Elston v Abou-Jaber (No 2)
[2023] VCC 588
•19 April 2023
| IN THE COUNTY COURT OF VICTORIA AT Melbournemelbourne commercial DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-20-00410
| ROSS ELSTON | Plaintiff |
| v | |
| JAMES ABOU-JABER | Defendant |
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JUDGE: | HIS HONOUR JUDGE WOODWARD | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 31 March 2023 | |
DATE OF RULING: | 19 April 2023 | |
CASE MAY BE CITED AS: | Elston v Abou-Jaber (No 2) | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 588 | |
REASONS FOR RULING
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Subject: PRACTICE AND PROCEDURE
Catchwords: Application for a stay – defendant commencing a new proceeding – defendant seeking to stay summary judgment in this proceeding pending outcome of new proceeding – discretion – prejudice – no proposal by defendant to ameliorate prejudice pending determination of new proceeding – application refused
Cases Cited:Scott v Australian and New Zealand Banking Group Ltd [1989] WAR 256; The State Bank of Victoria v Parry [1989] WAR 240; D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12.
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr B E Barr | Duffy & Simon Lawyers |
| For the defendant | Ms L Collaris | HM Ong Lawyers |
HIS HONOUR:
Nature of the application
1This is an application by summons filed 20 March 2023 by the defendant (“Mr Abou-Jaber”) seeking a stay on the execution of the warrant of possession numbered W22012493214, in respect of the land described in Certificate of Title Volume 08597 Folio 224 and situated at 3 Hann Street, Pearcedale (“the Property”). The stay is sought pending the hearing and determination of a fresh proceeding commenced by Mr Abou-Jaber in January 2023 naming the plaintiff in this proceeding (“Mr Elston”) as defendant (proceeding no CI-23-01187) (“New Proceeding”).
2In the course of the application, Mr Abou-Jaber sought leave to amend the summons to extend the stay to the entirety of the judgment of Judge Burchell dated 3 August 2022 (“3 August Judgment”), including in relation to the order for possession (order 3) and costs (order 6). Mr Abou-Jaber’s caveat over the Property referred to in order 5 of the 3 August Judgment has already been removed. The application proceeded on the basis that leave would be granted, but a formal order granting leave could be deferred pending the outcome of the application.
3I delivered oral reasons at the conclusion of the hearing and indicated that I would revise and supplement those oral reasons in a later written ruling. This is the ruling.
Factual background and outcome
4The background to the proceeding and procedural history, including the full text of relevant previous orders is set out in the ruling of Judge Cosgrave earlier this month (Elston v Abou-Jaber [2023] VCC 416) (“Cosgrave J Ruling”). I respectfully adopt (without repeating) his Honour’s background summary (including defined terms). These reasons should be read with the Cosgrave J Ruling.
5Both parties have provided detailed and thoroughly researched written submissions and are to be commended for the care taken with these. I have been greatly assisted in determining this application, including in preparing these reasons, by the examination of the issues in those submissions.
6There is some force in Mr Abou-Jaber’s submission that, despite the long and tortuous history of this proceeding, there has been no determination of the matters in dispute between the parties on the merits. In particular, Mr Abou-Jaber was ultimately defeated in the pursuit of his claims in this proceeding by his failure to secure a timely annulment of his bankruptcy. It was this that underpinned the 3 August Judgment.
7However, in my view, the matters raised by Mr Elston in opposition to the application overwhelmingly weigh against the grant of relief that Mr Abou-Jaber now belatedly seeks. I will therefore order that Mr Abou-Jaber’s application by summons dated 20 March 2023 is dismissed, the stay on the warrant is lifted forthwith and that Mr Abou-Jaber pay Mr Elston’s costs of and incidental to the application on an indemnity basis fixed in the sum of $10,668.
Defendant’s submissions
8Mr Abou-Jaber’s written submissions begin with a recitation of the factual background and some of the procedural history. After then referring to his application on 9 March 2023 dismissed by Judge Cosgrave for the reasons set out in the Cosgrave J Ruling, Mr Abou-Jaber states that:
“On 20 March 2023, instead of filing an appeal, the defendant filed a new proceeding in this court bearing proceeding number CI-23-01187. (New Proceeding). The New Proceeding is based upon the same facts and seeks substantially the same relief as the defendant sought in the counterclaim in the current proceeding but is pleaded differently. In summary, in the New Proceeding the defendant makes the claims set out at paragraphs 4 and 5 above and seeks a declaration that the plaintiff holds the Property on trust for the defendant.”
