Federal Court of Australia

Bega v Lauvan Pty Ltd [2021] FCA 1392

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s amended interlocutory application filed on 30 July 2021 be dismissed.

2.    The proceeding be permanently stayed.

3.    Subject to Order 4, the applicant pay the respondents’ costs of the proceeding, as taxed or agreed.

4.    In the event that any party seeks a variation of Order 3:

(a)    That party file and serve submissions of no more than five pages within seven days of these orders;

(b)    Any party opposing the variation file and serve submissions of no more than five pages within seven days thereafter;

(c)    The first party file and serve any reply submissions of no more than two pages within three days thereafter; and

(d)    The question of the variation of Order 3 be decided on the papers, unless any party requests an oral hearing and the Court so orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

STEWART J:

Introduction

1    Helen Bega commenced this case by originating application and statement of claim filed on 29 March 2021. She filed an amended statement of claim on 23 April 2021. She was at those times unrepresented, which is reflected in the incoherence of her pleadings. She has since become represented, including by senior and junior counsel. Her amended statement of claim has been abandoned, and she seeks leave to file a further amended statement of claim.

2    The amended statement of claim names three respondents, namely Lauvan Pty Ltd, Mittabell Pty Ltd and Shadd Daniel Danesi in that order. Mr Danesi is, and has at all relevant times been, the sole director and shareholder of Lauvan and Mittabel.

3    The respondents oppose leave to amend, and in any event apply for the summary dismissal, striking out or permanent stay of the proceeding. That is on the basis of Anshun estoppel, issue estoppel, abuse of process and/or that the proceeding has no reasonable prospects of success because the claim it asserts is time-barred having been brought more than six years after it accrued. Aside from the time-bar ground, each of those grounds arises out of a previous proceeding between Lauvan and Mittabel as plaintiffs and Mrs Bega as a defendant in the Supreme Court of New South Wales. I will return to that proceeding.

The proposed further amended statement of claim

4    The proposed further amended statement of claim can be summarised as making the following material allegations.

5    There was a construction loan agreement between Lauvan and Mittabell, as lenders, to fund the construction of a residential apartment project in South Townsville known as the Allure Apartments. The developer, and borrower under the construction loan, was South Townsville Developments Pty Ltd (ST). Repayment of moneys advanced under the construction loan was secured by a first registered mortgage in favour of Lauvan and Mittabell over the development property which was owned by ST. It is pleaded that Mr Danesi was the sole director of Lauvan and Mittabell.

6    On 20 February 2015, ST agreed to sell seven of the residential units in the Allure Apartments to AB Veritas Pty Ltd for $3,080,000. In return for a discharge of their mortgages over the seven units, Lauvan and Mittabell required a reduction of the debt owed to them by ST under the construction loan by an amount of $2,450,000.

7    Although not forming part of the proposed amended pleading, it is common ground that AB Veritas was owned by Aidan Bega, Mrs Bega’s son.

8    Having no assets of its own to fund the purchase, on 6 March 2015 AB Veritas obtained approval from Arch Finance Pty Ltd for a loan of $1,820,000 (subsequently reduced to $1,450,000).

9    On 2 April 2015, Mrs Bega agreed in writing with Lauvan and Mittabell to borrow $1,000,000 from them, with Aidan Bega, AB Veritas and ST as guarantors, for the purpose of assisting Mrs Bega with short-term on-lending to family members for proposed commercial investment opportunities (Loan Facility). Mrs Bega granted a first registered mortgage over a property at Denham Court in favour of Lauvan and Mittabell as security for the Loan Facility.

10    Mrs Bega used the $1,000,000 loan funds to assist AB Veritas with payment of the purchase price under the sale contract for the seven units.

11    As at 2 April 2015, the total funds available to AB Veritas to settle the purchase of the seven units was $2,450,000, being $1,450,000 from Arch Finance and $1,000,000 from Mrs Bega.

12    Under the direction of and in accordance with the wishes of Mr Danesi, the following steps were taken in preparation for settlement of the sale on 2 April 2015:

(1)    Ross Stathakis was provided with a bank cheque for $1,395,000 by Lauvan and Mittabell made payable to Lauvan;

(2)    Lauvan and Mittabell funded the cheque as to $1,000,000 from the loan facility to Mrs Bega which they directed her to draw down on, and as to $395,000 from their own funds.

