Arraj v Al-daqaq and Naami

District Court

New South Wales

Medium Neutral Citation:

Arraj v Al-daqaq and Naami [2023] NSWDC 9

Hearing dates:

8 and 9 December 2022

Date of orders:

3 February 2023

Decision date:

03 February 2023

Jurisdiction:

Civil

Before:

Weber SC DCJ

Decision:

(1)   That there be judgment and verdict for the plaintiff against the defendants in the sum of $195,857.74.

(2) Interest thereon at the rates pertaining from time to time pursuant to s 100 of the Civil Procedure Act.

(3)   That the defendants pay the plaintiff’s costs.

Catchwords:

Contract of Loan – Construction Loan – where monies advanced have not been repaid

Legislation Cited:

Civil Procedure Act

Cases Cited:

Thomas v Hollier (1984) 156 CLR 152

Young v Queensland Trustees Ltd (1956) 99 CLR 560

Category:

Principal judgment

Parties:

Plaintiff: Simon Arraj
First Defendant: Haythem Khairi Al-daqaq
Second Defendant: Maria Naami

Representation:

Counsel:
Plaintiff: J Pokoney
First Defendant: Self Represented
Second Defendant: Self Represented
Solicitors:
Plaintiff: Deutsch Partners
First Defendant: N/a
Second Defendant: N/a

File Number(s):

2021/00364317

JUDGMENT

Introduction

1. The plaintiff is the sole director and shareholder of Checkpoint Finance Group Pty Ltd (“CFG”). CFG carries on the business of providing mortgage management services.

2. The plaintiff explained CFG's role in a typical loan transaction in the following way:

“In a typical loan transaction, CFG’s role as a Loan/Mortgage/Facility Manager is to manage the entire loan process pre- and post-settlement including:

origination of new loan applications;

borrower and property due diligence;

borrower and guarantor credit checks;

instructing and managing panel-approved land values;

instructing and managing panel-approved quantity surveyors for construction loans;

instructing solicitors, certification and settlement;

managing loan repayments;

issuing loan statements;

managing progress payments for construction loans;

facilitating loan variations and restructures; and

discharging mortgages at the end of the loan.

3. The first defendant is the registered proprietor of certain land in Yagoona (“The Land”). The second defendant is his wife. All dealings between the defendants and the plaintiff were undertaken by the second defendant, whose grasp of English is superior to the first defendant’s English language skills.

4. The first defendant purchased the land with a view to demolishing the existing house and undertaking a duplex development. The intention was that once complete, the defendants would live in one duplex and sell the other. The development was to be undertaken jointly between the first and second defendant.

5. Neither plaintiff had any experience in either building or property development. Neither presented as commercially adept.

The Defendants Seek Finance

6. A development application was ultimately obtained for the duplex development and plans for construction were made. The defendants required finance in order to undertake the development. They were advised that a financier would require any application for finance to be made by a company controlled by them, rather than by them in their individual capacities. Accordingly, the plaintiff's caused Christina Pty Ltd to be incorporated (“Christina”). Both defendants were shareholders and directors of Christina.

7. In order to obtain finance, the defendants approached the plaintiff. In addition to providing mortgage management services through CFG,…