9Mr Abou-Jaber next submits that the starting point in considering an application for a stay is that a party who obtains a judgment is entitled to have it enforced without delay. However, the discretion of the court to stay execution under r66.16 is a wide one. The court is required to take into account all the circumstances of the case and is not bound by decisions on other sets of facts. The circumstances that will justify a stay are special circumstances that go to the enforcement of the judgment and not those that go to its validity or correctness (citing Civil Procedure Victoria at paragraph [66.16.15]).
10Mr Abou-Jaber’s written submissions rely on two authorities to support his arguments. First, Federal Commissioner of Taxation v Myer Emporium Ltd (No 1),[1] as cited in Scott v Australian and New Zealand Banking Group Ltd,[2] in which Dawson J held that “special circumstances … will, I think, exist where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed”.
[1] (1986) 160 CLR 220
[2] [1989] WAR 256 at 260
11Second, Mr Abou-Jaber sets out a passage from the decision of Malcolm CJ in The State Bank of Victoria v Parry[3] (“Parry”). In relying on this passage, Mr Abou-Jaber is drawing an analogy between the present case and cases where a party seeks a stay pending the determination of a counterclaim brought in the same proceeding. In that case, Malcolm CJ held (at 260):
“There is little guidance in the authorities as to what constitutes “special circumstances” for the purposes of the relevant rule. A stay of execution on a summary judgment is often granted where the defendant has a counterclaim against the plaintiff. Express provision for such a stay is contained in O 13 r 3(2). Such a stay may be granted until after the trial of the counterclaim. Where a defendant sets out a bona fide counterclaim arising out of the same subject matter as the action and connected with the grounds of defence, the defendant will normally be given unconditional leave to defend … Where the counterclaim arises out of quite a separate and distinct transaction, or there is no connection between the claim and the counterclaim, the proper order is for judgment for the plaintiff with costs without a stay pending the trial of the counterclaim … The degree of connection between the claim and the counterclaim, the strength of the counterclaim and the ability of the plaintiff to satisfy any judgment on the counterclaim are some of the considerations which the court may take account of in the exercise of its discretion whether or not to order a stay”.
[3] [1989] WAR 240
12Mr Abou-Jaber then notes that his caveat over the Property has been removed and that he is thus precluded by s91(4) of the Transfer of Land Act 1958 (Vic) from lodging a further caveat.
13Finally, Mr Abou-Jaber submits:
(a) Mr Elston has never proved his case but rather obtained summary judgment under r23.01 because Mr Abou-Jaber’s then bankruptcy was a procedural bar to him defending Mr Elston’s claim and prosecuting his counterclaim.
(b) Mr Abou-Jaber has now had his bankruptcy annulled and is in a position to prosecute the New Proceeding, being a proceeding that arises out of the same subject matter as Mr Elston’s claim.
(c) Mr Abou-Jaber is barred from renewing his caveat that was removed by the 3 August Judgment.
(d) If the court does not grant a stay, there will be nothing to prevent Mr Elston from selling the Property and dissipating the funds without taking into account the interest Mr Abou-Jaber claims to have in the Property.
(e) Accordingly, the relief claimed by Mr Abou-Jaber in the New Proceeding, may be rendered nugatory.
(f) Mr Abou-Jaber’s interest in the Property is demonstrated by the fact that he has lived there for 17 years, funded loan repayments and undertaken substantial works at the Property, including demolishing an old dwelling and constructing a new dwelling to the lock-up stage.
(g) Despite some differences in the pleading, the New Proceeding is essentially a restatement of the counterclaim in this proceeding, and the authorities establish where a summary judgment is obtained on a claim in a proceeding involving a counterclaim, that judgment will generally be stayed pending the hearing and determination of the counterclaim.
Plaintiff’s submissions
14Mr Elston’s written submissions begin with a brief outline of the summons dated 20 March 2023 and filed on 23 March 2023 and foreshadow submissions focussing on the inconsistency of Mr Abou-Jaber’s application with the substantial public interest in the finality of litigation, the overarching purpose of the Civil Procedure Act 2010 (Vic) (“Civil Procedure Act”) and Mr Elston’s entitlement to the benefit of the judgment in his favour.
15After making a submission that the court is functus officio that he indicated shortly before the hearing would not be pressed, Mr Elston submits:
(a) The application effectively seeks to appeal the order for possession of the Property made by Judge Burchell on 3 August 2022. It is not permissible to renew Mr Abou-Jaber’s defence to the substantive claim in the proceeding on an application for a stay of execution.
