Ghaemi v Opal Capital Pty Ltd

Case [2023] SASC 153

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

GHAEMI & ORS v OPAL CAPITAL PTY LTD & ANOR

[2023] SASC 153

Judgment of the Honourable Justice Stein  

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT  - IN ACTIONS FOR SPECIFIC PERFORMANCE

EQUITY - EQUITABLE REMEDIES - SPECIFIC PERFORMANCE - GENERALLY

BANKING AND FINANCE - INSTRUMENTS - CHEQUES

The applicants and the respondents resolved proceedings at mediation and entered into a deed of settlement.  The respondents did not perform some obligations under the deed.  The applicants commenced these proceedings seeking summary enforcement of the deed.  The application was defended.  Mr Aeini asserted the applicants were in breach of obligations under the deed by failing to make the last instalment payment by the required deadline as a consequence of which the respondents did not have to comply with their remaining obligations under the deed.

Held, granting the application for summary enforcement of the deed:

1.The respondents do not have a reasonable basis for defending the claim for breach of deed.  The applicants paid the fourth instalment within the time required by the deed.  The deed did not require payment to be made by EFT and the cheque was tendered and accepted before the deadline.

2.      It is appropriate in the circumstances to grant specific performance.

Corporations Act 2001 (Cth) ss 175, 1322(4); Uniform Civil Rules 2020 (SA) r 144.2, referred to.
National Australia Bank Ltd v KDS Construction Services Pty Ltd (1987) 163 CLR 668; Tilley v Official Receiver in Bankruptcy (1960) 103 CLR 529; Fuji Xerox Australia Pty Ltd v Thoi [2018] VSC 483; Bell v Knight 34 Langdon Road Pty Ltd [2022] VSC 497; Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd (2020) 137 SASR 117; General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6; Wardle v Agricultural & Rural Finance Pty Ltd; Agricultural & Rural Finance Pty Ltd v Brakatselos [2012] NSWCA 107; George v Cluning (1979) 28 ALR 57; Homes v Smith [2000] Lloyd’s Rep Bank 139; Petroleo Brasileiro SA v ENE Kos 1 Ltd (2009) EWCA Civ 1127; In the matter of Alon Pty Ltd [2021] NSWSC 1021, considered.

GHAEMI & ORS v OPAL CAPITAL PTY LTD & ANOR
[2023] SASC 153

Civil: Application

  1. STEIN J:  After successfully resolving proceedings CIV-22-012592 (the “primary proceedings”) at mediation, the parties have fallen into further dispute giving rise to this application for summary judgment.  The primary proceedings were settled by the parties on the entry on 16 March 2023 into a Deed of Settlement and Release (“Deed”). After part performance of some of the obligations contained in the Deed, the respondents did not perform other specified obligations. The applicants assert the respondents are in breach of the Deed.  The respondents deny any breach and contend the applicants failed to comply with the provisions of the Deed resulting…

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AGLC
Ghaemi v Opal Capital Pty Ltd [2023] SASC 153
Case
[2023] SASC 153
Decision Date

CaseChat Overview and Summary

In the case of Ghaemi v Opal Capital Pty Ltd, the parties were involved in joint ventures to construct dwellings at various locations in Marion. The disputes arose from the execution of a Deed of Settlement which aimed to resolve various legal disputes, including those between the parties and third party purchasers. The Ghaemi parties sought summary judgment to enforce the terms of the Deed, specifically to compel the Opal parties to comply with their obligations under the Deed. The Opal parties argued that the Ghaemi parties had not fully complied with their obligations, particularly in relation to the fourth instalment payment.

The court was required to determine whether the Ghaemi parties had fulfilled their obligations under the Deed and if the Opal parties had defaulted in any manner. The court examined the affidavits and other evidence provided by both parties, particularly focusing on the payment of the fourth instalment and the satisfaction of the conditions precedent. The Ghaemi parties argued that they had satisfied all conditions precedent and made the fourth instalment payment as required, evidenced by the cheque accepted by the Opal parties' solicitor.

The court found that the Ghaemi parties had indeed satisfied the conditions precedent and made the fourth instalment payment as required by the Deed. The court relied on the evidence of acceptance of the cheque by the Opal parties' solicitor and the absence of any notice under the Deed, which would have been necessary if the payment was not accepted. The court held that the payment was complete upon acceptance of the cheque, in line with established legal principles.

