Leedman v Chahhoud

[2024] NSWSC 1284

Supreme Court

New South Wales

Medium Neutral Citation:

Leedman v Chahhoud [2024] NSWSC 1284

Hearing dates:

23-26, 29, 31 July, 7 August 2024

Date of orders:

16 October 2024

Decision date:

16 October 2024

Jurisdiction:

Equity - Real Property List

Before:

Williams J

Decision:

See orders at [344].

Catchwords:

EQUITY – Equitable charges – Enforceability – Order for judicial sale.

CONTRACTS – Formation – Intention to be bound.

DURESS – Whether the first defendant signed deed under duress exerted by second defendant – Where the evidence does not establish duress – Where the plaintiffs (being the parties seeking to enforce the deed) did not have actual or constructive knowledge of the alleged duress, – Where plaintiffs did not use the second defendant as their agent to procure the first defendant’s execution of the deed.

EQUITY – Undue influence – Whether the first defendant signed the deed as a result of undue influence of the second defendant – Where the evidence does not establish undue influence –

Equity – Yerkey v Jones – Where the first defendant was not a volunteer.

EQUITY – Unconscionable conduct – Whether the first defendant suffered from a special disadvantage, ­ Whether the plaintiffs had actual or constructive knowledge of any special disadvantage.

CONTRACTS – Unjust contracts – Whether the terms of the deed are unjust under the Contracts Review Act 1980 (NSW) – Where the proper law of the deed is the law of Queensland.

Legislation Cited:

Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAB, 12CA, 12CB, 12CC

Civil Procedure Act 2005 (NSW) s 101

Contracts Review Act 1980 (NSW) ss 6(2), 17(3)

Property Law Act 1974 (Qld) s 45

Cases Cited:

Abdallah v Baygan [2019] NSWSC 1507

Abdallah v Baygan (No. 4) [2020] NSWSC 1075

Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418; [1996] HCA 39

Australia and New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344

Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246

Braam v BBC Hardware Ltd [2020] VSCA 164

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24

Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; [2002] NSWCA 413

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8

ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Garcia v National Australia Bank Ltd

(1998) 194 CLR 395; [1998] HCA 48

Ghannam v BB&B Penrith Pty Ltd [2022] NSWSC 1588

Helou v Chahhoud [2021] NSWSC 878

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

King Investment Solutions Pty Ltd v Hussain (2005) 64 NSWLR 441; [2005] NSWSC 1076

MSPR Pty Ltd v Advanced Braking Technology Ltd [2013] NSWCA 416

Morris Finance Ltd v Free (2017) 18 BPR 37,223; [2017] NSWSC 1417

Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102

Narain v Euroasia (Pacific) Pty Ltd (2009) 26 VR 387; [2009] VSCA 290

Nitopi v Nitopi (2022) 109 NSWLR 390; [2022] NSWCA 162

Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission [2024] HCA 27

Retirement Village Bargo Pty Ltd v Anwar (2023) 21 BPR 44,177; [2023] NSWSC 209

Roberts v Investwell Pty Ltd (in liq) (2012) 88 ACSR 689; [2012] NSWCA 134

Rogers v Rogers [2020] NSWSC 392

Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102

Sood v Christianos (2008) 14 BPR 26,101; [2008] NSWSC 1087

Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6

Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; [2004] HCA 52

Wakim v Senworth Capital Pty Ltd [2024] NSWCA 102

Watson v Foxman (1995) 49 NSWLR 315

Yerkey v Jones (1939) 63 CLR 649; [1939] HCA 3

Texts Cited:

J D Heydon, M J Leeming, P G Turner, Meagher Gummow & Lehane’s Equity Doctrines & Remedies (5th ed, 2015, LexisNexis)

N Seddon, Seddon on Deeds (2nd ed, 2022, The Federation Press)

Category:

Principal judgment

Parties:

Kim Leedman (First Plaintiff)
Anita Leedman (Second Plaintiff)
Trilam Developments Pty Ltd (ACN 130 367 412) (Third Plaintiff)
Chadia Chahhoud (First Defendant)
Elias Taleb (Second Defendant)
Fawaz Helou (Third Defendant)
Ozem Kassem in his capacity as liquidator of Class 1 Form Pty Ltd (In liquidation) (Fourth Defendant)

Representation:

Counsel:
Mr Daniel Krochmalik with Ms Ada Lim (Plaintiffs)
Ms Chadia Chahhoud (Litigant in person) (First Defendant)

Solicitors:
JHK Legal (Plaintiffs)
Ms Chadia Chahhoud (Litigant in person) (First Defendant)

File Number(s):

2022/158199

Publication restriction:

N/A

Judgment

Introduction

1. The plaintiffs in these proceedings are Mr Kim Leedman, Mrs Anita Leedman, and Trilam Developments Pty Limited. Mr and Mrs Leedman are the directors and shareholders of Trilam Developments.

2. The proceedings arise out of a deed dated 16 June 2017 between the plaintiffs (referred to in the deed as the “Retiring Entities”) and Mr Elias Taleb (the second defendant), Ms Chadia Chahhoud (the first defendant), Class 1 Form Pty Limited, Steadiform Pty Limited, Steadiform Holdings Pty Limited, Akena Pty Limited, Akena Installations Pty Limited, and Elias Pty Limited (referred to in the deed as the “Continuing Entities”).

3. The purpose of the deed, as recorded in the recitals, was to dissolve the legal and commercial relationships between the Retiring Entities and the Continuing Entities in relation to the activities of entities defined as the “Affected Entities” – Class 1 Form, Steadiform, Steadiform Holdings, Akena, Akena Installations, and the Steadiwall Intellectual Property Trust – including the development of structural formwork systems under the names “Class 1 Form” and “Steadiform”.

4. The deed required the Retiring Entities to surrender their shares in the Affected Entities and their units in the Steadiwall Intellectual Property Trust, to assign their interest in the intellectual property in the structural formwork systems to the Continuing Entities, and to resign from all positions of office in the Affected Entities, in consideration for payment of a “Settlement Amount” of $2,100,000. The sum of $600,000 was payable on execution of the deed (the “Initial Payment”), with the balance of the Settlement Amount payable within two years (the “Deferred Payment”). Interest accrued on the balance at the rate of 1% per month, on a compounding basis. The deed provides that the Continuing Entities’ liability to pay the Settlement Amount is joint and several.

5. By clause 7.1 of the deed, each of the Continuing Entities granted a security interest in its present and after-acquired property to each Retiring Entity to secure payment of the Settlement Amount.

6. The Retiring Entities complied with their obligations under the deed, including taking the necessary steps to surrender their shares in the Affected Entities and their units in the Steadiwall Intellectual Property Trust.

7. As referred to in more detail later in these reasons, the Retiring Entities’ surrender of those shares and units resulted in Elias Pty Limited becoming the sole shareholder of Steadiform and Steadiform Holdings increasing its shareholding in Akena and Akena Installations, and becoming the sole unitholder in the Steadiwall Intellectual Property Trust.

8. Elias Pty Limited was registered in the Australian Capital Territory in June 2013. Ms Chahhoud has been the sole director and shareholder of Elias Pty Limited since October 2015.

9. Ms Chahhoud was married to Mr Taleb at all times relevant to these proceedings, including when she executed the deed in her personal capacity and in her capacity as the sole director of Elias Pty Limited on 16 June 2017. Ms Chahhoud and Mr Taleb separated in October 2021.

10. The Continuing Entities made the Initial Payment of $600,000 when the deed was executed. They failed to make the Deferred Payment of $1,500,000, plus interest in accordance with the deed, by the due date of 16 June 2019.

11. In February 2019, Ms Chahhoud acquired a rural property at Parkers Road in Peak View, near Cooma in New South Wales (the Peak View property). ^[1]

    1. [Redacted] in deposited plan [redacted].

12. The plaintiffs commenced these proceedings on 31 May 2022 claiming: (1) a declaration that the plaintiffs have an equitable charge over the Peak View property; (2) an order in favour of the plaintiffs as equitable chargees for judicial sale of the Peak View property, and ancillary orders including orders requiring the third and fourth defendant to remove caveats lodged against the title to the Peak View property; (3) judgment against each of the first and second defendants – Ms Chahhoud and Mr Taleb – in the amount of the Deferred Payment, plus interest up to the date of judgment in accordance with the deed and interest after the date of judgment pursuant to s 101 of the Civil Procedure Act 2005 (NSW); and (4) an order for costs on an indemnity basis.

13. The proceedings were dismissed as against the third and fourth defendants in April and May 2023 after those defendants withdrew their caveats from the title to the Peak View property.

14. Summary judgment for the balance of the Settlement Amount plus interest was entered against Mr Taleb on 11 July 2023. The plaintiffs have not recovered any part of that judgment sum from Mr Taleb.

15. It remains for the Court to determine the plaintiffs’ claims against Ms Chahhoud.

16. At this stage, the plaintiffs wish to have judgment entered against Ms Chahhoud only in respect of their claim for judicial sale of the Peak View property. The plaintiffs wish to defer until some point after the property has been sold in accordance with any order for judicial sale their claim for judgment to be entered against Ms Chahhoud for the amount owing under the deed following the application of the sale proceeds of the Peak View property in reduction of that amount. The evidence indicates that the value of the Peak View property is considerably less than the principal amount of $1,500,000 owing under the deed, without even taking into account interest that has accrued since 16 June 2019. The plaintiffs apprehend that they might lose the benefit of the claimed equitable charge if judgment were entered against Ms Chahhoud on their claim for an order for judicial sale and on their monetary claim concurrently, due to a potential merger of the choses in action in any monetary judgment. ^[2]

    2. Abdallah v Baygan [2019] NSWSC 1507, especially at [17] (Ball J); Abdallah v Baygan (No. 4) [2020] NSWSC 1075.

17. Ms Chahhoud does not dispute that she signed the deed. By her defence and cross-claim filed on 6 March 2024, Ms Chahhoud pleads that the deed is ineffective, void, or liable to be set aside against her on one or more of the following grounds: (1) she did not intend to be bound by the deed; (2) the “special wives equity” in Yerkey v Jones; ^[3] (3) Mr Taleb, to whom she was married at the time, procured her execution of the deed, at the direction of the plaintiffs, by duress, by undue influence, or by unconscionable conduct, and the plaintiffs knew or ought reasonably to have known this; (4) unconscionable conduct on the part of the plaintiffs within the meaning of the general law or within the meaning of ss 12CA and 12CB of the Australian Securities and Investments Commission Act 2001 (Cth); and/or (5) the deed is unjust within the meaning of the Contracts Review Act 1980 (NSW).

    3. (19393) 63 CLR 649; [1939] HCA 3.

