Ibrahim v Ayoubi

[2013] NSWCA 405

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Ibrahim v Ayoubi [2013] NSWCA 405

Hearing dates:

22 November 2013

Decision date:

05 December 2013

Before:

Emmett JA, Sackville AJA

Decision:

The application for an extension of time in which to file the application for leave to appeal is refused.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PRACTICE AND PROCEDURE - orders made in defendant's absence - primary Judge refuses to set aside orders - application for an extension of time to file an application for leave to appeal - sufficiency of explanation for defendant's absence - no arguable defence shown - no question of principle

Legislation Cited:

Civil Procedure Act 2005, s 56
Supreme Court Act 1970, s 101(2)

Uniform Civil Procedure Rules 2005, rr 29.7, 51.10

Cases Cited:

Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331
Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239

Category:

Principal judgment

Parties:

Michael Ibrahim (First Applicant)
Fatat Faleh (Second Applicant)
Jihad Ayoubi (First Respondent)
Sanna Ayoubi (Second Respondent)

Representation:

Counsel:

First Applicant in person (Applicants)

Second Respondent in person (Respondents)

File Number(s):

2013/272605

 Decision under appeal 

Jurisdiction:

9111

Citation:

[2013] NSWSC 204

Date of Decision:

2013-02-28 00:00:00

Before:

White J

File Number(s):

2012/357843

Judgment OF THE COURT

1. The applicants seek leave to appeal from a judgment of a Judge of the Equity Division of this Court (White J): Ayoubi v Faleh [2013] NSWSC 204. In that judgment, his Honour refused to set aside orders made by Gzell J on 15 February 2013, entering judgment for the first respondent ("Mr Ayoubi") against the first applicant ("Mr Abraham"). (The first applicant is referred to in court documentation as Mr Ibrahim, but he informed the Court that his name is Mr Abraham.) Leave to appeal is required because White J's judgment was interlocutory and, in any event, the amount in issue is less than $100,000: Supreme Court Act 1970, s 101(2)(e), (r).

1. The ex tempore judgment of White J was given on 28 February 2013. The summons seeking leave to appeal was not filed until 9 September 2013, over five months out of time: see Uniform Civil Procedure Rules 2005 ("UCPR"), r 51.10(1)(b). Mr Abraham's affidavit in support of the summons merely says that he was not aware that there were time limits within which he had to lodge an appeal.

Proceedings in the Supreme Court

1. The factual background of the case, as it appears from the judgment of White J, may be shortly stated. On 16 November 2012, the respondents, Mr Ayoubi and his mother, Mrs Sanna Ayoubi, brought proceedings against the applicants, Mr Abraham and Fatat Faleh. They alleged that Mr Ayoubi had made an oral agreement with Mr Abraham to sell a Honda NSX motor vehicle to him for $25,000 and that Mr Abraham had paid a deposit of $500 pursuant to the agreement. It was further alleged that Mr Abraham had paid money to Mr Ayoubi's brother, Mohamed Ayoubi, who had permitted Mr Abraham to remove the vehicle from Mrs Ayoubi's house. The respondents claimed that Mr Abraham had not paid the balance of the agreed price of $24,500. Mr Abraham's defence was that he had purchased the vehicle from Mohamed Ayoubi.

1. The parties to the alleged contract were Mr Abraham and Mr Ayoubi. However, it appears that Mrs Ayoubi contributed to the purchase price and presumably for that reason was joined as a plaintiff in the proceedings. It is less clear why Fatat Faleh was joined as a defendant.

1. Despite the claim being for a small amount, it has come before the Equity Division of the Supreme Court on a number of occasions. On 16 November 2012, the respondents successfully applied ex parte for an injunction restraining the applicants from dealing with the vehicle. On 20 November 2012, the matter was adjourned before the duty Judge and stood over to 26 November 2012. In the interim, it appears that Mr Abraham sold the vehicle to a buyer for $12,000 in cash.

1. On 3 December 2012, Bergin CJ in Eq ordered Mr Abraham to pay $6,200 into court, this sum apparently being the balance of the purchase price retained by him. Her Honour also made orders for the service of evidence and fixed the matter for hearing on 15 February 2013.

1. When the matter came before Gzell J on 15 February 2013, there was no appearance for the applicants. His Honour granted leave to the respondents to file in court a further amended summons and also granted leave to file further affidavits of Mr Ayoubi and Sanna Ayoubi. The respondents' counsel indicated to his Honour that no relief was sought against Fatat Faleh.

1. After hearing from the respondents' counsel, Gzell J entered judgment for Mr Ayoubi against Mr Abraham for $24,500. His Honour also ordered that the moneys in court be paid out to Mr Ayoubi.

