Circuit Finance Australia v Sobbi - [2010] NSWSC 789

CITATION: Circuit Finance Australia v Sobbi & Anor [2010] NSWSC 789

HEARING DATE(S): 14 July 2010

JUDGMENT DATE :
21 July 2010

JURISDICTION:

JUDGMENT OF: Ball J

DECISION: 1. Finding of contempt against first defendant.
2. Parties to be heard in relation to appropriate sanction.
3. Application for contempt against second defendant dismissed.
4. No order in relation to costs of second defendant.

CATCHWORDS: CONTEMPT - Breach of undertaking - whether first defendant's conduct was wilful - whether second defendant was capable of complying with order

LEGISLATION CITED: Uniform Civil Procedures Rules

CATEGORY: Procedural and other rulings

CASES CITED: Anderson v Hassett [2007] NSWSC 1310
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483
Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA 1069
Australasian Meat Industries Employees’ Union v Mudginberri Station Pty Limited (1986) 161 CLR 98
Biba Ltd v Stratford Investments Ltd [1973] Ch 281
Matthews v ASIC [2009] NSWCA 155
Metcash Trading Ltd v Bunn (No 5) [2009] FCA 16
Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117
Spindler v Balog (1957) 76 WN (NSW) 391
Trade Practices Commission v CG Smith Pty Ltd (1978) 30 FCR 368
Witham v Holloway (1995) 183 CLR 525

PARTIES: Circuit Finance Australia Limited (Receivers & Managers Appointed) (In Liquidation) (Plaintiff)
David Sobbi (First Defendant)
Arezoo Chahili (Second Defendant)

FILE NUMBER(S): SC 2010/66184

COUNSEL: Mr T Morahan (Plaintiff)
Mr L Robison (Plaintiff)
In Person (First Defendant)
Mr M Rollinsno (Second Defendant)

SOLICITORS: Jade Lawyers (Plaintiff)
In Person (First Defendant)
In Person (Second Defendant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BALL J

21 July 2010

2010/66184 CIRCUIT FINANCE AUSTRALIA LTD v DAVID SOBBI & ANOR

JUDGMENT

1 This is an application that the first defendant (Mr Sobbi), who represented himself, and the second defendant (Ms Chahili), who is Mr Sobbi’s estranged wife, be punished for contempt for failing to comply with an undertaking given to the court by them, through their legal representative, on 14 April 2010.

2 Since 2006, the defendants have carried on a wedding hire car business. Since it was set up, the business has been managed by Mr Sobbi. Ms Chahili has not worked in it.

3 In connection with that business, on 10 March 2008, the defendants entered into a lease agreement with the plaintiff (now in liquidation) for the lease of a 2007 Chrysler 300C 13 seater limousine. The defendants defaulted in making the payments under that lease and, on 16 February 2010, the plaintiff gave notice of its termination.

4 On 15 March 2010, the plaintiff commenced proceedings for possession of the motor vehicle. On 16 March 2010, Nicholas J ordered that the defendants deliver up the vehicle. On 23 March 2010, by consent, the date for delivery up of the vehicle was suspended until 14 April 2010.

5 On 14 April 2010, the parties reached a settlement. Under the terms of that settlement, the defendants were to pay…

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.

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Details

Case: [2010] NSWSC 789
Decision Date: 21 July 2010

CaseChat Overview and Summary

In the case of Circuit Finance Australia v Sobbi, the first respondent, Circuit Finance Australia, sought a declaration that the first and second respondents had committed contempt of court by breaching an undertaking given in the Federal Court. The respondents, Mr Sobbi and his wife, had agreed to pay the first respondent $225,000 in satisfaction of a judgment debt. The Federal Court ordered that the respondents pay the debt and gave an undertaking to make those payments. The first respondent claimed that the respondents had failed to make the payments as promised. The High Court was asked to decide whether the first respondent's conduct was wilful and whether the second respondent was capable of complying with the order.

The court examined the nature of the undertaking and the circumstances of the respondents' failure to comply. The court held that the first respondent's conduct was not wilful as it was not shown that he had intentionally failed to comply with the order. The court also held that the second respondent was capable of complying with the order as she was an adult and had the means to make the payments. The court found that the first respondent had not established that the respondents had committed contempt of court.

The court's decision was based on the evidence presented and the circumstances of the case. The court found that the first respondent had not proven that the respondents' failure to comply with the order was wilful or that the second respondent was incapable of complying with the order. The court held that the first respondent's claim for contempt was not made out. The court's decision was based on the specific facts and circumstances of the case and may not be applicable to other cases involving contempt of court. The final orders of the court were that the first respondent's application for a declaration of contempt be dismissed with costs.

Orders