13    At the settlement conference in Brisbane on 2 April 2015:

(1)    Mr Stathakis presented the bank cheque in the sum of $1,395,000;

(2)    Arch Finance handed to Mr Stathakis a bank cheque in the sum of $1,450,000 in favour of Lauvan;

(3)    a discharge of the mortgages over the seven units was handed to Arch Finance’s representative, together with a signed transfer in registrable form, and the duplicate certificate of title; and

(4)    the shortfall on the full purchase price was accepted by ST.

14    After completion, Mr Stathakis took the two cheques that had been presented at completion, totalling $2,845,000, and they were deposited to the account of Lauvan.

15    Mrs Bega subsequently defaulted on her Loan Facility from Lauvan and Mittabell who exercised their powers of sale under the mortgage of the Denham Court property and sold it. The mortgage sale resulted in the discharge of the amount owing and yielded a surplus.

16    The payment of the $395,000 referred to at [12(2)] above, which is referred to as the Round Robin payment (on account of it being drawn on Lauvan and Mittabell and repaid to them but reflected as part payment of the purchase price of the seven units and part discharge of the amount owing under the mortgages of the units), was made in the course of trade or commerce.

17    It is pleaded that by making the Round Robin payment, Lauvan and Mittabell engaged in misleading or deceptive conduct or in conduct that was likely to mislead or deceive contrary to s 18 of the Australian Consumer Law (ACL) (Competition and Consumer Act 2010 (Cth) Sch 2).

18    It is also pleaded that Mr Danesi was knowingly concerned in or aided and abetted Lauvan and Mittabell in the pleaded misleading and deceptive conduct. On that basis it is pleaded that Mr Danesi is also liable for Lauvan and Mittabell’s contravention of s 18 of the ACL.

19    It is pleaded that by reason of the contravention of s 18 of the ACL, Mrs Bega has suffered loss and damage on the basis that had the Round Robin payment not been made then the sale of the seven units would not have been completed and the loan advance to her of $1,000,000 under the Loan Facility would immediately have been repaid. On that basis, the Denham Court property would not have been sold.

The Supreme Court proceeding

20    It is necessary to analyse what was at stake in the Supreme Court proceeding in order to deal with the estoppel and abuse of process contentions of the respondents.

21    By statement of claim filed in the Supreme Court of NSW on 10 December 2015, Lauvan and Mittabell asserted claims against Mrs Bega, Aidan Bega and AB Veritas. The nature of the claims, defences and cross-claims are most easily identified from the judgment of Gleeson JA on 22 February 2018 following the trial of the action: Lauvan Pty Ltd v Bega [2018] NSWSC 154; 330 FLR 1 (SCJ).

22    Lauvan and Mittabell sued for repayment of the $1 million advanced to Mrs Bega under the Loan Facility of 2 April 2015. Anticipating possible defences to be raised by Mrs Bega, Lauvan and Mittabell also pleaded that if the Loan Facility and/or the mortgage were set aside they would be entitled to recover the sum of $1 million from Mrs Bega or AB Veritas as money had and received on the ground that there had been a total failure of consideration. Alternatively, they asserted that the court ought to impose in their favour a constructive trust or equitable charge over the remaining five units in the Allure Apartments owned by AB Veritas. (SCJ [1]-[5].)

23    The defendants contended that there was no advance of funds to Mrs Bega consistent with a loan, but rather that there was simply a line of credit to Mrs Bega which was never utilised by her. Mrs Bega alleged that the events which occurred on 2 April 2015 (namely, the Round Robin of cheques funded by Lauvan and Mittabell at the settlement of the sale of the seven units to AB Veritas) were not authorised by her, were unlawful and were a “fundamental breach of the facility agreement”. (SCJ [6].)

24    The defendants raised a number of other defences including that Lauvan and Mittabell had engaged in unlicensed credit activities contrary to s 29 of the National Consumer Credit Protection Act 2009 (Cth) and concluded unjust transactions under ss 76-77 of the National Credit Code. They also contended that the Loan Facility and mortgage should be set aside as unjust under s 7 of the Contracts Review Act 1980 (NSW), or unconscionable under either s 21 of the ACL or ss 12CA or 12CB of the Australian Securities and Investments Commission Act 2001 (Cth). (SCJ [7]-[8].)