Consequently, the court granted summary judgment in favour of the Ghaemi parties and ordered the Opal parties to comply with their obligations under the Deed. The court also directed the Opal parties to refrain from dealing with the escrow transfer pending the determination of the application. The Ghaemi parties were thus able to enforce the terms of the Deed, ensuring compliance by the Opal parties and the continuation of the joint ventures.

Orders

Orders of the court

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Background

Background to the litigation

I have determined to grant summary judgment and make an order for specific performance. I set out below my reasons for this conclusion. Background The primary proceedings arose out of disputes between the parties concerning joint ventures to construct dwellings being undertaken by two companies, 244 Sturt Road Pty Ltd (“244 Co”) and 301 Sturt Road Pty Ltd (“301 Co”) at 244 Sturt Road and 301 Sturt Road in Marion. A number of third party purchasers entered into sale and purchase contracts with 244 Co and 301 Co to purchase dwellings. At the time the primary proceedings were commenced, construction of the dwellings on one property had commenced. The disputes in relation to the joint ventures impeded the ability of the parties to progress the developments to the potential detriment of the third party purchasers. Accordingly, the proceedings were listed for an urgent trial to commence in April 2023. The trial did not proceed as a result of the settlement. The terms of the Deed addressed not only the resolution of the primary proceedings, but also the resolution of District Court proceedings[1] between Ipad Building Services Pty Ltd (“Ipad”) and Opal Capital Pty Ltd (“Opal”) (the “District Court proceedings”). It also resolved disputes notified in writing, but not the subject of proceedings, relating to a development project to be undertaken by Sturt Developments Pty Ltd (“Sturt Developments”) on two properties known as the 309 Property and the 882 Property (the “Sturt Developments dispute”).[1] CIV-22-011801. On 27 July 2023, the Ghaemi parties filed an application in the primary proceedings seeking orders to enforce the terms of the Deed. The Ghaemi parties asserted that they had fully complied with their obligations pursuant to the Deed but the respondents, while having part performed certain aspects, had refused to comply with their obligations under the Deed. The Ghaemi parties sought orders for enforcement in the primary proceedings by summary relief, submitting that the respondents’ default was causing and continuing to cause substantial prejudice to them. The Ghaemi parties contend there was sufficient basis for the Court to enforce the settlement in the primary proceedings. However, in circumstances in which the Deed addressed disputes beyond those the subject of the primary proceedings, the Ghaemi parties chose to issue the new proceedings to enforce the Deed. While the respondents, Mr Aeini and Opal (“Opal parties”), were represented by experienced solicitors and counsel during the proceedings and in the negotiation of the settlement terms, they ceased to act for the respondents after the application for enforcement was filed. Different solicitors acted for a short time but thereafter the respondents were self represented. I initially gave Mr Aeini, leave to appear on behalf of Opal on the basis he was a director of Opal. However, after I became aware that Mr Aeini ceased to be a director in July 2023, I gave Opal the opportunity to obtain legal representation, which it did. Opal did not make submissions on the application for summary judgment. New proceedings

