill property to the defendants. But enough has been said to illustrate the nature of the plaintiff's allegations.

The statement of claim was filed on 23 October 2015 and the amended statement of claim the subject of the strike out application was filed on 8 December 2015. This was after an interlocutory hearing before McDougall J on 21 September 2015 relating to the continuance or discharge of certain freezing orders. In connection with that application the plaintiff's tutor filed an affidavit setting out evidence in relation to these matters, and that was responded to by affidavits of the first and second defendants, amongst others.

There may well be further evidence to be served by both parties in relation to the claim. In accordance with the usual procedures the parties will be required to serve their evidence-in-chief in written form through affidavits.

Unfortunately the plaintiff's statement of claim prompted a letter from the defendant's solicitor, dated 17 November 2015, in which particulars were sought of many of the allegations in the pleading. The request for particulars included matters such as asking how it is alleged that the first and second defendants knew of the matters alleged in the statement of claim. Those would not be material facts. Nor were such particulars required by the rules (see Uniform Civil Procedure Rules 2005 (NSW) r 15.4). The solicitors asked questions such as, "What does the plaintiff mean by `on notice'. How, if at all, does it differ from knowledge?" These are the sort of questions that, like the objections considered by Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority, should be characterised as pedantic and pettifogging. They lead to delay and they lead to the wasteful expenditure of costs.

I am quite satisfied that the defendants know the case that they have to meet. The extent of the evidence that they will have to meet, which the plaintiffs will rely upon to prove their case, will be provided in the form of the affidavits already filed, or any further affidavits that the plaintiff will be required to file in support of his case. It was never the function of request for particulars to require a party to state the evidence to be relied upon to prove facts pleaded. But the distinctions between evidence, particulars, and material facts are very fine. In the context of current procedures for case management it is unhelpful to have to attempt to delineate such differences.

The questions are, or at least should be, whether the pleading will enable the issues to be defined, whether it discloses an arguable cause of action, and whether the defendants are apprised of the case that they have to meet.

It is clear that the pleading does disclose an arguable cause of action. The question of whether the plaintiff's pleading discloses an arguable cause of action was considered by McDougall J in Verner v Giannaros [2015] NSWSC 1406. His Honour said, in relation to the transaction that I have outlined earlier, that he was satisfied that not only was there a serious question to be tried but it was not appropriate to characterise the case as "weak," as the defendants had so characterised it.

I do not propose to go through each of the objections in the defendants' submissions or each of the requests for particulars. As Martin CJ said in Barclay Mowlem Construction Ltd v Dampier Port Authority, in many cases to do so would be to give rise to precisely the type of time and resource wasting that the current court procedures are designed to discourage.

As I said in Hillig v Darkinjung Pty Ltd, it is easy to quibble about a pleading. In my view, the time for any complaint about any lack of particularity to be made would only be once defences have been filed and affidavits have been served, and only then if it could seriously be contended that the defendants do not understand the case they have to meet. It seems to me that the defendants do understand that case.

I order that the amended notice of motion filed in Court today be dismissed with costs.

The further orders I make are: