Al Dakhili v Al Kheurallah

[2023] NSWSC 47

Supreme Court

New South Wales

Medium Neutral Citation:

Al Dakhili v Al Kheurallah [2023] NSWSC 47

Hearing dates:

1 – 2 February 2023

Date of orders:

8 February 2023

Decision date:

08 February 2023

Jurisdiction:

Equity

Before:

Meek J

Decision:

Specific performance of deed granted - Consequential orders made

Catchwords:

DEED — Parties in dispute regarding operation of barbershop businesses in three locations — Plaintiff commences main proceedings and parties resolve differences by entering into a deed of settlement and release — Deed sets out particular provisions relating to each of the three businesses including particular provisions relating to assignment of a lease in respect of one of the businesses — Delay of one year between the date of the deed and the date plaintiff’s solicitors sent a letter to the landlord requesting their consent for an assignment of the relevant lease — Landlord specifies consent requirements which the plaintiff in turn seeks the first defendant’s cooperation in complying with — First defendant declines/fails to sign documentation — Plaintiff commences these proceedings seeking specific performance of the deed — First defendant incarcerated for part of the time of the proceedings and upon release then detained by immigration authorities — First defendant nonetheless legally represented for many directions hearings up to and including the time the matter is fixed for hearing — First defendant withdraws instructions to solicitors and is subsequently self-represented on several directions hearings and then released from detention — Some delay in first defendant seeking further legal representation — Belated application by first defendant on first day of the hearing to adjourn the hearing — Application refused and hearing proceeds

UNREPRESENTED LITIGANTS — Content of procedural fairness 

INTERPRETERS — First defendant — Born in Kuwait — Assisted by Iraqi-Arabic interpreter — Arrangements for interpreters at the hearing

CIVIL PROCEDURE — Hearings — Adjournment — Applicable principles — First defendant legally represented for many directions hearings up to and including time matter is fixed for hearing — First defendant withdraws instructions to solicitors and is subsequently self-represented on several directions hearings and released from detention — Some delay in first defendant seeking further legal representation — No disclosure of defence prior to hearing — Belated application to adjourn hearing refused

PRACTICE AND PROCEDURE — Principles regarding email communications with Judge’s chambers — Approach with self-represented litigants

DEED — Delivery — Requirements regarding delivery of deed

CONSTRUCTION & INTERPRETATION — Principles of construction regarding contracts applicable to deeds — Approach to construction aided by identifying possible competing constructions

EQUITY — Equitable remedies — Specific performance — Working out of orders for specific performance — Issues in respect of only one of three businesses litigated on application for specific performance — Effect of simmering un-litigated and unresolved other issues on order for specific performance — Whether order for specific performance in respect of litigated issue precludes the Court being able to subsequently address other un-litigated issues

EQUITY — Equitable remedies — Defences to specific performance – Delay 

EQUITY — Equitable remedies — Specific performance — Order for specific performance brings contract under the supervision of the Court — Specific performance ordered subject to proffered undertaking that plaintiff not raise any estoppel argument in the event that a subsequent claim was made by the first defendant under the deed

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Conveyancing Act1919 (NSW)

Corporations Act2001 (Cth)

Migration Act1958 (Cth)

Real Property Act1900 (NSW)

Retail Leases Act1994 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Adderley v Dixon (1824) 1 Sim & St 607; 57 ER 239

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

ANZ v Mio Amico Pty Ltd [2013] NSWSC 716

Australian Hardboards Ltd v Hudson Investment Group Limited (2007) 70 NSWLR 201; [2007] NSWCA 104

Bauskis v Liew [2013] NSWCA 297

Cong v Shen (No 3) [2021] NSWSC 947

Central Gold Coast Animal Care Facility Incorporated v Wyatt [2022] NSWSC 1373

Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438

D Capital 2 Pty Ltd v Western [2022] NSWSC 1064

Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207

Ford-Hunt v Raghbri Singh [1973] 1 WLR 738

Hamod v State of New South Wales [2011] NSWCA 375

Horn v GA & RG Horn Pty Ltd [2022] NSWSC 1519

JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600

Khattar v Hills Shoppingtown Pty Ltd (subject to a Deed of Company Arrangement) [2022] NSWSC 363

Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536

Lady Naas v Westminster Bank Ltd [1940] AC 366

Neylon v Dickens [1987] 1 NZLR 402

Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146

Quadrant Visual Communications Ltd v Hutchison Telephone (UK) Ltd [1993] BCLC 442

Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] VSC 467

Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5

Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124; [2003] WASCA 263

Turner v Bladin (1951) 82 CLR 463

Wardley Australia Ltd v McPharlin (1984) 3 BPR 9500

Willis & Bowring Mortgage Investment Ltd v Belramoul [2009] NSWSC 125

Xenos v Wickham (1866) LR 2 HL 296

Zhang v Zhang [2022] NSWSC 924

Texts Cited:

Halsbury’s Laws of Australia (online)

Seddon, Nicholas, Seddon on Deeds (2nd ed, Federation Press, 2022)

Young, Peter, Clyde Croft and Megan Smith, On Equity (2009, Thomson Reuters)

Category:

Principal judgment

Parties:

Najah Hasan Dakhal Al Dakhili (Plaintiff)
Mohammad Al Kheurallah (in person) (First Defendant)
Jawad Al Ghadheeb (Second Defendant)
Scissors Style Barber Pty Ltd (Third Defendant)

Representation:

Counsel:
M Klooster (Plaintiff)
Self-represented (First Defendant)

Solicitors:
One Law Group Pty Ltd (Plaintiff)
Self-represented (First Defendant)

File Number(s):

2022/123207

JUDGMENT

Introduction

1. HIS HONOUR: These proceedings relate to a specific performance claim arising out of a dispute involving a barbershop business at Hornsby (the Hornsby business).

2. The main matter that is in dispute between the parties involves whether a deed of settlement (deed) is binding and effective, and, if so, whether certain provisions of the deed should be specifically performed to give effect to the assignment of a lease of premises at Hornsby Westfield (the Hornsby lease), resignation of the first defendant as a director of a company and a transfer of shares in the company.

3. There are a number of defendants in the proceedings but only the first defendant (Mohammad Al Kheurallah) played any active role in the proceedings and for convenience I will refer to him as simply “the defendant”, and, where it is otherwise necessary, will distinguish him from the other defendants.

4. The plaintiff Najah Al Dakhili, (the plaintiff) and the defendant are the directors and shareholders of the third defendant, a company named Scissors Style Barber Pty Ltd ACN 622 906 736 (Scissors 1).

Outcome

5. In circumstances outlined below, on the hearing of the claim the defendant made an application to adjourn the hearing. I refused that application and proceeded with the hearing.

6. The defendant then participated in that hearing.

7. I have determined that:

1. the deed is binding and effective;

2. the provisions of the deed should be specifically performed and, in particular, the defendant should specifically perform his obligations to assign the Hornsby lease, subject to an undertaking proffered by the plaintiff (as noted below); and

3. the provisions of the deed regarding resignation of the defendant as a director of Scissors 1 and transfer of his shares in Scissors 1 are conditional upon payment of what is described below as the Blacktown sum, and the obligation to perform the resignation and transfer provisions has not arisen by reason of non-payment of the Blacktown sum (but without prejudice to such right, if any, to litigate other issues as noted in the undertaking).

Parties

8. The parties in the proceedings and some related parties had involvement in three barber shops at Blacktown, Hornsby and Carlingford.

9. Apart from the parties mentioned so far there are other persons or entities referred to in the evidence.

10. For convenience, and without any disrespect, I will refer to these other parties by reference to the names adopted in the form of deed of settlement between them, including in the case of individuals by reference to their first or given names.

11. The second defendant (Jawad) claims to have had some involvement in the Hornsby business.

12. The evidence refers to two other gentlemen, Hussain and Emad, and another company with a similar name to the third defendant, which company I will refer to as “Scissors 2”.

13. Emad is known by various names but his other names are not necessary to recite for the purposes of the judgment. Emad was, on the plaintiff’s case, a former partner in the Blacktown business: T 68.

14. The company Perpetual Trustees WA Limited is the landlord of the relevant shop premises in Hornsby in respect of the Hornsby business (Hornsby landlord). The Hornsby premises are in Westfield Hornsby, and I note that in some of the evidence, the landlord of the Hornsby premises is sometimes referred to as “Westfield”.

15. There is reference to a company N&J Barbershop Pty Ltd being a company which Jawad and the plaintiff incorporated on 12 March 2021 for the purpose of taking over the Hornsby lease.

16. It is described in the evidence as the “Former Assignee”.

17. At some point of time seemingly near the end of April 2022, Jawad and the plaintiff incorporated another entity KM Blacktown Pty Ltd (KMB) which they intend to be the new proposed assignee for the Hornsby lease, subject to the landlord’s approval.

18. As will become apparent below, although the issues brought by the plaintiff in the proceedings focused on the Hornsby lease, there were simmering, but un-litigated issues regarding the barbershop business in Blacktown (Blacktown business), in respect of premises within Westpoint Blacktown (Blacktown premises) leased from QIC Ltd (Blacktown landlord).

19. Angela Johnston is a retail manager at Westpoint Blacktown, being relevantly an agent or representative of the Blacktown landlord.

20. Some material in the proceedings pointed to the fact that the Blacktown premises were a particular shop within Westpoint Blacktown and that some arrangements have been made for the plaintiff to receive a lease of another shop within Westpoint Blacktown.

21. I have deliberately described what I have just stated loosely in terms of “material” rather than as an evidentiary finding.

22. That is to reinforce the fact that in these proceedings, other than as is strictly necessary to address the plaintiff’s claims for relief (specifically in respect of what I describe below as the resignation relief and share transfer relief), the simmering matters regarding issues in respect of the Blacktown business whilst providing some context for the defendant’s resistance to the relief sought by the plaintiff in the proceedings, have not been litigated in the hearing before me.

23. I expressly do not make general findings in respect of the parties’ rights regarding the Blacktown business.

Appearance and representation

Plaintiff and defendant

24. On the hearing, Mr Klooster of counsel appeared for the plaintiff. He is instructed by James Saba of One Law Group Pty Ltd (OLG) although the solicitor from OLG with the main carriage of the proceedings is Sina Shokouhi (Mr Shokouhi), and he instructed Mr Klooster in Court.

25. Mr Shokouhi also gave affidavit evidence which was read on the hearing of the matter.

26. The defendant, who at least at various earlier points of time has been legally represented for various purposes including for the purposes of these proceedings, appeared in person.

Other defendants

27. The second defendant, who was joined to the proceedings on 7 December 2022, filed a notice of appointment of solicitor naming Mr Saba as his solicitor on 12 December 2022.

28. On 16 December 2022, the second defendant further, by Mr Saba, filed a notice of submitting appearance.

29. Whilst I note that Mr Saba acts for both the plaintiff and the second defendant, in light of the submitting appearance, I say nothing further about the nicety of Mr Saba’s position in acting on both sides of the record.

30. No appearance has been filed on behalf of Scissors 1.

Interpreter

31. The defendant was born in Kuwait.

32. On several pre-trial directions hearings, the defendant, who was then in detention, required the assistance of an NAATI accredited Iraqi-Arabic interpreter.

33. I addressed the principles regarding the use of interpreters in Zhang v Zhang [2022] NSWSC 924 (Zhang v Zhang). In particular, I noted at [132(1)-(10)] the following:

(1)   There are various statutory provisions and general law which inform and explain the use of interpreters for court proceedings.

(2) Proceedings in the Supreme Court are to be conducted in English, subject to Div 3 Pt 31: r 31.57 UCPR; (see also Standard 2.1 ‘Recommended Standards for Courts’ RNSWICT Publication).

