Hassan v Nadeem - [2022] WASC 160

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HASSAN -v- NADEEM [2022] WASC 160
CORAM:   MASTER SANDERSON
HEARD:   8 MARCH 2022
DELIVERED          :   9 MAY 2022
PUBLISHED           :   9 MAY 2022
FILE NO/S:   CIV 2182 of 2021
BETWEEN:   MAHMADHANIEF HASSAN
First Plaintiff
MOOINODDIN HASSEN
Second Plaintiff
ALAUODIN HASSAN
Third Plaintiff
AND
MUHAMMAD NADEEM
First Defendant
THE REGISTRAR OF TITLES
Second Defendant
SUDHIR KUMAR JINDAL
Third Defendant

Catchwords:

Property law - Application by plaintiffs to extend operation of caveat - Turns on own facts

Legislation:

Nil

Result:

Order caveat be maintained

Category: B

Representation:

Counsel:

First Plaintiff	:	JA Robertson
Second Plaintiff	:	JA Robertson
Third Plaintiff	:	JA Robertson
First Defendant	:	Mr C Breheny
Second Defendant	:	No appearance
Third Defendant	:	In Person

Solicitors:

First Plaintiff	:	Williams & Hughes
Second Plaintiff	:	Williams & Hughes
Third Plaintiff	:	Williams & Hughes
First Defendant	:	Croftbridge
Second Defendant	:	No appearance
Third Defendant	:	In Person

Case(s) referred to in decision(s):

Nil

MASTER SANDERSON:

