Dabboussi v Akra

[2020] NSWDC 364

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Dabboussi v Akra [2020] NSWDC 364

Hearing dates:

1, 2, 3 July 2020

Date of orders:

15 July 2020

Decision date:

15 July 2020

Jurisdiction:

Civil

Before:

Russell SC DCJ

Decision:

(1)   Judgment for the plaintiff against the defendant for $554,699.25.

(2)   Order the defendant to pay the plaintiff’s costs.

Catchwords:

CONTRACT – Joint venture to establish and operate two restaurants – no written agreement – dispute arose concerning the obligations of the parties to meet the establishment and running expenses of restaurant businesses – parties agreed to participate in an Islamic Mediation – oral agreement reached between parties to settle their dispute – conflicting versions of settlement agreement

EVIDENCE – evidence concerning conversations forming settlement agreement – corroborative evidence by Imam present when agreement made – failure to call lay person also present when agreement made – quality of and weight to be given to evidence of spoken words

Cases Cited:

John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451

Category:

Principal judgment

Parties:

Ahmad Dabboussi (Plaintiff)
Ziad Akra (Defendant)

Representation:

Counsel:
C Robinson (Plaintiff)
S Stanton (Defendant)

Solicitors:
Cambridge Law (Plaintiff)
Future Legal (Defendant)

File Number(s):

2018/280258

Judgment

Introduction

1. In 2014 the plaintiff Mr Ahmad Dabboussi and the defendant Mr Ziad Akra entered into a business venture to carry on two restaurants in Liverpool known as “Jasmins” and “Thai Me”. The parties incorporated two companies. Zam Zam Functions Pty Limited (ZZ Functions) was to carry on the business of Jasmins and Zam Zam Foods Pty Limited (ZZ Foods) was to carry on the business of Thai Me. Mr Dabboussi and Mr Akra each acquired 50% of the shares in these companies and became directors of the companies.

2. In 2016 a dispute arose concerning the obligations of the parties to meet the establishment and running expenses of Jasmins and Thai Me.

3. Mr Dabboussi and Mr Akra participated in meetings held at the Masjid Al Noor Mosque in South Granville. Three Imams participated in the discussions. A lay person Mr Wissam Chamma was also present for some of the meetings.

4. The plaintiff’s claim litigated in these proceedings is that at a final meeting at the mosque, attended by Mr Dabboussi, Mr Akra, Mr Chamma and Sheikh Omar El Banna, an agreement was reached to settle the dispute. I will refer to the Sheikh in this judgment as Sheikh Omar. That is how the parties referred to him, and when the Sheikh gave evidence, he indicated that this was a proper form of address.

5. The plaintiff’s version of the agreement set out in par 8 of the Statement of Claim filed on 12 September 2018 is that Mr Akra would pay Mr Dabboussi a total sum of $800,000 made up as follows:

1. Mr Akra would assign to Mr Dabboussi his title and right to repayment of a $200,000 loan which Mr Akra had made to a mosque.

2. Mr Akra would pay $150,000 to Mr Dabboussi by August 2016.

3. Mr Akra would pay Mr Dabboussi $200,000 by November 2016.

4. Mr Akra would pay Mr Dabboussi $250,000 by February 2017.

6. Thus by assignment of the right to receive repayment of the $200,000 loan and three further payments, Mr Dabboussi would be paid the agreed amount of $800,000.

7. Mr Akra accepts that he and Mr Dabboussi entered into an oral agreement in May 2016 in the presence of Sheikh Omar – par 7 of the Defence filed on 27 April 2019.

8. In par 8 of the Defence Mr Akra pleaded that the agreement reached had the following elements:

1. Mr Akra would pay Mr Dabboussi $130,000.

2. Mr Akra would forego his share of the earnings from Thai Me from early 2015 (when Thai Me was opened) to May 2016.

3. Mr Akra would forego his share of earnings from Jasmins from January 2016 to May 2016.

4. Mr Akra would forgive the outstanding debt owed by Mr Dabboussi to Mr Akra for fruit and vegetables supplied by Mr Akra to Jasmins and Thai Me from early 2015 to May 2016.

5. Mr Akra would transfer his shareholdings in ZZ Foods to Mr Daboussi and would resign from his position as director.

6. Mr Daboussi would transfer his shareholdings in ZZ Functions to Mr Akra and would resign from his position as director.

9. In short, there are two conflicting versions of the verbal agreement reached during the final meeting at the mosque, in the presence of Sheikh Omar and Mr Chamma.