(3) By r 31.58(1) UCPR, if the Court is satisfied that a witness cannot understand and speak the English language sufficiently to enable the witness to understand, and to make an adequate reply to, questions that may be put to the witness, then the witness may give:

(a)   oral evidence in the other language that is interpreted into English by an interpreter in accordance with this Division, or

(b) evidence by an affidavit or statement in English that has been sight translated to the witness by an interpreter in accordance with r 31.62 UCPR.

(4)    At common law, whether an interpreter should be used is a matter for the discretion of the trial judge. The discretion will generally be exercised according to an assessment of whether the party seeking the use of an interpreter would without such use be placed at an unfair disadvantage: Aslan v Shehadie [1998] NSWCA 19 at 4-5 citing Dairy Farmers Co-operative Milk Co Ltd v Acquilina (1963) 109 CLR 458 at 464; [1963] HCA 59; Adamopoulos v Olympic Airways SA (1991) 25 NSWLR 75 at 78, 81, 84 (Adamopoulos).

(5)    The Evidence Act provides that a witness may give evidence about a fact through an interpreter unless the witness can understand and speak the English language sufficiently to enable the witness to understand, and to make an adequate reply to, questions that may be put about the fact: s 30 Evidence Act.

(6)    It is not entirely clear whether s 30 Evidence Act modifies the common law position, by affecting the discretionary nature of the use of an interpreter or the matters relevant to the discretion: Aslan v Shehadie at 5. However, Div 3 Pt 31 applies subject to the provisions of the Evidence Act: r 31.64 UCPR.

(7) The party calling a witness requiring an interpreter is responsible for engaging an interpreter who meets the standards and requirements imposed by Div 3 Pt 31: r 31.58(2) UCPR; see also Model Rule 1.4.

(8) If the Court is satisfied that a party cannot understand and speak the English language sufficiently to enable the party to understand and participate in the proceedings, the Court must permit the party to use an interpreter who meets the standards and requirements imposed by this Division so as to communicate with the court (but for no other purpose): r 31.58(3) UCPR; see also Model Rule 1.6.

(9)    The provision of the rules in this respect follows the general law in that ordinarily in civil proceedings the parties must provide any interpreter required for the purpose of proceedings. That is in contrast with the position in criminal proceedings where, if an accused person or a witness called by the accused requires an interpreter, that is arranged by the Court: New South Wales Crime Commission v Nguyen [2018] NSWSC 1858 at [4] per McCallum J (as her Honour then was); Model Rule 1.5.

(10)    The Court’s decision regarding permitting an interpreter is clearly made in the context of facilitating a fair trial: Adamopoulos at 80G-81A per Mahoney JA.

34. It seemed to me that for the purposes of ensuring a fair trial it was appropriate that the defendant have some degree of assistance with interpretation both on the application for adjournment and on the hearing itself.

35. I addressed the principles regarding who bears the responsibility concerning arrangements for interpreters in Zhang v Zhang at [120]-[173].

36. Ultimately, as was the case in Zhang v Zhang (see [116]), I did not need to make any determination as to directions regarding the engagement of an interpreter having regard to the fact that independent NAATI accredited interpreters, engaged by the plaintiff’s solicitors, were made available to assist not merely the plaintiff but also the defendant and the Court, in interpreting for necessary purposes from time to time during the hearing.

37. On the first day of the hearing, Mr Ayres Zaki, a NAATI accredited Iraqi-Arabic interpreter, who had previously attended the Court on a number of directions hearings, was sworn in, and present in Court to assist the defendant and the Court with interpretation.

38. On the second day, another NAATI accredited interpreter, Ms Malak Hijazi, who could speak all different dialects of Arabic language including Iraqi (T 50), assisted with interpretation.

39. For the most part, the defendant addressed me in English and appeared able to comprehend English, in my estimation, relatively well.

40. Nonetheless, to ensure that there was no aspect of the matter that he could not fairly and properly understand, I indicated to him that he should avail himself as he needed of the assistance of the interpreter.

41. There were clearly occasions on which the defendant needed such assistance.

Unrepresented litigants

42. In a context, detailed below, the defendant in or by early December 2022 withdrew his instructions from his then legal representatives. From that point, up to and including the hearing, the defendant was self-represented.

43. The approach of the Court in assisting an unrepresented litigant is properly understood and considered in the context of the Court’s obligation to ensure a fair trial according to law for all parties in the proceedings.

44. In Bauskis v Liew [2013] NSWCA 297, Gleeson JA (Beazley P – as her Excellency then was – and Barrett JA agreeing) addressed the question of the Court’s duty to unrepresented litigants in the context of procedural fairness: at [66]-[70]. His Honour referred to the decision of Beazley JA (as her Excellency then was) in Hamod v State of New South Wales [2011] NSWCA 375 at [309]-[316].

45. In summary, essentially the following principles were indicated:

1. The Court’s obligation is to give sufficient information to the self-represented litigant as to the practice and procedure of the Court to ensure that there is a fair trial to both parties, noting that the extent of information provided will vary depending on the circumstances of the case.

2. The duty of the trial judge in assisting the unrepresented litigant in this regard does not extend to advising the litigant as to how his rights should be exercised.

3. The trial judge must remain at all times an impartial adjudicator of the matter, measured against the touchstone of fairness.

46. As will appear from the transcript, I provided information to the defendant regarding the Court’s processes explaining amongst other things the order in which the hearing would proceed, the purpose of opening the proceedings, addressing evidence and objections, rights in relation to cross-examination and the purpose of cross-examination as well as re-examination and broadly speaking the purpose of final submissions.

46. I emphasised to the defendant on a number of occasions that I was not permitted to advise him as to how his rights should be exercised

47. Essentially, in covering those topics, my explanations drew upon what I have previously addressed in Zhang v Zhang at [180]-[182].

Evidence

49. Evidence was led in respect of the application for adjournment and also on the main hearing.

50. On the application for the adjournment, the defendant tendered and relied upon a bundle of emails which were marked Exhibit D1 and read an affidavit of the plaintiff affirmed 12 May 2022.

51. Mr Klooster relied upon matters appearing from the Court record which I set out below.

52. I drew to the attention of the parties the fact that there was on the Court file an affidavit by Jonty Alexander Player Simmons (Simmons Affidavit), a solicitor employed by Melbourne Law Studio (MLS).

53. The affidavit was affirmed on 14 September 2022. It indicates that MLS was on the record for the defendant.

54. I pause to note that it is not entirely clear what the phrase “on the record” means. There is a notice of appointment of solicitor by the defendant. However, at no stage has any notice of appearance been filed for or on behalf of the defendant.

55. The affidavit appears to have been prepared in the context, which I refer to in more detail below, of explaining and apologising to the Court for what at that point of time had been delay by the defendant in meeting the timetable imposed by the Court.

56. I gave the parties an opportunity to consider whether either of them wished me to consider the affidavit. In particular, I gave an opportunity to the defendant to have the contents of the affidavit translated to him by the interpreter. I was subsequently informed by the interpreter that the defendant was agreeable for me to consider the affidavit and that he agreed with its contents.

57. On the hearing of the claims of final relief the plaintiff read and relied upon an affidavit of himself affirmed on 28 April 2022 and an exhibit to that affidavit NHA-1 (which became Exhibit P1). The plaintiff also initially relied upon two affidavits of Mr Shokouhi affirmed on 4 July 2022 and 19 January 2023 respectively.

58. The plaintiff also relied upon the Joint Statement of Agreed Facts and Issues in Dispute which had been signed by the solicitor for the plaintiff and the defendant on 19 January 2023 (Joint Statement) (Exhibit P2).

59. The defendant, prior to the luncheon adjournment on the first day, indicated he wished to rely upon some material.

60. The defendant without any notice during that lunch adjournment arranged for an email and two attached documents to be sent to my Chambers.

61. The two attachments were a letter dated 17 January 2023 from the Office of the New South Wales Legal Services Commissioner and a form of complaint.

62. On resumption after the luncheon adjournment, I indicated to those present in Court, including Mr Klooster, that such documents had been received.

63. I noted that, ordinarily, emails should not be sent to the Judge’s Chambers without at least being copied to the other party in the matter and that, in the context of a hearing of the matter over which there is any dispute, emails should not be sent but rather if any party wishes to draw to the attention of the Court a matter, that should be formally done in open Court.

64. In this regard, I repeat what I stated in Central Gold Coast Animal Care Facility Incorporated v Wyatt [2022] NSWSC 1373 at [153]-[157] regarding email communications with Judges’ Chambers:

153. Generally there should be no communication with a judge's chambers in relation to any matter before the Court without the consent of all other active parties to the proceedings: Tugrul v Tarrants Financial Consultants Pty Limited (in liquidation) [No 2] [2013] NSWSC 1971 at [3] per Kunc J.

154. The reasons for that and the circumstances in which communications are and are not permissible are addressed by his Honour at [19]-[22]:

“19 Email has done away with what might be thought to have been the last practical barriers to quick and easy communication with a judge's chambers. There are many types of communication, including by email, with a judge's chambers which can assist the parties and the Court in achieving a just, cheap and quick resolution of proceedings (see s 56 of the Civil Procedure Act 2005 (NSW)). This can include the advance provision of material proposed to be relied upon in court.

20 However, the natural and well intentioned desire on the part of legal practitioners to send a communication to a judge's chambers copied to all the parties, which, at first blush, might appear to promote the efficient conduct of proceedings must always be subordinate to the cardinal consideration that the impartiality of the judge must never be compromised (in fact or appearance) by communications sent without either the knowledge or consent of all parties. As I have said in paragraph [17] above, sending such a communication with a disclosure of the other parties' lack of knowledge or lack of consent does not cure any impropriety.

21 As a practical matter, and consistently with the principles and rules to which I have referred, I summarise the position as follows. There should be no communication (written or oral) with a judge's chambers in connection with any proceedings before that judge without the prior knowledge and consent of all active parties to those proceedings. Particularly in relation to written communications, given the ubiquity and speed of emails, the precise terms of any proposed communication with a judge's chambers should be provided to the other parties for their consent. There are four exceptions to this:

(1) trivial matters of practice, procedure or administration (e.g. the start time or location of a matter, or whether the judge is robing);

(2) ex parte matters;

(3) where the communication responds to one from the judge's chambers or is authorised by an existing order or direction (e.g. for the filing of material physically or electronically with a judge's associate); and

(4) exceptional circumstances.

22 There are three other matters. First, any communication with a judge's chambers which falls into any of the categories set out in sub-paragraphs [21] (2), (3) and (4) above should expressly bring to the addressee associate's or tipstaff's attention the reason for the communication being sent without another parties' knowledge or consent. Second, where consent has been obtained, that fact should also be referred to in the communication. Third, all written communications with a judge's chambers in relation to proceedings should always be copied to the other parties.”

155. Specifically, absent consent, it is not an appropriate way to apply for an adjournment to send an email to a judge’s chambers email or to the Associate (even if copied to an opponent). Whilst a judge may treat that sort of communication as amounting to an application, there is no obligation on the judge to do so: Magjarraj v Asteron Life Limited [2010] NSWCA 207 per Hodgson JA at [5], Macfarlan JA at [7] agreeing (facsimile communications sent to primary judge).

156. A party cannot properly expect a judge to consider privately materials emailed to a judge’s chambers on a contested application, afortiori where the responding party has not been included in some of the communications allegedly because material is “highly confidential”.

157. Such a practice should not be engaged in. Notions of expediency however well-intentioned must, as noted by Kunc J, be subordinate to the cardinal consideration that the impartiality of the judge must never be compromised (in fact or appearance).

65. It is perhaps understandable that an unrepresented litigant might in the exigencies of a hearing, particularly in the context of an application seeking an adjournment where no evidence has been marshalled prior to making the application, seek to urgently provide material to the Court in a way which seems expedient to such litigant.

66. There is no presumption that everyone knows the law. However, ordinarily, ignorance of the law does not excuse its breach: e.g. Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536 at 546F per Hunt J.