18. Ms Chahhoud’s claim of unconscionable conduct is founded on her allegation that, at the time that she signed the deed, she was suffering from a special disadvantage by reason of: (1) not having been given an opportunity to negotiate any of the terms of the deed, and not having been represented during those negotiations; (2) not having been provided with a complete copy of the deed prior to and at the time of signing the deed; (3) not being afforded the opportunity to review the deed prior to signing it; (4) not being afforded the opportunity to obtain independent legal advice in relation to the deed prior to signing it; (5) the provisions of the deed not being explained to her accurately, or at all, before she signed the deed; (6) the provisions of the deed, which was written in English, not being translated for her in a language that she could understand, before she signed the deed, her first language being Arabic; (7) her lack of knowledge or understanding of the nature or effect of the deed that she was being asked to sign; and (8) her lack of intention to be bound by the deed. Ms Chahhoud alleges that Mr and Mrs Leedman and Trilam Developments knew, or ought reasonably to have known, that they did not allow any time, or did not allow adequate time, for Ms Chahhoud to have the nature and effect of the deed explained to her, or to obtain independent legal advice before signing the deed.

19. For the reasons that follow, I have determined that: (1) Ms Chahhoud’s conduct in signing the deed, considered objectively, conveyed to the plaintiffs that she intended to be bound by it; (2) the “special wives equity” does not apply to the deed because Ms Chahhoud was not a volunteer; (3) Ms Chahhoud has not established that she signed the deed under duress or illegitimate pressure, or by reason of undue influence or unconscionable conduct by Mr Taleb; (4) the plaintiffs did not engage in unconscionable conduct in connection with Ms Chahhoud’s execution of the deed; (5) ss 12CA and 12CB of the Australian Securities and Investments Commission Act do not apply to the deed; and (6) the Contracts Review Act does not apply to the deed.

20. I have also determined that the deed, properly construed, creates an equitable charge in favour of the plaintiffs over the Peak View property acquired by Ms Chahhoud after she executed the deed, and that orders should be made for judicial sale of the Peak View property by way of enforcement of that equitable charge.

21. In coming to those conclusions, I have considered all of the evidence and all of the parties’ written and oral submissions, although I have not found it necessary to expressly refer to all elements of those submissions in these reasons. ^[4] In particular, I have not found it necessary to refer to those elements of Ms Chahhoud’s closing submissions that asserted matters of fact in respect of which no evidence was adduced at the hearing that was conducted over six days, or that propounded allegations against the plaintiffs that are outside the scope of the pleaded defence and cross-claim.

Salient evidence and findings of fact

4. The plaintiffs’ written and oral opening submissions, Ms Chahhoud’s oral opening submissions, all parties’ written and oral closing submissions, and all parties’ further supplementary closing submissions made in writing, with leave.

Reliability and credibility of witness testimony

22. As referred to in more detail later in these reasons, Ms Chahhoud and Mr Taleb executed the deed on which the plaintiffs sue at the Canberra office of Ashurst, who were the solicitors acting for the plaintiffs in relation to the deed. Mr and Mrs Leedman were not present on that occasion. The signatures of Ms Chahhoud and Mr Taleb were witnessed by an employed solicitor of Ashurst, Mr Robert Andersen, who gave evidence in these proceedings.

23. As the plaintiffs submitted, and as discussed in more detail later in these reasons, Mr Andersen was careful to distinguish between his very limited recollection of the occasion when Mr Taleb and Ms Chahhoud attended Ashurst’s office to sign the deed on 16 June 2017, and evidence of his usual practice when witnessing parties’ execution of a deed. It is entirely unsurprising that Mr Andersen does not now claim to have a detailed recollection of that occasion seven years ago, and cannot even specifically recall watching Mr Taleb and Ms Chahhoud sign the deed. It is to Mr Andersen’s credit that he took care not to overstate the extent of his recollection. As the plaintiffs submitted, Mr Andersen gave direct, non-evasive answers in cross-examination, including stating succinctly and without hesitation that he has no recollection of taking certain steps that Ms Chahhoud put to in him cross-examination should have been taken before she signed the deed. I accept Mr Andersen as a credible witness, who gave truthful evidence of his limited recollection of the occasion on which the deed was signed, and who put forward the contemporaneous documents that are capable of casting some light on what occurred at Ashurst’s Canberra office on that occasion. ^[5] I reject Ms Chahhoud’s submission, which I understood to be directed to Mr Andersen’s credibility, that he had a conflict of interest, or that he may be biased in favour of the plaintiffs, because he is employed by a firm of solicitors who had acted for the plaintiffs in relation to the deed (although not in those proceedings), and because Mr Andersen personally had some involvement in representing Mr Leedman in other proceedings. It was not put to Mr Andersen in cross-examination that his evidence was affected by any such conflict or bias. It is inherently improbable that Mr Andersen would give untruthful evidence thereby breaching his legal obligations as a witness and exposing himself to disciplinary and other sanctions as a solicitor.

    5. See [193]-[216] below.

24. As the plaintiffs submitted, Mr Leedman and Mrs Leedman answered questions under cross-examination in a direct, responsive and non-obfuscating manner. More importantly, each of them readily made concessions, including concessions that may have felt uncomfortable with the benefit of hindsight. For example, each of Mr and Mrs Leedman conceded that they had not communicated with Ms Chahhoud about the proposed deed at any stage before she signed it, and that Mr Taleb had not told them that he was authorised to negotiate the deed on behalf of Ms Chahhoud. ^[6] I accept Mr and Mrs Leedman as credible witnesses who gave truthful evidence to the best of their recollection.

    6. See [279] below.

25. Ms Chahhoud told several lies under oath in these proceedings when she apparently thought that it would assist her defence and cross-claim to do so. I refer to my findings in relation to each of those lies at [39], [43]–[53], [87], [92]–[97], [284] and [288] below.

26. Ms Chahhoud’s credibility was further undermined by: (1) inconsistencies between her two affidavits sworn and affirmed in these proceedings; ^[7] (2) inconsistencies between those affidavits and her evidence given under cross-examination,^[8] during which she had a tendency to give speeches arguing for her cause rather than answering the direct question that had been asked of her; (3) inconsistences between her evidence and contemporaneous documents; ^[9] (4) inconsistencies between Ms Chahhoud’s evidence and statements that she made to the Court in her submissions in these proceedings; ^[10] and (5) inconsistencies between her evidence in these proceedings and statements that she has made previously in the course of giving evidence in earlier proceedings in this Court. ^[11]

    7. See [226]–[227] below.

    8. See [76], [78] and [92]–[97] below.

    9. See [76], [142]–[147] below.

    10. See [79]–[82], [87], [235] below.

    11. See [86] below.

27. When questioned about those inconsistencies in cross-examination, Ms Chahhoud gave non-responsive answers, refused to acknowledge the inconsistency, or sought to explain away the inconsistency by attributing the substance of the earlier inconsistent evidence to her teenage daughter (who helped her prepare her first affidavit in these proceedings), to the solicitors formerly acting for her in these proceedings (who prepared her second affidavit in these proceedings), to the interpreter who had sight translated her second affidavit in these proceedings in the Arabic language before Ms Chahhoud swore that affidavit, or to the solicitors who had acted for her in the previous proceedings in this Court and who had prepared the affidavit that she swore in those proceedings. Those purported explanations, which were implausible, further damaged Ms Chahhoud’s credibility. ^[12]

    12. See, for example, [78], [86] and [96] below.

22. I reject Ms Chahhoud’s submissions that she was cross-examined in a manner that was unfair to her. Ms Chahhoud complained that she was asked leading questions and submitted that this was improper. Ms Chahhoud also submitted that the questions about some subjects were “excessive and designed to confuse or pressure” her into changing her answer. Ms Chahhoud also complained that Counsel for the plaintiffs asked questions using complex legal terms without ensuring that she fully understood, even when she asked for clarification. Ms Chahhoud submitted that this was “an unfair tactic”. There is no substance to any of these complaints. It is proper and orthodox for a cross-examiner to ask leading questions. It is only when adducing evidence in chief or in re-examination that the questioner is not permitted to ask leading questions. The cross-examiner did spend considerable time on some subjects, but I did not regard the questions about any particular subject as “excessive”. The need to spend considerable time on any one subject generally arose from the need to explore the inconsistencies within Ms Chahhoud’s evidence to which I have referred above. The questions were designed to clarify Ms Chahhoud’s position about each such subject, rather than to confuse or pressure her in any way. The process often became drawn out by reason of Ms Chahhoud’s tendency to give evasive, obfuscating answers. That is no fault of the cross-examiner. I reject the submission that Counsel for the plaintiffs persisted in using complex legal terms. When Ms Chahhoud indicated that she did not understand a particular term, despite having the assistance of the interpreter, Counsel addressed the problem by rephrasing the question using different terms.

23. A further matter relevant to the assessment of Ms Chahhoud’s credibility is the stark discrepancy between her affidavit evidence about the limited ability that she claims to possess in communicating in the English language and understanding the English language, on the one hand, and the manner in which she has conducted herself in the course of representing herself in these proceedings, on the other hand.

24. In her second affidavit affirmed in these proceedings on 12 March 2024 after it was sight translated for her in the Arabic language, Ms Chahhoud gave evidence that she completed her high school education in Lebanon and undertook two years of university study in Lebanon before marrying Mr Taleb and falling pregnant with her first child. Ms Chahhoud gave evidence that her high school and tertiary studies had been in the French language, and that she had learned only “a small amount of English” in high school. Ms Chahhoud described English as her third language. She gave evidence that she first moved to Australia together with Mr Taleb in about September 2009, shortly before their first child was born. Ms Chahhoud deposed that, at that time, she had “very basic knowledge of the English language – both reading and written”. She returned to Lebanon together with Mr Taleb and their four children and her two step-daughters in October 2019. After separating from Mr Taleb in October 2021, Ms Chahhoud remained in Lebanon for a further two years before returning to Australia in November 2023. Ms Chahhoud deposed that:

“Since moving to Australia, my hold of the English language has improved but only in respect of day-to-day matters. On a day-to-day basis, I communicate mostly in Arabic, including with my children. To the extent that I communicate in English, it relates mostly to my children’s schooling (when I speak with their teachers or principal) and general day-to-day matters like grocery shopping.”

31. That evidence given by Ms Chahhoud of the limited extent to which she says her English language skills improved during the period since moving to Australia in September 2009 until affirming her second affidavit in March 2024 is irreconcilable with the manner in which I observed Ms Chahhoud using the English language during the final hearing before me in July and August 2024.

32. An accredited interpreter in the Arabic language was present in Court at all times during the final hearing. The interpreter sat beside Ms Chahhoud at the Bar table at all times other than during Ms Chahhoud’s cross-examination, when the interpreter was seated beside Ms Chahhoud in the witness box. The interpreter translated for Ms Chahhoud throughout the proceedings as and when required by Ms Chahhoud.

33. On the first day of the hearing, Ms Chahhoud cross-examined Mr Andersen with minimal assistance from the interpreter.

34. On the second day of the hearing, Ms Chahhoud cross-examined Mr Leedman for approximately one hour. I observed that, for the most part, Ms Chahhoud asked questions of Mr Leedman in English, and only rarely required the interpreter to interpret Mr Leedman’s answers into the Arabic language. The questions that Ms Chahhoud asked of Mr Leedman included questions relating to legal documentation, legal representation, minutes of meetings of directors of companies, tax returns, balance sheets, and PPSR registrations. Ms Chahhoud did not appear to me to waiver or hesitate in formulating her questions in English. I reject Ms Chahhoud’s submission that the questions had been formulated for her in advance by her daughter Jasmine, or by her brother-in-law, Mr Sebastian Roi. To my observation, Ms Chahhoud was not reading the questions put to Mr Leedman from notes. Many of the questions were formulated in terms that sought to pursue elements of Mr Leedman’s previous answer. Such questions cannot be formulated in advance. Ms Chahhoud’s tone in asking her questions was forthright and robust. The cross-examination proceeded at a relatively fast pace.