Evidence for the plaintiff

Mr Daboussi

10. Mr Dabboussi gave his evidence-in-chief by an affidavit dated 26 August 2019 (PX 1). He said that in early March 2014 Mr Akra approached him concerning the two men going into the restaurant business.

11. At par 6 of PX 1 Mr Dabboussi gave evidence of a conversation which included the following elements:

1. Mr Dabboussi was to pay 75% of the set up costs and Mr Akra was to pay the remaining 25%.

2. The profit was to be split 50/50.

3. Mr Akra was to be responsible for setting up the Jasmins restaurant, managing it, organising supplies and employees and doing everything else involved with the operation of the restaurant.

4. If the business failed in the first 12 months, then Mr Dabboussi was to get his 75% back from the proceeds of sale and Mr Akra would get 25%, so that each party would get back what they put in.

5. If the business operated for more than 12 months but then failed the proceeds of sale would be shared 50/50.

6. Mr Akra agreed with all of those propositions.

12. Thus on Mr Dabboussi’s case, the original agreement was concluded by that conversation. The parties never set out their agreement in writing.

13. Mr Dabboussi and Mr Akra travelled together to China in June 2014 to purchase plant and equipment to fit out and furnish Jasmins.

14. An architect was engaged to design Jasmins and submit a DA. In August 2014 work commenced on the set up and fit out of the restaurant in accordance with plans drawn up by the architect.

15. The company ZZ Functions was incorporated and the business name Jasmins was registered with ASIC. In August 2014 Mr Dabboussi and Mr Akra signed a lease for 375 Macquarie Street, which was to be the location of Jasmins.

16. In November 2014 Mr Dabboussi and Mr Akra incorporated ZZ Foods and agreed to carry on the business of Thai Me through that company.

17. The two men made a second trip to China in December 2014 and again purchased plant and materials to set up both restaurants.

18. In December 2014 ZZ Foods entered into a lease of 357-367 Macquarie Street, as premises for Thai Me. The two restaurants were a very short distance from each other on the same street.

19. Mr Dabboussi said that between May 2014 and May 2015 Mr Akra contributed $250,000 in cash towards the cost of the set up and fit out of both restaurants. He made no other financial contribution to those costs.

20. Mr Dabboussi gave evidence (PX 1, par 24) that Mr Akra said to him on many occasions words to the effect: “My father owes me $600,000. He will pay me this money when he sells his house. I will pay what I owe you from those funds. It is coming.”

21. Mr Dabboussi gave evidence (PX 1, par 26) that he paid all of the set up and fit out costs for both restaurants, apart from the payment of $250,000 made by Mr Akra.

22. Thai Me opened in July 2015 and Jasmins opened in early 2016.

23. In early 2016 Mr Dabboussi continued to make requests to Mr Akra for him to pay his share of the set up costs. In March 2016 they discussed seeing Sheikh Omar, the Imam of the mosque attended by both parties, to have the Sheikh mediate their differences. Two other Imams being Sheikh Nasser and Sheikh Omran were also to be present during the meetings.

24. In April 2016 the parties met at the Masjid Al Noor Mosque in South Granville. The three Sheikhs were present, as was Mr Chamma, said by Mr Dabboussi to be a friend of Mr Akra.

25. Mr Dabboussi said (PX 1, par 29) that he provided to the Sheikhs and to Mr Akra spreadsheets summarising the records of the expenses which he had paid in the set up and fit out process. He annexed copies of the spreadsheets at pp 159-188 of Exhibit AD-01 to his affidavit. This exhibit formed part of PX 1.

26. Mr Dabboussi thought that there were about four mediation sessions between April and May 2014. These sessions were held about four months after the opening of Jasmins. The final meeting was only between Mr Dabboussi, Mr Akra, Sheikh Omar and Mr Chamma.

27. That meeting discussed complaints made by Mr Akra that tradesmen had charged too much for work done on the set up of the restaurants. Mr Akra was also disputing the costs of the supplies and equipment purchased from China.

28. Mr Dabboussi gave evidence (PX 1, par 46) that at the final meeting, which was held on or about 20 May 2016, there was a conversation in words to the following effect:

Sheikh Omar:   “We need to resolve this matter with an agreed settlement. Ziad will need to pay Ahmad back for the set up costs of Jasmins. Then I propose that Ziad will keep Jasmin restaurant and Ahmad can keep Thai Me.”

Mr Dabboussi:   “That is fine, I am happy with this proposal so long as I receive my money first.”

Mr Akra:             “I am happy with this agreement.”

