Ace Electrical Wholesalers Pty Ltd v Bitar

[2018] NSWDC 360

District Court

New South Wales

Medium Neutral Citation:	Ace Electrical Wholesalers Pty Ltd v Bitar [2018] NSWDC 360
Hearing dates:	7, 8 and 9 November 2018
Date of orders:	12 November 2018
Decision date:	12 November 2018
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)   Proceedings dismissed. (2)   Plaintiff to pay the defendant's costs.
Catchwords:	JURISDICTION – jurisdiction of District Court AGREEMENT – partly oral – partly in writing – between family members – assessing credit
Legislation Cited:	Civil Procedure Act 2005, s 144 Conveyancing Act 1919, s 23C, s 46, s 54A District Court Act 1973, Pt 3 Div 8 Subdiv 2, s 44, s 134 Justice Legislation Amendment Act (No 3) 2018 Supreme Court Act 1970 Supreme Court Rules 1970, Pt 14 r 2
Cases Cited:	Abbott v Klein [2015] NSWDC 45 Australian Wholesale Meats (Sydney) v S&R Cool Logistics Pty Ltd [2018] NSWSC 1541 Bendigo and Adelaide Bank Limited v Jaeger [2018] NSWDC 244 Commonwealth Bank of Australia v QBE Insurance (Australia) Ltd [2018] NSWSC 1440 Firebird Global Master Fund II Ltd v Republic of Nauru (2015) 258 CLR 31; [2015] HCA 43 Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531; [2007] HCA 8 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Guirguis Pty Ltd v Michel’s Patisserie System Pty Ltd [2018] 1 Qd R 132; [2017] QCA 83 Jefferis v Gells Pty Ltd trading as Gells Lawyers [2018] NSWDC 288 May v Brahmbhatt [2013] NSWCA 309 Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2015] NSWCA 402 New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338 Nova 96.9 Pty Ltd v Natvia Pty Ltd [2018] NSWSC 1288 Pacific Shoji Pty Ltd v Xia [2018] NSWCA 290 Rogic v Samaan [2018] NSWSC 1464 Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160 Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWSC 1366 Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 Southern Classic Group Pty Ltd t/as Southern Classic Cars v Arch Underwriting at Lloyd’s Ltd on behalf of Syndicate 2012 (No 2) [2018] NSWSC 1530 The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194 Tzovaras v Williams [2018] NSWDC 275 Watson v Foxman (1995) 49 NSWLR 345
Category:	Principal judgment
Parties:	Ace Electrical Wholesalers Pty Ltd (ACN 103 597 002) - plaintiff Mr Sami Bitar - defendant
Representation:	Counsel: Mr J O’Sullivan - plaintiff Ms A Avery-Williams - defendant   Solicitors: Etienne Lawyers - plaintiff KPL Lawyers - defendant
File Number(s):	2017/2939
Publication restriction:	None

Judgment

1. Introduction

1. Ace Electrical Wholesalers Pty Ltd jointly owned a property in Heckenberg, New South Wales with Eile Melki, a close friend of Nabeh Bitar, the sole director of Ace. Mr Nabeh Bitar lived next door to the property.

2. The property was transferred to Mr Nabeh Bitar's nephew, Sami Bitar, pursuant to a transfer signed before a solicitor by Mr Nabeh Bitar on behalf of Ace, Mr Melki and Mr Sami Bitar on 31 August 2015. The transfer at that date disclosed consideration of $400,000. Settlement occurred on 22 December 2015. On or about that date, Mr Sami Bitar paid to Ace $400,000. Ace sues Mr Sami Bitar for $175,000, being what it alleges to be an unpaid component of the purchase price.

2. Issues

3. The following issues arise for determination:

1. whether the District Court has jurisdiction;

2. whether Mr Sami Bitar agreed to buy the property for $575,000 as Ace alleges, or $400,000, as Mr Sami Bitar alleges;

3. whether, if the purchase price was agreed to be $575,000, Mr Sami Bitar has paid the addition $175,000; and

4. whether the formal requirements of ss 23C, 46 or 54A of the Conveyancing Act 1919 are a defence to Ace's claim.