(b) Even if Mr-Abou Jaber succeeds in the New Proceeding, Mr Elston will remain entitled to the fruits of the judgment in this proceeding, being possession of the Property. The relief to which Mr Abou-Jaber will be entitled to in the New Proceeding, if any, cannot include possession of the Property lest there be inconsistent judgments of the court. Accordingly, the stay sought by Mr Abou-Jaber serves no purpose other than to delay Mr Elston’s entitlement to execute judgment.
(c) This is not a case in which concurrent proceedings are being prosecuted in different jurisdictions. Final judgment has already been pronounced and the court is bound to give effect to that judgement.
(d) The court has already considered that the prejudice to Mr Elston by reason of Mr Abou-Jaber’s conduct in the proceedings is manifest, extreme and cannot be cured by an award of costs. Granting another stay on the execution of the warrant of possession would only exacerbate that prejudice, particularly where Mr Abou-Jaber has not offered anything as the price of the stay.
16In elaborating on each of the arguments above, Mr Elston notes that the relief sought by Mr Abou-Jaber consists of a declaration that Mr Elston holds the Property on constructive trust for Mr Abou-Jaber. However, Mr Abou-Jaber has failed to articulate how such relief could entitle him to possession of the Property in circumstances where Mr Elston is entitled to possession, pursuant to an existing order of the Court. Unless a judgment in the New Proceeding was made that was inconsistent with the 3 August Judgment and the Cosgrave J Ruling, Mr Abou-Jaber will not be entitled to possession of the Property, even if his claim in the fresh proceeding is entirely successful.
17Mr Elston argues that the principles applicable to stay applications where multiple proceedings are prosecuted concurrently in different jurisdictions are well-established and the relevant authorities, including Sterling Pharmaceuticals Pty Ltd v Boots Co (Aust) Pty Ltd,[4] Bella Products Pty Ltd v Creative Designs International Ltd,[5] and HungryPanda Au Pty Ltd v Fantuan Australia Pty Ltd,[6] lend stronger support to Mr Elston than Mr Abou-Jaber.
[4] (1992) 34 FCR 287
[5] [2009] FCA 868
[6] [2023] VSC 102
18Final judgment has already been pronounced and was announced prior to the commencement of the New Proceedings. Resultantly, the extant application is an application for the stay of execution of judgment, not the stay of a proceeding. Therefore the only impact that the authorities regarding concurrent proceedings have is that of lending support to the argument that Mr Elston should be entitled to enforce the judgment he has already obtained.
19Mr Elston further submits that the prejudice to Mr Elston sustained from Mr Abou-Jaber’s conduct of the proceeding is reflected in the findings made by the court previously, with regard to the “protracted history” of the proceedings and “various indulgences” granted to Mr Abou-Jaber, including the accommodation of his repeated attempts to have his bankruptcy annulled. These matters, and the subsequent stay on execution granted by Judge Cosgrave, are strongly reminiscent of the presumptive prejudice referred to by McHugh J in Brisbane South Regional Health Authority v Taylor[7] (“Brisbane South”). Granting another stay on the execution of the warrant would further exacerbate this prejudice against Mr Elston.
[7] (1996) 186 CLR 541 at [555]
20Finally, Mr Elston’s written submissions note that Mr Abou-Jaber has not committed to any undertaking as to damages, nor has he made offers to pay rent in exchange for residing at the Property pending the determination of this new proceeding. Mr Abou-Jaber’s failure to do should weigh against the grant of a stay of execution.
21In oral submissions, Mr Elston emphasised four matters. First, he emphasised that he had been the beneficiary of a number of costs orders in his favour, none of which were subject to appeal. These included:
(a) the order made as part of the 3 August Judgment that Mr Abou-Jaber pay Mr Elston’s costs of and incidental to the proceeding, including reserved costs on a standard basis; and
(b) the order as part of the Cosgrave J Ruling that Mr Abou-Jaber pay Mr Elston’s costs of and incidental to the summons before him on an indemnity basis, fixed in the sum of $12,807.
22In those circumstances, the offer by Mr Abou-Jaber in the course of submissions to pay the costs of the summary judgment application (that is, the hearing before Judge Burchell leading to the 3 August Judgment), is no more than “a drop in the ocean”. Further, while there had been discussion on paying the $12,807 ordered by Judge Cosgrave in instalments, the parties are nowhere near agreement on that matter.