29. Mr Dabboussi said (PX 1, par 47) that Mr Chamma was also present when this conversation took place.

30. There was further discussion about the amount to be paid by Mr Akra to Mr Dabboussi. Mr Dabboussi said (PX 1, par 52) that Mr Akra asked that the amount be rounded down to $800,000. He said that the Sheikh asked him if he would accept this and he agreed to accept that amount.

31. Mr Dabboussi gave evidence (PX 1, par 50) that there was then a further conversation as follows:

Sheikh Omar:     “Ziad will relinquish to you his $200,000 loan to the mosque and you will receive the loan repayments. Ziad will make the following payments to Ahmad. $150,000 by August 2016, $200,000 by November 2016 and $250,000 by February 2017.”

Mr Dabboussi:    “I agree to this.”

Mr Akra:              “I agree.”

32. In August 2016 Mr Akra paid $130,000 into Mr Dabboussi’s bank account. No further payments have been made. Those two matters are agreed between the parties.

33. In April or May 2017 the parties again approached Sheikh Omar to assist in resolution. Nothing further was achieved through those efforts.

34. The affidavits tendered by both parties were quite poor in form. Objections were taken by both counsel which resulted in large parts of the affidavits being rejected. In the case of some of the rejected portions, leave was granted to call oral evidence. The copies of the affidavits on the court file have had the passages which were rejected or not read ruled through. The precise rulings will of course appear in the transcript.

35. By leave Mr Dabboussi gave the following oral evidence-in-chief. He said that during the mediation process he referred to his spreadsheets and went through each item line by line. The spreadsheets, the receipts and the bank statements showed what had been spent on the fit out of the two restaurants. He provided copies of these documents to all at the mediation.

36. Mr Dabboussi said that at the mediation there was a conversation concerning the “discount” of 25% to be given to Mr Akra in relation to the set up costs. Mr Dabboussi said that he told the meetings that the 25% discount was given to Mr Akra on condition that Mr Akra set up the businesses and ran the restaurants after they were opened. The discount was conditional on the businesses surviving 12 months and not being split up. Mr Akra responded that the discount was for use of the name “Jasmins”. Sheikh Omar said that the parties should leave that issue aside for the present.

37. Mr Dabboussi said that when Mr Akra made a payment of $130,000 instead of $150,000, and when he missed the later payments, he tried to contact Mr Akra. He rang him and asked when he would be paid. Mr Akra continued to say that he was waiting for his father’s house to be sold, that he was owed $600,000, and that he would pay Mr Dabboussi when he got that money.

38. Mr Dabboussi said that he did know Mr Chamma, but that he met him for the first time at the first mediation meeting.

39. Mr Dabboussi was then cross-examined. He said that he relied on his spreadsheets in his computer to compile his affidavit. He had also referred to the invoices and “transfers”. He and Mr Akra rarely corresponded by email. He and Mr Akra often communicated by mobile phone text, but he had kept no record of those messages.

40. Mr Dabboussi was cross-examined about the source of the $2.2 million which he said was used to finance the ventures. He said that this money came from numerous people who invested money with him. People gave him money to invest, but not specifically to be invested in these restaurants. When pressed he named two people who were investors with him. Mr Dabboussi said that about 20 individuals invested with him and their balances went up and down.

41. Mr Dabboussi acknowledged that he did not use a lawyer to set up the business and he never recorded in writing the nature of the agreement he had with Mr Akra. Mr Dabboussi accepted the proposition that the arrangement he had with Mr Akra was a partnership.

42. Mr Dabboussi said that at the mediation meetings figures were written on a whiteboard and that he and Mr Akra both took photographs of the whiteboard.

43. In answer to questions which I asked, Mr Dabboussi said that Mr Akra now runs Jasmins and that he now runs Thai Me, although that restaurant has since been reconfigured. He said to me that he had not been paid $200,000 by the mosque, but that he had applied that $200,000 debt as the deposit on a unit which was to be developed by the mosque.

44. Mr Dabboussi was shown DX 4 which was an ASIC search for ZZ Foods. On 23 November 2017 Mr Akra resigned as a director and transferred his shares to Mr Dabboussi.

45. Mr Dabboussi was cross-examined about the vegetables and the fruit supplied by Mr Akra to the two restaurants. Mr Dabboussi said that this amount was taken into account when the parties worked out the settlement figure.

46. Mr Dabboussi agreed that part of the settlement agreement was that he was to resign as a director of ZZ Functions and transfer his shareholding to Mr Akra. He said that the events had not yet happened which required him to resign and transfer his shares.