3. Jurisdiction

4. The primary grant of jurisdiction to the District Court under s 44(1)(a) of the District Court Act1973 is to hear and dispose of actions which, if brought in the Supreme Court, would be assigned to the Common Law Division. The High Court[1] determined that the construction of s 44(1)(a)(i) "turns on the statutory provisions governing from time to time the assignment of business within the Supreme Court of New South Wales",[2] that the provision did not bear an "ambulatory construction", [3] and that its application depended upon the statutory provisions governing assignment as at 2 February 1998.

   1. Forsyth v Deputy Commissioner of Taxation (2007) 231 CLR 531; [2007] HCA 8.

   2. Forsyth at [24].

   3. Forsyth at [42], [45].

5. On 2 February 1998, the assignment provisions [4] of the Supreme Court Act 1970 were expressed to be "Subject to the rules". One of those rules was Pt 14 r 2, which provided:

“…there shall be assigned to the Commercial Division proceedings in the Court:

(a) arising out of a commercial transaction; or

(b) in which there is an issue that has importance in trade or commerce…”

4. See ss 52-55.

6. Part 14 rule 2 accordingly indicates that proceedings which arise out of a commercial transaction would, in February 1998, have been assigned to the Commercial Law Division, not the Common Law Division, and would thus fall outside the jurisdiction conferred on this Court by s 44(1)(a)(i) of the District CourtAct 1973. At least eight first instance judges have found this to be the effect of the rule. [5] Yet the matter is not free from controversy. The Court of Appeal, in cases referred to in some of the single judge decisions,[6] found that the District Court has jurisdiction to deal with actions to recover monetary sums because such actions were "typically…assigned to the Common Law Division",[7] irrespective of "the underlying source of the debt". Although none of the Court of Appeal decisions referred to Pt 14 r 2, these decisions have caused at least one first instance judge to find jurisdiction on the basis of stare decisis. [8]

   5. Abbott v Klein [2015] NSWDC 45 at [60]-[69] per Taylor SC DCJ; The NTF Group Pty Ltd v PA Putney Finance Australia Pty Ltd [2017] NSWSC 1194 at [41]-[46] per Parker J; Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160 at [2]-[17] per Taylor SC DCJ; Bendigo and Adelaide Bank Limited v Jaeger [2018] NSWDC 244 at [12]-[16] per Taylor SC DCJ; Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWSC 1366 at [4]-[13] per Harrison J; Nova 96.9 Pty Ltd v Natvia Pty Ltd [2018] NSWSC 1288 at [6]-[35] per Rein J; Commonwealth Bank of Australia v QBE Insurance (Australia) Ltd [2018] NSWSC 1440 at [4]- [10] per N Adams J; Tzovaras v Williams [2018] NSWDC 275 at [3]-[23] per Russell SC DCJ; Australian Wholesale Meats (Sydney) v S&R Cool Logistics Pty Ltd [2018] NSWSC 1541 at [2]-[9] per Beech-Jones J and Southern Classic Group Pty Ltd t/as Southern Classic Cars v Arch Underwriting at Lloyd’s Ltd on behalf of Syndicate 2012 (No 2) [2018] NSWSC 1530 at [13] -[20] per Stevenson J.

   6. Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWDC 160 at [2]-[17] per Taylor SC DCJ; Sapphire Suite Pty Ltd v Bellini Lounge Pty Ltd [2018] NSWSC 1366 at [4]-[13] per Harrison J; Jefferis v Gells Pty Ltd trading as Gells Lawyers [2018] NSWDC 288 at [64]-[91] per Dicker SC DCJ.

   7. New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338 at [71]. See also May v Brahmbhatt [2013] NSWCA 309 at [3] and Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd [2015] NSWCA 402 at [49].