67. The above-mentioned principles regarding the appropriate means of communication with judges are underpinned by considerations of justice not only being done but being seen to be done and by procedural fairness for all the parties in the matter.

68. The principles apply to all practitioners and litigants, including self-represented litigants.

69. In making that observation, it may be that a Judge in dealing with such a communication takes steps to explain the principles and their purpose to the matter to a self-represented litigant, in a way that would not ordinarily be necessary to explain by way of reminder to a legal practitioner.

70. The approach of the Court will self-evidently vary according to the particular circumstances of any different case.

71. Often, if there has been a transgression (especially a first-time instance) by a self-represented litigant of such principles, the matter can be addressed in a sensitive and low-key way to ensure the important principles regarding transparency and fairness are upheld whilst not embarrassing the litigant nor overly detracting from progression of the hearing.

72. In some instances (which was not this case), if a self-represented litigant repeatedly sends such impermissible communications to a Judge’s chambers, despite having been made aware on prior occasions of such principles, the approach of the Court to the matter may well differ to what I have described immediately above.

73. The defendant sought to read an affidavit of the plaintiff affirmed 12 May 2022, which affidavit was read and relevantly marked as MFI-1 (it being an affidavit in the “main proceedings” discussed below).

74. The defendant indicated that those materials concluded his evidence.

75. During Mr Klooster’s submissions, the defendant raised an issue regarding compliance with clause 3 of the deed (I will outline the details of the deed in more detail below). The defendant sought to reopen his case.

76. I permitted the defendant to reopen his case. Having regard to the time of day, I adjourned the matter to the following morning to enable further evidence to be adduced.

77. The following morning, the defendant tendered a photocopy of a cheque which became Exhibit D3 and a trust account receipt and text message which became Exhibit D4.

78. The plaintiff on the reopening read an affidavit of Mr Shokouhi affirmed 1 February 2023 (Shokouhi February Affidavit) and tendered an email from Angela Johnston and a copy of a tenant reconciliation statement (and invoice) (Exhibit P3).

79. The purpose of the tender was to demonstrate that the tenant reconciliation statement, which had been an annexure to the Shokouhi February Affidavit, had in fact been received from the landlord and to demonstrate that a payment made by the defendant to his solicitors of the sum of $32,000 on 4 November 2020 (Exhibit D3) had not (according to the plaintiff) been received by the Blacktown landlord until 11 November 2020.

80. The defendant sought to tender two documents comprising three emails to demonstrate that the plaintiff was renting premises in Westpoint Blacktown. I rejected the tender as the emails seemed to me to go beyond the limited purpose of reopening. The emails were marked MFI-2: T 54-55. Finally, during the course of submissions, the defendant asserted that a new lease had been obtained for one of the businesses in Blacktown.

81. The plaintiff had progressed the case on the basis that the Blacktown lease had not been granted: Joint Statement of Agreed Facts at paragraph 12. Mr Shokouhi had given evidence that the Blacktown shop’s lease had expired on 30 November 2020 and that the landlord eventually took possession of the business: CB 77 [17].

82. The defendant sought to reopen again to tender a number of emails (dated 22 February 2021, 10 June 2021 and 22 June 2021) for the purpose of demonstrating that a new lease had been granted in respect of the Blacktown business. I rejected the tender and had the emails marked MFI-3: T 73. The materials did seem to suggest that some arrangements have been negotiated, and possibly consummated, for the plaintiff to lease premises at Westpoint Blacktown.

83. Mr Klooster objected to the material noting that it referred to a Shop 2011 rather than the shop which the landlord’s tenant reconciliation statement demonstrated was the relevant Blacktown premises being Shop 2003A.

84. He submitted that whatever new lease had been granted, it was not for the Blacktown premises the subject of the deed. Further, he indicated that had the material been served in a timely fashion and in chief his client would have taken steps to attempt to meet the material and essentially would be unable to meet the material now noting that this was the final day of the hearing.

85. I rejected the material on the basis that there was prejudice to the plaintiff.

Background

86. The adduced evidence is somewhat limited in describing the background to the proceedings and relationships between the parties.

87. However, it is not, other than as noted below, necessary for the purposes of the proceedings to make particular findings as to the background facts.

88. I set out details which appear from the evidence. Much of the detail appears from documents or evidence in respect of which there was no cross-examination.

89. Further, the evidence in that regard was relatively undisputed and I find the details below as facts, subject to any particular qualification noted by me.

Hornsby lease

90. On 25 September 2018, Scissors 1 entered into a lease of shop premises at Hornsby Westfield (Hornsby premises) as lessee with the Hornsby landlord.

91. The lease was for a term of seven years commencing on 12 November 2018 and due to terminate on 11 November 2025.

92. The lease provides, inter alia, for the defendant to be a Guarantor of Scissors 1’s obligations under the lease.

93. The lease was executed as a deed by the Hornsby landlord and also relevantly by Scissors 1 with each of the defendant and plaintiff signing the lease in their capacities as “Director/Secretary” pursuant to s 127 of the Corporations Act2001 (Cth) (Corporations Act).

94. Further, the defendant signed the deed in his capacity as Guarantor with his signature being witnessed by Fatema Alam.

95. The lease contains provisions in respect of transfer of the lease (assignment).

96. Clauses 21.1 and 21.2 are in the following form:

21.    TRANSFERS OF LEASE

21.1   The Lessee will not sub let. assign, share or part with possession of the Premises, and will not allow the Premises to be sub let, assigned, shared or put into possession of any other corporation or person and will not mortgage or charge this Lease or any estate or interest in it. However, the Lessee may transfer the whole of this Lease on the following conditions precedent:

(a)    the lessee has complied with the procedure set out in Section 41 of the Act:

(b)   the Lessee proves to the reasonable satisfaction of the Lessor that the proposed transferee has financial resources and retailing skills equal to or better than the Lessee;

(c)   the Lessee obtains the execution by the transferee and by the Lessee of a deed to which the lessor will be a party in such form as the Lessor reasonably approves and prepares and in which:

(i)    there are repealed by the transferee with the Lessor such of the Lessee's covenants contained in this Lease as are reasonably required by the Lessor; and

(ii)    there is an acknowledgment by the Lessee that the Lessee will not by any transfer or by the Lessor's consent to it be released from any of its obligations under the provisions of this Lease, except where pursuant to the Act the Lessee is released from liability;

(d)   the Lessee will pay the reasonable costs of the preparation, execution and stamping of the deed referred to in clause 21.1(c) and will give the Lessor a duly executed and stamped copy of such deed;

(e)   where the transferee is a corporation (except a corporation the voting shares of which are listed on the Australian Securities Exchange) the Lessee obtains the execution of a guarantee of the Lessee's covenants on terms reasonably acceptable to the Lessor by guarantors reasonably acceptable to the Lessor and delivers the guarantee to the Lessor:

(f)   the Lessee pays the Lessor's reasonable costs, charges and expenses of and incidental to any reasonably necessary enquiries which may be made by or on behalf of the Lessor as to the respectability, solvency, responsibility, stature, experience and capability of any proposed transferee;

(g)   the transferee gives to the Lessor or procures the Lessee to give to the Lessor where the Lessor so requires a Bank Guarantee or supplemental Bank Guarantee for such sum as the Lessor reasonably determines as security for the performance by the transferee of all the covenants obligations and provisions on the part of the Lessee contained in this Lease. The Bank Guarantee and supplemental Bank Guarantee (if any) will be held by the Lessor on the terms and conditions set out in clause 11.13. Where clause 11.13 has been struck out it will for the purposes or any transfer, be deemed to be incorporated in this Lease: and

(h)   the transferee pays to the Lessor one (1) months Minimum Rent then payable under this Lease in advance. If the date of transfer is not the first day of the Month then the one (1) months Minimum Rent will be for the period commencing on the first day of the Month immediately following the date or transfer and the provisions or clause 11 will be modified accordingly.

Change in Ownership of Shares in Corporation

21.2    If the Lessee is a corporation (except a corporation whose voting shares are listed on the Australian Securities Exchange) and there is a proposed change in Control of the Lessee or any Holding Company of the Lessee at any time then:

(a)    the Lessee will so notify the Lessor; and

(b)   the Lessee must obtain the Lessor's approval (such approval not to be unreasonably withheld) to the proposed change; and

(c)   the Lessee must comply with the provisions of clause 21.1 (except for subclauses (c), (d) and (h)) as if the person or persons acquiring Control were transferees of the Lessee (but such change of Control shall not for the purposes of the Act be deemed to be an assignment of lease).

97. The reference to s 41 of the Act in clause 21.1 is a reference to the provisions of the Retail Leases Act1994 (NSW).

98. In general terms, clause 21.1 deals with assignment where a new entity is to become the lessee. Clause 21.2 deals with a form of deemed assignment situation in which there is a change in the share structure or control of the lessee, in which case consent is required: T 23.

Dispute in main proceedings

99. The plaintiff, defendant, Jawad, Emad and Hussain had disputes regarding the three businesses.

100. On 29 June 2020, the plaintiff commenced the main proceedings against a number of defendants relating to partnership issues in respect of the three barbershop businesses: CB 12.

101. Relevantly, the defendant was the first named defendant and there were five other defendants including two companies: CB 12.

102. Subsequently the plaintiff filed a statement of claim in the main proceedings.

103. On 27 October 2020 (according to Mr Klooster’s submissions), a notice of motion filed (at some earlier point of time) by the plaintiff seeking the appointment of receivers and managers to the Blacktown business was listed for hearing before Williams J: [2.3]. The deed refers to another application for “vacation” (possibly of that hearing but unidentified by the evidence): CB 20 Recital F. It is unnecessary to make specific findings of what was actually listed on that day.

104. On 28 October 2020, the parties reached an agreement to resolve the proceedings and on the same day the defendant, Hussain, the plaintiff, Jawad, Emad, Scissors 1 and Scissors 2 entered into the deed (described as a “Deed of Settlement and Release”).

99. The proceedings did not conclude on that day and in fact the proceedings are still on foot, I was informed, pending the outcome of these proceedings: T 22.

100. On 4 November 2020, the defendant in the afternoon (on or around 4:09 PM) corresponded with his solicitor Firas Hammoudi of Circle Bridge Legal (CBL) regarding payment of a sum of $32,000 referred to in clause 3a of the deed (which was due to be made by 4 PM on 4 November 2020 to the landlord).

101. The defendant’s communication by text indicated that he would seek to make a $20,000 payment on that day (it being the daily transfer limit for his bank) and at midnight arrange to transfer the remaining $12,000 or alternatively proposed to make a cheque payment to the CBL’s bank account the following day.

102. Mr Hammoudi was in conference at the time and indicated that he would call the defendant back. The evidence does not disclose precisely what happened. However, on 4 November 2020, the defendant caused Bankwest to issue a bank cheque in the sum of $32,000 payable to CBL Law Practice Trust Account: Exhibit D3.

103. On 5 November 2020, CBL issued to the defendant a trust account receipt for the sum of $32,000 being “[o]n account of rent for the Blacktown shop”.

104. On 11 November 2020, (according to the tenant reconciliation spreadsheet (Exhibit P3)) the landlord received the $32,000 sum. Again, whilst there is no express detail regarding preparation of the reconciliation statement, I infer from the statement that was the date that those monies were received.

105. At some point the defendant was incarcerated because of unrelated criminal proceedings. The evidence discloses differing dates as to when that occurred. It might have been as early as on or from 1 July 2020 – according to Exhibit D1. On the other hand, it might have occurred later on or about 17 December 2020: Simmons Affidavit at [8].

106. Whilst the precise dating is obviously important to the defendant, it is not necessary for me to make a specific finding as to precisely when incarceration occurred. I accept that the defendant was incarcerated from at least mid to late December 2020.

107. On 9 February 2021, OLG caused a payment of $50,000 to be made to the Blacktown landlord, being the payment referable to the provision in clause 3b of the deed: Shokouhi February Affidavit at [5].