35. Ms Chahhoud then cross-examined Mrs Leedman for approximately twenty minutes later that afternoon. I observed that Ms Chahhoud made slightly greater use of the interpreter during this short cross-examination.

36. Counsel for the plaintiffs cross-examined Ms Chahhoud for the whole of the third and fourth days and the morning of the fifth day of the hearing. I observed that, throughout her cross-examination, Ms Chahhoud generally waited for questions to be interpreted into Arabic before answering. Her answers were sometimes given wholly or partly in English, but were usually given in Arabic and then interpreted in the English language. It was my impression from Ms Chahhoud’s demeanour, facial expression and frequent slight nodding of her head while the interpreter was interpreting Ms Chahhoud’s answers into English, that Ms Chahhoud was listening carefully to the English interpretation to see whether she was satisfied with it. At the end of the English interpretation of her answers, Ms Chahhoud frequently nodded her head again more forcefully, and said the word “yes” in English. I formed the impression that Ms Chahhoud was thereby processing for herself the English interpretation and determining whether she agreed with it. When I raised this with Ms Chahhoud during closing submissions in order to give her an opportunity to make submissions about my observations and impressions, Ms Chahhoud submitted that nodding was simply a habit of hers, and that she always nods her head. Ms Chahhoud submitted that she did not understand the English interpretation fully, but she trusted the interpreter. I reject Ms Chahhoud’s submission that the nodding that I observed is simply a habit of hers. I did not observe her to be nodding at other times during the hearing, including when the interpreter was interpreting into Arabic things said by me to Ms Chahhoud, or answers given by witnesses to questions asked by Ms Chahhoud in cross-examination.

37. There were many occasions during Ms Chahhoud’s cross-examination when she was asked questions about documents written in the English language. I observed that Ms Chahhoud looked at those documents in the witness box before answering such questions. She appeared to me to be studying the contents of the documents, and she often answered those questions by reference to the contents of those documents. I observed that, irrespective of whether Ms Chahhoud answered the relevant question in Arabic or in English, she did not request the interpreter to interpret the English document into Arabic for her before answering the question.

38. As I have already mentioned, Ms Chahhoud left Australia in October 2019. She then lived in Lebanon for four years, before returning to Australia in November 2023. In cross-examination, Ms Chahhoud gave the following evidence:

“Q.   I take it that you didn’t speak really any English at all when you were in Lebanon for those four years or so?

A. WITNESS:      That’s true.

A. INTERPRETER:   She said that’s true.

Q.   Thank you. So it’s probably the case that your English got worse between the end of 2019 and 2023 when you were in Lebanon?

A. INTERPRETER:   You cannot say that. During that period, my eldest daughter taught me English.

Q.   But you just said you didn’t speak any English when you were in Lebanon?

A. INTERPRETER:   Because everybody around me spoke in Arabic and in French, but in the circumstances where I was at home with two big daughters, stepdaughters, they – we were by ourselves and they did teach me English.

Q.   All right, but you didn’t speak to them in English as a native language, did you?

A. INTERPRETER:   At home, they wouldn’t let me speak in Arabic. They would shout at me and they, like, enforce, or they help me learn English. So if I spoke to them in Arabic, they would tell me, ‘Repeat the whole sentence in English so you learn.’”

Q.   Are you just making this up along the way, or is this really the truth?

A. WITNESS:      This is the truth. This is the truth.”

39. In describing the extent of her proficiency in English in her affidavit to which I have referred at [30] above, Ms Chahhoud did not mention that her step-daughters taught her English during the four years when she lived in Lebanon. As the plaintiffs submitted, that story is inconsistent with her answer to the first question that I have extracted above that she hadn’t really spoken any English at all during those four years. Ms Chahhoud’s answer to that first question was given without hesitation. Based on that inconsistency, and Ms Chahhoud’s demeanour and tone of voice when she answered the second question above – which I would describe as combative – I formed the impression that Ms Chahhoud made up the story that her eldest step-daughter, or both step-daughters, had taught her English during those four years in Lebanon because she realised when the cross-examiner asked the second question that the Court might otherwise infer that her proficiency in English in 2017 had been something better than that which she displayed during the course of the hearing of these proceedings, and that this might be harmful to her unconscionability defence and cross-claim in these proceedings which rely on her alleged inability to understand the deed that was written in English. The story was a lie designed to support Ms Chahhoud’s defence and cross-claim.

40. In 2020, Mr Fawaz Helou and Helou Developments Australia Pty Ltd commenced proceedings in this Court against Ms Chahhoud (the first defendant), Mr Taleb (the second defendant), Steadiform (the third defendant), Steadiform Holdings (the fourth defendant), Class 1 Form (the fifth defendant) and Elias Pty Limited (the sixth defendant) to enforce an alleged loan agreement in respect of a loan of $500,000 made to the defendants to finance the acquisition of the Peak View property. Mr Taleb had purportedly signed the loan agreement not only on his own behalf, but also on behalf of all of the other defendants, including Ms Chahhoud and Elias Pty Limited. Ms Chahhoud and Elias Pty Limited defended the proceedings on the basis that Ms Chahhoud had not authorised Mr Taleb to sign the loan agreement on her behalf, or on behalf of Elias Pty Limited. It is convenient to refer to those proceedings as the Helou proceedings. ^[13]

    13. Proceedings 2020/89187.

41. As I have already mentioned, Ms Chahhoud has been the sole director and shareholder of Elias Pty Limited since October 2015.

42. Mr Alex Ronayne of Ronayne Owens Lawyers represented Ms Chahhoud, Steadiform, Steadiform Holdings, Class 1 Form and Elias Pty Limited in the Helou proceedings. Ms Chahhoud and Elias Pty Limited, together with the other defendants, filed a cross-claim against Mr Helou and Helou Developments.

43. On 26 May 2020, Ms Chahhoud – as the first defendant/cross-claimant and as the director of the sixth defendant/cross-claimant, swore affidavits verifying the defence and cross-claim filed in the Helou proceedings. Neither the defence and cross-claim nor the verifying affidavits were sight translated for Ms Chahhoud before she swore the verifying affidavits.

44. On 8 July 2021, Ms Chahhoud swore an affidavit in the Helou proceedings in which she deposed to being the sole director of Elias Pty Limited, and gave evidence concerning the acquisition of the Peak View property. That affidavit was not sight translated for Ms Chahhoud before it was sworn. Ms Chahhoud and Elias Pty Limited defended the proceedings on the basis that she had not authorised Mr Taleb to sign the loan agreement on her behalf, or on behalf of Elias Pty Limited.

45. The Helou proceedings were heard before Parker J. The transcript of that hearing records that Ms Chahhoud was cross-examined for a period of about 20 minutes on 20 July 2021 in English, without any assistance from an interpreter. Ms Chahhoud appeared via audio visual link from Lebanon for that purpose. She was questioned about the subjects addressed in her 8 July 2021 affidavit, including the acquisition of the Peak View Property. The transcript records two instances during the cross-examination in which Ms Chahhoud communicated that she was having difficulty hearing the question, and one instance in which those present in the court room did not appear to have heard her answer to the question. The transcript records one instance in which his Honour instructed Ms Chahhoud to wait for the question to finish, after she had interrupted the cross-examiner by commencing her answer before he completed asking the question. Ms Chahhoud’s relatively brief cross-examination otherwise appears to have proceeded smoothly. The transcript does not record any instance of Ms Chahhoud stating that she did not understand the question, asking for the question to be rephrased, or asking for the question to be repeated (other than on the two occasions when she stated that she had not heard the question).

46. In the present proceedings, Ms Chahhoud was asked in cross-examination about the two verifying affidavits and the substantive affidavit that she had sworn in the Helou proceedings without the assistance of an interpreter, and about her cross-examination in those proceedings. Ms Chahhoud gave evidence that she was able to understand the affidavits that she swore without an interpreter because her solicitor in the Helou proceedings explained everything “in detail” while “simplifying his words”, and because her daughter was with her assisting her to understand. Assuming that Ms Chahhoud was referring to her eldest daughter, that child would have been eleven and twelve years old when Ms Chahhoud swore her affidavits in the Helou proceedings in May 2020 and in July 2021.

47. In relation to her cross-examination in the Helou proceedings, Ms Chahhoud gave evidence under cross-examination in the present proceedings that “the judge, he was very nice to me and he repeated his question thousands of times so I can understand it”. Ms Chahhoud said that, when she was asked a question, “I would take a lot of time to understand it, I'll ask them to repeat the question once and twice, and I'll take a lot of time to be able to answer, and I would tell them, ‘Sorry, I did not understand, can you repeat?’”. Ms Chahhoud then indicated that she could not remember whether it was counsel or Parker J who she claimed repeated questions to her “again and again”, but she remained adamant that this did occur. Ms Chahhoud said that she did not know at the time that she was cross-examined in the Helou proceedings that she could have requested an interpreter.

48. Ms Chahhoud’s evidence about the process by which her affidavits were prepared in the Helou proceedings is internally inconsistent and inherently improbable. On the one hand, Ms Chahhoud asserts that her solicitor was using simplified words. On the other hand, Ms Chahhoud claims that her solicitor was nevertheless able to explain everything to her in detail. Assuming (without deciding) that Ms Chahhoud’s eldest daughter did provide some assistance to her at the time that she swore the three affidavits in the Helou proceedings, it is inherently improbable that her solicitor, Mr Ronayne, would have been content for Ms Chahhoud to swear those affidavits without having them sight translated for her by an interpreter if, as Ms Chahhoud claims, she had required him to use simplified words to explain the substance to her, and if she had been enlisting the help of her child to explain those simplified words to her. It is equally improbable that the solicitor would have exposed Ms Chahhoud to the risk of cross-examination without the benefit of an interpreter.

49. Ms Chahhoud’s account of what occurred during her cross-examination in the Helou proceedings is falsified by the transcript of that cross-examination to which I have referred above.

50. I find that Ms Chahhoud’s account of the preparation of the affidavits that she swore in the Helou proceedings and her cross-examination in the Helou proceedings is a story that she made up under cross-examination in the present proceedings in an effort to support her contention that she has only limited ability to understand spoken and written English and to communicate in the English language, and that she was therefore suffering from a special disadvantage when she signed the deed that is the subject of these proceedings. That is to say, Ms Chahhoud lied when giving evidence under oath in these proceedings about her affidavits and cross-examination the Helou proceedings.