   8. Jefferis at [64]-[91], especially [89] per Dicker SC DCJ.

7. Part 14 rule 2 may thus operate to preclude jurisdiction in this Court if the proceedings "[arise] out of a commercial transaction". [9]

   9. Note that a retrospective amendment to s 44 in the Justice Legislation Amendment Act (No 3) 2018 removed this limitation; see Pacific Shoji Pty Ltd v Xia [2018] NSWCA 290 at [6].

8. Ace was a trading company and it owned the Heckenberg property as an investment. The property was a residential property but was not occupied in the period either before or after the sale.

9. But the parties here are agreed that the sale of the property was not relevantly "commercial", apparently because it was not the subject of a written agreement or documented in the usual manner; it was a transaction between family members, here, an uncle and nephew, said not to be at arm's length; and because the transaction was not in the ordinary course of the business of Ace.

10. The meaning of "commercial transaction" in the former Pt 14 r 2 lacks certainty. The term in a different context received some consideration in the High Court,[10] although perhaps not in a way relevant to the present. Counsel in Jefferis [11] submitted that the term included contracts involving the purchase of residential property,[12] although any reasoning behind that submission was not recorded and is not apparent, and the judgment does not indicate acceptance of that submission.

    10. Firebird Global Master Fund II Ltd v Republic of Nauru (2015) 258 CLR 31; [2015] HCA 43.

    11. Jefferis v Gells Pty Ltd trading as Gells Lawyers [2018] NSWDC 288.

    12. At [86].

11. The present case certainly has "uncommercial" aspects to it: no usual documentation such as a contract for sale, a family transaction, perhaps not at arm's length, between uncle and nephew, a residential property next door to the uncle's home. These matters, and not the circumstance that the transaction was not in the ordinary course of business of Ace, persuade me that the sale of the property was not relevantly a commercial transaction for the purposes of Pt 14 r 2 of the Supreme Court Rules 1970 as it was in February 1998.

12. However, there is a further factor. Mr Sami Bitar says that a piece of documentary evidence relied on by Ace to sue for the residual debt on the purchase was unconnected with the property sale but, rather, connected with another commercial transaction between himself and his uncle. Further, Mr Sami Bitar, in an alternative defence, says that if the $175,000 was owed on the purchase of the property, it was paid by reason of certain payments he made to Ace, payments which he principally alleges were in respect of the unrelated commercial transaction.

13. Although the matter may be finely balanced, I remain of the view that in all the circumstances stated, the sale of the home was not relevantly a commercial transaction, and the joint submission of the parties should be accepted. Part 14 r 2 of the Rules, as it was in February 1998, therefore has no application, and s 44(1)(a)(ii) gives this Court jurisdiction to determine the dispute.

14. There is a separate jurisdictional issue that arises from the circumstance that Mr Melki, a former joint owner, is not a party to the dispute and claims no interest in the proceedings. Ordinarily one might suppose that any unpaid purchase price was recoverable by the vendors, in this case, Ace and Mr Melki. But neither party seeks to join Mr Melki, and Mr Melki gave evidence to the effect that as he contributed nothing to the purchase (save perhaps for carrying a joint liability for the mortgage debt) he has no interest in the proceeds of sale.

15. I was concerned whether this raised questions of a resulting trust, which might enliven s 134(1)(e) of the District Court Act 1973 so that if I were in doubt about jurisdiction, I would be required to transfer the matter to the Supreme Court under s 144 of the Civil Procedure Act 2005. However, there is no equitable claim in the proceedings. The uncontested part of the agreement to sell the property is that Ace and Mr Melki would transfer the property to Mr Sami Bitar in return for payment by Mr Sami Bitar to Ace. No barrier to such a tripartite agreement was raised by the parties, and such an agreement would, if some of the amount payable by Mr Sami Bitar was unpaid, enliven a claim for damages by Ace. That is the claim the subject of these proceedings. I conclude that there is no basis for the Court to find that these proceedings fall within the small equity jurisdiction in Subdiv 2 of Div 8 of Pt 3 of the District Court Act 1973.