108. On 3 February 2021, Angela Johnston provided Mr Shokouhi with the latest tenant reconciliation statement for the Blacktown shop and February invoice. The statement showed an amount due of $80,687.47 including a deferred component of $7,883.90. The amount immediately due and payable was $72,773.57: Exhibit P3.

Delay in application for assignment of Hornsby lease

115. There was a delay of one year between the date of the deed and the date when the plaintiff’s solicitors sent a letter to the Hornsby landlord requesting their consent for an assignment of the Hornsby lease.

116. The plaintiff gives evidence which addresses that delay.

117. It is not necessary to go into all the details regarding the delay other than to note that at least part of the delay according to the plaintiff arose from issues in relation to the Blacktown lease and the COVID-19 pandemic.

118. In or around June 2021, Mr Shokouhi received correspondence from the defendant’s (then) legal representatives CBL advising that they no longer acted for him.

119. On 10 June 2021, Mr Shokouhi had some contact with the defendant.

120. From the end of June 2021 until October 2021, there was a further COVID-19 lockdown (at least to some degree).

Application for assignment of lease

121. On 28 October 2021, the plaintiff’s solicitors sent to the Hornsby landlord a letter requesting their consent for an assignment of the Hornsby lease: CB 49.

122. The letter attached a directors’ authority signed by the plaintiff and the defendant. The defendant’s legal representatives were described in the document as being Abbas Jacob Lawyers Pty Ltd (AJL) with Abbas Jacob being described as the contact person: CB 51.

123. On 5 November 2021, Mr Shokouhi received a response from Indira Bundalo (Ms Bundalo), the Administration Manager of Westfield Hornsby.

124. The email outlined certain requirements for the Hornsby landlord to consent to the assignment of the lease and other matters which on the Hornsby landlord’s part were considered necessary for assessment of the proposed assignee: CB 52-54.

125. The email attached two separate forms headed “Application for Consent to Assignment of Lease”, one to be completed by each of the lessee and the proposed assignee: CB 55-60.

126. On 2 December 2021, Mr Shokouhi sent the plaintiff the forms to complete.

127. On 7 December 2021, Mr Shokouhi corresponded with the defendant’s newly appointed solicitors AJL noting that the forms had been received and were being completed. The letter also addressed the issue of payment of the “Hornsby sum” under the deed.

128. The letter stated in part:

Payment of the Hornsby Sum

I confirm we hold approximately $50,000 in trust.

I also spoke with the Third Defendant's wife who also told me that their former solicitor holds $20,000 in trust.

In terms of the remaining $25,000, we note cl 13(e) of the Deed provided that it be paid to your client in 8 equal monthly instalments starting on 1 Jan 2021 (subject to consent to the assignment). Through earlier correspondence, we believe it was sufficiently demonstrated to you that your client's obdurate resistance to co-operating & approaching the Hornsby landlords in a mutually agreed way led to the extensive delays in this matter and no payment ever being made for Hornsby.

Whilst our client reserves its right against your client for its clear repudiation of the terms of the Deed as it concerned the Hornsby shop, we are instructed to propose that the remaining $25,000 be paid within six (6) months from the date a Deed of Consent & Assignment of Lease is entered into between our client and the landlord ('Consent Date').

We note this proposal constitutes new terms under which our respective clients can agree to the payment of the $25,000 as the terms of the previous cl 13(e) were discharged by frustration as a a [sic] result of your client's refusal to co-operate from essentially 2 Jan 2021 when payments were no longer possible to be made in accordance with that agreed schedule (MacAndrew v Chapple 1866 LRD 1 CP 643).

Please seek instructions and revert.

Regards,

Sina Shokouhi

129. On 17 December 2021, Mr Shokouhi emailed AJL requesting that the defendant sign the Application for Consent to Assignment form as a director of Scissors 1 (the current tenant). The letter noted that AJL should advise if they were unable to obtain the defendant’s signature due to his incarceration in which case his attorney would need to sign.

130. The defendant’s signature was not forthcoming.

131. Between 21 December 2021 and 25 February 2022 various requests were made for the defendant to sign: CB 66-72.

132. On 24 March 2022, there was a listing before this Court in the main proceedings.

Proceedings for specific performance

133. On 29 April 2022, these proceedings were commenced, with the plaintiff filing a summons naming the defendant as a party.

134. The plaintiff states that by the time of the commencement of these proceedings neither he nor his solicitors had received any correspondence from the defendant or his lawyers – relevantly in respect of signing the consent to assignment for the Hornsby lease.

135. In May 2022, in the main proceedings, the plaintiff obtained leave of the Court to issue subpoenas to the ANZ bank.

136. The basis for obtaining of leave is said to have been a concern over unauthorised transfers of funds from the business bank account of Scissors 1 controlled by the plaintiff and the defendant: CB 75 [7], 77 [16].

137. On 24 May 2022, the ANZ bank produced documentation. The documentation revealed a number of matters.

138. On 11 May 2022 a sum of $109,000 had been withdrawn (Mr Shokouhi says without authorisation) from Scissors 1’s bank account to Scissors 2’s bank account, Scissors 2 being an entity, according to Mr Shokouhi, controlled by the defendant: CB 75-76.

139. Mr Shokouhi indicates that the screenshot of a “related customer screen” shows three individuals who are authorised third parties to transact on the Scissors 2 bank account being the defendant, Maida Talib Al Khirallah and Sinin Al Khirallah, the Seventh and Eighth Defendants in the main proceedings: CB 76-77, 89.

140. On 11-13 May 2022, four payments totalling $56,660 were withdrawn from the Scissors 2 bank account and paid to Criminal Law Group (CLG): CB 76, 84-86.

141. On 17 May 2022, a payment of $8,000 was made to AJL: CB 76, 87.

142. Mr Shokouhi asserts that such payments were to lawyers engaged by the defendant. It appears to be a reasonable, and arguably irresistible, inference. The defendant did not object to the assertions made by Mr Shokouhi in the affidavit. Further, Mr Shokouhi was not cross-examined by the defendant.

143. On or after 24 May 2022, seemingly with the benefit of the materials produced by the ANZ bank, the plaintiff made a complaint to ANZ regarding the withdrawals.

144. In late May 2022 and early June 2022, it appears that the plaintiff was informed that without an order of the Court any freeze on the account would not be extended beyond a short period: CB 77-78.

Claim for specific performance and revised relief

145. The initial summons sought an order that the deed be specifically performed and that the defendant carry out certain steps necessary to assign the Hornsby lease referred to in clause 10 of the deed (assignment relief).

146. There were other consequential and ancillary orders sought.

147. On 5 July 2022, the plaintiff filed an amended summons which, apart from the assignment relief, also sought orders that the defendant resign as a director of Scissors 1 (resignation relief).

148. The catalyst for the amendment to the summons related to the alleged unauthorised taking of the sum of $109,000 from Scissors 1’s bank account which, according to Mr Shokouhi, the plaintiff believes was done by the defendant or someone on his behalf: CB 77 [16].

149. On 7 December 2022, consequent upon an order I made on that occasion, the plaintiff filed a further amended summons naming Jawad and Scissors 1 as the second and third defendants respectively.

150. The summons also sought an order that the defendant transfer his shareholding in Scissors 1 (being 50 ordinary class shares) to the plaintiff (share transfer relief).

151. The assignment relief sought is that the defendant execute the following documents:

1. Application for Consent to Assignment of Lease – to be completed by the Lessee;

2. 01TL Land Registry form for assignment of lease;

3. A deed of assignment and consent of landlord form; and

4. A Client Authorisation form.

152. Further, the assignment relief sought includes an order that the defendant create a workspace via an electronic lodgement network operator (i.e. PEXA) to enable the registration of an assignment of lease.

153. As noted above, there was tendered a Joint Statement. I confirmed with the defendant during the hearing that he had in fact signed the Joint Statement.

154. The Joint Statement of Facts indicates that the defendant had recently agreed to sign the resolution of directors of Scissors 1, a resignation as a director and a share transfer form: paragraph 9(a).

155. As Mr Klooster opened the case initially, he indicated that he did not seek what I have described as the resignation relief.

156. However, following a brief adjournment to enable Mr Klooster to clarify with the defendant whether the defendant was still agreeable to signing the resolution of directors, resignation and share transfer forms, it was indicated to me that the defendant refused to sign those documents.

157. Accordingly, notwithstanding that part of the Joint Statement, Mr Klooster indicated that he would additionally seek the relief in paragraph 3 of the further amended summons.

158. Subsequently during the hearing, the defendant’s position vacillated in relation to the resignation relief and share transfer relief.

159. Ultimately, I considered that the only safe course was to proceed on the basis that the defendant disputed that relief.

160. I did ask Mr Klooster, in light of the fact that clause 8 of the deed (which deals with signatories of bank accounts) appeared to be connected with clause 7, whether Mr Klooster sought to additionally seek specific performance of clause 8.

161. Initially he indicated that he would. However, subsequently, as I noted that it was not formally part of the relief and further amended summons, he sought to clarify the position.

162. As I understand it, if the plaintiff were to receive the resignation of the defendant as director of Scissors 1 and a transfer of the shares, the work that might be necessary to change signatories on the bank account could be separately attended to by the plaintiff without seeking that relief from the Court.

163. In that context, Mr Klooster indicated that he did not seek to specifically perform the obligation in clause 8 of the deed.

Directions listings

164. Relevant to the application for the adjournment were details of listings of the matter before the Court, who had appeared on those listings and what directions were made.

165. I note those relevant details below.

166. On 24 May 2022, the matter was listed for a first directions hearing. The defendant was given an opportunity until 7 June 2022 to serve evidence.

167. On about 10 June 2022, MLS was instructed by the defendant. Mr Simmons indicates that the defendant is not fluent in English, having arrived in Australia from Iraq on a protection Visa. The defendant was assisted by a niece who advised Mr Simmons that the defendant required an Iraqi-Arabic interpreter to provide comprehensive instructions.

168. On 20 June 2022, a notice of appointment of solicitor was filed with the Court by which the defendant appointed Ines Brcic (Ms Brcic) of MLS as his solicitor.

169. On 27 June 2022, the matter was listed on the second occasion this time before Registrar Walton. The defendant was given until 9 August to serve evidence.

170. Between approximately 1-8 August 2022, Mr Simmons made various attempts to contact the defendant and experienced difficulties with contact via JustCONNECT.

171. On 9 August 2022, Mr Simmons and a junior solicitor attended upon the defendant but were unable to obtain comprehensive instructions to support the drafting of documents to be filed with the Court on that date.

172. Mr Simmons indicates that part of the difficulties involved the fact that the interpreter was unable to attend the conference due to connectivity issues and the South Coast Correctional Facility had not provided all the documents they had sent for the defendant’s attention.

173. On about 11 August 2022, Mr Simmons contacted OLG by way of email and advised them of the difficulties being confronted in obtaining comprehensive instructions.

174. On or about 12 August 2022, despite the above-mentioned communication, Mr Simmons states the plaintiff sought to have the matter listed for trial.

175. On or about 17 August 2022, the defendant’s niece advised Mr Simmons that the defendant had successfully appealed his convictions.

176. On or about 18 August 2022, Mr Simmons wrote to the plaintiff’s solicitors proposing a revised timetable.

177. Between 17-19 August 2022, the Court on behalf of Registrar Walton sent “multiple messages” through the messaging system on the Online Court to Mr Simmons. Mr Simmons indicates that he did not receive any message from the plaintiff’s solicitor until seemingly about 22 August 2022.

178. On about 22 or 23 August 2022, the directions hearing which was listed was vacated.

179. On or about 25 August 2022, Mr Simmons had surgery and did not return to work until 5 September 2022.

180. Further, on or about 25 August 2022, MLG was advised by the defendant’s niece that on or about 23 August 2022, the defendant, upon his release from incarceration at the South Coast Correctional Facility, was immediately taken into immigration detention by the Australian Border Force.