47. Mr Dabboussi was cross-examined about a payment of $20,000 said to have been made on 21 July 2016 by Mr Akra to ZZ Functions. He did not deny that that money came to the bank account of ZZ Functions, but he did not accept it either. It is noted that Mr Akra did not claim any credit for this payment in his Defence and that payment, if made, has no bearing upon the outcome in these proceedings.

48. In re-examination Mr Dabboussi said that he spoke to Mr Ziad Hussein who was the accountant at the mosque. He asked Mr Hussein to apply the $200,000 loan owed to him to be used as a deposit for a unit which was to be developed. He said that there were no invoices given by Mr Akra for the vegetables and fruit supplied to either restaurant. Finally, he said that from the opening of Thai Me until November 2017 there was no profit made and therefore no funds from which Mr Akra could be paid anything.

Sheikh Omar

49. Sheikh Omar gave evidence-in-chief by an affidavit sworn on 27 August 2019 (PX 2). He said that he is an Imam in the Muslim community in Sydney. One of his roles in the community is to assist in and resolve disputes between members of the community. He recalled Mr Dabboussi and Mr Akra approaching him in early 2016 and asking him to help resolve a dispute concerning two restaurant businesses. Sheikh Omar organised a committee of Imams to listen to the parties and propose a resolution for their dispute. The committee consisted of himself, Sheikh Nasser and Sheikh Omran. Mr Akra asked if his friend Mr Chamma would be allowed to attend the discussion. The committee agreed to this request.

50. Sheikh Omar remembered approximately three meetings with everyone present and a final meeting in which the only parties present were himself, Mr Dabboussi, Mr Akra and Mr Chamma. The meetings were held between April and May 2016 at Masjid Al Noor Mosque in South Granville.

51. Sheikh Omar recalled (PX 2, par 6) Mr Dabboussi saying words to the following effect:

“Ziad has not lived up to our agreement. He is not managing either of the businesses as he promised. Ziad did not manage the fit out as we agreed. I have paid for and done most of the fit out myself. Ziad owes me a lot of money. Jasmins has cost around $1.5 million and Thai Me has cost around $600,000, in total about $2.1 million.”

52. Sheikh Omar recalled (PX 2, par 8) that both Mr Dabboussi and Mr Akra said words to the effect: “We agreed that Ziad was to receive a 25% discount on the set up costs of Jasmins on certain conditions”. He recalled that each party had a different version of the conditions for the discount.

53. Sheikh Omar recalled (PX 2, par 14) that he said to Mr Akra: “Whatever the case, from what we have heard from both of you, you owe Ahmad a significant amount of money”. He recalled Mr Akra replying: “Yes, I accept that”.

54. Sheikh Omar said that Mr Dabboussi produced a spreadsheet of all the set up costs as well as copies of invoices and bank statements (PX 2, par 16). He said that the invoices and bank statements were given to Mr Akra to examine and that the committee looked at them during the meetings (PX 2, par 17).

55. Sheikh Omar recalled a dispute being aired concerning the “China expenses” (PX 2, pars 22-23).

56. Sheikh Omar said to Mr Dabboussi and Mr Akra (PX 2, par 29):

“I suggest that you put aside the most contentious expenses, the China expenses, and we can try and get a resolution on the rest of the expenses. The China expenses can be dealt with later.”

57. Sheikh Omar said (PX 2, par 29) that at the time of the meetings, the holy month of Ramadan was approaching and he wanted to help resolve the dispute before then so that the parties could concentrate on their religious activities for that month.

58. Sheikh Omar recalled that at the final meeting Mr Dabboussi “agreed to a payout figure of $800,000”. He said (PX 2, par 32) that a conversation then took place in words to the following effect:

Sheikh Omar:      “Ahmad has agreed to a payout figure of $800,000.”

Mr Akra:              “I will need time to pay that.”

Sheikh Omar:      “Ziad will need time to repay you. How much time are you willing to give him?”

Mr Dabboussi:     “I am willing to give him three months.”

Mr Akra:               “I will need more than three months to pay you back.”

Sheikh Omar:       “Ok, what about the $200,000 the mosque owes you, can that be paid back to Ahmad as part of the $800,000. Do you agree with that?”

Mr Akra                “Yes I do.”

Sheikh Omar:      “Ziad needs more than three months but he agreed to have the mosque loan transferred to you as part of this agreement.”