16. Accordingly, I find that this Court does have jurisdiction.

4. The agreement

17. The agreement alleged by Mr Nabeh Bitar in the original statement of claim, verified by Mr Nabeh Bitar, was express and in writing dated 21 December 2015. That document, referred to as the agreement, was in the following form:

“21/12/2015

Agreement between Mr Sami Bitar and Nabeh Bitar

Sami Bitar has paid Nabeh Bitar the sum of fifty thousand dollars. The amount outstanding that still needs to be paid is the sum of one hundred and twenty five thousand dollars. The payments will be done in 3 separate payments over 15 months

[signature of Sami Bitar]      [signature of Nabeh Bitar]

name: Sami Bitar                 name: Nabeh Bitar

[signature of Ghassan Bitar]

witness”. [13]

13. Court Book, p 21.

18. It can readily be noted that the agreement contains no reference to the property, no reference to an alleged price of $575,000, no reference to the vendors of the property, Ace and Mr Melki, and no reference to money being owed to the plaintiff, Ace. It also does not identify the consideration for the debt, although it does indicate that the debt was once $175,000. On its face the document does not evidence the sale of the property.

19. The current iteration of the statement of claim particularises the agreement, still dated 21 December 2015, as "oral or partly oral and partly in or evidenced by writing". The written part is the document quoted above.

20. The "oral” part, presumably also the whole oral agreement on the principal claim that the agreement was "oral", was particularised as five conversations.

21. The first alleged conversation is in December 2015 between Mr Sami Bitar and Mr Nabeh Bitar in the presence of Ghassan Bitar. Mr Nabeh Bitar's account of this conversation is:

“Sami:	I’m getting married. I need somewhere to live. The house prices keep going up and up. Can I buy your house at St John’s Road?
Nabeh:	Yes. I got offered over $600,000 for it but I can give it to you for $575,000.
Sami:	Great.”[14]

14. Affidavit of Nabeh Bitar, 5/12/17 at [4].

22. This conversation is denied by both Mr Sami Bitar and his father, Mr Ghassan Bitar.

23. The second alleged conversation occurred "[s]hortly after" the first. Mr Nabeh Bitar gave evidence that it was in the following terms:

“Sami:	I applied for a loan. I can’t get approval for all of the money. Can you help me out? I can pay you $400,000 on settlement which is all the bank will give me and pay you the balance of $175,000 in instalments over the next year and a half.
Me:	OK.”[15]

15. Affidavit of Nabeh Bitar, 5/12/17 at [5].

24. Mr Sami Bitar and Mr Ghassan Bitar deny this conversation.

25. The third alleged conversation, said to be between Mr Ghassan Bitar and Mr Nabeh Bitar, is recorded in a subsequent affidavit made after the service of the initial affidavits of Mr Sami Bitar and Mr Ghassan Bitar, and indirectly identifies the second conversation as occurring on 21 December 2015 at “Sami and Ghassan's house". Mr Nabeh Bitar deposes to the third conversation being as follows:

“NB:	I need something in writing.
GB:	But we’re family. Are you saying you don’t trust us?
NB:	I do but if something happens to you, I need something on paper.”[16]

16. Affidavit of Nabeh Bitar, 13/8/18 at [15].

26. Mr Ghassan Bitar denies this conversation. Mr Sami Bitar does not refer to this conversation in his responding affidavit. However, he had earlier (before Mr Nabeh Bitar’s subsequent affidavit) given a more detailed version of a conversation "at my parent’s house" on 21 December 2015. It was to the following effect:

“Nabeh:	‘If you want to stay in business with me, you need to pay me one hundred and seventy-five thousand dollars in cash.’
Me:	‘It’s not fair, you are forcing me to give you soo much money towards the business.’
Nabeh:	‘It’s more so for us to get more products and build the business up. I am not here to rip you off. I am your uncle.’
Me:	‘Okay. I only have fifty thousand dollars cash and I will give the remaining money to you in instalments later.’
Nabeh:	‘Prepare a document and we will sign it and make it a written agreement.’
Me:	‘Why?’
Nabeh:	‘If something was to happen to you, at least no one will take that money from you and it will stay in the business to go to your family. Trust me.’
Me:	‘Okay.’
Nabeh:	‘When you make the transfers, make them to Global Co and make sure you put in the reference to stock, so that it follows on with transfers of stock and I don’t need to explain this agreement to anyone.’”[17]