181. Mr Simmons indicates that the defendant’s Visa, immediately following his convictions in 2018, had been cancelled on a “character ground” by a delegate authorised by the Federal Minister for Immigration, Citizenship and Multicultural Affairs (Minister). However, the Minister had not revoked the cancellation of the Visa.

182. On 31 August 2022, the matter was listed before the Registrar on a fourth occasion and there was a direction made for the defendant’s solicitors to file an affidavit explaining delay by 14 September 2022.

183. On 14 September 2022, Mr Simmons affirmed his affidavit.

184. On 16 September 2022, the matter was listed before the Registrar on a fifth occasion and orders were made for the defendant to file evidence by 23 September 2022.

185. On or about 8 September 2022, Mr Simmons attended an AVL conference organised by the Villawood Detention Centre with the defendant alongside an accredited Iraqi-Arabic interpreter, counsel and Ms Brcic, the principal of MLS.

186. On 24 August 2022, the defendant was detained pursuant to s 189 of the Migration Act1958 (Cth): Exhibit D1.

187. On 19 October 2022, the matter came back on the sixth occasion before Senior Deputy Registrar Hedge and was adjourned until 2 November 2022.

188. On 1 November 2022, the matter was listed on the seventh occasion and adjourned for another week until 10 November 2022.

189. On 9 November 2022 (the eighth listing), the matter was adjourned until 24 November 2022.

190. On 23 November 2022, the matter was set down for hearing before myself to commence on 1 February 2022, with an estimate of two days.

Pre-trial directions

191. On 7 December 2022, the matter was listed before me for pre-trial directions. At that stage the defendant was still in Villawood Detention Centre.

192. Mr E Vuu of counsel attended the listing. Mr Vuu was instructed by MLS. He informed me that his solicitors’ instructions had been withdrawn by the defendant. He indicated that the matter had had a chequered history and believed that his instructing solicitors were the third set of solicitors (that had acted for the defendant).

193. Mr Klooster on that occasion noted that the matter had been before the Equity Registrar on numerous directions hearings and indicated that at some point a representative on behalf of the defendant had raised the prospect of or foreshadowed a cross-claim although no such cross-claim had ever eventuated.

194. I asked Mr Vuu whether he had appeared for the defendant at the time that the matter was listed for hearing. He indicated that he thought the solicitors had done so through the Online Court.

195. I further requested whether the defendant or anyone on his behalf had articulated what the “defence” was to the claim. Mr Klooster indicated that the plaintiff took the view that there was no defence and certainly that they had not been informed of any defence.

196. Mr Klooster noted that at the time there was mention of a cross-claim there was a suggestion by the then legal representative for the defendant that the deed signed did not have the authority to bind the defendant in these proceedings noting “but that is the only articulated defence, if one wants to call it a defence”: T 4 (7 December 2022).

197. I raised on that occasion a question regarding parties and also whether clause 10 of the deed raised joint and several obligations or several obligations or a joint obligation.

198. I gave leave to the plaintiff to file and serve a further amended summons joining Jawad and Scissors 1 as second and third defendants respectively.

199. I directed that the further amended summons be served personally on the defendant by 9 December 2022 and that the matter be stood over to 16 December 2022 before me. Being mindful of the fact that the defendant was in the detention centre, I ordered that an AVL link be made available to him for that listing.

200. On 16 December 2022, the matter was listed. However, no interpreter was available and, accordingly, I stood the matter over further to 19 December 2022 with directions for another AVL link to be sent to the defendant.

191. On 19 December 2022, the matter was listed at 10 AM. My staff attempted to make contact with the detention centre via AVL for the defendant to appear that way. However, that had not been able to be achieved. Eventually, at approximately 10:45 AM, the defendant appeared on the AVL, and an Iraqi-Arabic interpreter was sworn in.

192. I attempted to understand what the issues were in relation to the plaintiff’s claim. I informed the defendant through the interpreter (Mr Zaki) that the summons sought specific performance of certain obligations in the deed and that the plaintiff wanted the defendant’s cooperation to do a number of things including consenting to the assignment of the lease, resigning as a director of Scissors 1 and transferring shares.

193. The defendant indicated that there was “[n]o problem” and appeared to indicate that he was “not objecting” to the relief being sought. In light of that, I gave the parties an opportunity to see if the matter could be resolved by signing appropriate forms although making it clear that I was not directing the defendant to do that.

194. I stood the matter over to 16 January 2023 to receive an update of the matter, noting that if the matter was able to be resolved orders could be made, and also noting that if the matter was not resolved, I would need to make orders on that day to finalise the preparation of the matter for hearing to commence on 1 February 2023.

195. On or about 26 December 2022, the defendant was released from the immigration detention: Exhibit D1.

196. On 27 December 2022, the defendant emailed Mr Shokouhi from his personal email address requesting the provision of documents for him to sign.

197. On 30 December 2022, the defendant emailed Mr Shokouhi referring to a request apparently made by email on 23 December 2022 for Mr Shokouhi to provide “the documents regarding the contracts for Hornsby Shop in order for me to progress”: CB 102, 105.

198. I pause to note that the email did not assert any basis as to why the relief sought by the plaintiff should not be provided.

199. On 10 January 2023, the day following Mr Shokouhi’s return from a Christmas New Year vacation, he emailed the defendant five documents being relevantly: Application for Consent to Assignment of Lease; Transfer of Lease 01TL form; resolution of directors; resignation of director and a share transfer form: CB 102, 106-113.

200. On 12 January 2023, Mr Shokouhi says he called the defendant as he had not heard from him and had a conversation to the following effect:

11    On Thursday, 12 January 2023, I called the First Defendant as I had not heard from him in relation to my email 2 days prior. During the phone call, we had a conversation to the following effect:

Me:    'Hi Mohammad, I want to know if you received my email I sent on the 10^th and whether you have any questions?'

First Defendant:    'Yes I got your email, but I am not signing the document because I don't have to transfer the lease to another company. The contract only says I have to get out of the company'

Me:    'No that's not correct. You have to co-operate so we can get the landlord's consent for an assignment of lease. My client wants to assign the lease to a different company that he controls with Jawad'

First Defendant:    'No I am not signing for a new company. I will only resign as director'

Me:    'You will be removed as director also. This is the effect of documents 3, 4 and 5 in my email. But you will still need to sign the assignment of lease application form because you are still a director of Scissor Style Barber and you have a duty to co-operate under the deed'

First Defendant:    'No, I am not signing that document. I also want a contract to say Najah is not going to sue me or claim cost against me. Send me that contract and I will look at it otherwise I am going to explain everything to the Judge'

Me:    'If you sign these documents, we will not have to go to a hearing for the substantive dispute and everyone will save lots of money and time'

First Defendant:    'I don't care about the money. You either fix the documents or we go to Court'

Me:    'Okay, well unfortunately we are not going to achieve anything here. We will tell the Court on this coming Monday that you refused to sign the documents'.

211. According to Mr Shokouhi’s version of the conversation, which I accept, the defendant’s objection to signing the documents is based on the fact that he asserts that the contract only says that he has to get out of the company but does not require him to transfer the lease to another company. The defendant apparently asserted that he would only resign as a director.

212. The conversation indicates that additionally the defendant wanted a “contract” to say that the plaintiff was not going to sue him or claim costs against him.

213. On 13 January 2023, my Chambers received an email from Mr Shokouhi noting that the defendant had been released from detention (said to be as of 27 December 2022 – though evidence tendered by the defendant suggests it was 26 December 2022).

214. Mr Shokouhi had spoken with the defendant the prior day and informed him of the upcoming pre-trial directions and would send him another email confirming the time and place of attendance.

215. On 16 January 2023, the matter was listed before me for directions. Mr Zaki was sworn in and he interpreted in the matter. I was informed that settlement negotiations had not progressed.

216. Accordingly, I made directions to finalise the matter for hearing including directions in relation to cooperation in respect of an agreed list of facts and issues (as noted above).

217. The orders included an opportunity, albeit brief, for the defendant to put on any affidavit evidence and to provide a list of affidavits intended to be relied upon by Thursday, 19 January 2023.

218. Other directions were made for lodging of objections, preparation of the court book and the provision of submissions and authorities. I stood the matter over for hearing and gave liberty to the parties to restore on two days’ notice by email correspondence to my Associate.

219. On 19 January 2023, the defendant made a request to extend the time for evidence or more particularly under order 2 regarding the provision of notification of affidavits to be relied upon, such extension being requested up to and including 4 PM on 20 January 2023.

220. My Associate sent to the parties an email on my behalf noting that if there was consent to the extension of time that I would make such an order but if any extension was opposed would not make any variation unless there was a formal application to vary the order supported by appropriate evidence.

221. In the early evening of 19 January 2023, Mr Shokouhi informed my Associate that the plaintiff consented to the extension of time but reserved a right to reply and in respect of any “prejudice” that might arise in respect of material served in circumstances where the evidence closed.

222. I was provided with the plaintiff's materials as directed including an indication that Mr Shokouhi was waiting for the defendant, whom he described as receiving assistance from a family friend, before finalising the Joint Statement.

223. By 31 January 2023, the plaintiff had effectively complied with the Court’s directions, but no materials had been received from the defendant, other than the Joint Statement.

224. On 31 January 2023, the defendant sent email correspondence to my Chambers requesting a further extension of time.

225. My Associate responded to the parties on my behalf indicating that unless there was any consent any application for extension would need to be made in open court.

Adjournment application

226. On 1 February 2023, at the listing of this matter for hearing, the defendant applied for an adjournment of the matter, essentially to vacate the hearing dates.

Principles

227. The Court has statutory power to adjourn proceedings pursuant to s 66 of the Civil Procedure Act 2005 (NSW) (CPA).

228. The Court also has an incidental power to adjourn the hearing of any matter in appropriate circumstances.

229. The power of adjournment is to be exercised in accordance with the overriding purpose of the CPA and rules, to facilitate the just quick and cheap resolution of the real issues in the proceedings (s 56 CPA) and in accordance with the dictates of justice described in s 58 CPA.

230. For the purposes of determining what the dictates of justice are in a particular case, the Court must have regard to the provisions in ss 56 and 57 CPA and may have regard to the matters set out in s 58(2)(b) CPA to the extent which the Court considers them relevant.

231. The provisions of s 58(2)(b) CPA are as follows:

(2) For the purpose of determining what are the dictates of justice in a particular case, the court–

…

(b) may have regard to the following matters to the extent to which it considers them relevant–

(i) the degree of difficulty or complexity to which the issues in the proceedings give rise,

(ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities,

(iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties,

(iv) the degree to which the respective parties have fulfilled their duties under section 56 (3),

(v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings,

(vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction,

(vii) such other matters as the court considers relevant in the circumstances of the case.

232. The principles discussed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 are often applied analogously to applications for adjournment: ANZ v Mio Amico Pty Ltd [2013] NSWSC 716 at [58] per Davies J.

233. In this respect, the Court considers not merely the interests of the parties to the immediate proceedings but also the effect on other litigants in the Court who are or may be prejudiced by adjournment applications necessitating further appointment of hearing dates which have already been fixed.

234. As was observed by Schmidt AJ in Willis & Bowring Mortgage Investment Ltd v Belramoul [2009] NSWSC 125 at [8], adjournment applications are frequently made, and it is not uncommon that they arise when there has been a change in legal representation. It is well-settled that whether an adjournment should be granted in such a situation depends upon what is just in the particular circumstances.

Basis for application

235. The essential basis for the defendant’s application for an adjournment was to obtain legal representation and he indicated that he had insufficient time to do so.