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Clause 1.4(f) of the Deed provides that subject to sub-cls 1.4(a) to (e) and any notices given by the Opal parties to the Ghaemi parties under sub-cls 1.4(a) or (c), if any part of the total sum is not paid to Opal in accordance with the requirements of the Deed by the due date and that default is not remedied within seven days from the date of the default, such amounts in respect of the 244 First Payment, the 244 Second Payment, the 301 Payment, the 309 Payment and the 882 Payment that have not been paid to Opal at that date will become immediately due and payable in full and Opal will be entitled to a consent Court judgment against the parties in default for such amounts of the payments as are unpaid plus interest at a specified rate. Summary judgment application By interlocutory application (FDN 3) dated 6 September 2023, the Ghaemi parties seek summary judgment in relation to paragraph 39.1 of the statement of claim, that is, to compel the Opal parties to comply with their obligations under the Deed and to carry out all actions at their cost to give effect to the requirements of specified clauses of the Deed. While the Ghaemi parties also sought injunctive orders to prevent the Opal parties dealing with the escrow transfer, it was not necessary for the Court to address that aspect of the application as Mr Aeini gave an undertaking not to execute or in any way deal with the escrow transfer pending the determination of the application. The interlocutory application is supported by an affidavit of Ms Tiffany Irving affirmed on 4 September 2023 (FDN 2) (“Irving affidavit”). In support of the application the Ghaemi parties relied on the Irving affidavit, the affidavit of Mr Vozzo dated 2 August 2023 in the primary proceedings (FDN 89) (“Vozzo affidavit”) and the respondents’ submissions (FDN 103) which were said to contain admissions. In the Irving affidavit, Ms Irving deposes to the satisfaction of the conditions precedent contained in the Deed. Ms Irving deposes to participating in settlement negotiations and related correspondence which resulted in the execution of two separate deeds with third party purchasers, one of which was finally executed on 29 March 2023 and the other of which was finally executed on 30 March 2023. Ms Irving also deposed to the satisfaction of the NAB condition precedent and exhibited to her affidavit a copy of an email chain including a release signed by Mr Stevens of NAB dated 21 March 2023. Ms Irving deposes to the payment by the Ghaemi parties of all instalment payments required by the Deed and to her belief that there is no controversy that the Ghaemi parties paid to the Opal parties and the Opal parties accepted payment of each and every amount required to be paid by the Ghaemi parties pursuant to the provisions of the Deed. Ms Irving exhibited to her affidavit documents said to prove each of the instalment payments. In relation to payment of the fourth instalment, Ms Irving referred to and relied upon the Vozzo affidavit. Ms Irving deposed to believing a cheque in the amount of the fourth instalment was delivered by Mr Vozzo by hand to Mr Graham, then solicitor for the respondents, on 5 July 2023 at about 6.00 pm and that Mr Graham accepted the cheque. Ms Irving stated that at no time has notice been received by the solicitors or any of the Ghaemi parties from the Opal parties in accordance with cl 1.4(a) of the Deed.

Ratio Decidendi

Legal Principle Established

The Ghaemi parties submit that Mr Aeini’s refusal to resign as a director of 244 Co and 301 Co is preventing documents being executed in accordance with the Corporations Act 2001 (Cth) (“Corporations Act”), with consequential impact on the companies’ ability to progress developments, including obtaining bank finance. The Ghaemi parties submit I have the power summarily to enforce a deed of settlement and to correct the ASIC register upon application of an aggrieved person pursuant to s 175 of the Corporations Act. The Ghaemi parties rely on the Opal parties’ admissions in the defence including that the primary proceedings were settled by the Deed. In relation to the conditions precedent, the Ghaemi parties point to the admission by the Opal parties of the satisfaction of the conditions precedent. As the instalment payments had to be made in timeframes following satisfaction of the last of the conditions precedent, the date of satisfaction of the last condition precedent is important. The Ghaemi parties observe that the Opal parties admit paragraph 13 of the statement of claim in which the Ghaemi parties plead that the last of the conditions precedent was met on 30 March 2023. Observing that the Opal parties admit the first three instalment payments, the Ghaemi parties submit the contest relates to whether the Ghaemi parties complied with the Deed in making the fourth instalment. The Ghaemi parties rely on the Irving affidavit and the Vozzo affidavit as evidence of the circumstance in which the fourth instalment was paid. The Ghaemi parties submit the payment was made by the provision in person of a cheque to Mr Graham which was handed by Mr Vozzo to Mr Graham and accepted by Mr Graham. The Ghaemi parties refer to the email exhibited to the Aeini affidavit in which Mr Graham stated the cheque was received the day before (that is, on 5 July 2023). The Ghaemi parties dispute the Opal parties’ assertions that the cheque was not provided until 14 days after the fourth instalment was due and point to the admission by the Opal parties that the fourth instalment was due by 28 June 2023 through the respondents’ admission of paragraph 15 of the statement of claim. The Ghaemi parties also rely on the evidence contained in the Aeini affidavit which demonstrates that the fourth instalment was banked into the Opal parties’ solicitor’s trust account on 6 July 2023 and appears to have cleared on 10 July 2023. Further, the Irving affidavit deposes to no notice under the Deed ever being received and the Opal parties not adducing any evidence that such a notice was given. The Ghaemi parties submit that the payment was made when Mr Vozzo handed the cheque to Mr Graham and Mr Graham accepted the cheque. The Ghaemi parties rely on authorities supporting well established principles concerning payment by cheque including to the effect that payment is complete at the time when the tendered cheque is accepted.[2] [2] National Australia Bank Ltd v KDS Construction Services Pty Ltd (1987) 163 CLR 668; Tilley v Official Receiver in Bankruptcy (1960) 103 CLR 529; Fuji Xerox Australia Pty Ltd v Thoi [2018] VSC 483 at [55] per Riordan J.