17. Affidavit of Sami Bitar, 1/3/18 at [56].

27. The alleged fourth and fifth conversations are not evidenced by Mr Nabeh Bitar, although there is evidence that they occurred in his presence. Nor do they occur in December 2015, but are evidenced to occur some months earlier. They are contained in a reply affidavit of Mr Melki, the co‑owner of the property and a close friend of Mr Nabeh Bitar. The fourth conversation was in the following form:

“I was present at a further conversation between myself, Bill [Nabeh] and Sami at the shop of the Plaintiff (“ACE”) in about July or August 2015 to the following effect:

NB:	Sami, the price of the house is $575,000, are you happy with that?
SB:	OK. I agree. But I can’t borrow the full amount. I’ll pay you some now and pay you the rest later.”[18]

18. Affidavit of Eile Melki, 15/8/18 at [9].

28. The fifth conversation was evidenced as follows:

“In about late August 2015, I went to the offices of Catherine Shad, solicitor, with Bill and Sami. Sami and Bill picked me up from my home and we drove there together. In the car there was a conversation to the following effect:

NB:	So we’re putting $400,000 on the paperwork now but the sale price is $575,000.
SB:	Ok. But I won’t be giving you all of the money now because I couldn’t get the loan. I’ll be giving you most of it now and the rest later.
NB	OK.”[19]

19. Affidavit of Eile Melki, 15/8/18 at [11].

29. There are a number of difficulties with the oral agreement as alleged. But in submissions, no focus was placed by Ace on a solely oral agreement, but rather a partly oral, partly written agreement, to which I propose to go directly.

30. As I noted earlier, the written part was the 21 December 2015 document. The pleading asserted that the agreement was "signed by Nabeh Bitar, on behalf of the Plaintiff and Eile Melki". There was no evidence of Mr Melki being a party to the 21 December 2015 agreement, and no evidence of any authority in Mr Nabeh Bitar to sign on Mr Melki's behalf.

31. So in summary, there is the written document dated 21 December 2015, evidencing a debt of $125,000 owed by Mr Sami Bitar to Mr Nabeh Bitar, and Mr Nabeh Bitar asserting three conversations in about December 2015, the first two at an unspecified location but denied by the other two persons present, that Mr Sami Bitar would pay $575,000 for the property by way of $400,000 on settlement and $175,000 in instalments thereafter over 18 months.

32. Mr Melki's evidence of the other conversations in July or August 2015 is not direct evidence of the 21 December 2015 agreement pleaded. These conversations are denied by Mr Sami Bitar and not referred to by Mr Nabeh Bitar, but if accepted, they might provide some support for the later agreement. However, Mr Melki's evidence is inconsistent with Mr Nabeh Bitar's evidence. The latter’s evidence implies that $575,000 was first mentioned in December 2015, whereas Mr Melki says agreement on this amount was reached in July or August 2015.

33. This evidence must be assessed in the context of surrounding circumstances established by other evidence. Those circumstances can be listed as follows.

34. First, on 31 August 2015 in front of Catherine Shad, a solicitor, Mr Nabeh Bitar, Mr Melki and Mr Sami Bitar signed a transfer to Mr Sami Bitar of the Heckenberg property. The transfer recorded a consideration of $400,000. Mr Nabeh Bitar failed to mention this significant circumstance in his first affidavit, and the conversations he alleges in December 2015 are inconsistent with it.

29. Secondly, there was no evidence providing a reason for recording a lower figure on the transfer than that which Mr Nabeh Bitar alleged was agreed between the parties. There was no suggestion of an attempt to minimise stamp duty. Documentary evidence from August 2015 recorded that there was a need for a valuation for stamp duty purposes, [20] indicating that the transfer was not seen as determinative of the amount of stamp duty.