236. Exhibit D1, being the bundle of emails which the defendant tendered, relevantly demonstrated that he had applied on 25 January 2023 to Progressive Legal Pty Ltd to seek assistance with the hearing and that on 31 January 2023 that firm declined to assist. The defendant additionally relied upon the affidavit of the plaintiff affirmed on 12 May 2022 (an affidavit previously used in the main proceedings in support of an application for injunctive relief).

237. The defendant drew my attention to short minutes of order dated 2 July 2020 signed apparently by number of solicitors on behalf of the parties. The orders were made by Lindsay J.

238. The solicitor’s name was identified to me by Mr Klooster as being (on his instructions) Dickran Yakenian who was at the time working for the firm Legal Edge Australia and who appeared in Court on that day (2 July 2020): T 9.

239. The defendant asserted that at the time the short minutes of order were signed he was incarcerated. There was some vagueness in the defendant’s assertion as to whether he had instructed the solicitor or not.

240. The defendant essentially indicated that Mr Yakenian was a lawyer from the firm representing the defendant regarding his criminal law matters and not a lawyer from the firm representing the defendant in relation to his business law matters.

241. The defendant indicated that, as at 1 July 2020 (the day before the short minutes of order were signed), whatever work was to be done by the criminal lawyers had been completed by that time.

242. I understood the defendant’s assertion to be essentially that Mr Yakenian (a lawyer from the criminal law firm) had no authority to act for the defendant in relation to “business” matters and allegedly no authority to sign such short minutes of order on the defendant’s behalf.

243. That is a serious allegation. However, Mr Klooster indicated for his part it was not necessary for me to resolve that issue as the claim for the relief in the proceedings did not rely upon that document.

244. Mr Klooster indicated that a lawyer, Sabir Amad being a representative of AJL, appeared before the Court on the first four listings (24 May 2022, 27 June 2022, 27 August 2022 and 31 August 2022) and thereafter a solicitor Ms Tremayne Symss from MLS appeared on the remaining occasions before the Registrars until MLS ceased to act on 6 December 2022: T 11.

245. I sought to confirm from the defendant whether he disputed that those two legal representatives had appeared on his behalf. He did not dispute that: T 12.

246. Mr Firas Hammoudi of the firm CBL appeared or acted for the defendant up to July 2020: T 14-15.

247. The defendant asserted that CBL or Mr Hammoudi had some documents since July 2020 which the defendant had wanted and that he had made a complaint about Mr Hammoudi: T 14-15.

248. I confirmed with the defendant that he agreed that apart from the evidence provided on the adjournment application on the first day of the hearing that from the commencement of the hearing up until then he had not provided any evidence to the Court in respect of the claims for relief: T 15.

249. I asked the defendant whether he agreed that at no stage since the proceedings had commenced had he or anyone representing him informed the Court of his defence to the claim up to the time of the hearing: T 15. His response was that he did not know “because I was in gaol”: T 15.

250. I heard submissions from Mr Klooster and also the defendant. The defendant essentially submitted that he had only got out of the detention centre on 24 December 2022 (noting that is a little at odds with the date indicated above being 26 December). Further, as it was a holiday and the New Year he had not had time to obtain representation: T 17.

251. Further, he indicated that when he was in the correctional facility, his opportunity to speak with his lawyers was limited to ten minutes on the phone and one hour on a video call being one hour a week.

252. Mr Klooster had earlier recited the interlocutory history of the matter.

253. In particular, he drew my attention to the evidence of Mr Simmons to the effect that since the engagement of counsel in Sydney and being able to attend a further audio-visual conference with the defendant assisted by an interpreter, his office (MLS) had been able to obtain fulsome instructions: Simmons Affidavit at [48].

Reasons for refusal of adjournment

254. Having considered the evidence and heard the submissions I refused the application for adjournment. My essential reasons for refusing the application were as follows:

1. I accept that the defendant had had some communication difficulties with his solicitors during the time that he was incarcerated and in detention.

2. However, it appeared that the defendant had been represented on at least all occasions the matter had been before the Court, at least between 24 May 2022 up to and including 24 November 2022 when the matter was set down for hearing.

3. None of the directions that the Court had made (leaving aside the solicitor’s affidavit explaining non-compliance for directions) had been complied with in terms of the defendant putting on substantive evidence addressing the relief sought by the plaintiff in the proceedings.

4. No defence had been indicated to the Court to the substantive claim for relief since the proceedings had been commenced (leaving aside reference to an issue in respect of clause 5 of the deed in the Joint Statement of Issues signed on 19 January 2023, which I will address below).

5. Albeit that the defendant had been released from detention on 26 December 2022 (or according to his assertion perhaps two days earlier on 24 December 2022) and that late December-early January was described by the defendant as a “holiday and New Year” period (T 17), it appears the first approach made by the defendant to obtain representation was on or about 25 January 2023, a week prior to the hearing.

6. The defendant seemingly provided fulsome instructions to Mr Simmons or some representatives at his firm at least by 15 September 2022 (or perhaps by 8 September 2022).

255. The defendant, to my mind, had sufficient opportunity to instruct lawyers of his choosing yet, for reasons that are not explained, at no stage prior to the commencement of the hearing had ever articulated an arguable defence to the claim (leaving aside the belated incorporation of a reference to an issue regarding clause 5 of the deed in the Joint Statement dated 19 January 2023).

256. In addition to the abovementioned considerations, I accept there would be some general prejudice in the form of delay to the plaintiff if the proceedings were to be adjourned.

257. Overall, having regard to the dictates of justice and the purpose of the CPA and rules to facilitate the just, quick and cheap resolution of the real issues in the proceedings, I refused the adjournment.

Hearing

258. Following the refusal of the adjournment, I proceeded with the hearing.

Issues

259. The Joint Statement of Issues in Exhibit P2 specifies five issues for the Court’s consideration as follows:

1.   Whether clauses 10 and 13, properly construed requires the First Defendant to sign the Assignment Documents.

2.    Whether the First Defendant is in breach of clauses 10 and 13 of the Deed.

3.   In the event the First Defendant is in breach of clauses 10 and 13 of the Deed, whether specific performance should be granted as a matter of discretion.

4.   The First Defendant says that the Deed is unenforceable or should be set aside as the Plaintiff did not comply with Clause 5.

5.   Whether the deed is binding and enforceable.

260. Mr Klooster, in his preliminary written submissions dated 27 January 2023 and on the first day at the hearing during submissions (T 41), framed the issues in a slightly different way, though not materially different from the above description.

261. Essentially the issues to be addressed are as follows:

1. Is there a binding agreement?

2. Is the deed unenforceable or should the deed be set aside by reason of alleged non-compliance with clause 5?

3. Do clauses 10 and 13 of the deed properly construed require the defendant to sign the assignment documents?

4. Is the defendant in breach of clauses 10 and 13 of the deed?

5. Does clause 7 of the deed require the defendant to resign from Scissors 1 and execute a share transfer?

6. Should specific performance be granted as a matter of discretion?

262. The principal issues with respect to the proceedings related to assignment of the lease in respect of the Hornsby business.

263. Although the defendant did not file any defence or cross-claim raising specific issues in relation to the Blacktown business, there were clearly simmering issues from the defendant’s perspective in relation to the Blacktown business and lease which appeared to underpin his resistance to cooperation in respect of assignment of the Hornsby lease.

264. Such simmering issues were raised a number of times during the hearing as the defendant sought to explain his position in the case.

265. That is least in part understandable because, as will be noted below, the resignation relief and share transfer relief founded on clause 7 of the deed is contained in a part of the deed which deals with the Blacktown business and clause 7, at least in its terms, connects reference to the obligation of the defendant to resign from Scissors 1 and transfer shares to “timing” to payment of the Blacktown sum.

“Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable.”

That passage also well illustrates that although reference is made to “admissible” and “receivable”, what is meant is the use of such evidence.

33. In Zoobury at [120]-[122], extracted below, Parker J explains the relevance of identifying a specific construction issue that necessitates referring to evidence of prior negotiations.

[120] In support of this argument, counsel relied on the Court of Appeal decision in Cherry v Steele-Park (2017) 96 NSWLR 548. That case concerned the interpretation of a guarantee given by the directors of a company which was purchasing land. The guarantee was given as part of a variation agreement under which the time for completion was extended and the company was to make an additional payment on top of the purchase price under the original contract. The question was whether the guarantee covered the whole of the company’s obligations or only the obligation to make the additional payment.

[121] Correspondence between the parties in the course of negotiations suggested that the commercial purpose of the guarantee had been to secure the company’s obligation to make the additional payment; this had been the only obligation mentioned in the correspondence. Counsel for the director guarantors sought to rely on the correspondence to support their argument on construction. White JA considered that the correspondence was inadmissible on the construction issue. But Leeming JA, with whom Gleeson JA agreed, held that it was, although in the end that did not overcome the language of the agreement, which was held to extend to all of the company’s obligations.

[122] In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, Mason J referred to what he described as a “difficulty” with using evidence of prior negotiations to construe a commercial contract (at 352):

Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.

Analysis of Leeming JA’s judgment shows that his Honour did not intend to cast any doubt on the principles stated by Mason J in this passage. At [66] the judgment actually quoted the first three sentences of the passage. In his reasoning at [60]-[67] Leeming JA pointed out that, consistently with those principles, in some circumstances a communication between the parties can itself be admissible as part of the matrix of fact where it shows the “aim” or “genesis” of the transaction; his Honour considered that the communications in question fell into this class (or at least the initial proposal did, and there was no argument that subsequent communications should be treated differently).

There may be a question about how far the receipt of evidence of negotiations between the parties goes when it is said to be relevant because it discloses the “aim” or “genesis” of the ultimate contract. If the negotiations were oral, there may be a factual contest about what was said. Even where the negotiations were in writing, there may be an argument that it is necessary to refer to further matters of background, or earlier dealings between the parties, to put them into proper context. It might be thought that these are precisely the sort of collateral enquiries that the parol evidence was designed to exclude. But there was no need to consider this in Cherry (note, however, the comments at [67]). As will be seen, I have not found it necessary to do so in the present case either.

As Leeming JA pointed out in Cherry at [89]-[90], where a party seeks to have evidence admitted as part of the matrix of fact for the purposes of construction, that party ought to be able, readily and precisely, to identify how that evidence bears on the construction issue. It follows that it is critical to identify what the construction issue is.

356. The rules that apply to the interpretation of deeds are the same as those which apply to contracts: Nicholas Seddon, Seddon on Deeds (2nd ed, Federation Press, 2022) 217-218; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 at [9]-[10] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Cong v Shen (No 3) [2021] NSWSC 947 at [1187] per Ward CJ in Eq (as her Honour then was).

357. Clause 10 of the deed requires the parties to cooperate and take all necessary steps to obtain the consent of the landlord under clause 21 of the Hornsby lease.

358. In particular, Mr Klooster referred to the aspect of clause 13 which entitles the defendant to receive a sum of $95,000 (Hornsby sum) on condition that Jawad or the plaintiff or their nominees receive consent from the Hornsby landlord.

359. Mr Klooster states that KMB is the relevant nominee within the meaning of clause 13: T 27.

360. I accept that submission.

361. He further states that the obligation has not arisen at this stage and, accordingly, need not be considered by the Court.

362. Whilst clause 13 forms part of the overall deed and is in that sense to be considered under the principles of construing a deed, it does not seem to me that it bears materially on the proper construction of clause 10.

363. The wording in clause 10 (“all necessary steps”) begs the question of, practically speaking, what is required to achieve the consent of the Hornsby landlord.

364. I have set out above the correspondence with the landlord and the landlord’s response.

365. The ordinary English meaning of “necessary” connotes something that is “requisite” or “indispensable”: Macquarie Dictionary, online ed.

366. The email from Ms Bundalo (the Administration Manager of Westfield Hornsby) to Mr Shokouhi dated 5 November 2021 addresses matters necessary for the lessor to provide its consent to the proposed assignment of the lease.