59. Sheikh Omar said that Mr Dabboussi then agreed to allow more time but he asked that a payment plan be set up. He recalled (PX 2, par 33) a conversation in words to the following effect:

Mr Akra:               “I can pay $150,000 in August and $200,000 in November 2016. I will pay the last $250,000 in February 2017.

Mr Dabboussi:     “I accept that proposal but I want your share of Thai Me transferred to me immediately and I will transfer my share in Jasmins when I get the last payment.”

Mr Akra:              “I agree.”

60. Cross-examination, to be dealt with in more detail below, demonstrated that this was not one continuous conversation, but rather a series of private conversations between Sheikh Omar and each party separately, followed by a joint meeting at which the consensus was expressed.

61. Sheikh Omar recalled another meeting which occurred in April 2017. Sheikh Nasser attended but Sheikh Omran did not attend. Mr Chamma attended.

62. Sheikh Omar recalled Mr Akra saying (PX 2, par 37):

“I was forced into the agreement, I now disagree with the outcome. You and Ahmad are partners. You teamed up against me.”

63. Sheikh Omar decided to leave the meeting. Sheikh Nasser continued in the meeting.

64. The cross-examination of Sheikh Omar commenced with his explanation of the nature of Islamic mediation. He said that the process was designed to enable parties to understand their rights from an Islamic perspective. As the Imam he could conduct a mediation to try to get parties to agree on a settlement, or if a settlement could not be agreed he could issue a “verdict”. He saw his role as hearing both sides and trying to bring the parties together in a settlement. Sheikh Omar, who is an Islamic scholar, said that any “verdict” issued by an Imam was not binding in law but was binding morally upon the participants. He said that the first few meetings were held to try to understand the dispute and each party’s perspective.

65. Sheikh Omar said that at the last meeting which was held, figures were set out on a whiteboard. He recalled both men photographing the board. Sheikh Omar took the view that because everything between the two men had been done verbally, it would be very hard to give a verdict as there was no “solid evidence”. He therefore thought that the only option was to come to some sort of “friendly agreement”. He conducted the settlement negotiations. No notes were made of the negotiations or the agreement. Sheikh Omar said that since he became the Imam at South Granville in 2013, he had conducted three business mediations, including this one. He was involved in conducting family mediations on a weekly basis.

66. Sheikh Omar was challenged, in a rigorous but very proper manner, concerning his recollection of the conversations. He said he had a “very strong memory of the conversations”. The mediation sessions were conducted in both English and Arabic. Sheikh Omran spoke English. Sheikh Nasser was less fluent in English and often matters were translated into Arabic for him.

67. Sheikh Omar expressed the view that he believed that Mr Dabboussi was “oppressed”. He explained that he held this view because in his mind the parties came to an agreement at the end of the mediation, but Mr Akra did not honour it. He said that at the end of the final meeting, Mr Dabboussi and Mr Akra hugged each other and they both hugged him. Sheikh Omar said that this was a cultural sign that the parties had reached an agreement.

68. Sheikh Omar was cross-examined about the $200,000 loan which the mosque had owed to Mr Akra, which was he understood was now to be paid to Mr Dabboussi. He said that he told the accountant for the mosque about this arrangement after it was reached and he asked the accountant to make a ledger entry to reflect the fact that the $200,000 loan was now owed to Mr Dabboussi and not to Mr Akra. The mosque had a board of management but he did not consult the board. He said that the change of creditor did not affect the mosque, as the money had to be repaid to someone. Sheikh Omar said that both Mr Dabboussi and Mr Akra were “trustworthy members of the community” and he saw no reason to consult the board about the arrangement reached. Sheikh Omar was cross-examined about whether the accountant Mr Hussein had spoken to Mr Akra recently about the transfer of the loan. He knew of such a conversation although he was not part of it. His understanding was that Mr Akra had said that he wanted his money. Mr Akra said: “You haven’t paid the money to Mr Dabboussi so I want the money paid to me”.

69. Sheikh Omar was cross-examined about Mr Akra speaking to another Sheikh and to the Mufti of Australia. He said that to his knowledge Mr Akra entered into another mediation conducted at the Lakemba mosque. To his understanding the Imam there had told Mr Akra that the money had been transferred and that it was too late to ask for it back.

70. These matters are recorded in this judgment because they were part of the cross-examination. Of course in law they have no relevance to the outcome in the present dispute.