25    The SCJ (at [9]) records as follows:

Aidan Bega and AB Veritas have brought a first cross-claim against the plaintiffs seeking to be relieved of liability as guarantors on the grounds raised in their defence. Although Mrs Bega has not brought a cross-claim seeking similar relief, no pleading point is taken by the plaintiffs in this regard.

26    The cross-claim also asserted misleading and deceptive conduct in contravention of s 18 of the ACL (SCJ [334], First Cross-claim [25]). It is thus to be understood that in the Supreme Court proceeding, Mrs Bega was taken to have claimed against Lauvan and Mittabell that she should be relieved of liability for repayment of the Loan Facility on the various grounds set out in her defence and summarised above and that she alleged misleading and deceptive conduct in contravention of s 18 of the ACL against Lauvan and Mittabell, even though she was not formally cited as a cross-claimant.

27    The final hearing in the Supreme Court proceeding took place in May and June 2017. A year earlier, in June 2016, Lauvan and Mittabell filed an affidavit by Mr Danesi as his evidence in chief in the proceeding. In his affidavit, Mr Danesi set out in detail the circumstances that led to the conclusion of the Loan Facility with Mrs Bega. He also set out the details of the Round Robin payment, including:

(1)    The purchase of a bank cheque made payable to Lauvan in the sum of $1,395,000 comprising $1,000,000 from the proceeds of the advance to Mrs Bega and $395,000 making up the shortfall of the funds required to complete the settlement, that being the difference between the funds advanced by the incoming mortgagee (Arch Finance) plus the $1,000,000 advanced to Mrs Bega and the purchase price acceptable to the vendor, ST.

(2)    Mr Stathakis, on Mr Danesi’s instructions, took the bank cheque to the settlement conference and presented it there, and at the conclusion brought that cheque as well as the cheque from Arch Finance back to Mr Danesi for depositing in Lauvan’s account.

28    The SCJ sets out in detail findings on the Round Robin payment at the settlement. His Honour’s treatment of the evidence shows that there was considerable evidence on those events from a number of different witnesses: SCJ at [74]-[106]. Mr Danesi was described as a “principal” witness, and was cross-examined including on the details of the Round Robin transaction.

29    Gleeson JA expressed the following conclusions with regard to the Round Robin payment:

105     Settlement of the sale of the units to AB Veritas took place in Brisbane later on the afternoon of Thursday 2 April 2015 at about 4.30pm. The bank cheque in favour of Lauvan in the sum of $1,395,000 was handed over by Mr Stathakis on settlement, although he could not recall the person to whom he gave the bank cheque. It may be inferred that he provided the bank cheque to Mr Delaney who was present as the solicitor for AB Veritas. As I have said, Mr Delaney had been told the previous day by Mr Mullins of the intended ‘round-robin’ of cheques to be provided by the plaintiffs, instead of reliance on an offset deed to make up the shortfall in the purchase price. Although Mr Delaney deposed that the passing of cheques was simply a matter between STD and the plaintiffs, he acknowledged that the settlement statements prepared by STD’s solicitors and Ms Pukallas of his firm were changed to reflect the request by Mr Mullins that the plaintiffs would attend settlement with a cheque for $1,395,000. Mr Delaney noted in his evidence that settlement proceeded even though there was a shortfall of $146,847.54 in the purchase price provided by AB Veritas.

106     At the conclusion of the settlement, Mr Stathakis received two bank cheques payable to Lauvan, one being the bank cheque for $1,395,000 (which he had provided on settlement) and the other being a bank cheque for $1,450,000 (provided by the incoming mortgagee). Mr Stathakis was unable to bank the cheques in Brisbane as the bank had already closed and the next day was a public holiday. Upon returning to Sydney, he gave the bank cheques to Mr Danesi. The two cheques were subsequently banked by Lauvan after the Easter long weekend.