367. The matters set out included:

1. The prospective assignee has the financial capacity and the experience and/or expertise necessary to carry on the business presently carried on. The landlord requested completion of the forms attached to that email (referred to above);

2. The proposed assignee is required to have an interview with the lessor as part of the lessor’s assessment;

3. The lessee and prospective assignee must execute a deed in a form reasonably approved by the lessor;

4. If the prospective assignee is a company the lessor requires provision of personal guarantees;

5. The lessor requires payment of an administration fee, provision of security and payment of one month’s rent; and

6. Other provisions regarding insurances are also addressed by the email.

368. Paragraph 2 of the further amended summons, as noted above, seeks an order that the defendant execute four documents and create a PEXA workspace to enable the registration of an assignment of lease.

369. One of those four documents is the document titled “Application for Consent to Assignment of Lease – to be completed by the lessee” (Application for Consent). The document is referred to in the email by Ms Bundalo. I accept that it is essential.

370. The second document is the Land Registry form 01TL. Although not referred to in the letter by Ms Bundalo, I accept that it is a necessary document as it is clear that the title to the property is Torrens Title held under the Real Property Act1900 (NSW).

371. The third document is a Deed of Assignment and Consent of Landlord form. This appears to be the document referred to in the letter from Ms Bundalo. It appears unsurprising that there would be such a form of deed of assignment and consent.

372. The fourth document which it is sought that the defendant sign is a Client Authorisation form. There is no particular document referred to in the evidence that identifies what this is.

373. The Transfer of Lease form 01TL is certainly one of the documents provided by Mr Shokouhi to the defendant under cover of the email dated 10 January 2023: see CB 106, 110.

374. I am satisfied that the first three documents (Application for Consent; Land Registry Transfer of Lease form 01TL; and Deed of Assignment) are necessary documents to be signed.

375. In the event that an order for specific performance is made, part of the working out of that order could, I consider, include some identification of what is required by means of a “Client Authorisation form”. Further, there is no particular evidence indicating that the landlord requires (or the plaintiff has agreed to) assignment of the lease in an electronic conveyancing transaction.

376. Whilst it would hardly surprise me that such an arrangement might be convenient or perhaps assumed or expected, there is simply no detail before me at least at the moment addressing that part of the relief. I considered, in some detail, electronic conveyancing and the provisions of PEXA in my decision in D Capital 2 Pty Ltd v Western [2022] NSWSC 1064 (D Capital 2 Pty Ltd v Western).

377. I would not decline specific performance merely because there is no specific evidence regarding that at this stage. However, for there to be a particular order regarding the defendant to create a workspace, there would need to be some evidence in respect of that.

378. The defendant did not address any specific submissions in relation to the above-mentioned matters.

379. As indicated above, I am satisfied that at least the first three documents identified in subparagraphs 2(a)-(c) of the further amended summons are documents the signing of which are necessary steps in order to obtain the consent of the landlord.

Issue 4 – Is the defendant in breach of clauses 10 and 13 of the deed?

380. There is no real dispute in the proceedings that the defendant has not signed at least the first three documents referred to in subparagraphs 2(a)-(c) of the further amended summons.

381. I have recited above the correspondence dating from 7 December 2021 had as between Mr Shokouhi and the defendant and those acting upon his behalf in relation to requests to sign, in particular, the application for consent to assignment.

382. I am satisfied that the defendant is in breach of clause 10 of the deed.

383. The defendant did not seriously contend otherwise.

384. The Joint Statement of Issues frames an issue in terms of whether the defendant is in breach of clause 13 of the deed. It is not entirely clear to me how that is put as being a real issue in the proceedings.

385. Mr Klooster’s submission was that with respect to clause 13 there could be no breach in circumstances where the obligation to make a payment under that clause has not arisen yet as the consent of the landlord has not been obtained.

386. I do not propose to dwell on this issue any length.

387. In a real sense it is premature.

Issue 5 – Does clause 7 require the defendant to resign from Scissors 1 and execute a share transfer?

388. Of all the issues in the proceedings this issue was, in a sense, the most vexed.

389. Yet in a practical sense the plaintiff, as I understand it, was somewhat ambivalent as to whether the relief identified in paragraphs 3 and 3A of the further amended summons was truly necessary in a practical sense for the plaintiff’s purposes.

390. As I understand it, if the relief sought in respect of the defendant signing the resolution of directors, resignation of directors and a transfer of shares was not granted, the plaintiff would not be stymied from operating the Hornsby business in the event that the defendant did sign necessary documents to assign the Hornsby lease.

391. Mr Klooster frankly conceded on the first day of the hearing that commercially it makes little difference to the plaintiff whether or not those forms are signed on the basis that the new entity (KMB) will run the Hornsby business in the event that an assignment is effected: T 43.

392. Mr Klooster, in addressing submissions in relation to clause 7 of the deed, accepted that construction of that clause is somewhat more challenging than clauses 10 and 13 which he described as stand-alone obligations.

393. That is because clause 7 is introduced by wording which connects the statement that the defendant is to resign as a director of Scissors 1 and to transfer his shares to the plaintiff or his nominee by reference to a time “[w]ithin 14 days from the date of payment of the Blacktown Sum”.

394. A very important part of construing written materials and, in particular, contracts and deeds is the starting point of identifying the possible meanings the words chosen by the parties can bear: Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 (Fitness First Australia Pty Ltd v Fenshaw) at [32] per Leeming JA (McColl and Payne JJA agreeing).

395. Normally, though not exclusively, it is only once possible available meanings are identified and there is consideration of text, context and purpose, that informed provisional views and, ultimately, conclusions can be derived regarding the meaning.

396. Sometimes, the parties by dint of adducing limited evidence restrict the scope of contextual considerations which may be considered by the Court in construing the relevant text in question. Making that observation is not necessarily a criticism of parties.

397. Sometimes, there may be very little known about the surrounding circumstances or context of the text and the absence of such materials in such cases has little to do with forensic choices made by a party or parties to place material before the Court.

398. Rather, it may have more to do with the fact that in the outworking of life, little or no information may be recorded about circumstances surrounding the contract, deed or text in question or if recorded such recording may be no longer available because it is or has been unable to be located, lost or destroyed.

399. In Fitness First Australia Pty Ltd v Fenshaw, Leeming JA noted that the parties had chosen to restrict the scope of the contextual considerations which may be considered by the Court. His Honour simply observed that that decision should be respected, not least because of considerations of fairness: at [32].

400. Mr Klooster submitted that the question of construction, which was a difficult one, involved determining whether or not the obligation under clause 7 is conditional upon payment of the Blacktown sum being made: T 43.

401. He submitted that if I found that it was conditional then the plaintiff’s specific performance case, with respect to the relief in paragraphs 3 and 3A of the further amended summons, could not succeed: T 43.

402. He submitted that the resignation and share transfer provisions are not conditional upon payment of the Blacktown sum: T 43. When I asked him how that worked, he diverted attention away from the wording of clause 7 and directed my attention to the Joint Statement: T 43.

403. The argument was not developed at that point because attention was further diverted then away to clause 3 of the deed which then became the springboard for the defendant’s application to reopen evidence in the matter.

404. Clause 7 sits within a group of seven clauses (clauses 3-9) under the heading “[t]he Blacktown Business” in the deed.

405. One possible interpretation is that the requirement for the defendant to resign as a director and transfer his shares in Scissors 1 is conditional upon payment of the Blacktown sum.

406. That construction appears from the terms of clause 7 itself and so is an available possibility and, on the face of it, not an absurd or unreasonable possibility.

407. The other possibility is that is that it is not conditional upon payment of the Blacktown sum.

408. The first possibility of it being conditional is to be considered by looking how the clause fits in relation to the clauses around it.

409. Although clause 3 does not expressly indicate that the payments of $32,000 and $50,000 are expressly referable to outstanding rent, that much may perhaps be inferred by clause 4.

410. The trust account receipt from CBL (Exhibit D4) indicates that $32,000 was received on account of rent for Blacktown.

411. Whilst there might be some issue as to whether the receipt is a matter which could be used in respect of construction of the deed, neither party seriously contended that clause 3 did not relate to outstanding rent.

412. I consider that clauses 3 and 4 could properly be said to be addressing outstanding rent and matters in relation to the Blacktown lease up to the time of the deed.

413. Clauses 5-8, on the other hand, have a connectedness about them.

414. Clause 5 refers to an obligation to cooperate to obtain a new lease for the Blacktown “shop”.

415. Clause 6 is premised upon the condition that a new lease is obtained and provides for payment of the Blacktown sum.

416. Clause 7 is introduced by reference to timing for payment of the Blacktown sum and goes on to provide for the defendant to resign as a director and transfer his shares in Scissors 1 to the plaintiff or his nominee.

417. Finally, clause 8 provides for the defendant to remove himself as a signatory of bank accounts of Scissors 1 within a timing from the date of resignation in clause 7.

418. On one view, those clauses provide for a series of cascading obligations which are conditional upon satisfaction of the preceding obligation.

419. I consider that that way of viewing the matter provides a reasonable construction and has a degree of logical coherence to it.

420. The argument in favour of the resignation and transfer obligations in clause 7 not being connected to or conditional on payment of the Blacktown sum is somewhat more challenging.

421. One possibility of looking at it is that if the deed was supposed to facilitate the disentanglement of the parties from their respective business disputes, it might seem unlikely that the removal of the defendant from involvement in Scissors 1 should be tied to payment of the Blacktown sum in circumstances where the decision as to whether the lease would be renewed or not was in the hands of a third party, namely, the Blacktown landlord.

422. Further, in understanding the commercial context for what was to occur, as noted above, I, in testing possible constructions, raised with Mr Klooster the possibility that the parties in settling their differences under the deed attributed certain values to outcomes but took the risk that no lease would be obtained in relation to the Blacktown premises.

423. I then posited that one way of looking at clause 7 is that if the Blacktown sum never becomes payable then one might simply give no effect to the words “[w]ithin 14 days from the date of the payment of the Blacktown Sum”. That would then leave at large the timing for the defendant to resign as a director of Scissors 1 and to transfer all of his shares in Scissors 1 to the plaintiff or his nominee: T 61.

388. There are principles in relation to implication of terms where a contract or agreement provides either no period or an indefinite period for certain matters to take place. It may be that a term can be implied that it will take place within a reasonable time. For consideration of issues in a somewhat different context see Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438.

389. In considering the matter in submissions from Mr Klooster, I asked why it was that the obligation to resign as a director and transfer shares had in clause 7 been “connected” to the payment of the Blacktown sum: T 61.

390. Mr Klooster frankly indicated that the only explanation he had, which he accepted was unsatisfactory, was “bad drafting”: T 61.

391. His only argument which made any reasonable sense was to come back to questions of what he described as the commercial reality of the matter.

392. However, he tied this to the fact that the Blacktown store was not trading and had not traded for a long time so that Scissors 1 was dormant and the only asset of value which his client pursued was the Hornsby business which required the assignment of the lease.

393. That commercial context, whilst conceptually possible, was not really undergirded by any direct evidence in the matter other than the fact that the lease for the Blacktown shop had expired and that the landlord had taken possession of the premises.

394. Mr Klooster accepted that, notwithstanding the commercial reality, it was difficult to escape the introductory words in clause 7 and he accepted that it appeared on a reading of those words with their ordinary meaning that the defendant is only to relinquish his interest as a director and shareholder in Scissors 1 on payment of the Blacktown sum.

395. Another matter of significance which was not addressed in submissions but appears from the terms of the deed is that under clause 16 it is provided that clauses relating to the payment of the Blacktown sum and the Hornsby sum are essential terms of the deed.

396. It may be, as Mr Klooster says, that the parties in the context of settling their differences did not think through all the implications and the drafting of provisions was, to use a more neutral expression, less than ideal.