    20. Exhibit 16, final page.

30. Thirdly, the solicitor, Ms Shad, gave evidence of informing all the parties that the consideration for the transfer was $400,000. She was not challenged on this evidence. Her file notes repeatedly referred to a price of $400,000. [21]

    21. Exhibit 18.

31. Fourthly, documentary evidence dated 31 August 2015 indicates, as was accepted by the parties at trial, that the motivation for the sale was to remove the name of Mr Melki from the title because Mr Melki had financial problems. This motivation was not mentioned by Mr Nabeh Bitar in his first affidavit. There is no reference in the contemporaneous documents to Mr Sami Bitar needing a place to live, as Mr Nabeh Bitar asserted in his first affidavit. As noted earlier, Mr Sami Bitar did not move into the house after settlement.

32. Fifthly, Ms Shad's first written account in February 2017 about the transaction was consistent with her evidence. In written correspondence she was asked a series of questions as follows:

“Request for Information

We kindly request you assist our office in providing the following information:-

1.   When was the Transfer document prepared by your office and executed by all parties?

2.   When was the consideration amount of $400,000.00 struck through the Transfer document and the consideration amount of $460,000.00 written?; and why was it done?

3.   Whether the Transfer was shown to the parties again after the consideration amount was amended?

4.   When was the date ‘22 December 2015’ handwritten in on the Transfer document? (the date is written on the stamped copy obtained from the LPI, however, the copy of the Transfer document provided in the conveyancing file is undated) Please clarify.” [22]

22. Exhibit 19, p 1.

39. Ms Shad's answers to these questions were as follows:

“We respond to the questions requested to the best of my recollection:

1.   Transfer was prepared and executed on 31 August 2015. Each party was in the room separately when signing and agreed upon the terms of the sale being $400K willingly. At this time the Transferor advised the matter was urgent as they were heading to China. I have received instructions that morning to act and they attended my office at 3.30pm that afternoon. Nothing further happened on the matter until the valuation was provided. We are trying to locate the original transfer sent to the broker for the purposes of obtaining the transferee's loan and will confirm if same is located.

2.   The consideration of $460,000.00 was changed by the paralegal upon receipt of the valuation on 26 October 2015 only for purposes of stamping in accordance with the valuation. At all times $400K was the agreed upon price.

3.   No it was not shown as it was purely changed for stamping purposes to reflect the valuation price.

4.   This was written when the matter settled at settlement by the settlement clerk. This dated transfer is what was registered at the LPI. The transfer in our file was prior to settlement and therefore was not dated as it cannot be dated until settlement occurs.” [23]

23. Exhibit 19, final page.

40. Sixthly, the bank records and settlement sheet reveal that Mr Sami Bitar paid a total of precisely $400,000 to Ace on the day of and the day following the settlement date.

41. Seventhly, Mr Nabeh Bitar made no complaint about non-payment of instalments after the settlement date until late 2016, although his initial affidavit[24] indicated his belief that the first instalment was payable on 21 May 2016.

    24. 5/12/17 at [16].

42. Eighthly, Mr Nabeh Bitar obtained no security in respect of the alleged unpaid instalments and did not lodge a caveat until 14 September 2016.

43. Ninthly, the valuation dated 8 October 2015, some two months before Mr Nabeh Bitar's evidence of the conversations constituting an agreement in December 2015, evidenced a value of $460,000. This was known to Mr Nabeh Bitar and Mr Sami Bitar before the 21 December 2015 agreement document was signed.

44. Tenthly, Mr Nabeh Bitar gave no other evidence to support having received the offer of $600,000 asserted in his affidavit.