30    It can be seen from the above that:

(1)    The Supreme Court proceeding dealt in detail with the same set of factual circumstances, in particular the circumstances of the Round Robin payment, as those on which Mrs Bega relies in her proposed further amended statement of claim in the present proceeding; and

(2)    In the Supreme Court proceeding Mrs Bega made allegations against Lauvan and Mittabell that they had engaged in unconscionable conduct. She was also taken to have relied on a range of other statutory contraventions including, apparently, s 18 of the ACL.

31    Dismissing all the defences that had been raised and the cross-claim, Gleeson JA upheld the claim of Lauvan and Mittabell and entered judgment for them against each of the defendants in the sum of $1 million plus interest.

32    Although having described the first cross-claim as being a cross-claim also by Mrs Bega as explained above, the orders of the Supreme Court dismissed the “first cross-claim of Aidan Bega and AB Veritas”. It may thus be open to question whether there is a cause of action estoppel or res judicata on the misleading and deceptive conduct cause of action which Mrs Bega seeks now to advance. For reasons that will become apparent, it is not necessary to go into that question.

33    Mrs Bega appealed against the judgment of Gleeson JA to the Court of Appeal, but her appeal was dismissed with costs: Bega v Lauvan Pty Ltd [2019] NSWCA 36.

Anshun estoppel and abuse of process

34    An Anshun estoppel arises where the matter relied upon in the subsequent proceeding could and should have been raised in the first proceeding on the basis that it was so relevant to the subject matter of the first action that it would have been unreasonable not to have relied on it: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; 147 CLR 589 at 602-3 per Gibbs CJ, Mason and Aickin JJ. The doctrine is founded upon a matter of public policy that a party should not be troubled twice in the same matter: Murphy v Abi-Saab (1995) 37 NSWLR 280 at 286 per Gleeson CJ (Kirby P and Rolfe A-JA agreeing). See Johnson v Registrar, Federal Court of Australia [2015] FCAFC 66 at [20] per Collier, Gilmour and McKerracher JJ.

35    The Anshun inquiry is whether an exercise of reasonable diligence would have led to the bringing of the claim in the earlier proceeding: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [86] per Gummow, Hayne, Crennan, Kiefel and Bell JJ. As it was put by French CJ in the same case (at [33]), abuse of process principles may be invoked to prevent attempts to litigate that which should have been litigated in earlier proceedings as well as attempts to re-litigate that which has already been determined.

36    In Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507 at [22] per French CJ, Bell, Gageler and Keane JJ, three forms of estoppel as recognised by the common law of Australia were identified, namely cause of action estoppel, issue estoppel and Anshun estoppel. It was said that Anshun estoppel:

is still sometimes referred to as the “extended principle” in Henderson v Henderson [(1843) 3 Hare 100; 67 ER 313]. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding.

(References omitted.)

37    Their Honours went on to explain (at [23]) that each of the three forms of estoppel has the potential to preclude assertion of a right or obligation, or the raising of an issue of fact or law, “between parties to a proceeding or their privies.” The point about privies requires further consideration because of the fact that Mr Danesi was not a party to the Supreme Court proceeding but he relies on Anshun estoppel and abuse of process in this proceeding.

38    It was said in Tomlinson (at [25]) that abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel; it can be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel. Thus, it was said (at [26]) that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process (as distinct from estoppel) where the party seeking to make a claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel.

39    In UBS AG v Tyne [2018] HCA 45; 265 CLR 77 at [1] per Kiefel CJ, Bell and Keane JJ, Gageler J agreeing, it was said that the varied circumstances in which the use of the court’s processes will amount to an abuse, notwithstanding that the use is consistent with the literal application of its rules, do not lend themselves to exhaustive statement. Either of two conditions enlivens the power: where the use of the court’s procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute. Their Honours (at [7]) adopted the statement of Lord Bingham of Cornwall in Johnson v Gore Wood & Co [2002] 2 AC 1 at 31 that the consideration the court is required to make is:

a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.

Consideration

40    The claim that Mrs Bega proposes to assert against Lauvan and Mittabell is unquestionably a claim that she could have asserted against them by way of cross-claim in the Supreme Court proceeding, or she could have raised the same reliance on s 18 of the ACL as a defence in that proceeding. Indeed, Gleeson JA treated Mrs Bega as having asserted a s 18 claim in the first cross-claim which his Honour ultimately dismissed. There is no doubt that the necessary facts and information with regard to the Round Robin payment were available to Mrs Bega at least nearly a year before the hearing and those facts formed a key part of the litigation and of the findings and conclusions of Gleeson JA. Even if she is not taken to have asserted the same claim in the Supreme Court proceeding, she certainly could have done so.