51. On the basis of all of my observations recorded at [32]-[37] above, the evidence concerning Ms Chahhoud’s affidavit and oral evidence in the Helou proceedings, and Ms Chahhoud’s false evidence given in these proceedings about the preparation of her affidavits and about her cross-examination in the Helou proceedings, I reject Ms Chahhoud’s evidence in her second affidavit affirmed in these proceedings that, since moving to Australia in September 2009, her English language skills have improved “only in respect of day-to-day matters” such as speaking with her children’s school teachers or communicating while doing the grocery shopping. I find that, although English is Ms Chahhoud’s third language, she is capable of understanding and communicating in English about a far greater range of subjects, including those that were covered in her cross-examination of Mr Leedman conducted in English. ^[14]

    14. See [34] above.

52. Given that I have found that Ms Chahhoud’s evidence about her step-daughters teaching her English in Lebanon from 2019 is untrue, it is inherently probable, and I find, that Ms Chahhoud had a similar level of proficiency in the English language in 2017 – some eight years after she had arrived in Australia, and only two years before returning to Lebanon – as she had at the time of the hearing in 2024, less than one year after returning from Lebanon in November 2023. I reject Ms Chahhoud’s denials of that proposition in cross-examination.

53. I find that, in giving evidence in these proceedings that her English language skills have improved “only in respect of day-to-day matters” since September 2009, in falsely claiming that her step-daughters had taught her English during the four years in which they lived in Lebanon during the period from 2019 to 2023, and in lying about her affidavits and cross-examination in the Helou proceedings, Ms Chahhoud deliberately sought to give the Court the false impression that her ability to understand spoken and written English and to communicate in the English language in 2017, when she signed the deed that is the subject of these proceedings, was far more limited than was in fact the case. I find that Ms Chahhoud sought to mislead the Court in that way because she perceived that this would assist her defence and cross-claim in these proceedings, both of which rely on her claimed limitations in the English language at the time the deed was signed as contributing to the special disadvantage from which she claims to have been suffering at that time.

39. For all of the reasons at [25]–[53] above, I do not accept the evidence of Ms Chahhoud about any disputed matter, except where her evidence is contrary to her own interests, inherently probable, consistent with undisputed objective facts, or corroborated by contemporaneous documents or some other reliable source.

40. Ms Chahhoud did not adduce any evidence from Mr Taleb. The plaintiffs submitted that the Court should therefore infer that Mr Taleb’s evidence about the circumstances in which Ms Chahhoud signed the deed that is the subject of the proceedings would not have assisted Ms Chahhoud. ^[15] I reject that submission. Mr Taleb is Ms Chahhoud’s estranged husband, and a defendant against whom judgment has already been entered in these proceedings. Mr Taleb’s liability under that judgment will be reduced by the proceeds if sale of the Peak View property if the plaintiff’s succeed in obtaining an order for judicial sale against Ms Chahhoud. Mr Taleb is therefore not a witness Ms Chahhoud would be expected to call, and the “rule” in Jones v Dunkel is not engaged. ^[16]

Nature of the business relationship between Mr and Mrs Leedman, Mr Taleb and their associated companies

15. Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.

16. MSPR Pty Ltd v Advanced Braking Technology Ltd [2013] NSWCA 416 at [53]–[54] (Macfarlan JA, Ward and Gleeson JJA agreeing).

56. Mr and Mrs Leedman operate an invoice financing business through a company called Leedman Financial Services Pty Ltd (LFS), which was a franchisee of Fifo Capital.

57. Mr and Mrs Leedman first met Mr Taleb in about late 2012 or early 2013 to discuss the invoice financing needs of his formwork business known as Class 1 Form. LFS provided invoice financing for Class 1 Form from about mid-2013.

58. Class 1 Form was in the business of erecting formwork for concrete in the construction industry, using a product called “Permaform”. During a visit to Class 1 Form’s warehouse in Queanbeyan after LFS began financing the company, Mr Taleb told Mr Leedman that he was developing a plastic formwork product, but that he needed investors to fund the work necessary to protect the intellectual property and to develop and commercialise the product, and to begin performing installations using the product. Mr Leedman discussed this with Mrs Leedman, and they decided to invest by acquiring an interest in the following companies which they established together with Mr Taleb, Mr Andrew Bannick and Mrs Nicole Bannick:

1. Akena Pty Ltd; ^[17]

2. Akena Installations Pty Ltd; ^[18] and

3. Akena Holdings Pty Ltd, which was established to act as the trustee of an intellectual property trust. This company subsequently changed its name to Steadiwall Holdings Pty Ltd, and then to Steadiform Holdings Pty Ltd. ^[19]

   17. ACN 167 892 953, now called Thermal Cladding Solutions Pty Ltd.

   18. ACN 169 530 661, now called Tranquility Construction Group Pty Ltd.

   19. ACN 169 965 351.

59. Each of those companies was registered in Queensland.

60. Mr and Mrs Leedman held their interest in those companies through Trilam Developments, a company registered in South Australia. Mr and Mrs Leedman were, and remain, the sole directors and shareholders of Trilam Developments.

61. Trilam Developments also acquired units in the Steadiwall Intellectual Property Trust, which had been established with Akena Holdings (ultimately renamed Steadiform Holdings) as the trustee. Mr Leedman became a director of that trustee company.

62. About six months after investing in the Akena companies, Mr and Mrs Leedman caused Trilam to invest $500,000 in Class 1 Form in consideration for a 50 per cent shareholding in that company. At the same time, Mr Leedman became a director of Class 1 Form, which was registered in New South Wales. ^[20]

    20. ACN 119 822 132.

63. A further company, Steadiwall Pty Ltd, was registered in Queensland in April 2015. Trilam Developments became a shareholder and Mr Leedman became a director of that company, which was subsequently renamed Steadiform Pty Ltd. ^[21]

    21. ACN 605 375 568.

64. The Akena companies – Akena, Akena Installations and Akena Holdings – operated in Queensland. Class 1 Form operated in Canberra, save for one project in Queensland.

65. I accept Ms Chahhoud’s evidence that she was not involved in the management of the companies in which Mr and Mrs Leedman invested through Trilam Developments. Neither Mr Leedman nor Mrs Leedman gave evidence to the contrary. Ms Chahhoud was not a party to any of the correspondence tendered in these proceedings concerning the management of those companies in the period leading up to the execution of the deed in June 2017.

66. Ms Chahhoud was on the payroll of Class 1 Form during the financial year ended 30 June 2015, but I accept her evidence that she did not in fact work at that company in that period, during which she had two young daughters and gave birth to a third – Rebecca – in April 2015. Ms Chahhoud’s evidence that she did not work for Class 1 Form is consistent with Mr Leedman’s evidence in cross-examination that Mr Taleb had made arrangements to put Ms Chahhoud on the payroll for Class 1 Form before he became involved in Class 1 Form together with Trilam Developments and Mrs Leedman. Mr Leedman did not suggest that Ms Chahhoud in fact worked at Class 1 Form.

67. From October 2015, Ms Chahhoud was the sole director and shareholder of Elias Pty Limited, which was a substantial shareholder in Class 1 Form, Akena, Akena Installations, Steadiform and Steadiform Holdings, as discussed later in these reasons. However, Ms Chahhoud was not a director of any of those companies in which Elias Pty Limited held shares.

Nature of the relationship between Ms Chahhoud and Mr Taleb

68. In her first affidavit sworn in these proceedings on 16 March 2023, Ms Chahhoud gave evidence concerning her marriage to Mr Taleb, in which she deposed: “I am of a culture where the husband controls all the financial and legal matters”.

69. In her second affidavit affirmed on 12 March 2024, Ms Chahhoud gave more detailed evidence about the nature of her relationship with Mr Taleb. Ms Chahhoud deposed that she married Mr Taleb in January 2009, and she fell pregnant with their first child shortly thereafter. They moved to Australia in September 2009, and their first child – Jasmine – was born soon afterwards. At some stage, Mr Taleb’s two daughters from his previous marriage came to live with them. They subsequently had three more daughters of their own. As I have mentioned earlier in these reasons, Ms Chahhoud, Mr Taleb and their family returned to Lebanon to live in October 2019. Ms Chahhoud and Mr Taleb separated in October 2021, although they remain legally married. Ms Chahhoud returned to Australia, together with her four daughters, in November 2023. Mr Taleb remains in Lebanon.

70. In her second affidavit, Ms Chahhoud deposed that, since she married Mr Taleb in 2009, her full-time role has been that of a homemaker, and her focus has been on raising her children. Ms Chahhoud deposed that, since the birth of her eldest daughter in 2009:

“…I have not … engaged in any meaningful paid employment. During the time that I was married to Elias until October 2021, he was the sole income earner and my children and I relied solely upon him to provide for us financially.”

71. Ms Chahhoud deposed that she did engage in some casual employment:

“For a period between 2009 and 2014, I privately tutored 3 students in the French and Arabic languages – both reading and writing. I taught these students for about 2 hours 3 times per week, and only to fill my time during the days. I did not have any family or friends in Canberra. I was paid $25 per tutoring session, which money I gave to Elias to store in the safe that he kept at his yard.”

72. Ms Chahhoud’s tax returns and notices of income tax assessment were produced to the Court in response to a notice to produce issued by the plaintiffs in these proceedings on 21 May 2024, after Ms Chahhoud had affirmed her second affidavit. The plaintiffs tendered those documents, which record that Ms Chahhoud’s taxable income was $55,188 in the 2015 financial year (being the year in which she was included on the payroll of Class 1 Form), $20,546 in the 2016 financial year, $20,646 in the 2017 financial year, $20,715 in the 2018 financial year, and $13,731 in the 2019 financial year. In each of those financial years, Ms Chahhoud claimed a deduction for business expenses that were described as motor vehicle expenses. In the 2020 and 2021 financial years, during which Ms Chahhoud was living in Lebanon, she submitted tax returns declaring taxable income of $21,654 and $22,850 (respectively). Ms Chahhoud again claimed a deduction for motor vehicle expenses in the 2021 financial year.

73. Ms Chahhoud gave evidence in cross-examination that her tax return in each of the years referred to above were prepared by Mr Roi, who is her accountant. According to Ms Chahhoud’s evidence, she was careful to make sure that the returns correctly recorded her income for the relevant year, and she would check that the amount was correct before authorising Mr Roi to lodge the returns with the Australian Taxation Office.

74. After Ms Chahhoud’s tax returns and notices of income tax assessment had been produced to the Court in response to the notice to produce, and prior to the commencement of the hearing, Ms Chahhoud sent correspondence to my Associate indicating that she wished to change her evidence in her second affidavit concerning her earnings. Ms Chahhoud was permitted to do so at the commencement of her oral evidence. Ms Chahhoud then gave evidence through the interpreter that, during the period from 2010 to 2013, she had been “working for some Lebanese people in things related to food and, and their home” in addition to tutoring students in French and Arabic. Ms Chahhoud also gave evidence that she carried on the tutoring work not only during the period from 2009 to 2014, but also during the period from 2016 to 2021.

75. In relation to the tutoring work, Ms Chahhoud gave evidence in cross-examination that, in the period after 2014, she conducted about three tutoring sessions per week, that each session was between two and three hours, and that she was paid at the rate of $25 per hour. She continued these tutoring sessions via audio visual link after she returned to Lebanon in October 2019.

