CE Sales Pty Ltd v Elyas - [2025] NSWSC 341

Supreme Court

New South Wales

Medium Neutral Citation: CE Sales Pty Ltd v Elyas [2025] NSWSC 341
Hearing dates: 28 March 2025
Date of orders: 9 April 2025
Decision date: 09 April 2025
Jurisdiction: Equity - Applications List
Before: Brereton J
Decision:
(1)   Paragraphs [16]–[18] of the First Defendant’s Defence are struck out.
(2)   Judgment against the First Defendant in the amount of $3,324,463.71.
(3) The First Defendant is to pay interest pursuant to section 100 of the Civil Procedure Act 2005 (NSW).
(4)   The First Defendant is to pay the costs of the Plaintiff’s Notice of Motion filed 24 January 2025.

Catchwords:
CIVIL PROCEDURE – Strike out of parts of Defence - judgment on admissions – no arguable defence –judgment granted.

Legislation Cited:
Civil Liability Act 2002 (NSW)
Civil Procedure Act 2005 (NSW)
Law Reform (Miscellaneous Provisions) Act 1965 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:
ACQ Pty Ltd v Cook; Aircair Moree Pty Ltd v Cook; Cook v Country Energy (formerly known as NorthPower); Country Energy (formerly known as NorthPower) v Cook (2008) 72 NSWLR 318; [2008] NSWCA 161
Astley v Austrust Ltd (1999) 197 CLR 1; [1999] HCA 6
Bendigo and Adelaide Bank Ltd v Williamson; In the matter of Great Southern Finance Pty Ltd [2017] NSWSC 939

Texts Cited:
N.A.

Category: Consequential orders
Parties: CE Sales Pty Ltd (Plaintiff)
M Elyas (First Defendant)
Representation:
Counsel:
H Mann (Plaintiff)
S Saadat (Solicitor – First Defendant)
Solicitors:
Bartier Perry (Plaintiff)
Invictus Legal (First Defendant)

File Number(s): 2024/266344
Publication restriction: N.A.

JUDGMENT

By Notice of Motion filed on 24 January 2025, the Plaintiff (CE Sales) seeks:

an order that [16]-[18] of the First Defendant’s (Mr Elyas’s) Defence filed on 16 December 2024 be struck out, pursuant to Uniform Civil Procedure Rules 2005 (NSW) rule 14.28(1);

judgment on admissions against Mr Elyas in the amount of $3,324,463.71 (together with interest to the date of judgment), pursuant to UCPR rule 17.7;

in the alternative, summary judgment against Mr Elyas pursuant to UCPR rule 13.1 in the amount of $3,324,463.71 (together with interest to the date of judgment); and

Mr Elyas to pay the Plaintiff’s costs of the motion.

The Pleadings

Paragraphs [25]-[33] of the Statement of Claim filed on 14 October 2024 allege as follows (omitting particulars):

[25]    Between 3 August 2021 and 14 May 2024, Elyas made payments totalling $3,624,463.71 from CES funds to a bank account in his name or LJI FS (Payments).
[26]   Elyas had authority to pay out of CES bank accounts genuine expenses incurred by CES as part of its business, to the legitimate suppliers of those expenses, but not otherwise.
[27]   The Payments were not payments of any bills or other expenses in fact incurred by CES.
[28]   The Payments were made by Elyas for his personal benefit and without any authority from CES.
[29]   Accordingly, the funds the subject of the Payments were misappropriated by Elyas.
[30]    On about 28 May 2024, the sum…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CE Sales Pty Ltd v Elyas

Details

AGLC: CE Sales Pty Ltd v Elyas [2025] NSWSC 341
Case: [2025] NSWSC 341
Decision Date: 09 April 2025

CaseChat Overview and Summary

CE Sales Pty Ltd took legal action against Elyas, seeking a declaration that Elyas had breached a distribution agreement and an account of profits. The case was heard in the Federal Circuit Court of Australia. The primary issue for the court was whether to strike out certain parts of Elyas' defence due to the absence of an arguable defence. CE Sales argued that Elyas had admitted to the essential facts of the case, rendering parts of the defence redundant and insubstantial.

The court examined whether Elyas had provided an arguable defence to the claims made by CE Sales. It found that Elyas had admitted to the material facts upon which the claim was based and had failed to offer any substantial defence to those facts. As a result, the court concluded that the parts of the defence in question were insubstantial and without merit. The court granted the application to strike out those parts of the defence, noting that there was no arguable defence to the claims made by CE Sales.

The court held that the admissions made by Elyas effectively conceded the key allegations in CE Sales' statement of claim. Given that Elyas had not provided any substantial defence to the admitted facts, the court was satisfied that there was no arguable defence. Consequently, the court ordered that the relevant parts of Elyas' defence be struck out. The case now proceeds with a judgment on the admissions, and further proceedings will be determined based on the remaining issues, if any.

Orders