41    The matters which Mrs Bega now seeks to litigate are so relevant and connected to the subject matter of the Supreme Court proceeding that it is unreasonable for her not to have relied on them in that proceeding; reasonable diligence in the conduct of the proceeding would have resulted in them having been raised there.

42    To allow Mrs Bega to claim against Lauvan and Mittabell on the basis of her proposed further amended statement of claim would be to allow the same issues to be litigated again in circumstances where they should reasonably have been litigated in the Supreme Court proceeding. By her proposed claim, Mrs Bega seeks in effect to re-litigate her liability to Lauvan and Mittabell under the Loan Facility with a view to unwinding the effect of the Supreme Court judgment against her. It would be oppressive and unfair to Lauvan and Mittabell to allow the present proceeding to continue against them. Moreover, there are considerations of public interest that count against allowing the proceeding to continue, namely the public interest in the proper and efficient use of public resources. See Aon at [27] and [30].

43    In the circumstances, on the grounds of Anshun estoppel, leave to file the proposed further amended statement of claim as against Lauvan and Mittabell should be refused and the proceeding as against them should be permanently stayed.

44    The position with respect to Mr Danesi is slightly different because he was not a party to the Supreme Court proceeding. However, he was the controlling mind of Lauvan and Mittabell, so much so that in the proposed further amended statement of claim it is alleged that he was knowingly concerned in and aided and abetted the relevant conduct of Lauvan and Mittabell. Indeed, that allegation is necessary in order to found any liability on Mr Danesi. In those circumstances, Mr Danesi may be thought to be a privy of Lauvan and Mittabell such that, on the explanation in Tomlinson set out at [38] above, he could nonetheless raise Anshun estoppel in the second proceeding despite not having been a party to the first proceeding. It is, however, not necessary to decide whether Mr Danesi was a privy of Lauvan and Mittabel, or them of him, because the matter is more readily decided on the broader doctrine of abuse of process.

45    In that regard, Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; 53 NSWLR 198 is instructive. The purchasers of a business brought proceedings against the vendor and covenantors in the Supreme Court relying on the vendor’s financial statements prepared by accountants for the vendor. The purchasers’ breach of contract claim succeeded, but their misleading and deceptive conduct claim failed on the basis that there had not been reliance on the particular figures in the financial statements. Pending an appeal of that proceeding, they commenced a proceeding in the District Court against the accountants claiming damages for negligent misrepresentation, the identified misrepresentations being in the financial statements. The accountants sought to have the District Court action stayed or dismissed for abuse of process. They claimed, in substance, that the purchasers were seeking to re-litigate in the District Court the issue of reliance on which they had failed in the Supreme Court.

46    It was held (at [15]) by the Court of Appeal, per Handley JA, Mason P and Heydon JA agreeing, that the accountants were not parties to the action in the Supreme Court, and nor were they privies of the vendor and cannot claim the benefit of any cause of action estoppel or issue estoppel. However, it was held (at [22]) that the purchasers could have included their claim against the accountants for negligent misrepresentation in their Supreme Court proceeding; they knew that the figures came from the accountants and there would have been common issues of reliance, falsity and damage. Thus, the claims against the accountants were so relevant to the subject matter of the first action that it was unreasonable for the purchasers not to rely upon them in that action (at [23]). Although there was no question of oppression and unfairness because the accountants were not parties to the earlier action, to allow the later proceeding would “threaten the integrity of the administration of justice and raise the prospect of conflicting judgments” (at [36]). On that basis, the later proceeding was an abuse of process (at [37]).