1. The transcript of the proceedings before Gzell J does not identify the power upon which his Honour relied to make orders in the absence of Mr Abraham. Presumably, however, his Honour made the orders pursuant to UCPR, r 29.7. Sub-rule 29.7(1) is a general power in a court to proceed with a trial if a party is absent. Sub-rule 29.7(3) empowers the court, in relation to a liquidated claim, to give judgment for the plaintiff against a defendant who does not appear, on evidence of the amount due to the plaintiff.

1. On 18 February 2013, Mr Abraham filed a notice of motion seeking to set aside the orders of Gzell J. In an affidavit sworn on 19 February 2013, Mr Abraham deposed that he was running late for court on 15 February 2013 and had attempted to leave a message through the Court Registry to that effect. According to Mr Abraham, the message had been received at 9.56 am, but had not been passed on to Gzell J.

1. On 19 February 2013, an order was made staying the orders made by Gzell J.

1. On 28 February 2013, Mr Abraham's notice of motion came before White J, sitting as the duty Judge in the Equity Division. Mr Abraham again did not appear when the matter was called. Accordingly, his Honour ordered that Mr Abraham's motion be dismissed with costs.

1. In the afternoon of the same day, Mr Abraham appeared before White J. He sought to file a fresh notice of motion seeking orders setting aside the judgment given in his absence by Gzell J on 15 February 2012. Mr Abraham informed White J that the reason for his non-appearance that morning was that he had not woken up in time. He claimed that his failure to wake up in time was a consequence of his bipolar disorder. In support of his claim, he tendered a medical certificate dated 12 February 2013 which indicated that he suffered from a bipolar condition. As White J pointed out in his judgment (at [18]), however, the certificate "[did] not, on its face, support bipolar disorder as being an adequate reason for not waking up in time for court proceedings".

1. White J accepted (at [19]) that the Court had power pursuant to UCPR, r 36.16 to set aside orders made in the absence of a party, in this case Mr Abraham. His Honour noted (at [20]) that factors relevant to the exercise of the power conferred by r 36.16 included the reason for Mr Abraham's failure to appear before Gzell J; whether delay would operate to Mr Ayoubi's prejudice; and Mr Abraham's prospects of success in the proceedings. White J also observed (at [21]) that the Court was obliged to seek to give effect to the "overriding purpose" of facilitating the just, quick and cheap resolution of the real issues in dispute: Civil Procedure Act 2005 ("CP Act"), s 56.

1. White J recorded (at [22]) that Mr Abraham's contention was that Mohamed Ayoubi was the true owner of the vehicle. His Honour noted (at [23]-[24]) that Mohamed Ayoubi had deposed in an affidavit that he had bought a severely damaged Honda vehicle in about 2004 for cash, paying between $38,000 to $48,000. However, Mr Ayoubi had filed an affidavit stating that he had purchased the vehicle in question in 2003 for $68,000. His affidavit annexed a copy of a contemporaneous document, apparently from a car dealer, recording the purchase of the vehicle by Mr Ayoubi for that amount. Mr Ayoubi also annexed what appeared to be a handwritten copy of a receipt issued by him acknowledging payment by Mr Abraham (referred to as "Michael Abraham") of the sum of $500 in connection with the sale of the vehicle.

1. White J assessed the evidence as follows (at [29]):

The objective support for Mr [Abraham]'s contention that Mr Mohamed Ayoubi was the owner of the vehicle is extremely slender. On the material to which I have been referred, it consists of no more than Mr Mohamed Ayoubi's assertion that he paid for the vehicle in cash in 2004, a contention that is not only contradicted by the evidence of Mr Jihad Ayoubi and his mother, but by the only documentary materials to which I have been taken.

1. His Honour then said (at [30]) that the other issue that would have been before Gzell J, had Mr Abraham appeared on 15 February 2012, was the measure of damages. It is not clear why his Honour thought that damages would be an issue, since Mr Ayoubi's claim was for the unpaid balance of the purchase price due under the agreement for the sale of the car, namely $24,500.

1. White J continued as follows:

34. The explanation for the non-appearance of Mr [Abraham] when the matter was before Gzell J on 15 February is not really satisfactory.

35. Having regard to the amount which is at stake and to the fact that the issue of quantum would appear to turn on the conflict of oral evidence between the four persons involved and the dictates of s 56 that the Court is to have regard to the requirements of seeking to facilitate the just, quick and cheap resolution of the real issues, I am not satisfied that it would be appropriate to exercise the discretion under r 36.16 to set aside the orders made on 15 February. The Court provided the facility for the resolution of the real issues in dispute on that day.

36. The fact that Mr [Abraham] is not legally represented is not a reason for setting aside the orders. It would not be consistent with s 56 of the Civil Procedure Act for the orders to be set aside and for there to be a further hearing, even limited to questions of quantum.

37. Accordingly, had Mr [Abraham] presented in court this morning when the matter was called, the argument that he presented this afternoon, I would not have acceded to the application listed before me this morning.