71. Sheikh Omar was cross-examined about the conversation to which he deposed in pars 32 and 33 of PX 2. He acknowledged that as set out in pars 32 and 33, it might be thought that the conversation was one continuous conversation between himself, Mr Dabboussi and Mr Akra. However, it did not happen that way. He said that what did occur was that he had private conversations with each party separately, and brought them together at the end where they reached their agreement. I interpolate that this style of mediation, known as Harvard Mediation, is that taught to mediators in Australia. Interestingly, Sheikh Omar said that it had been part of Islamic culture “since the beginning”, meaning for thousands of years.

72. As explained in cross-examination by Sheikh Omar, the conversation deposed to in pars 32 and 33 of PX 2 took place as follows:

1. In a meeting between Sheikh Omar and Mr Dabboussi only, Mr Dabboussi agreed to payout figure of $800,000.

2. In a meeting between Sheikh Omar and Mr Akra only, a conversation took place as follows:

Sheikh Omar:   “Ahmad has agreed to a payout figure of $800,000.”

Mr Akra:           “I will need time to pay that.”

3. In a meeting between Sheikh Omar and Mr Dabboussi only, a conversation took place as follows:

Sheikh Omar:   “Ziad will need time to repay you. How much time are you willing to give him?”

Mr Dabboussi:  “I am willing to give him three months.”

4. In a meeting between Sheikh Omar and Mr Akra only, a conversation took place as follows:

Mr Akra:            “I will need more than three months to pay you back.”

Sheikh Omar:   “Ok, what about the $200,000 the mosque owes you, can that be paid back to Ahmad as part of the $800,000. Do you agree with that?”

Mr Akra:           “Yes I do.”

5. In a meeting between Sheikh Omar and Mr Dabboussi only, a conversation took place as follows:

Sheikh Omar:   “Ziad will need time to repay you. How much time are you willing to give him?”

Mr Dabboussi:   “I am willing to give him three months.”

6. In a meeting between Sheikh Omar and Mr Dabboussi only, a conversation took place as follows:

Sheikh Omar:   “Ziad needs more than three months but he agreed to have the mosque loan transferred to you as part of this agreement.”

7. Mr Dabboussi agreed to this but asked that a payment plan be set up.

8. In a meeting between Sheikh Omar and Mr Akra only, a conversation took place as follows:

Mr Akra:            “I can pay $150,000 in August and $200,000 in November 2016. I will pay the last $250,000 in February 2017.

9. Sheikh Omar, Mr Dabboussi, Mr Akra and Mr Chamma then met again where the three payment amounts put forward by Mr Akra in private conversation were conveyed to Mr Dabboussi.

10. In a meeting during which all four men were present, a conversation took place as follows:

Mr Daboussi:    “I accept that proposal but I want your share of Thai Me transferred to me immediately and I will transfer my share in Jasmine when I get the last payment.”

Mr Akra:            “I agree”.

73. I do not draw any adverse inference from Sheik Omar’s clarification regarding pars 32 and 33 in PX 2. What he said in cross-examination accords with the method of mediation which he adopted. Any impression that the words set out in pars 32 and 33 were part of a continuous conversation between all four participants at the final meeting has arisen because of the poor drafting of this affidavit.

74. Part of Mr Akra’s version of the final agreement reached was put to Sheikh Omar. He was asked what he said about Mr Akra’s version that the agreement was that he was only to pay $130,000. His response was “that is a straight out lie”. That must be a painful thing for an Imam to say about one of his flock, but Sheikh Omar did not shrink from speaking the truth as he saw it.

75. I formed a very favourable impression of Sheikh Omar, based upon the answers he gave and the forthright manner in which he answered questions during a detailed cross-examination by very experienced counsel. Sheikh had no notes of the mediation and thus gave his evidence-in-chief in his affidavit and his oral evidence based upon his memory of events. I formed the view that his memory was excellent. I accept him entirely as a witness of truth and as a witness whose evidence was accurate. I formed the view that he approached his task as a mediator for the parties conscientiously and without preconceptions or bias. He was very firm in his evidence and asserted that he had a clear memory of the conversations. Cross-examination did not disturb this impression. Sheikh Omar had no reason to be partisan in giving his evidence. Both men were regular worshippers at his mosque.

76. The evidence of Sheikh Omar corroborates Mr Dabboussi’s version of the agreement reached. The evidence of Sheikh Omar concerning the crucial conversations contradicts the version put forward by Mr Akra.

Evidence for the Defendant

Mr Akra

77. Mr Akra gave evidence-in-chief by an affidavit sworn on 11 December 2019 (DX 1). The affidavit was poorly drafted and large portions of it were struck out. Leave was granted to call oral evidence in relation to many of the matters struck out.