This matter has a slightly unusual background. On 8 November 2021, the plaintiffs issued an originating summons seeking to extend the operation of a caveat over a property in Canning Vale owned by the first defendant. The originating summons also sought to amend the caveat from an absolute caveat to a subject to claim caveat. On the same day the originating summons was issued, the plaintiffs took out a chamber summons seeking to extend the caveat until further order of the court. That is the conventional way in which matters such as this proceed. Generally at the first return date, the interlocutory application will be programmed for hearing. If there is a serious question to be tried, then the caveat will be extended until the underlying dispute is resolved. It is not unusual for the extension of the caveat to be conditional upon the caveator instituting proceedings to vindicate their right to maintain the caveat. Those proceedings may be initiated in this court or in another jurisdiction.
It was plain in this case there was really only one issue which separated the plaintiffs and the first defendant. That was a question as to whether or not a lease had been signed by the first defendant. It was not in dispute the lease had been signed. What the first defendant said was that it was not his signature, he had never signed the lease and he was not bound by the guarantee which was found in the lease. Given the issue between the parties was so confined, I suggested to counsel I should determine this issue without the need to issue separate proceedings and without requiring pleadings. After some hesitation, counsel agreed to this course of action. There was, in the end, a trial with witnesses cross-examined. Although in his written submissions, counsel for the first defendant raised an issue which he said provided the first defendant with a defence to the claim, in reality the central issue of whether the first defendant had signed the lease remained the only question which divided the parties. For reasons which follow, I am satisfied the first defendant did sign the lease. He is bound by the guarantee contained in the lease and the plaintiff is justified in maintaining the caveat. During the course of the proceedings, the plaintiffs amended the relief sought to include appointment of a receiver to realise the Canning Vale property and satisfy the debt the subject of proceedings. On the face of it, it is appropriate to make such an order but I will not do so without giving the first defendant an opportunity to make submissions on that issue.
In large measure, the facts are not an issue. They can be summarised as follows. On 4 November 2016, a company known as Sunfas Pty Ltd (Sunfas) was registered. Towards the end of 2016, the first and third defendants decided to go into business together selling Indian and Pakistani groceries. On 9 November 2016, the first and third defendants signed lease documents for a shop in Geographe Way, Thornlie.
On 15 February 2017, the first defendant travelled to Pakistan from Australia. On 1 March 2017, the third defendant signed an offer to lease a property in Spencer Road, Thornlie. He sent a copy of those documents to the first defendant by email. The first defendant signed those documents and by email sent copies of the executed documents to the third defendant. Around 12 March 2017, the first defendant returned to Australia.
The lease over the Spencer Road shop was to commence on 1 May 2017. At some point after that date, a Mr Robert Farris of Ron Farris Real Estate (RFRE) witnessed the signature of both the first and third defendants. On that same day, a letter was sent from Murcia Pestell Hillard (then the solicitors for the plaintiffs) to RFRE providing instructions to the effect to draw a lease between the plaintiffs and the first and third defendants. The first defendant then travelled to Pakistan on 3 May 2017. On 15 May 2017, a deed of lease over the premise was effected between the plaintiffs and Sunfas. The first and third defendants were listed as guarantees of Sunfas. The date of 15 May 2017 was inserted into page 1 of the lease. On 18 May 2017, a letter was sent from Tom Jack of RFRE to the third plaintiff and Sunfas confirming the deed of lease had been signed by all parties.
The first defendant returned to Australia on or about 26 May 2017 and then on around 18 June 2017 he returned to Pakistan. He returned to Australia around 10 July 2017.
On 9 October 2018, a document entitled 'Re: Breach of lease - final notice of demand' was sent from RFRE to Sunfas. Between 11 December and 22 January 2019, there was correspondence passing between Mr Jack and the third defendant concerning the first and third defendants' rent being in arrears. On 22 January 2019, the plaintiffs took possession of the property and later that month terminated the lease. On 13 February 2019, the plaintiffs registered the caveat, the subject of these proceedings, over the first defendant's property in Canning Vale. There followed certain further negotiations which are not presently relevant. It is sufficient to note the first defendant caused the Commissioner to issue a 21 day notice which lead to these proceedings being issued. As at the date of hearing, the premises remain vacant.
At the hearing of this matter the plaintiffs relied on nine affidavits, four of which were sworn by the third plaintiff on various dates between 5 November 2021 and 15 February 2022. Among the other affidavits relied upon by the plaintiffs, the only one of importance is the affidavit of Mr Robert Clarence Pritchard Farris filed 18 January 2022. The first defendant relied on one affidavit filed 9 December 2021. The third defendant relied upon an affidavit sworn 20 January 2022.
The first affidavit of the third plaintiff has as 'AH‑1' a copy of the lease of the premises. The three plaintiffs are described as 'the landlord'. Sunfas is described as 'the tenant' and the first and third defendants are described as 'the guarantor'. Clause 60 of the lease deals with 'guarantee'. I need not quote the operative clause because it is not in dispute between the parties. If the first defendant signed the lease, the guarantee clause is operative. The lease is not signed by Sunfas. The plaintiffs say there is an equitable lease and the terms and conditions of the lease, including the guarantee, are operative despite the lease not being executed by the tenant. This is disputed by the first defendant and I will deal with this issue in due course. For present purposes, it is relevant to note there is a signature on page 62 of the lease adjacent to the name of the first defendant and that this signature has been witnessed by Mr Farris. On the face of it then, there is an equitable lease in place and the performance of the obligations under the lease have been guaranteed by the first defendant. The third defendant's signature appears just below the signature of the first defendant and his signature is also witnessed by Mr Farris. He does not dispute he signed the lease.
The third defendant's evidence is brief and to the point. Paragraph 7 of his affidavit reads as follows:
For the second shop at 5/320 Spencer Road, Thornlie, I signed some lease documents on 1 March 2017 and sent a scanned copy via email to Mr Nadeem as he was not in the country at the time. Mr Nadeem signed the lease papers on 2 March 2017 and sent them back via email on the same day.
Attached and marked 'SKJ1' are copies of those lease documents and Mr Nadeem's email.
