Ace Demolition and Excavation Pty Ltd v Mehajer

[2018] NSWSC 579

Supreme Court

New South Wales

Medium Neutral Citation:	ACE Demolition & Excavation Pty Ltd v Mehajer [2018] NSWSC 579
Hearing dates:	01 May 2018
Decision date:	01 May 2018
Jurisdiction:	Equity - Commercial List
Before:	Stevenson J
Decision:	Hearing date vacated on terms
Catchwords:	PRACTICE AND PROCEDURE – application to vacate hearing date – where defendants sued on guarantee – where defendants belatedly adduced evidence that some signatures on surety documents purporting to be theirs were not genuine – whether there is an arguable defence
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52
Category:	Procedural and other rulings
Parties:	ACE Demolition & Excavation Pty Ltd (Plaintiff) Salim Mehajer (First Defendant) Khadijeh Mehajer (Second Defendant) Zenah Osman (Third Defendant)
Representation:	Counsel: P D Reynolds (Plaintiff) G Foster (Second and Third Defendants)   Solicitors: Clayton Utz (Plaintiff) Zali Burrows at Law (Second and Third Defendants)
File Number(s):	SC 2018/39427

EX TEMPORE Judgment (REVISED)

1. This matter is listed for hearing before me today.

2. The plaintiff, ACE Demolition & Excavation Pty Ltd, seeks judgment against each of the three defendants for $6.2 million by reason of documents that each has executed which, ACE contends, constitute guarantees by them for the indebtedness to ACE of Sydney Project Group Pty Ltd.

3. The first defendant, Mr Salim Mehajer, is bankrupt. The proceedings against him are stayed. ACE seeks to proceed against the second and third defendants, Ms Khadijeh Mehajer and Ms Zenah Osman, who are sisters of Mr Mehajer.

4. The documents on which ACE relies are a Deed of Variation dated 5 May 2016 and mortgages purportedly given by the second and third defendants over property they own dated 4 May 2016 (in the case of the second defendant) and 2 May 2016 (in the case of the third defendant).

5. ACE also relies upon declarations that each of the second defendants has purportedly made, reciting an understanding of the documents and the receipt of independent legal advice.

6. ACE commenced the proceedings on 6 February 2018. At that time a solicitor, Mr Abbas, told ACE's solicitors that he had instructions to accept service of process on behalf of the second and third defendants. Service was effected accordingly.

7. On 16 February 2018 the second and third defendants, through Mr Abbas, consented to an order that their Commercial List Responses be filed by 7 March 2018. That did not happen. Mr Abbas has withdrawn as their solicitor.

8. On 15 March 2018 ACE filed a Notice of Motion for summary judgment.

9. That motion was made returnable on 23 March 2018. Counsel appeared for the second and third defendants on that occasion, instructed by a different solicitor, and sought an adjournment. The matter was adjourned to 13 April 2018. The second and third defendants were ordered to pay ACE’s costs.

10. On 13 April 2018 Hammerschlag J set the matter down for hearing today and ordered the second and third defendants to file their Commercial List Responses, and evidence by 20 April 2018.

11. The Responses were served on 20 April 2018 but no evidence was filed or served until 3pm yesterday when affidavits were served by the second and third defendants in support of a Notice of Motion, filed at that time, seeking to vacate today's hearing date.

12. I have heard debate this morning as to whether the hearing date should be vacated. Mr Reynolds, who appears for ACE, points to the history of the matter that I have recited and contends, with some justification, that the second and third defendants have had ample opportunity to present their case and that it is now too late for them to raise the matters to which they depose in their affidavits.

13. I do see the force of that submission. But I must do justice not only to ACE but also to the second and third defendants.

14. Having considered what the second and third defendants say in their affidavits, I am persuaded that the justice of the case requires that the hearing date be vacated, albeit on strict terms.

15. The second defendant, who describes herself as a "criminology graduate", but who is currently engaged in "home duties caring for a baby", contends that several signatures on the Deed of Variation that purport to be hers are not genuine. There are a number of signatures on the Deed of Variation that the second defendant accepts are hers; albeit they are, for the most part, signatures as a witness to those of other parties.

16. I am not a handwriting expert, but some of the signatures on the Deed of Variation, which purport to be those of the second defendant, appear to be different from her genuine signature as it appears on her affidavit.

17. The second defendant says that her genuine signature appears only on two pages of the Deed of Variation (pp 11 and 12) and that when she appended her signature to those pages she was not given or shown any of the other 13 pages of the document; particularly its text.

18. There appear to be two versions of p 12 of the Deed of Variation. That page provides for the second defendant to sign as guarantor, as opposed to, for example, as a director of a corporate guarantor. On one of those versions is the signature that the second defendant accepts is hers. On the other version is a signature, purporting to be that of the second defendant that she denies is hers. It does appear to be different from the second defendant’s signature on her affidavit.

19. The second defendant agrees that her signature appears on three occasions on the 4 May 2016 mortgage but says that she was given only the three pages upon which she appended her signature; and not any of the remaining 49 pages of that document.

20. The third defendant, who is a solicitor, but who currently cares for her three infant children and is pregnant with a fourth, contends that all of the signatures purporting to be hers on the Deed of Variation, and particularly that purporting to be her signature as a guarantor, are not hers. Again, the signatures on that document appear to be different from the third defendant's signature in her affidavit. The third defendant also denies that any of the signatures on the mortgage relating to her property are hers.

21. The second and third defendants accept that their signatures appear on declarations which, according to its terms, recite their understanding of the nature and effect of the Deed of Variation and of the mortgage and that they received legal advice.

22. The second and third defendants both say that the solicitor who purportedly gave them that advice "pushed the document in front of me, pointed to where I was required to sign and said 'sign here'".

23. In all these circumstances, I am satisfied that there is a serious question to be tried as to whether the second and third defendants have a defence to a claim such as warrants the vacation of the hearing date.

24. As Mr Reynolds has pointed out in his written submissions, the general rule is that a party signing a document is bound by its terms whether or not they have read it or have any understanding of what was in it: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52.

25. But here, the second defendant contends that, although she signed some pages of the relevant documents, they were proffered to her in isolation from the balance of the document of which they ultimately became part.

26. The third defendant contends she did not sign the documents at all.

27. In those circumstances, despite the belated nature of the application, and the paucity of the evidence explaining the delay, I feel compelled to accede to the application for adjournment to allow the second and third defendants an opportunity to articulate their cases.

28. But the adjournment will be on strict terms.

29. First, I propose to order that the second and third defendants pay the costs thrown away by the adjournment.

30. Second, I propose to assess those costs as a gross sum under s 98(4) of the Civil Procedure Act 2005 (NSW).

31. I have heard submissions from Mr Reynolds and Mr Foster, who appears for the second and third defendants, as to what that figure should be. Mr Reynolds submitted that the amount should be $12,500. Mr Foster considered that figure was excessive. However, it appears reasonable to me and I propose to assess costs in that figure.

32. I order that the second and third defendants pay the costs thrown away by the adjournment, and which I assess under s 98(4) of the Civil Procedure Act to be $12,500, by 5 pm on 18 May 2018.

33. I order that if those costs are not paid at that time, ACE be at liberty to enter judgment against the second and third defendants for that claim.

34. I stand the matter over to the Commercial List on 4 May 2018 for directions and, if the List Judge thinks it appropriate, for allocation of a hearing date.

**********

Decision last updated: 02 May 2018