45. Eleventhly, the valuation in October 2015, the loan application in late October 2015, [25] and the approval on 1 December 2015, were months after 31 August 2015, indicating that Mr Sami Bitar would not likely have said on 31 August 2015, as Mr Melki alone asserts, that "I can't borrow the full amount" and "I couldn't get the loan". Nor does this established documentary chronology fit with Mr Nabeh Bitar’s evidence of December conversations, which suggested that loan approval was obtained by Mr Sami Bitar in December 2015.

    25. Exhibit 22.

46. Twelfthly, in the caveat lodged by Mr Nabeh Bitar in September 2016, he asserted a debt of $125,000, not $175,000. There was no explanation for this difference.

47. Thirteenthly, Mr Nabeh Bitar asserted that the omissions in the written agreement dated 21 December 2015 were explained by his inability to read English. However, he gave evidence of reading all the documents relating to the original purchase of the property in 2008, and that purchase, together with the purchase of his own home, the refinancing of his loan on the subject property, and the manner of his evidence left me persuaded that he had some familiarity with commercial and property transactions and of the recording in writing of agreements, and that he could read and understand English. His evidence that he argued for a written document on 21 December 2015 but that he did not read or understand the resulting extremely brief document before he signed it was unpersuasive.

5. Other matters of credit, and analysis

48. Mr Melki's demeanour did not cause me to doubt his evidence. But there are “dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses”,[26] and an ounce of intrinsic merit in the evidence, derived from a comparison of the evidence with known facts, "is worth pounds of demeanour". [27]

    26. Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

    27. Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 at 152, see also Rogic v Samaan [2018] NSWSC 1464 at [65], Guirguis Pty Ltd v Michel’s Patisserie System Pty Ltd [2018] 1 Qd R 132; [2017] QCA 83 at [50]-[51].

49. Mr Melki's evidence, unaided by any notes and recalling conversations years earlier that were of no particular significance to him (since he claimed no interest in the purchase price), seems unlikely to be reliable. [28] Any prospect of reliability is further diminished by the references in those asserted conversations that presuppose decisions on loan applications which had not then been made. The conversations, if they occurred, were of real significance to Mr Nabeh Bitar, but he did not recall them. I reject Mr Melki's evidence of these conversations.

    28. See Watson v Foxman (1995) 49 NSWLR 345, 318-319.

50. As earlier mentioned, the difficulties noted in respect of Mr Nabeh Bitar's evidence are magnified by his failure in his initial verified statement of claim and initial affidavit to mention attendances at the solicitor's office, the signing of the transfer, or the need for and purpose of Mr Melki's name being removed from the title. The existence of these matters tends to deny the December conversations asserted by Mr Nabeh Bitar.

51. On the other hand, Mr Sami Bitar's evidence and his father's evidence were not inconsistent with any of the documentary evidence.

52. The foundation of Mr Nabeh Bitar's claim, as it was in the initial statement of claim, rested upon the 21 December 2015 agreement document being in respect of the property transaction. Mr Sami Bitar asserted that that agreement was unconnected with the purchase, and that it was an agreement that he was required to enter into in order to continue to do business with Mr Nabeh Bitar. He said he made the payments required by that agreement.

53. The 21 December document acknowledged that Mr Sami Bitar had paid $50,000. Both Mr Sami Bitar and his father gave evidence that Mr Sami Bitar provided that sum in cash in a plastic bag. Mr Sami Bitar gave an explanation of how he came to have that cash. Mr Nabeh Bitar disputed receiving that sum, in cash or otherwise. Principally on the basis of the signed agreement document acknowledging that Mr Nabeh Bitar had received $50,000, I accept the accounts of Mr Sami Bitar and Mr Ghassan Bitar.

54. The other payments of $125,000, required by the 21 December agreement document, were said by Mr Sami Bitar to have been paid, and that the payments were evidenced by entries in bank statements. But those payments were described as being for stock, and were not relevantly distinguishable from other stock payments. Mr Nabeh Bitar says that all the payments were actually for stock. Mr Sami Bitar said he described the debt payments in this manner because he was instructed to in the conversation to that effect quoted earlier. He also says that those payments were to enable his uncle to buy more stock to grow their businesses. Yet once the payments were completed, the dealings between the parties ceased.