78. Mr Akra set out his version of events in the first 11 paragraphs of the affidavit. Only par 7 dealt with the final mediation meeting. That paragraph stated that a verbal agreement was reached to resolve the dispute concerning the business ventures of Jasmins and Thai Me. Paragraph 7 gave no evidence concerning the conversations which resulted in the verbal agreement. Instead, par 7 purported to simply state, in a conclusory fashion, what Mr Akra asserted were the terms of the agreement. That part of par 7 was struck out and leave was granted to call evidence concerning the conversations.

79. In pars 12-82 of DX 1 Mr Akra dealt with Mr Dabboussi’s affidavit, paragraph by paragraph, with some exceptions.

80. Mr Dabboussi had set out the terms of the conversation involving himself, Mr Akra and Sheikh Omar in par 53 of PX 1. While Mr Akra dealt in some detail with each paragraph of PX 1, a notable exception was that he said nothing about the allegations made by Mr Dabboussi in par 53 of PX 1 concerning the crucial final conversation. In par 69 of DX 1 Mr Akra dealt with par 52 of PX 1. In par 70 of DX 1 Mr Akra made comment about the Imams who were involved in the mediation. A large part of this paragraph was struck out. In par 71 of DX 1 Mr Akra dealt with par 54 of PX 1.

81. Thus, Mr Akra gave no evidence in DX 1 concerning the words spoken between the two men in front of Sheikh Omar and did not set out his version of the final crucial conversation.

82. As recited above, pars 32 and 33 of the affidavit of Sheikh Omar (PX 2) set out his recollection of the terms of the final crucial conversation. As to par 32 of PX 2, Mr Akra said that he disagreed with the version of events stated in the paragraph and that he never had a conversation with Sheikh Omar to this effect (DX 1, par 118).

83. As to par 33 of Sheikh Omar’s affidavit, Mr Akra said that he disagreed with the version of events stated in that paragraph and said: “I only agreed to pay Ahmad $130,000 pursuant to the terms of the Agreement” (DX 1, par 119). Again, this was only stated in a conclusory fashion, and there was no evidence of Mr Akra’s version of the conversation which took place, even though Mr Akra said that he disagreed with the version of events deposed to by Sheikh Omar.

84. Mr Akra gave oral evidence, most of it by leave, in relation to matters struck out of his affidavit. He said that he reached an agreement with Mr Dabboussi in mid-2016. It came about because of conversations held at the mosque involving Sheikh Omar, Sheikh Omran, Sheikh Nasser, Mr Dabboussi and Mr Chamma. He said that Sheikh Omran was not present at the final mediation meeting. Mr Akra said that at the final meeting Sheikh Omar and Sheikh Nasser were present. It was never put to Mr Dabboussi or Sheikh Omar that Sheikh Nasser was present at the final mediation meeting. In his own affidavit (DX 2) Sheik Nasser did not say that he was present at the last meeting.

85. Mr Akra gave oral evidence that Sheikh Omar said that he was to pay $130,000 and that he agreed to do so. This version was never put to Sheikh Omar in cross-examination, or to Mr Dabboussi.

86. Mr Akra gave evidence that he had a part-time business as a provedore, attending the markets and delivering fruit and vegetables to various restaurants including Jasmins and Thai Me. He said that he was not paid for the supply of vegetables to the two restaurants run by the parties. Mr Akra asserted that he was owed $260,000 in total. There was no evidence produced to justify this figure.

87. In cross-examination Mr Akra said that he had not spoken since the mediation to Mr Chamma and that Mr Chamma is “not my friend”. He said that Mr Chamma became abusive towards him near the end of the mediation. This allegation was not put to Mr Dabboussi or to Sheikh Omar. Mr Akra said that Sheikh Omar sided with Mr Dabboussi, that he would not let Mr Akra bring witnesses, or go to China to verify matters, and that there were no receipts. None of these matters were put to Sheikh Omar.

88. Mr Akra was cross-examined about Jasmins and the company ZZ Functions. He was asked whether he was still a director and shareholder of ZZ Functions. He said that he was no longer involved in running Jasmins. He said that that restaurant was now run by a company which was “Jasmin something”. He said that he ran the restaurant until 18 months ago through his own company. He said that he had moved assets out of ZZ Functions into his own company. His evidence in this regard was vague, and it appeared that he had since sold or transferred the business of Jasmins to a third party, although possibly that third party was a company associated with his family. It was all unclear. How he managed to transfer an asset of the company ZZ Functions, without involving Mr Dabboussi who was still a director of that company, was not explained.

