DEFENDANT SEEKS REHEARING DUE TO NEW STATEMENTS IN AN AFFIDAVIT PRESENTED BY THE PLAINTIFF

DGF Property Holdings Pty Limited v Di Federico (No 4) [2021] NSWSC 157 (2 March 2021)

 This case involves the defendant seeking to recall the prior reasons made in the third judgment by the court on the ground that the observations were made “per incuriam” or “through lack of care”

Facts:

This is the fourth judgment the court has given in relation to these proceedings. The first judgment, concerned two proceedings in which DGF Property Holdings Pty Ltd (DGF) was the plaintiff, namely, the Specific Performance Proceedings and the Rescission Proceedings. Both proceedings arose out of a proposed subdivision of land situated in Delaware Road, Horsley Park, New South Wales (the Land).

The defendants in the Specific Performance Proceedings are Mr  Enzo Di Federico and Mrs  Franca Di  Federico (together  the Di Federicos). The Di Federicos were also defendants in the Rescission Proceedings. The other defendants in the Rescission Proceedings were the purchasers (the Purchasers) under off-the-plan contracts made with DGF for the sale and purchase of lots in the proposed subdivision (the Sale Contracts).

It is relevant to know that DGF was incorporated on 17 September 2002 with an issued capital of four shares. Totu Pty Ltd (Totu) held two of those shares, BCF Design and Construction Pty Ltd (BCF) held one of the shares and Peter and Michael Remaili held the fourth share. Totu and BCF were entities associated with Mr Sylvano Frassetto, Mr Frank Gelonesi and Mr Graziano De Bortoli.

The court published its third judgment in the Specific Performance Proceedings, which related to four outstanding questions concerning the assessment of damages to which DGF is entitled (the Third Judgment). One of those questions was the extent to which DGF incurred loss consisting of interest at the rate of 8% was payable on funds provided to it for the purposes of the proposed subdivision. It indicated that the court would hear the parties on questions of costs as damages after all other issues have been resolved. The court afforded the parties the opportunity of considering the Third Judgment and both parties then made further submissions in the light of the conclusions reached in the Third Judgment.

The court then conducted a further oral hearing on 3 July 2020. The Di Federicos now assert that, in the course of oral submissions, DGF attempted for the first time to rely on paragraphs of Mr De Bortoli’s affidavit of 2 September 2019 (the September 2019 Affidavit) as evidence of an agreement made with “investors” who were not associated with the Proposed Joint Venturers to pay those “investors” interest at the rate of 8% per annum on advances made to DGF in connection with the proposed subdivision of the Land.  

DGF asserts that the September 2019 Affidavit was served some two and a half months before the hearing on 21  and 22 November 2019 and Mr De Bortoli was not cross-examined about the assertions made in it. However, the Di Federicos complain that that the De Bortoli Evidence was raised “very belatedly” and should have been raised during the hearing on 21 and 22 November 2019, in which the question of DGF’s entitlement to damages was extensively considered.

The Di Federicos assert that, on 24 November 2017, Mr De Bortoli had conceded in cross-examination that he did not have authority from DGF to enter into “investor agreements” and that he had entered into agreements with prospective “investors” only “as an investor in DGF”.

The Di Federicos contend that what they characterise as the “new” argument based on the De Bortoli Evidence may have the ability to affect the Court’s finding in the Third Judgment. They claim, therefore, that it is appropriate that they be permitted now to make the submissions that they would have made had the issue been addressed prior to the hearing on 21 and 22 November 2019.

DGF contends, it would be inappropriate to do so merely because counsel for the Di Federicos wishes to raise matters that have already been the subject of argument. The Di Federicos characterise the question as whether the Court should withdraw the reasons of 8 May 2020 in accordance with R.36.17 of the  Uniform Civil Procedure Rules 2005, which allows the Court, of its own motion, to vary a judgment if an error has arisen from an accidental slip or omission.

Issue: Should the Court order a recall?

Law:

• Uniform Civil Procedure Rules R.36.17 (Correction of Judgment or Order/ “Slip Rule”)- If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error”

Analysis:

Di Federicos’ contention that Mr De Bortoli did not, by his own admission, have authority from DGF to enter into the alleged “investor agreements” should be characterised as a “second attempt” and a “reprised argument”. Its reliance at this stage on the De Bortoli Evidence involves a new argument and asserts that its contention as to agreement to pay interest at 8% to investors was squarely raised in its submissions of 21 November 2019 and in oral submissions on 22 November 2019.

The court is satisfied that the observation in the Third Judgment that there was no reason to doubt that Mr De Bortoli had authority from DGF to make arrangements with the “investors” was made per incuriam and should be withdrawn.

Conclusion: Application by the defendant to recall reasons for judgment is not granted.

#CivilProcedure