55. There was no accounting evidence to indicate whether the nominated five payments totalling $125,000 were for stock or not. However, Mr Nabeh Bitar created a substantial number of invoices, dated 27 December 2015 but created some time later as manifest by an incorrect business address on the invoices. I was not satisfied that these were genuine invoices and their creation tended to militate against the truthfulness of Mr Nabeh Bitar’s account.

56. I have some doubts about the nature of these payments by Mr Sami Bitar, but that is insufficient to persuade me that the agreement of 21 December 2015 represented part of the purchase price of the property. Nowhere does the documentary evidence indicate a purchase price of $575,000. That price for the sale of a property known by the parties to be valued at $460,000 would seem unlikely by a vendor uncle to his nephew of apparently no significant means, especially in circumstances when it was the vendors who were motivated to sell.

57. The fact that the agreement document dated 21 December 2015 was signed on the day before settlement might indicate that the upcoming settlement may have prompted the signed agreement acknowledging a debt. That does not persuade me that the debt was a part of the purchase price.

58. Mr Nabeh Bitar submitted that the subsequent payment of $50,078.50, two days after the signed agreement, showed that the signed document was relevant to the purchase. I could not see how. The written document indicated that $50,000 had been, rather than was to be, paid. The sums were not identical. And on Mr Nabeh Bitar's case, if the reference to a payment of $50,000 in the 21 December document was a reference to the subsequent payment of a similar, but not identical, amount, the document would not support a purchase price of $575,000, but only $525,000. That result would be contrary to all the asserted conversations upon which Mr Nabeh Bitar relied. I accept that the payment of $50,078.50 was the final payment in settlement of the purchase. This payment together with the payment the previous day on settlement totalled precisely $400,000, the purchase price on the transfer.

59. Ms Shad gave evidence on subpoena. Her oral evidence, the contemporaneous documents, including file notes that she created, and a signed transfer stating consideration of $400,000 which was written on 31 August 2015, were compelling evidence of an agreement by Ace and Mr Melki to sell the property to Mr Sami Bitar for $400,000. Ms Shad was not challenged on her evidence of an agreed sale price of $400,000 that she confirmed with the parties. Nor was it suggested to her that a price of $575,000 was mentioned.

60. Ms Shad's evidence was also corroborated somewhat by a document of another solicitor, Gary Penhall, who had earlier been approached in respect of this proposed transfer. An email from Mr Penhall [29] referred to an earlier agreed price of $375,000. Mr Nabeh Bitar gave no explanation for this document, or how it related to the subsequent agreed price he asserted, whereas Mr Sami Bitar said the amount was increased to $400,000 by Mr Nabeh Bitar due to alleged general price rises at the time. The evidence of these two independent witnesses, especially Ms Shad’s evidence, was weighty evidence in support of Mr Sami Bitar’s account.

    29. Affidavit of Sami Bitar, 5/11/18, p 9.

61. For all these reasons, I conclude that the agreed purchase price for the property was $400,000, and that there was no discussion or agreement about a price of $575,000.

6. The other issues

62. It is not disputed that Mr Sami Bitar paid the amount of $400,000 in respect of the property. Mr Nabeh Bitar disavowed any claim to the $125,000 indicated to be owing by the 21 December agreement, apart from a claim for the unpaid purchase price. He did not assert that there was otherwise a debt owing by Mr Sami Bitar. Accordingly, it follows that Mr Sami Bitar has paid the agreed purchase price in full, and I should dismiss the claim of the plaintiff for $175,000.

63. In these circumstances, it is unnecessary for me to deal with the formalities defences relying upon ss 23C, 46, and 54A of the Conveyancing Act 1919 that were raised by Mr Sami Bitar.

64. The parties agreed that costs should follow the event.

7. Orders

65. Accordingly, the orders of this Court are:

1. Proceedings dismissed.

2. Plaintiff to pay the defendant's costs.

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Endnotes

Decision last updated: 03 December 2018