89. During cross-examination I formed the view that Mr Akra was vague and uncertain about important evidence, and much of his evidence was prevaricating, defensive and evasive, particularly concerning the present ownership of Jasmins.

Evidence of Sheikh Omran and Sheikh Nasser

90. Both Imams swore affidavits which were very brief. While both were present during earlier mediation meetings at the mosque, neither Imam was present during the final meeting. Nothing said by Sheikh Omran or Sheikh Nasser assisted the defendant’s case.

Consideration of the terms of the oral agreement

91. As previously recited, the version of the plaintiff and the version of the defendant are greatly at odds and cannot be reconciled. There was only one witness called who was present at the final meeting when the agreement was reached and that is Sheikh Omar. I have already expressed my view concerning the strength of his evidence, which entirely corroborates the version of Mr Dabboussi and which is contrary to the version of Mr Akra.

92. There was of course a fourth person at this final meeting, Mr Chamma. Counsel for the plaintiff criticised the defendant for not calling Mr Chamma, and counsel for the defendant criticised the plaintiff for not calling Mr Chamma. The idea of inviting Mr Chamma to the meeting was that of Mr Akra, though it was clear from his evidence that the two men had since fallen out. In the circumstances I am not willing to draw any inference from the failure of the plaintiff to call Mr Chamma and I am not willing to draw any inference from the failure of the defendant to call Mr Chamma. I will decide the case on the evidence which was called.

93. The evidence of Mr Dabboussi was detailed and consistent. He gave evidence in direct speech of the terms of the conversation at the mosque which led to the formation of the agreement at the conclusion of the mediation. Mr Dabboussi was cross-examined in a detailed and vigorous fashion by experienced counsel, but he was unshaken in his evidence.

94. As previously recited, I formed a favourable impression of Sheikh Omran as a witness, and his version corroborates the version of the agreement put forward by Mr Dabboussi.

95. I formed an unfavourable impression of Mr Akra as a witness. Even when he was given the opportunity to give evidence about the crucial conversations held before Sheikh Omar, he failed to set out clearly what he said the conversations were between himself, Mr Dabboussi and Sheikh Omar.

96. Counsel for the defendant referred me to the decision of Justice Hammerschlag in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94] where his Honour said:

94 Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.”

97. The evidence put forward by Mr Akra, in his affidavit and orally, was most certainly an “inexact proof” and was “indefinite testimony”, to adopt the phrases of Justice Hammerschlag. Further, differing versions put forward by Mr Akra were not put in cross-examination to Mr Dabboussi or to Sheikh Omar. With such experienced representation as he had, I infer that Mr Akra had not given instructions to his lawyers regarding the matters asserted by him in oral evidence, but not put to the other side.

98. In short, I found Mr Akra a very unsatisfactory witness. He gave little or no evidence about the crucial conversations held at the mosque. Instead he fell back upon simply asserting what he wanted the court to find was the version of the final agreement reached. Justice Hammerschlag said that “the conversation must be proved to the reasonable satisfaction of the court”. This is a case where the defendant did not even put forward evidence concerning the conversation.

99. I accept the evidence of Mr Dabboussi and I accept the evidence of Sheikh Omar, which corroborates Mr Dabboussi. I do not accept the evidence of Mr Akra concerning the conversations which led to the agreement upon which the plaintiff sues. In those circumstances there will be a judgment for the plaintiff for the full amount sought.

100. I find that the agreement between Mr Dabboussi and Mr Akra required Mr Akra to assign a $200,000 debt owed to Mr Akra by the mosque, and to pay a further $600,000 by several agreed instalments. Mr Dabboussi has taken an assignment of the debt owed by the mosque, although that too has been achieved in a verbal and very informal fashion, which is a hallmark of the dealings between the parties in this case. Mr Akra did pay $130,000 of the $600,000 owed, and thus the principal amount due to Mr Dabboussi is $470,000.

101. Interest is sought upon this amount. The calculation of the interest due upon $470,000 is set out in MFI 6. The amount due for interest is $84,044.41 to 3 July 2020 and thereafter $54.57 per day. The total award for interest will be $84,699.25.

97. The final judgment will be for $554,699.25 being principal of $470,000 and interest of $84,699.25.

Orders

103. My orders are:

1. Judgment for the plaintiff against the defendant for $554,699.25.

2. Order the defendant to pay the plaintiff’s costs.

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Amendments

15 July 2020 - Amended counsel representation

Decision last updated: 15 July 2020