23Second, Mr Elston submits that the onus squarely falls upon Mr Abou-Jaber to establish that the recent commencement of fresh proceedings gives rise to special or exceptional circumstances entitling Mr Abou-Jaber to the orders he seeks. Further, those orders have now been enlarged to extend beyond the warrant of possession alone to the entirety of Judge Burchell’s judgment dated 3 August 2022, including as to costs.
24Mr Elston argues that the authorities make clear that the legal and evidential burden that Mr Abou-Jaber bears in this proceeding is a heavy and significant burden. Mr Elston emphasised that the court should be concerned with the principle of finality of litigation, as discussed by the High Court of Australia in D'Orta-Ekenaike v Victoria Legal Aid,[8] and that this principle is one that weighs heavily in the circumstances of this application.
[8] [2005] HCA 12
25Mr Elston submits that the grant of a stay in these proceedings would result in severe compromise of the public interest in the finality of litigation and also impinge upon the overarching purpose under the Civil Procedure Act, which is an added factor that the court must consider in all aspects of proceedings of this kind, including this proceeding.
26Third, Mr Elston raised a number of contextual matters to emphasise the points made in his written submissions, as follows:
(a) during the course of this litigation, Mr Elston obtained the benefit of two judgments for possession, dated 1 July 2020 and 3 August 2022 respectively;
(b) Mr Elston has conducted these proceedings properly and diligently, which is to be contrasted with the way in which Mr Abou-Jaber has conducted himself in the course of the proceeding;
(c) six adverse costs orders have been made against Mr Abou-Jaber, a number of which were made on an indemnity basis, and three of which remain unsatisfied;
(d) seven orders have been made for the stay of the execution of the warrant, all of which have been made since the judgments of possession were made;
(e) Mr Elston has been prevented from enforcing his valid and legal rights, has been kept out of possession of the Property, has not been paid rent, and has not been able to deal with the Property, of which he is the registered proprietor; and
(f) there have been countless indulgences granted to Mr Abou-Jaber, identified in previous decisions of this court in the course of this proceeding, and indications of other judges have been that there should be no more indulgences.
27Against that background, Mr Elston submits that time has well passed for Mr Abou-Jaber to reap the benefits of his judgment.
28Fourth, Mr Elston relies on prejudice. He argues that:
(a) The way in which this proceeding has been conducted to date gives rise to presumptive prejudice discussed in Brisbane South, referred to in Mr Elston’s written submissions. It is not in dispute that Mr Elston is the registered proprietor, and that rent has not been paid by Mr Abou-Jaber.
(b) Second, the New Proceeding would likely take no less than 12 months until the final determination and the history of these proceedings indicate that it could be considerably longer than that.
(c) Third, unlike in Parry, nothing of substance has been offered by Mr Abou-Jaber as the price of the stay.
(d) Finally, Mr Abou-Jaber has provided no evidence of the type one might expect in regard to the prejudice he may suffer if a stay is not granted, such as evidence that he has nowhere else to go or stay. Mr Abou-Jaber should, and would, have been aware of the consequences of the proceedings for some time, and was in a position to ensure other arrangements were made.
29In response to Mr Abou-Jaber’s oral submissions, Mr Elston submits that:
(a) there have been no submissions by Mr Abou-Jaber that the relief sought entitles Mr Abou-Jaber to an interest in the Property to the exclusion of Mr Elston, nor that Mr Abou-Jaber is entitled to possession of the Property;
(b) the matters relied on by Mr Abou-Jaber in the New Proceeding comprise in effect an assertion that Mr Abou-Jaber may be entitled to a declaration of a construction trust that may include an interest in the Property;
(c) Mr Abou-Jaber further asserts that in absence of a stay, Mr Elston may sell the Property and may dissipate the proceeds with the result that any judgment in the fresh proceedings may be rendered nugatory;
(d) the various submissions and matters upon which Mr Abou-Jaber relies are speculative and involve various contingencies, and there is no evidence of substance to support the assertions; and
(e) in those circumstances, the matters relied upon by Mr Abou-Jaber do not satisfy the special or exceptional circumstances required for a stay.
30Returning to the decision in Parry relied on by Mr Abou-Jaber, Mr Elston notes that this was a case where a stay was being sought to ensure the primary judgment against the defendant could be satisfied via the third-party proceedings in that case. Mr Elston argues that it can therefore be distinguished from the circumstances of the current proceedings, where it could not be suggested that the purpose of the stay was to give effect to the existing judgment. Indeed, the purpose is the opposite. Further, and most notably, the orders in Parry required the party seeking the stay to provide $1 million in security as the price of the stay. In contrast, in this case, nothing of substance is being offered by Mr Abou-Jaber.