76. Ms Chahhoud’s evidence of the extent of her tutoring activities would account for only about half of the income reported in her tax returns referred to above, which are for the 2015 and subsequent financial years. When Ms Chahhoud was cross-examined about this, she claimed that she had also earned income during those years from cooking food for Lebanese people. This was inconsistent with the oral evidence that Ms Chahhoud had given a short time earlier when, after being given an opportunity to correct her evidence in relation to her income, she had identified 2010 to 2013 as the period during which she had earned some income from “working for some Lebanese people in things related to food and, and their home”.

77. The higher level of Ms Chahhoud’s taxable income reported to the ATO in the 2015 financial year compared to the other financial years referred to above is attributable to Ms Chahhoud being recorded on the payroll of Class 1 Form with a gross salary of $59,038 in the 2015 financial year. I have accepted Ms Chahhoud’s evidence that she did not in fact work at Class 1 Form in the 2015 financial year. ^[22] I therefore reject Ms Chahhoud’s evidence that she carefully checked the accuracy of the income recorded in her tax returns prepared by Mr Roi before authorising him to lodge them to the ATO.

    22. See [66] above.

78. Ms Chahhoud’s affidavit evidence describing Mr Taleb as the “sole income earner” during their marriage was wrong having regard to the income recorded in her 2015 to 2021 tax returns. When challenged about this in cross-examination, Ms Chahhoud acknowledged that she had earned money, but said that Mr Taleb was solely responsible for paying their expenses. Ms Chahhoud claimed that this was what she had intended to convey, and blamed the inaccurate description of Mr Taleb as the “sole income earner” on her solicitors who had prepared her second affidavit. That purported explanation is implausible. The affidavit was sight translated for Ms Chahhoud before she affirmed it. It was her responsibility, with the benefit of that translation, to ensure that the affidavit was accurate according to the best of her recollection before she affirmed it.

79. In the course of giving this evidence seeking to explain her description of Mr Taleb as the “sole income earner”, Ms Chahhoud said that: “my money was my money. I used to save them, because I had a dream and I wanted to achieve it”. It is very difficult to reconcile that evidence with Ms Chahhoud’s evidence concerning her relationship with Mr Taleb in her first affidavit, in which she described it as being part of “a culture where the husband controls all the financial and legal matters”.

80. Ms Chahhoud gave the following evidence about her relationship with Mr Taleb in her second affidavit affirmed on 12 March 2024:

“I have always known Elias to work in the construction industry and may have had a business involved with the supply or manufacture of plastic walls. Having said that, I did not really understand exactly what he did or the details of his business.

…

The dynamic between Elias and me was such that he took care of matters of business and things that were external to the home. He did not discuss with me his business dealings or business relationships or property ownership (except as described below). Elias did not speak to me at length about any topics and rarely, if ever, told me anything about his work. As such, I relied upon and trusted Elias during the marriage and followed his instruction whenever he required any documents to be signed.

I dedicated my time and attention towards creating a home for my daughters and maintaining our house.”

81. In relation to signing documents, Ms Chahhoud deposed in her second affidavit that:

“There was a longstanding practice between Elias and me where he came to me with documents and I signed them without reading them and without knowing or understanding what I was signing. He did not leave the documents with me to read.

…

While I cannot recall specifically when or what types of documents I signed, I recall numerous occasions in the past 10 years when Elias brought me documents and said to me words to the effect of “Sign this” and he pointed to parts of the document he wanted me to sign. When he did this, I was not given the documents to read and did not read them. On some occasions, I asked him “What is this?”. On every occasion, he became visibly agitated and responded in words to the effect of “Just sign it”. I cannot recall an instance where the documents were left with me.”

82. In her opening submissions made on the first day of the hearing, Ms Chahhoud described her relationship with Mr Taleb as involving a much greater level of control than she had suggested in her affidavit. Ms Chahhoud submitted:

“In, in this country, I don’t deal with lawyers. It’s only my husband who deals with that. My husband is in charge. I don’t have any authority over everything – anything in the family and running of the family. It’s my husband’s responsibility.

Whatever he says, I do it.

12 years, I was under his mercy. I, I always did what he asked me to do.

Without me knowing or seeking any advice. That’s the thing. And if I don’t do it …

Problem will, will emerge if I don’t do it.”

83. Ms Chahhoud gave evidence in her second affidavit that she first became aware that she was the sole director of Elias Pty Limited as a result of these proceedings, which were commenced on 31 May 2022. Ms Chahhoud deposed:

“As a result of these proceedings, I have become aware that I was and am the sole director and secretary of Elias Pty Limited. I became aware when I saw that I had signed some pages that formed a Deed the subject of the dispute in these proceedings in a signature block that referred to Elias Pty Limited.

…

I do not know what business, if any, either of Elias Pty Limited or Class 1 Form Pty Limited conduct or conducted. In or around 2021, I became aware from a conversation with Sebastian that Elias Pty Limited was an “asset holding company” although I do not know what assets it holds. I do not have access to any of the books and records of these Companies. I do not know who takes care of these Companies. …”

84. Ms Chahhoud’s account of her relationship with Mr Taleb and her directorship of Elias Pty Limited in her opening submissions and evidence to which I have referred at [80]-[83] above is untrue in some respects, and materially inconsistent in other respects with statements that she has made prior to the commencement of these proceedings or with other aspects of her evidence in these proceedings.

85. First, Ms Chahhoud’s statement in opening submissions that she does not deal with lawyers, and that only her husband deals with lawyers, is not true. As discussed earlier in these reasons, Mr Ronayne, solicitor, represented Ms Chahhoud in the Helou proceedings in 2020 and 2021, and Ms Chahhoud has given evidence in these proceedings describing her dealings with Mr Ronayne in the course of preparing her affidavits in the Helou proceedings. ^[23] As referred to later in these reasons, Ms Chahhoud instructed solicitors in connection with her sale of a property in Harrison in the Australian Capital Territory in October 2016^[24] , and in connection with her purchase of the Peak View property in February 2019. I infer that Ms Chahhoud’s statement in her opening submissions that she does not deal with lawyers, and that only her husband deals with lawyers, was a false claim that she made in the belief that it would be helpful to her defence and cross-claim in these proceedings to describe her relationship with Mr Taleb as one involving total control on his part and total lack of control on her part in relation to all matters concerning financial or business affairs.

    23. See [40]–[50] above.

    24. See [142]–[147] and [280]–[289] below.

86. Second, Ms Chahhoud’s description of herself as a “homemaker” during the whole of her marriage to Mr Taleb in the second affidavit that she affirmed in the present proceedings is inconsistent with the affidavit that she swore on 8 July 2021 in the Helou proceedings, in which her occupation was described as “Director”, and in which Ms Chahhoud deposed that she had been “engaged in business for five years”. When confronted with these inconsistencies during cross-examination in the present proceedings, Ms Chahhoud attributed to Mr Ronayne the decision to describe her occupation as a director. Ms Chahhoud also said that “business” meant “as in cooking and cleaning, not like a business business”. I reject Ms Chahhoud’s evidence given under cross-examination in these proceedings that she had only meant for her affidavit in the Helou proceedings to convey to the Court and to the parties that she was engaged in the business of “cooking and cleaning” on her own account, and not “a business business”. If that had been Ms Chahhoud’s intention, it would have been a simple matter for her to require the solicitor acting for her in the Helou proceedings to amend her affidavit to describe the nature of the business before she swore that affidavit. She did not do so. I find that Ms Chahhoud intentionally conveyed to the Court and the parties in the Helou proceedings one impression of her occupation and activities, and that she intentionally conveyed a very different impression in her affidavits and in her opening submissions in the present proceedings. In the Helou proceedings, it suited Ms Chahhoud’s interests to portray herself as the sole person with authority to make decisions on behalf of Elias Pty Limited. In the present proceedings, it is more consistent with Ms Chahhoud’s defence and cross-claim to distance herself from any knowledge of or involvement in the affairs of Elias Pty Limited.

84. Third, Ms Chahhoud’s claim made in her opening submissions that during her 12 year marriage to Mr Taleb she had been “under his mercy” is very difficult to reconcile with her own evidence that she set aside her own modest earnings to pursue her own “dream” rather than contributing to paying their household and family expenses. ^[25] It is also inconsistent with Ms Chahhoud’s evidence that she stipulated her requirements for a property to be purchased for herself to fulfil her “dream”, that she tasked Mr Taleb with identifying a property which met those requirements, that she insisted that he arrange to sell the Harrison property that he purchased which she considered did not satisfy her requirements, and that she then tasked Mr Taleb with identifying a replacement property that did satisfy those requirements. According to Ms Chahhoud’s evidence, it was through this process that Mr Taleb identified the Peak View property and Ms Chahhoud made the decision to purchase that property. ^[26]

    25. See [78] above.

    26. See [280]–[289] below.

85. Fourth, Ms Chahhoud’s evidence that she first became aware that she was the sole director of Elias Pty Limited as a result of these proceedings which were commenced in May 2022, and that she did not know anything about the nature of that company’s business prior to 2021, is false.

86. As Ms Chahhoud acknowledged in cross-examination, she signed a consent to act as a director of Elias Pty Limited in October 2015 and it was explained to her at that time that Elias Pty Limited was “a shareholder company” that “does not have any workers, does not have anything”, and that its purpose was “to protect the ownership of the plastic wall”. Thus, contrary to her 12 March 2024 affidavit, Ms Chahhoud knew when she agreed to be appointed as a director of Elias Pty Limited in October 2015 that it held shares that were connected to the ownership of “the plastic wall” which she has always known Mr Taleb was involved in manufacturing or supplying as part of his work in the construction industry. ^[27] As referred to later in these reasons,^[28] Elias Pty Limited was in fact a substantial shareholder in Akena, Akena Installations, Steadiform and Steadiform Holdings, and a substantial unit holder in the Steadiwall Intellectual Property Trust. Elias Pty Limited’s proportionate shareholding in those companies and its unitholding in the trust increased in June 2017 when Mr and Mrs Leedman caused Trilam Developments to surrender its shares and units in accordance with the deed that is the subject of these proceedings.

    27. See [65] above.

    28. See [266] below.

87. In her affidavit sworn on 8 July 2021 in the Helou proceedings, Ms Chahhoud deposed that she was the sole director of Elias Pty Limited, and that the company’s main purpose was asset holding. Thus, Ms Chahhoud was aware by no later than July 2021, and well before the commencement of the present proceedings in May 2022, that she was the sole director of Elias Pty Limited.

88. As I have already mentioned, Ms Chahhoud and Elias Pty Limited defended the Helou proceedings on the basis that Ms Chahhoud had not authorised Mr Taleb to sign the loan agreement in issue in those proceedings on her behalf or on behalf of Elias Pty Limited. ^[29] In her 8 July 2021 affidavit, Ms Chahhoud referred to that loan agreement as “the Purported Loan Agreement”. Ms Chahhoud deposed:

“I did not and never have authorised, instructed or given permission to the Second Defendant [Mr Taleb], or any other person to sign the Purported Loan Agreement on behalf of myself or the Sixth Defendant [Elias Pty Ltd].

…

At no time did I cause the Sixth Defendant, or authorise anyone, to draw funds from the Sixth Defendant to repay Mr Helou or another person at his direction.”