1. White J declined to set aside his orders of 28 February 2013 by which he dismissed Mr Abraham's notice of motion, with costs. His Honour also dismissed Mr Abraham's notice of motion of 28 February 2013.

The application for leave to appeal

1. The summons seeking leave to appeal, draft notice of appeal and summary of argument contain largely identical material, which can be summarised as follows:

• The decision of Gzell J was made ex parte and in circumstances that amounted to a denial of natural justice, as his Honour allowed the respondents to amend their application and to file additional evidence. Neither the amended application nor the additional evidence was served on the applicants before the ex parte hearing.

• White J dealt with the applicants' motion to set aside the ex parte judgment of Gzell J when Mr Abraham was not prepared to have the notice of motion heard, as he had been ill. When later that day, the applicants requested White J to reinstate the motion, his Honour determined a number of factual issues against the applicants without giving them an opportunity to present their evidence properly or to be represented and in circumstances that amounted to a denial of natural justice.

• His Honour should have found that the applicants had an arguable case which should have been allowed to proceed to trial.

• There was no urgency or other pressing need that precluded the Court below from allowing the applicants to be heard. The applicants' failure to appear was explained, and could have been appropriately addressed by a costs order.

1. Two matters should be noted at the outset. The first is that it is very difficult to understand the complaint that Mr Abraham did not have an adequate opportunity to put his case to White J. Mr Abraham filed his motion to set aside Gzell J's judgment on 18 February 2012, ten days before the application was heard. In the meantime, on 19 February 2012, he obtained a stay of the order made by Gzell J for the payment out of moneys that had been paid into court. Mr Abraham had the opportunity to prepare and present any affidavit or documentary evidence on which he relied. It is true that Mr Abraham was unrepresented, but that does not establish that he did not have an opportunity to put material in support of his case to White J.

1. Secondly, Mr Abraham in his affidavit filed in support of his application for leave to appeal offered no explanation for the delay of over five months in filing his application for leave to appeal, other than that he was unaware of the time limit. A bare assertion that he did not know of the time limits hardly qualifies as an explanation for such a delay.

1. When invited to make oral submissions to this Court, it was pointed out to Mr Abraham that he had offered no satisfactory explanation for the delay in filing the application for leave to appeal. He then tendered a report dated 19 June 2013 from a clinical psychologist. This report confirms that Mr Abraham has a bipolar condition and that his ability to perform certain tasks is impaired. However, the report does not suggest that Mr Abraham was incapable of filing an application for leave to appeal earlier than he did. While one can only have sympathy for Mr Abraham so far as his medical condition is concerned, it appears to be a long standing condition that did not prevent him taking action to stay the orders made by Gzell J.

1. There is a strong argument that even if Mr Abraham were able to demonstrate that he has an arguable defence to Mr Ayoubi's claim, he should not be granted an extension of time in which to file the application for leave to appeal. I accept that he has a significant illness. But that illness does not explain his failure to appear in time on two separate occasions when his matter was before the court. It certainly does not provide an adequate explanation for the prolonged delay in filing the application currently before the Court.

1. It must be remembered that the judgment against Mr Abraham is for a relatively small sum. The proceedings were commenced more than a year ago. In refusing to set aside Gzell J's decision, White J correctly took into account the "overriding purpose" of the CP Act and the rules, namely "to facilitate the just, quick and cheap resolution of the real issues in the proceedings". Mr Abraham has had ample opportunities to put forward evidence in support of his defence, but has not done so in a timely fashion.

1. Even so, if Mr Abraham demonstrated before White J that he had an arguable defence to the claim, there may be a basis for extending time for the filing of an application for leave to appeal and for permitting Mr Abraham to defend the proceedings. But Mr Abraham has not shown that White J erred in concluding that he (Mr Abraham) failed to establish that he had an arguable defence. In order for a defendant to succeed in an application to set aside a judgment obtained after an undefended hearing on the merits, it is ordinarily necessary for him or her to show, by affidavit or otherwise, that he or she has a good defence on the merits: Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 at 243; Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331, at [48]-[51]. Mr Abraham has not done so.

1. In his oral submissions, Mr Abraham asserted that he had made contact with a solicitor who was prepared to represent him in the proceedings. However, there was no evidence to that effect and the solicitor has not filed a notice of appearance or given any indication to the Court that he is prepared to act on behalf of Mr Abraham. Once again, one can sympathise with Mr Abraham's difficulties in obtaining representation, but he has had more than sufficient time to arrange representation, if that was his wish.

1. The application for an extension of time in which to file the application for leave to appeal should be refused.

1. As Mr Ayoubi did not appear and was content for his mother to appear on his behalf, there should be no order for costs in relation to the applications for an extension of time and for leave to appeal.

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Decision last updated: 05 December 2013