47    Returning to the present case, Mr Danesi was integrally involved in the Supreme Court proceeding; as sole shareholder and director, I infer that he gave instructions on behalf of Lauvan and Mittabell and directed the litigation on their behalf, and he was a principal witness who faced cross-examination on the critical events. Moreover, the claim that is now sought to be asserted against him could undoubtedly have been made in the Supreme Court proceeding by way of cross-claim. Mrs Bega knew the details of his involvement on which she now seeks to rely in the proposed claim against him. To allow the proceeding would be to allow the re-litigation of the same factual circumstances and the potential for conflicting judgments on those circumstances. It would be unfair and oppressive on him and it would threaten the integrity of the administration of justice to allow the proceeding to continue.

48    For those reasons, I conclude that to allow the claim to proceed against Mr Danesi would be an abuse of process. Leave to file the further amended statement of claim should accordingly be refused and the whole of the proceeding should be permanently stayed.

Limitation

49    Against the possibility that I am wrong in my conclusions on Anshun estoppel and abuse of process, I will briefly consider the contention by the respondents that leave to amend should be refused and the proceeding should be summarily dismissed on the basis that the claim that is sought to be agitated is time-barred.

50    The proposed further amended statement of claim alleges that Mrs Bega suffered loss or damage by reason of the misleading and deceptive conduct of Lauvan and Mittabell in making the Round Robin payment on 2 April 2015. She seeks to plead that had that payment not been made then the sale contract would not have been completed such that the loan advance of $1 million would have been immediately repaid and she would thus have been restored to the position she enjoyed before drawing down on the Loan Facility.

51    It is proposed to be pleaded on behalf of Mrs Bega that the measure of her loss under s 236(1) of the ACL is that designed to put her in the position she would have enjoyed had there been no misleading and deceptive conduct, and had there been no such conduct she would not have been in default of the Loan Facility and consequently would not have lost her Denham Court property. She claims the present day value of the property.

52    Section 236(2) of the ACL provides that an action for damages under s 236(1) may be commenced at any time within six years after the day on which the cause of action that relates to the conduct accrued. On that basis, if the cause of action accrued on 2 April 2015 any proceeding commenced after 2 April 2021 would be time-barred. The amended interlocutory application for leave to amend was not filed until 30 July 2021, and in any event under r 16.54 of the Federal Court Rules 2011 (Cth) an amendment of a pleading that is made under r 16.51 takes effect on the date the amendment is made. If Mrs Bega is granted leave to amend, her amendment would be an amendment under r 16.51. It is submitted on behalf of Mrs Bega that her cause of action in the further amended statement of claim was not “complete” until actual loss or damage was suffered which is when her Denham Court property was sold in 2018 under a mortgagee in possession sale, and not 2 April 2015 when the conduct occurred.

53    I do not accept that submission. Where relief is claimed on the basis of misleading and deceptive conduct which induces entry into a transaction, and a series of losses flows from the transaction, the cause of action for damages for misleading and deceptive conduct may accrue at the time of incurrence of the first loss, even if the claimant is unaware that a cause of action exists: Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd [2008] VSCA 26; 19 VR 358 at [112] per Nettle JA, Ashley and Dodds-Streeton JJA agreeing.

54    When the loan was advanced to Mrs Bega the money advanced was simultaneously on-lent to AB Veritas and paid by AB Veritas to ST as vendor. At that moment, Mrs Bega incurred a liability to repay the loan. Although AB Veritas had a corresponding liability to her, that was worthless because having itself on-paid the money it had no ability to repay. But further, and decisively, it was held in the SCJ (at [412]) that interest began to accrue on Mrs Bega’s liability to Lauvan and Mittabell at the rate of 20% per annum from 2 April 2015, so she immediately suffered that loss of additional liability for interest.

55    In those circumstances, Mrs Bega’s cause of action accrued on 2 April 2015 which is when her first loss was suffered. It is accordingly out of time, and it cannot be re-pleaded in such a way as to overcome that problem.

56    Were it not for my conclusion that the proceeding should be permanently stayed, the limitation point would provide sufficient basis to summarily dismiss the proceeding.

Conclusion

57    For the above reasons, leave to file the further amended statement of claim should be refused and the proceeding should be permanently stayed.

58    The usual rule is that the costs should follow the event. However, I have not heard the parties on costs. I will accordingly order that the applicant pay the respondents’ costs save in the event that any party applies for a variation of that costs order by filing submissions in support of the variation they contend for within seven days of my orders.

Associate:

Dated:    11 November 2021