29. See [42] above.

92. As Counsel for the plaintiffs put to Ms Chahhoud in cross-examination in these proceedings, it was implicit in Ms Chahhoud’s evidence in the Helou proceedings that, as the sole director of Elias Pty Limited, she was the only person who could cause that company to enter into any agreement, and the only person who could authorise the use of that company’s funds to make any payment. It was implicit that Mr Taleb had no ability or authority to act on behalf of Elias Pty Limited, without Ms Chahhoud as sole director specifically conferring such authority on him. The evidence given by Ms Chahhoud under cross-examination in these proceedings denying those propositions (that is, denying that those matters were implicit in her evidence in the Helou proceedings) was implausible and I reject it.

93. During cross-examination in these proceedings, Ms Chahhoud doubled down on her assertion that she only became aware through these proceedings that she was the sole director of Elias Pty Limited. Ms Chahhoud gave a detailed account of how she claims to have become aware of her position as sole director through these proceedings, which was inconsistent with the account given in her 12 March 2024 affidavit. Ms Chahhoud gave the following evidence:

“Q.   [Reading from Ms Chahhoud’s affidavit affirmed on 12 March 2024 in these proceedings] It says “As a result of these proceedings I have become aware that I was an [sic] am the sole director and secretary of Elias Pty Ltd.”

A. WITNESS:      Yes.

Q.   It’s not true that you only became aware of that as a result of these proceedings?

A. WITNESS:      It is true.

Q.   But in your affidavit in the Helou proceedings you said that you were a director of that company for five years?

A. WITNESS:      Yes. True.

Q.   So it was a lie, wasn’t it, for you to write in these proceedings that you’ve become aware that you were and are the sole director and secretary of Elias as a result of these proceedings? That is the proceedings that are now before the Court, before her Honour?

A. WITNESS:      No, I wasn’t lying.

Q.   What explanation do you have for saying in this affidavit [referring to Ms Chahhoud’s 12 March 2024 affidavit in the present proceedings] at paragraph 28 that you only became aware that you were the sole director and secretary of Elias Pty Ltd as a result of these proceedings?

A. WITNESS:      I wasn’t lying.

A. INTERPRETER:   I knew that I am the – or that I became the only director. I did not know before. I thought there was – Eli was with us. The lawyers told me “You are the only responsible person, and there is nobody else”.

Q.         When do you say these lawyers told you that?

A. INTERPRETER:   When I went to speak to them, they checked on their laptop, on their computer. That’s when they told me “No, you are the only one”, because they checked something about what’s in my name. I don’t know, but that’s what they said. I don’t know.

A. WITNESS:   … (Foreign language) … what’s on my name, what’s not in – on my name, and then they said “No, you’re the only one director. There’s no-one else director with you.” That’s what they said. I don’t know.

A. INTERPRETER:   They checked on their laptop.

Q.    Look at the second sentence of paragraph 28 [referring to Ms Chahhoud’s affidavit affirmed in these proceedings on 12 March 2024]. You’ve said that you became aware – that is, became aware that you were the sole director and secretary of Elias – when you saw you signed some pages that formed a deed the subject of the dispute in these proceedings?

A.         (No verbal reply)

Q,         Is that true, or is what you just said a moment ago true?

A. INTERPRETER:   Both are correct, because they also showed me papers.

A. WITNESS:      My signature on it.

Q.   You’re just making this up as you go along right now, aren’t you?

A. WITNESS:      No. You can’t assume that … (Foreign language) …

A. INTERPRETER:   You cannot say that.

…”              

94. I formed the impression that Ms Chahhoud’s detailed account of lawyers having undertaken searches on their laptops in her presence and ascertained that she was the sole director of Elias Pty Limited had been made up on the run in cross-examination in an effort to lend substance to her claim that she first became aware of her position as sole director through these proceedings, in circumstances where she perceives that it will assist her defence and cross-claim if she can distance herself from understanding the affairs of Elias Pty Limited.

95. Ms Chahhoud’s failure to answer when first confronted with the different account given in her affidavit affirmed on 12 March 2024 was an uncomfortable silence. Her silence and her demeanour at the time suggested to me that she had forgotten that she had given that different account in her affidavit. Ms Chahhoud’s assertion that both accounts are true is a further lie. Neither account is true, because, as I have already mentioned, Ms Chahhoud was aware that she was the sole director of Elias Pty Limited by no later than 8 July 2021 when she swore her affidavit in the Helou proceedings identifying herself as the sole director.

96. When this was put to her in cross-examination in these proceedings, Ms Chahhoud said that, according to the research undertaken by the solicitor acting for her in the Helou proceedings, she was the sole director, and that she had agreed to say so in her 8 July 2021 affidavit on the basis of what her solicitor told her at the time. However, Ms Chahhoud added that, “till now, I’m not 100% sure”. Expanding on that answer, Ms Chahhoud said: “I don’t know if I’m the only one because I never been … I was never asked about anything, no-one took my opinion about anything. I know that I am a director by name but I have no other things, I don’t know anything”.

97. That answer does not explain Ms Chahhoud’s evidence given in paragraph 28 of her 12 March 2024 affidavit that she became aware through these proceedings that she was, and remains, the sole director of Elias Pty Limited – which accepts that she is in fact the sole director – in circumstances where she has known this since at least 8 July 2021 when she gave evidence in the Helou proceedings identifying herself as the sole director and impliedly asserting that she was the only person with authority to act on behalf of Elias Pty Limited. As I have already said, Ms Chahhoud’s evidence in paragraph 28 of her 12 March 2024 affidavit is false. As was put to Ms Chahhoud in cross-examination, it was a deliberate lie to try and distance herself from Elias Pty Limited in circumstances where she perceives that this will be helpful to her defence and cross-claim in these proceedings.

98. For all of the reasons explained at [25]-[54] and [84]-[97] above, I do not accept Ms Chahhoud’s uncorroborated evidence in these proceedings about the nature of her relationship with Mr Taleb, and the “dynamic” between her and Mr Taleb, during the course of their twelve year marriage.

July 2014 dinner

99. It is common ground that Mr and Mrs Leedman came to dinner at the home of Mr Taleb and Ms Chahhoud in July 2014. This was the first occasion on which Ms Chahhoud met Mr and Mrs Leedman. Ms Chahhoud has given evidence that Mr Roi also attended the dinner. Mr and Mrs Leedman, who had met Mr Roi prior to the dinner, deny that he attended the dinner. Nothing turns on whether or not Mr Roi was present.

100. In her affidavit affirmed on 12 March 2024, Ms Chahhoud gave evidence that the conversation at the dinner was conducted in English. Ms Chahhoud deposed that everybody was speaking at a fast pace about things of which she says she had no background knowledge or understanding. She was preoccupied with cooking and serving the food, and the others did not invite her to participate in the conversation, or attempt to explain to her what they were talking about. Ms Chahhoud deposed that she cannot now recall what was said, and that they were speaking at a pace that was too fast for her to understand. According to Ms Chahhoud’s evidence, she had some limited conversation with Mrs Leedman during the evening about the food that she had prepared for the dinner, about her children, and about how she would wash up all the dishes after the dinner.

101. In cross-examination, Ms Chahhoud initially said that she did not remember speaking to Mr and Mrs Leedman at all during the course of the evening. When reminded about the contents of her affidavit, Ms Chahhoud reverted to her evidence that she had limited conversation which involved her answering any questions that Mr and Mrs Leedman asked about the food or about her children. Ms Chahhoud said that she could not recall whether there was any discussion about her having undertaken some university studies in Lebanon. She did not recall whether she indicated to Mr and Mrs Leedman that she had any difficulty understanding English.

102. According to Mrs Leedman’s first affidavit sworn on 4 October 2023, she had a conversation with Ms Chahhoud at dinner about her background, in which Mrs Leedman also shared her own family background with Ms Chahhoud. Mrs Leedman no longer recalls exactly what was said, but she recalls that either Ms Chahhoud or Mr Taleb mentioned that Ms Chahhoud had been to university or undertaken some further education after completing high school in Lebanon. Mrs Leedman gave evidence that, whilst she noticed that Ms Chahhoud had a slight accent, she had no difficulty speaking with Ms Chahhoud in English.

103. In her second affidavit sworn on 6 April 2024, Mrs Leedman gave evidence that she had several conversations in English with Ms Chahhoud throughout the evening. Mrs Leedman deposed that she did not recall what they had spoken about, other than the food that Ms Chahhoud had served. Mrs Leedman deposed that she recalled that Ms Chahhoud had a slight accent, but that it was not difficult to understand what she was saying, and that she did not observe Ms Chahhoud experiencing any difficulty engaging in conversation with Mrs Leedman in English.

104. Given the passage of time since July 2014, it is understandable that Mrs Leedman no longer has a detailed recollection of the substance of her conversation with Ms Chahhoud over dinner, and it is unremarkable that Mrs Leedman’s account of those conversations in her second affidavit contains even less detail than her account in her first affidavit sworn six months earlier.

105. In his affidavit sworn on 5 October 2023, Mr Leedman gave evidence that Ms Chahhoud had participated fully in the conversation at the dinner table, that he had no difficulties understanding her English, and that she did not seem to him to have any difficulties understanding what he said. Mr Leedman deposed that their discussion was mainly “social chitchat”, and he does not recall any discussion about business affairs. In his subsequent affidavit sworn on 6 April 2024, Mr Leedman confirmed his recollection that Ms Chahhoud was included in the discussions over dinner. Mr Leedman deposed that he no longer has any detailed recollection of what was discussed, but that he recalled Ms Chahhoud speaking about her early life in Lebanon, about attending university there, about how she had met Mr Taleb, and about her children and step-children. Mr Leedman deposed that Ms Chahhoud does have a slight accent when she speaks English, but he had no difficulties understanding her and he did not perceive that she had any difficulties understanding him or others at the dinner when they spoke to her in English.

106. I accept as inherently probable Ms Chahhoud’s evidence that she was preoccupied with cooking and serving the food when Mr and Mrs Leedman came to her home for dinner at Mr Taleb’s invitation in July 2014. I accept the evidence of Mr and Mrs Leedman, which is not inconsistent with Ms Chahhoud’s evidence, that they had some conversation with Ms Chahhoud during the course of the evening, including about her life in Lebanon, her university studies there, and her children, and that those conversations were conducted in English. For the reasons explained at [24] above, I accept that their interactions with Ms Chahhoud on the occasion of the dinner did not cause them to think that she had any difficulty understanding and communicating in the English language, although it would have been clear to them from the discussion about her life in Lebanon and from the slight accent that they observed that English was not Ms Chahhoud’s first language. I note that Ms Chahhoud does not claim to have communicated with Mr and Mrs Leedman in Arabic through Mr Taleb interpreting for her. Nor does she claim to have done anything else, or to have said anything to Mr and Mrs Leedman, that would have alerted them to any difficulty that she now says she experienced understanding the English conversation at the dinner table on that occasion.