Analysis
31As noted above, there is some force in Mr Abou-Jaber’s submission that despite the long and tortuous history of the proceeding there has been no determination of the matters in dispute between the parties on the merits. In particular, Mr Abou-Jaber was ultimately defeated in the pursuit of his claims in this proceeding by his failure to secure timely annulment of his bankruptcy. However, it is not in dispute that I have a broad discretion in relation to the relief now sought by Mr Abou-Jaber and I am satisfied that the factors relied on by Mr Elston overwhelmingly weigh against the grant of the release that Mr Abou-Jaber now belatedly seeks.
32First, I am not satisfied that Mr Abou-Jaber has met the threshold for establishing the special circumstances that the authorities contemplate. In particular, the 3 August Judgment is an order for possession and there was no order sought in the New Proceeding that directly impinges upon the judgment for possession in this case.
33Thus, the only matter which Mr Abou-Jaber is left to rely on to support the grant of an interim stay is the assertion that, if the stay is not granted, Mr Elston will likely sell the Property and dissipate the proceeds. While I accept that the prospect of a sale is real, there is no evidence and no basis, in my view, for any assertion that the proceeds would be dissipated in a way that would mean any judgment obtained in a new proceeding would be rendered nugatory. In particular, there is no evidence of risk of dissipation of the kind that is commonly adduced to support, for example, an application for a freezing order.
34Second, in my judgment, the issue of likely prejudice to Mr Elston weighs particularly heavily against the relief sought. Mr Elston has been pressing his claims in this proceeding since early 2020. Given the stage reached and the numerous interlocutory hearings, there can be no doubt he will have incurred many tens of thousands of dollars in costs. In those circumstances, the offer by Mr Abou-Jaber to cover just the costs of the summary judgment application hearing is indeed a drop in the ocean.
35To my mind, nothing short of the payment of all outstanding costs orders, or the provision of security in an equivalent sum, would ameliorate that prejudice to a sufficient degree to justify the stay in the form that Mr Abou-Jaber now seeks. As Mr Elston submits, that view is supported by the decision in Parry relied on by Mr Abou-Jaber in his submissions, where Mr Parry was ordered to pay $1,080,289.01 as a condition of the stay.[9] However, Mr Abou-Jaber has offered nothing of substance by way of payment or security, and it seems likely that he is unable to do so.
[9] Parry, per Malcolm CJ at 255
36In that regard:
(a) Mr Abou-Jaber conceded that he has been seeking to negotiate an arrangement to pay one fixed costs order against him for around $12,000 in instalments. I infer from that concession he is not presently in a position to pay that sum in full.
(b) Similarly, the submissions and affidavit material referring to the delays in Mr Abou-Jaber securing an annulment in his bankruptcy, included evidence that he was unable to meet the amount that was initially sought of $70,000.
(c) It would be surprising if the costs incurred by Mr Elston in this proceeding to date (including those where he has the benefit of a costs order in his favour that has not been met) do not exceed that sum by some margin.
(d) A final determination of the New Proceeding is likely to be at least a further 12 months away, which would mean that if the stay were granted, Mr Elston would be denied possession of the Property and payment of his costs for that period.
37Finally, as Mr Elston submits, Mr Abou-Jaber has been given numerous indulgences over the history of this proceeding, including every reasonable opportunity to secure his annulment in the period up to the 3 August Judgment. Further, despite finally achieving this in February 2023, Judge Cosgrave was not persuaded to grant Mr Abou-Jaber a further indulgence by his orders and ruling on 9 March 2023 – a decision that Mr Abou-Jaber has not appealed.
38In those circumstances, in my view, the application must be refused. I will order that:
(a) The summons filed by the defendant on 20 March 2020 is dismissed.
(b) The stay on the execution of warrant number W22012493214 issued by the Sherriff’s Office of Victoria on 7 December 2022 is lifted.
(c) The defendant pay the plaintiff’s costs of and incidental to the summons, including any reserved costs, on an indemnity basis fixed in the sum of $10,668.
Certificate
I certify that these 14 pages are a true copy of the ruling of his Honour Judge Woodward delivered on 19 April 2023.
Dated: 19 April 2023
Darcy White
Associate to his Honour Judge Woodward
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