397. Nonetheless, in the circumstances, I am not persuaded that the resignation and share transfer provisions of clause 7 are not conditional upon payment of the Blacktown sum. Accordingly, as is accepted by Mr Klooster, the relief in paragraphs 3 and 3A of the further amended summons is not, at least at this point of time, susceptible to a particular order.

398. I have addressed above the cooperation issue arising out of clause 5 which was belatedly raised as an issue on or about 19 January 2023.

399. I have also dealt with the issues arising out of clause 7 in a limited way as litigated by the parties.

400. I have done that because of how the parties chose themselves to frame issues in the proceedings.

401. As is evident from my discussions with the defendant and Mr Klooster in Court on the second day of the hearing, prior to Mr Klooster proffering to the Court the undertaking of the plaintiff recorded above, what I have determined regarding the resignation and transfer obligations under clause 7 is not intended to preclude the possibility that the defendant may wish to, at some point of time, assert that events have occurred which enliven an obligation to pay the Blacktown sum under clause 6 potentially making relevant the resignation and transfer obligations under clause 7.

Issue 6 – Should specific performance be granted?

Discretionary considerations

438. Mr Klooster submitted that specific performance is a discretionary remedy, and the discretion cannot be fettered by the contract citing e.g. Quadrant Visual Communications Ltd v Hutchison Telephone (UK) Ltd [1993] BCLC 442 at 451 per Stocker LJ (Butler-Sloss LJ and Sir George Waller agreeing).

439. He submitted that it was necessary to establish that damages are not an adequate remedy citing Adderley v Dixon (1824) 1 Sim & St 607; 57 ER 239; Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 at 151 per Barwick CJ (Kitto J agreeing).

440. Although Mr Klooster accepted that there had not been strict compliance by the plaintiff with the provisions of clause 3(b) of the deed in relation to payment of the sum of $50,000 for the arrears of the Blacktown rent, he indicated that that payment had subsequently been made and that there was no existing breach at the time of the commencement of the proceedings or even at the time of the hearing by the plaintiff of his obligations under the deed.

441. Understandably, the defendant was unable to assist me in relation to the legal position in respect of principles of specific performance.

442. Some of the factors relevant to the exercise of granting specific performance were identified by Connock J in Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] VSC 467 at [566]:

The requirements and discretionary factors taken into account when considering whether or not a decree of specific performance ought to be made depend upon the circumstances of a particular case, although a number of them are frequently raised or in issue. They include:

(a) whether there is an enforceable agreement;

(b) whether there has been a breach of the agreement;

(c) whether any issue of impossibility of performance arises;

(d) whether damages are an adequate remedy;

(e) whether the plaintiff has demonstrated, at least at the time when any order is to be made, it is ready, willing and able to perform all other substantial obligations;

(f) whether there is mutuality in the sense that it is possible to award the remedy against both parties;

(g) the plaintiff’s conduct and whether the plaintiff comes to equity with clean hands;

(h) hardship to the defendant of awarding specific performance;

(i) the involvement or impact from third parties;

(j) laches or delay (footnotes omitted).

443. Mr Klooster addressed a number of other matters which bear upon the question of whether specific performance might be awarded or denied.

444. He asserted that the plaintiff was ready willing and able to perform his obligations under the deed and in fact had done so since its execution.

445. Although the case was not pleaded, it may be noted that under rules of Court if it is a condition precedent necessary for a party’s case in any pleading that the party is ready and willing, or was at all material times ready and willing, to perform an obligation, a statement to the effect that the condition has been satisfied is taken to be implied in the party’s pleading: r 14.11(d) Uniform Civil Procedure Rules 2005 (NSW).

446. The defendant did not assert that the plaintiff is not ready and willing to perform obligations under the deed. No such assertion was put to the plaintiff in cross-examination.

447. Other discretionary issues such as mutuality and delay whilst mentioned by Mr Klooster were done so in a context in which he submitted that no such issues precluded relief.

448. The defendant’s main or material basis for not cooperating in relation to the assignment harked back to issues in relation to the Blacktown business and non-payment of the Blacktown sum: T 67.

449. For reasons, as noted above, those matters were not brought forward in any fairly disclosed way prior to the commencement of the hearing and were not litigated as part of the hearing.

450. I am satisfied that in the circumstances specific performance in relation to the defendant’s obligation to take all necessary steps to obtain the consent of the landlord at clause 10 of the deed should be granted.

Delay

451. Having regard to the fact that there was a delay of one year between the date of the deed and the date when the plaintiff’s solicitors sent a letter to the Hornsby landlord requesting their consent for an assignment of the Hornsby lease and a further six months delay before commencing these proceedings, it is appropriate to reflect on whether any such delay precludes a claim for specific performance.

452. I considered principles regarding delay in an application for specific performance in D Capital 2 Pty Ltd v Western at [932]-[940].

453. I stated as follows:

932. Quite apart from the discretionary consideration of unclean hands, specific performance may be denied because of delay: e.g. Lamshed v Lamshed (1963) 109 CLR 440 at 452–6; [1963] HCA 60 per Kitto J.

933. The degree of promptness required depends upon the nature of the case and all its circumstances. Thus, Kitto J indicated there is little point in citing cases for the purpose of comparing the period of delay in the case before the court with delay which is being considered fatal to claims for specific performance in circumstances in other cases: at 453.

934. It is clear that the bare fact of delay is not enough: at 453.

935. His Honour said that equity will not allow the possibility of its making such a degree to be held unfairly long over the head of the party who denies the existence of the contract and asserts a right to deal with property as his own. This is tied back to being a particular application of the general principle of laches: at 453.

936. In the context of matters which may preclude relief of specific performance Spry refers to delay in the context of laches. It is said that laches is established when two conditions are fulfilled. First, there must be unreasonable delay in the commencement or prosecution of proceedings for specific performance. Secondly, in all the circumstances the consequences of the delay must render the grant of relief unjust: I C F Spry, The Principles of Equitable Remedies (9^th ed, Lawbook Co, 2014) at 233.

937. Here there is no delay in the commencement of proceedings.

938. Spry specifically deals with the concept of prejudice to the parties opposing the specific performance or third parties.

939. There is not really in the authorities any satisfactory comprehensive description of the combinations of circumstances which will enable a Court to precisely determine whether gross delay or laches ought preclude equitable relief. In Orr v Ford (1989) 167 CLR 316 at 340-341; [1989] HCA 4 Deane J expressed this sentiment as follows:

“One searches in vain in the judgments in the above-mentioned cases (and, for that matter, elsewhere) for any satisfactory comprehensive description of the combinations of circumstances which will suffice to attract the label “gross” for the purposes of that qualification. That is not surprising since any attempt to specify exhaustively those combinations of circumstances would be likely to introduce an inappropriately arbitrary and technical element into an area of equity doctrine which has traditionally been kept free of arbitrary and technical constraints. On balance, the preferable approach is to treat the phrase “gross laches” as an intentionally imprecise one which involves not merely considerations of the period of the relevant delay but which invokes the traditional notions of equity and good conscience which are the general determinants of whether a plaintiff should be refused relief by reason of laches in the circumstances of a particular case.”

940. Deane J continued at 341:

“The ultimate test effectively remains that enunciated by Lord Selborne LC (not, as is often said, Sir Barnes Peacock (see Errata)), speaking for the Privy Council, in Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 239–40 , namely, whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable “to place him if the remedy were afterwards to be asserted”: see Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1279 , and also, per Rich J, Hourigan at 629–30.”

454. As I have noted above, the plaintiff gives evidence which addresses that delay. At least part of the delay, according to the plaintiff, arose from issues in relation to the Blacktown lease and the COVID-19 pandemic.

455. The defendant did not specifically complain of the delay in the period of time up to the commencement of these proceedings. The defendant did not point to any aspect of the matter in which the plaintiff could be said to have benefited from the delay.

456. Whilst the delay following the entry into the deed is regrettable, it does not seem to me that there has been any prejudicial delay by the plaintiff in commencing the proceedings.

457. The plaintiff has not delayed the prosecution of the proceedings but has, in my estimation, relatively promptly prosecuted the proceedings. As is evident from my recitation of the facts regarding the various directions hearings above, the delay arising from that has been delay on the defendant’s part rather than the plaintiff’s part.

458. Overall, I am not persuaded that there is any basis to preclude an order for specific performance arising from any matters of delay.

Conclusion

Specific performance

459. I determine that an order in terms of paragraph 1 of the further amended summons that the deed be specifically performed is appropriate.

460. I further determine that execution of the documents in paragraphs 2(a)-(c) of the further amended summons is necessary to effect assignment of the lease and that the defendant should be directed to execute those documents within seven days of the making of formal orders.

461. For the reasons I have noted above, I make no particular order in relation to the relief in paragraphs 2(d) and 2(e) of the further amended summons relating to the defendant executing a Client Authorisation form and creating a PEXA workspace.

462. Nonetheless, as noted, I would be amenable to receiving further evidence addressing the necessity of those requirements.

463. I decline at this stage to make any order in relation to paragraphs 3 and 3A of the further amended summons to the effect that the defendant sign a resignation of director document and transfer of shares for the reasons set out above.

Default ancillary orders

464. Order 4 of the further amended summons was a form of default order.

465. In Horn v GA & RG Horn Pty Ltd [2022] NSWSC 1519, I addressed the making of default orders empowering a Registrar to execute necessary documents in the event that a party might not do so if ordered to do so. I noted at [1284]-[1288] the following:

1284. The plaintiffs seek an order empowering the Registrar of the Court to execute the necessary documents for the transfer should Barbara fail to do so.

1285. The Court has power in the event that a person does not comply with an order directing the person to execute any conveyance, contract or other document to order that such document be executed by “such person as the court may nominate for that purpose”: s 94(1)(a) CPA.

1286. If any such order is made it is common practice of the Court to appoint the Registrar of the Court to be “such person”: e.g. Hill v Dunn [2019] NSWSC 419 at [53]-[55].

1287. If such an order is made the instrument executed operates for all purposes as if it had been executed by the person originally directed to execute it: s 94(2) CPA.

1288. Historically the practice of the Court is that orders should not be made under this section merely because of an anticipated refusal to execute a document: e.g. Savage v Norton [1908] 1 Ch 290 at 297 per Parker J.

466. My impression of the matter at the moment is that the defendant, whilst he has resisted relief for the reasons he explained on the hearing in connection with the Blacktown payment, did not intimate that he would not sign the necessary documents required to effect an assignment of the lease.

467. In circumstances in which I have raised an issue regarding the client Authorisation Form on the one hand and the necessity for creating a PEXA workspace on the other, I do not consider it appropriate at least in these reasons for judgement to foreshadow any default order.

468. I do not consider that order 4 ought to be made at least at this point.

469. In relation to an order for costs sought in paragraph 5 of the further amended summons, the plaintiff has succeeded at least in relation to the relief sought in paragraphs 1 and 2 of the further amended summons.

470. The plaintiff has not succeeded in relation to the relief in paragraphs 3 and 3A of the summons.

471. My tentative view is that some costs order ought to be made in the plaintiff’s favour. However, whether or not that is an order for the entirety of the plaintiff’s costs on the ordinary basis in light of the fact that the relief sought in paragraphs 3 and 3A has not been given (at least not at this point) is a question I consider should be subject of some further submission.

472. In light of the issues that I raised regarding disputes over the Blacktown sum and in light of the undertaking proffered by Mr Klooster on behalf of the plaintiff, I consider that the orders for specific performance should be conditioned upon that undertaking.

473. The orders of the Court are:

1. Direct the parties to submit to my Associate agreed short minutes of order to give effect to the reasons for judgment, including as to costs, or if there is no agreement between them, their respective draft orders, submissions (not exceeding five pages) and any affidavits by 4 PM on 16 February 2023.

2. Adjourn the proceedings to 9:30 AM on 17 February 2023 or such other time as may be arranged with my Associate.

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Decision last updated: 09 February 2023