Limited dealings between Mr and Mrs Leedman and Ms Chahhoud

107. In his affidavits sworn on 5 October 2023 and 6 April 2024, Mr Leedman deposed that he saw Ms Chahhoud only a couple of times in the year or so after the July 2014 dinner, and that he did not recall seeing her or speaking with her at any time after about mid-2016. Mr Leedman did not recall what he spoke about with Ms Chahhoud on the few occasions that he saw her after the July 2014 dinner, but he did not suggest that they discussed any business matters. Mr Leedman did not recall any occasion on which Ms Chahhoud had indicated to him that she did not understand what he was saying to her in English.

108. In cross-examination, Mr Leedman was asked whether he knew that Mr Taleb was controlling and strict with Ms Chahhoud and their children. Mr Leedman answered that he did not know that. Mr Leedman was also asked whether he and Mr Taleb had ever discussed the relationship between Mr Taleb and Ms Chahhoud. Mr Leedman answered that he and Mr Taleb had sometimes discussed their families and that, during such discussions, Mr Taleb had spoken of Ms Chahhoud and their children in a caring, loving and respectful way, and that Mr Leedman “never thought for one time ever that there would be any issues with your, with your marriage or your relationship”. Mr Leedman readily acknowledged in cross-examination that he had not asked Ms Chahhoud about her relationship with Mr Taleb. That is understandable, having regard to the very limited contact between Mr Leedman and Ms Chahhoud.

109. In her affidavit sworn on 4 October 2023, Mrs Leedman deposed that she and Ms Chahhoud were not close, and that she had spoken to Ms Chahhoud only a couple of times after first meeting her at the July 2014 dinner. Mrs Leedman deposed that she and Ms Chahhoud “never talked business”.

110. Ms Chahhoud gave evidence that she had no further contact with Mr and Mrs Leedman after the July 2014 dinner until just after the birth of her daughter, Rebecca, in April 2015. According to Ms Chahhoud’s evidence, Mrs Leedman came to visit her at her home one evening after Rebecca’s birth, bringing a gift. Mrs Leedman stayed for about 25 minutes, during which they discussed their children, Ms Chahhoud’s pregnancy, and how she was feeling. Mr Taleb was present throughout the visit.

111. Mrs Leedman gave evidence of visiting Ms Chahhoud at her home following the birth of a child in about September 2018. Save for the timing of the visit, Mrs Leedman’s account of it was consistent with Ms Chahhoud’s account in all material respects. I accept Ms Chahhoud’s evidence that the visit occurred in 2015, shortly after the birth of her daughter, Rebecca. Ms Chahhoud’s unchallenged evidence is that she has four children with Mr Taleb, who were aged 14, 11, 8 and 3 years old at the time Ms Chahhoud affirmed her affidavit in these proceedings on 12 March 2024. It follows that the youngest child, Elena, was born in 2020 or 2021, when Mr Taleb and Ms Chahhoud were living in Lebanon. No child was born to Ms Chahhoud in Australia after the birth of Rebecca in 2015. Mrs Leedman was mistaken in her recollection that the visit occurred in 2018. I note that this was not directly put to Mrs Leedman in cross-examination, but she did appear to be uncertain about the timing of the visit when asked about it. That is understandable, given the passage of time.

112. In her affidavit affirmed on 12 March 2024, Ms Chahhoud gave evidence that the July 2014 dinner and Mrs Leedman’s 2015 visit were the only occasions on which she met Mr or Mrs Leedman. She had no other communications with them, save for sending a message via Mr Taleb to thank them for some flowers that they sent her on one occasion when she was in hospital. In cross-examination, however, Ms Chahhoud acknowledged that she had met Mr Leedman a few more times in the year or two after the July 2014 dinner, because Mr Taleb had brought Mr Leedman to their home in Pialligo, near Canberra. Ms Chahhoud did not remember speaking with Mr Leedman on those occasions.

300. When Mr Taleb was ready to sign the deed, he requested Mr Leedman to arrange for one of his solicitors to witness Mr Taleb’s signature in Canberra. Mr Leedman obliged, reminding Mr Taleb that Ms Chahhoud was also a party to the deed and would therefore also need to sign. ^[86] I have accepted the evidence of Mr and Mrs Leedman that they did not ask Mr Taleb to put any pressure on Ms Chahhoud to sign the deed. ^[87]

     86. See [179]-[182] and [185]-[187] above.

     87. See [271]-[278] above.

301. As Mr Leedman candidly accepted in cross-examination, he did not discuss the deed directly with Ms Chahhoud, and did not advise Mr Taleb about how the terms of the deed applied to Ms Chahhoud. Mr Leedman was under no obligation to do so. Nor was there any occasion for Mr Leedman to advise Mr Taleb that Ms Chahhoud should read the deed and obtain legal advice. He had no reason to think that she had not done so. I have accepted Mr Leedman’s unchallenged evidence that he believed that Ms Chahhoud stood to benefit from the deed. ^[88] Ms Chahhoud did stand to benefit as one of the assignees of the intellectual property, and also as the sole shareholder of Elias Pty Limited, which would have an increased stake in the Akena companies and which would become the sole shareholder in the Steadiform companies and the sole unit holder in the Steadiform Intellectual Property Trust as a result of the plaintiffs’ surrender of Trilam Developments’ shares and units in consideration for the Continuing Entities’ promise to pay the $2,100,000 Settlement Amount plus interest secured by the charge over the Continuing Entities’ present and after-acquired property. ^[89]

     88. See [268] above.

     89. See [250], [267]-[268] and [279] above.

Alleged undue influence

305. The doctrine of undue influence was considered by the High Court in Thorne v Kennedy. ^[90] Kiefel CJ, Bell, Gageler, Keane and Edelman JJ said:^[91]

“30.   … undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.

31.   In 1836, in a passage which was copied verbatim by Snell thirty years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person ‘has no free will, but stands in vinculis [in chains]’. He explained that ‘the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him’. In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of ‘free agency’. In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a ‘free agent’. In Johnson v Buttress, Dixon J described how undue influence could arise from the ‘deliberate contrivance’ of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a ‘free act’. And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a ‘free and well-understood act’ and Williams J referred to ‘the free exercise of the respondent's will’.

32.   The question whether a person's act is ‘free’ requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a ‘mere channel through which the will of the defendant operated’. Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be ‘markedly sub-standard’ as a result of the effect upon the person's mind of the will of another.

33.   …

34   There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction. … Another way in which undue influence can be proved is by presumption. … Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a ‘substantial benefit’ to another, which cannot be explained by ‘ordinary motives’, or ‘is not readily explicable by the relationship of the parties’. Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust. In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will.”

90. (2017) 263 CLR 85; [2017] HCA 49.

91. Ibid at [30]-[34] (omitting references).

306. The marital relationship is not one of the established classes of relationship that gives rise to a presumption of undue influence. I have rejected Ms Chahhoud’s evidence that her relationship with Mr Taleb was characterised by his ascendancy or influence over her. ^[92] There is nothing for the plaintiffs to rebut. Ms Chahhoud bears the onus of proving the alleged undue influence.

     92. See [70]-[98] above.

307. I have rejected Ms Chahhoud’s evidence about the dynamic between her and Mr Taleb within their marital relationship, and about the interactions between them on the morning of 16 June 2017 leading up to Ms Chahhoud signing the deed in her own capacity and as the sole director of Elias Pty Limited. ^[93] Ms Chahhoud has therefore failed to establish that her will was substantially subordinate to that of Mr Taleb, or that her capacity to assess alternatives and judge between them was “markedly sub-standard” as a result of the effect of Mr Taleb’s will on her mind. I have rejected Ms Chahhoud’s evidence that she felt pressure from Mr Taleb to sign the deed when they met with Mr Anderson on 16 June 2017. As I have stated earlier in these reasons, there is no evidence of any reason why Ms Chahhoud could not have declined to sign the deed, or deferred that decision in order to obtain legal advice, or an Arabic language translation of the deed if Ms Chahhoud considered that it would assist her to have the deed translated. ^[94]

     93. See [236]-[244] above.

     94. See [244] above.

308. Ms Chahhoud’s undue influence claim fails for those reasons. Even if I had upheld Ms Chahhoud’s claim that she signed the deed as a result of undue influence of Mr Taleb, I would have dismissed her claim against the plaintiffs to set aside the deed on that basis because, as the plaintiffs submitted and as I have explained above, the deed benefitted both Mr Taleb and Ms Chahhoud, there is no evidence that the plaintiffs had actual or constructive knowledge or were on notice of the alleged undue influence, and the plaintiffs did not use Mr Taleb as their agent to procure Ms Chahhoud’s execution of the deed. ^[95]

     95. See [267]-[268] and [304] above; J D Heydon, M J Leeming, P G Turner, Meagher Gummow & Lehane’s Equity Doctrines & Remedies (5th ed, 2015, LexisNexis) at [15-150].

Unconscionability – the “special wives equity”

309. The principle in Yerkey v Jones,^[96] which was confirmed by the High Court of Australia in Garcia v National Australia Bank Ltd,^[97] applies to transactions in which a wife acts as surety by guaranteeing the obligations of her husband in a transaction from which the wife herself obtains no financial benefit.

     96. (1939) 63 CLR 649; [1939] HCA 3.

     97. (1998) 194 CLR 395; [1998] HCA 48 (Garcia).

310. The principle “begins with the recognition that the surety is a volunteer: a person who obtained no financial benefit from the transaction, performance of the obligations of which she agreed to guarantee”.^[98]

     98. Ibid at [31] (Gaudron, McHugh, Gummow and Hayne JJ).

311. In a case in which there is actual undue influence by the husband over the wife, the principle holds that “to enforce that voluntary transaction against her when in fact she did not bring a free will to its execution would be unconscionable”.^[99]

     99. Ibid.

312. In a case in which there is no undue influence, but the husband fails to explain the suretyship transaction adequately and accurately to the wife, the principle holds that “to enforce it against her if it later emerges that she did not understand the purport and effect of the transaction of suretyship would be unconscionable (even though she is a willing party to it) if the lender took no steps itself to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her by a competent, independent and disinterested stranger”.^[100]

     100. Ibid.

313. What makes it unconscionable, in the second kind of case, to enforce the guarantee against the wife is:^[101]

“… the combination of circumstances that: (a) in fact the surety did not understand the purport and effect of the transaction; (b) the transaction was voluntary (in the sense that the surety obtained no gain from the contract the performance of which was guaranteed); (c) the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and yet (d) the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.”

101. Ibid.

314. The second kind of case does not depend on any presumption of undue influence by the husband over the wife. Nor does it depend on the husband acting as the agent of the creditor in procuring the wife’s agreement to give the guarantee. Rather: ^[102]

“… it depends upon the surety being a volunteer and mistaken about the purport and effect of the transaction, and the creditor being taken to have appreciated that because of the trust and confidence between surety and debtor the surety may well receive from the debtor no sufficient explanation of the transaction's purport and effect. To enforce the transaction against a mistaken volunteer when the creditor, the party that seeks to take the benefit of the transaction, has not itself explained the transaction, and does not know that a third party has done so, would be unconscionable.”