Attachment 'SKJ1' is a document titled 'Heads of Agreement'. It shows Sunfas as the lessee and the predecessors of the present plaintiffs as lessor. The guarantors are said to be the first and third defendants. The final page of the attachment contains two signatures and by his own admission, one is the third defendant's signature. The other signature appears above the printed name of the first defendant. There then follows a document titled 'Contract to Lease Retail Premises by Offer and Acceptance'. Once again, that document would appear to be signed by the first defendant. It is certainly signed by the third defendant and his signature is witnessed by Mr Farris. There then follows a document entitled 'Annexure A - Contract to Lease Retail Premises by Offer and Acceptance'. Once again, it appears to be signed by the first defendant. It is certainly signed by the third defendant.
There then follows an email chain. As is the way of these things, working from the bottom up, there is an email from the third defendant to the first defendant. It reads as follows:
Hi Bro
Please sign the documents and sent (sic) it to me today.
Thank you
There then follows an email which, on the face of it, came from the first defendant. It was sent to the third defendant and it is dated 2 March 2017. It comprises only one word: 'Done'.
The third defendant goes on to recount the history of how the business, which was being run from the premises, failed and the plaintiffs demanded payment of the rent. Relevantly, he says (at paragraph 18):
I confirm Mr Nadeem and I signed original copies of the lease documents and that our signatures were both witnessed by Robert Farris. I obtained a copy of the lease from the Plaintiffs' solicitors and confirm it is the same lease Mr Nadeem and I signed in 2017.
Attached and marked 'SKJ4' is a copy of the original lease of the Shop at 5/320 Spencer Road, Thornlie.
The third defendant was cross-examined both by counsel for the plaintiff and counsel for the first defendant. He struck me as a witness of truth who recounted events he clearly remembered. He did not see the first defendant sign the lease, but he was in no doubt the first defendant had agreed they would cause Sunfas to lease the premises and they would guarantee the company's liabilities. He was entirely unshaken in cross-examination.
Mr Farris is a very experienced real estate agent who at the time had responsibility for the premises. In his affidavit he gives a brief background to how the premises came to be leased and notes that he dealt with both the first and third defendants. The operative part of his evidence is as follows:
7.I recall I witnessed both the signatures of Mr Nadeem and Mr Jindal and recollect I had to either get Mr Nadeem to sign before or after he went overseas around the time Sunfas entered into the Lease of the Premises.
8.I recollect I went to another business premises to witness Mr Nadeem sign the lease as guarantor. I do not recollect exactly where the other business premises was, but recall it was not far away from the Premises.
It is the case that Mr Farris was not entirely sure where he had witnessed the first defendant sign the lease. But he is in no doubt that he did witness the first defendant's signature and that it was the first defendant who signed the document. Mr Farris was cross-examined by counsel for the first defendant. His evidence was unshaken and he struck me as a witness of truth. In reaching that conclusion, I have taken into account first, he was very experienced as a real estate agent and knew the importance of a signature being witnessed and second, he was in large measure, an independent witness who had no vested interest in the proceedings.
Turning then to the evidence of the first defendant, paragraphs 1 through to 13, he provides some background to the relationship between him and the third defendant. The thrust of this evidence is to the effect that although the first and third defendants were acquaintances and although the first defendant lent the third defendant money, they were not in business together and it was never the first defendant's intention they should go into business together. In paragraphs 15 through to 21, the first defendant details some email exchanges passing between him and the third defendant. At no stage does the first defendant deal with the emails referred to by the third defendant in his affidavit. To be fair, at the time the first defendant swore his affidavit, the affidavit of the third defendant had not been sworn and filed. But at no stage subsequent to the filing of the third defendant's affidavit, did the first defendant seek to explain the emails relating to the agreement to lease.
The central aspect of the first defendant's evidence is found in pars 40 to 46 of his affidavit. Those paragraphs read as follows:
40.I did not sign either the Tenant Guide or the lease. I also did not authorise anyone to sign those documents on my behalf.
41.The second last page of the Tenant Guide (which is page 260 of this affidavit) has a signature above my name and the date alongside it as 2 March 2017. I did not sign that document. That is not my signature. I was not in Australia on that date.
42.There are two other similar signatures on page 30 of the Tenant Guide (which is page 256 of this affidavit) to that above my name of the second last page of the Tenant Guide. They are not my signatures. The second of those signatures on that page has the date 2 March 2017 alongside it. I was not in Australia on that date.
43.I did not sign the lease. The lease was executed on 15 May 2017. I was not in Australia on that date.
44.I have no knowledge of the signatures on the Tenant Guide and the lease that are said to be mine.
45.I have never corresponded or negotiated with the Plaintiffs or their agent in relation to the lease before it was executed.
46.I never authorised Mr Jindal to represent me personally or negotiate on my behalf in relation to the lease or the guarantee.
The first defendant was cross-examined with some vigour by counsel for the plaintiffs. I am satisfied he was not a witness of truth. I am satisfied he did sign the offer to lease documents and the lease itself. The first defendant was unable to explain the email exchange in the third defendant's affidavit. The explanation he gave was untenable. More to the point, his denial of having signed the document in front of Mr Farris was simply unbelievable. He could offer no explanation as to why an imposter - and on his version of events it must have been an imposter - would have signed the lease. He also could not explain how the signature on the lease was so close to his signature even to the untrained eye. In the circumstances, I am satisfied the first defendant is liable under the terms of the guarantee.
The subsidiary argument put by counsel for the first defendant was to the effect that as the lease was not executed by Sunfas, the lease was invalid and the guarantee was of no force and effect. It is clear in this case the first and third defendants caused Sunfas to enter into an equitable lease of the premises in the circumstances the guarantees provided by the first and third defendants are enforceable. That in turn means the caveat will be maintained. I would order amendment of the caveat to a subject to claim caveat.
On publication of these reasons, the parties should within seven days file short submissions dealing with the form of orders and the relief available to the plaintiffs. They should also deal with the question of costs which in the circumstances, should follow the event unless there is some particular reason why that should not be the case.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AH
Associate to Master Sanderson
9 MAY 2022