102. Garcia at [33] (Gaudron, McHugh, Gummow and Hayne JJ).

315. As the plaintiffs submitted, the principle operates in the second kind of case as a subset of the doctrine of unconscionability which applies only in the context of transactions in which the wife is a surety for the liabilities of her husband, and has obtained no financial benefit from the transaction herself. ^[103] It is not open to me as a judge of this Court sitting at first instance to extend the principles articulated by the High Court in Yerkey v Jones and Garcia to cases outside conventional guarantees given by wives acting wholly as volunteers. ^[104] I reject Ms Chahhoud’s submission that it is critical in all cases “in marital contexts” for each spouse to receive separate and independent legal advice.

     103. Ibid at [23]-[32] (Gaudron, McHugh, Gummow and Hayne JJ); Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; [2002] NSWCA 413 (Elkofairi) at [41]-[49] (Beazley JA, as Her Excellency then was) and [89]-[96] (Santow JA, Campbell AJA agreeing); Narain v Euroasia (Pacific) Pty Ltd (2009) 26 VR 387; [2009] VSCA 290 at [43]-[45] (Nettle JA, as his Honour then was, Bongiorno JA and Byrne AJA agreeing); Rogers v Rogers [2020] NSWSC 392 at [73] (Darke J).

     104. Elkofairi at [92] (Santow JA, Campbell AJA agreeing).

316. The principles in Yerkey v Jones do not apply to the deed. Ms Chahhoud was not a volunteer. Ms Chahhoud was one of the assignees of the intellectual property and, as the sole shareholder of Elias Pty Limited, she also stood to benefit from the increase in that company’s stake in the Akena and Steadiform companies and in the Steadiwall Intellectual Property Trust that would flow from the surrender of Trilam Developments’ shares in those companies and units in the Trust. The fact that Ms Chahhoud had no role in the day-to-day management of the Steadiform and Akena companies does not detract from the benefit of increased ownership of those companies through Elias Pty Limited. Ms Chahhoud was not a surety for Mr Taleb’s liabilities or the performance of his obligations. She undertook an obligation, jointly and severally with Mr Taleb and the other Continuing Entities, to pay the agreed monetary consideration for the assignment of the Retiring Entities’ interest in the intellectual property and for Trilam Developments’ surrender of its shares and units. Jointly and severally with the other Continuing Entities, Ms Chahhoud granted an equitable charge over present and after-acquired property to secure the performance of that obligation. ^[105]

     105. See [65], [250]-[268], [299] and [304] above.

317. Ms Chahhoud’s claim to have the deed set aside under the principles in Yerkey v Jones fails for those reasons.

Unconscionability

318. As Kiefel CJ, Bell, Gageler, Keane and Edelman JJ said in Thorne v Kennedy:^[106]

“A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage ‘which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests’. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring ‘victimisation’, ‘unconscientious conduct’, or ‘exploitation’. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.”

106. (2017) 263 CLR 85; [2017] HCA 49 at [38] (citations omitted).

319. These considerations are not to be applied as if they were separate elements of a cause of action. Each case calls for a precise examination of its particular facts, including the relationship between the parties, and the circumstances of the party who is said to have been vulnerable by reason of a special disadvantage. ^[107] There are no fixed or closed categories of circumstances that might constitute a special disadvantage but, in this context, “special disadvantage” means something that “seriously affects the ability of the innocent party to make a judgment as to his [or her] own best interests”. ^[108]

     107. Stubbings v Jams 2 Pty Ltd (2022) 276 CLR 1; [2022] HCA 6 at [39] (Kiefel CJ, Keane and Gleeson JJ).

     108. Ibid at [40] (Kiefel CJ, Keane and Gleeson JJ), referring to Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 462.

320. In determining whether one party has unconscientiously taken advantage of a special disadvantage of the other, it is necessary to consider whether the first party had actual knowledge of, or was wilfully ignorant of, the special disadvantage, or had constructive knowledge of that special disadvantage in the sense that they had knowledge of facts from which they ought to have known that the other party was suffering under the particular special disadvantage. Constructive notice – where the first party is on notice of facts that might lead on inquiry to discovery that the other party has a special disadvantage – will not suffice. ^[109]

     109. Nitopi v Nitopi (2022) 109 NSWLR 390; [2022] NSWCA 162 at [4]-[10] (Bell CJ) and [197]-[199] (White JA). Whilst it may be arguable that constructive knowledge is sufficient, it would not be open to me as a trial judge to accept such arguments as I am bound by the Court of Appeal’s judgment in Nitopi: Wakim v Senworth Capital Pty Ltd [2024] NSWCA 102.

321. As I explained at the outset of these reasons, the special disadvantage on which Ms Chahhoud relies in support of her unconscionability claim in these proceedings is said to have arisen from a combination of the following alleged circumstances: (1) not having been given an opportunity to negotiate any of the terms of the deed, and not having been represented during those negotiations; (2) not having been provided with a complete copy of the deed prior to signing the deed, and at the time of signing; (3) not being afforded the opportunity to review the deed prior to signing it; (4) not being afforded the opportunity to obtain independent legal advice in relation to the deed prior to signing it; (5) the provisions of the deed not being explained to her accurately, or at all, before she signed the deed; (6) the provisions of the deed, which was written in English, not being translated for her in a language that she could understand, before she signed the deed, her first language being Arabic; (7) her lack of knowledge or understanding of the nature or effect of the deed that she was being asked to sign; and (8) her lack of intention to be bound by the deed. Ms Chahhoud alleges that Mr and Mrs Leedman and Trilam Developments knew, or ought reasonably to have known, that they did not allow any time, or did not allow adequate time, for Ms Chahhoud to have the nature and effect of the deed explained to her, or to obtain independent legal advice before signing the deed.

322. Ms Chahhoud was not legally represented in the negotiations for the deed but she was provided with a complete copy of the deed before she signed it at Ashurst’s office on 16 June 2017. She had sufficient time to review the deed before signing it while she was present at Ashurst’s office on that day. In the absence of pressure to sign the deed there and then, there was no impediment to her taking further time than she in fact took to review the deed, seeking such legal advice and representation as she may have wished, and either declining to sign the deed or negotiating for changes to it before she would sign. Similarly, there was no impediment to Ms Chahhoud deferring signing the deed in order to have it translated into the Arabic language if she had considered that this would assist her, although I do not feel a sense of actual persuasion that Ms Chahhoud lacked the ability to understand the deed written in English and I have rejected her evidence that she did not read it before signing it. I have also rejected Ms Chahhoud’s evidence that she did not understand the nature and effect of the deed, believing that she was signing a share transfer, and her contention that she did not intend to be bound by the terms of the deed that she in fact signed. ^[110]

     110. See [51], [190], [226], [238]-[246] and [296] above.

323. In my opinion, those circumstances, considered as a whole, did not place Ms Chahhoud in a position of special disadvantage by seriously affecting her ability to make a judgment as to her own best interests. Ms Chahhoud might now consider, with the benefit of hindsight, that she acted too hastily in signing the deed on 16 June 2017. That does not constitute a special disadvantage in the requisite sense.

324. Assertions in Ms Chahhoud’s closing submissions that she suffered from a general lack of business experience, and that this constituted a special disadvantage in the requisite sense, travel outside the pleaded case. In any event, I have rejected Ms Chahhoud’s evidence in these proceedings concerning the extent of her business experience for the reasons explained at [25]-[54] and [68]-[98] above, including because that evidence is inconsistent with Ms Chahhoud’s evidence in the Helou proceedings, in which she described her occupation as a company director and deposed that she had been in business for five years as at July 2021.

319. Even if I had held that Ms Chahhoud was suffering from a special disadvantage by reason of the circumstances described at [322] above, I would not have set aside the deed. I would have held that the evidence did not establish that Mr and Mrs Leedman had actual or constructive knowledge of the special disadvantage, much less that they took unconscientious advantage of any such special disadvantage. I would have rejected Ms Chahhoud’s submission that the plaintiffs “actively exploited” the alleged special disadvantage. As I have already stated, Mr Leedman, who negotiated the deed on behalf of the Retiring Entities, reasonably assumed that Ms Chahhoud was legally represented. ^[111] The plaintiffs did not rely on Mr Taleb to procure Ms Chahhoud’s execution of the deed. ^[112] I have accepted Mr and Mrs Leedman’s evidence that their limited interactions with Ms Chahhoud did not cause them to think that she had any difficulty understanding and communicating in the English language. ^[113] I have accepted Mr Leedman’s unchallenged evidence that he believed that Ms Chahhoud stood to benefit from the deed. ^[114] As I have already explained, she did stand to benefit directly as the assignee of intellectual property rights, and indirectly through her ownership of Elias Pty Limited. ^[115] As I have already explained, Ms Chahhoud has not established that Mr Taleb pressured her into signing the deed. ^[116] In any event, as I have stated above in relation to Ms Chahhoud’s duress claim, I have accepted Mr and Mrs Leedman’s evidence that they were not aware of any pressure exerted by Mr Taleb against Ms Chahhoud, either generally or in relation to the deed. ^[117] Ms Chahhoud does not contend that Mr Taleb did anything in the presence of Mr Andersen on 16 June 2017, or that Ms Chahhoud said anything to Mr Andersen, that could have alerted him to the pressure that Ms Chahhoud claims to have been subjected to when she signed the deed. ^[118] Mr Andersen does not recall noticing any signs of coercion or pressure. ^[119]

     111. See [190] above.

     112. See [302] above.

     113. See [106] above.

     114. See [268] above.

     115. See [304] above.

     116. See [244] above.

     117. See [115] and [271]-[278] above.

     118. See [228] above.

     119. See [210]-[211] above.

320. Ms Chahhoud’s claim to set aside the deed on the grounds of alleged unconscionability fails for those reasons.

Statutory unconscionability

327. As noted at the outset of these reasons, Ms Chahhoud relies on ss 12CA and 12CB of the Australian Securities and Investments Act.

328. Section 12CA provides:

“12CA  Unconscionable conduct within the meaning of the unwritten law of the    States and Territories

(1)    A person must not, in trade or commerce, engage in conduct in relation    to financial services if the conduct is unconscionable within the meaning    of the unwritten law, from time to time, of the States and Territories.

(2) This section does not apply to conduct that is prohibited by section 12CB.”

329. Ms Chahhoud’s claim relying on s 12CA fails for the same reasons that I have explained above in relation to her claim of unconscionability at general law. ^[120]

     120. See [318]-[326] above.

330. Section 12CB applies only in relation to conduct in connection with the supply or acquisition, or the possible supply or possible acquisition, of “financial services”. I accept the plaintiffs’ submission that s 12CB therefore does not apply to their conduct in connection with Ms Chahhoud’s entry into the deed. The deed did not involve the supply or acquisition of “financial services” as defined in s 12BAB(1). Whilst s 12BAB(1) provides that a person provides a financial service if they “deal in a financial product”, such as shares, the plaintiffs’ were not “dealing” in Trilam Developments’ shares and units by negotiating and entering into the deed because their promise to surrender those shares and units was merely a dealing on their own behalf: see s 12BAB(7) and (9).

331. Ms Chahhoud’s claim relying on s 12CB fails for that reason.

332. Even if s 12CB had been applicable, I would have held that, having regard to all of the circumstances in which Ms Chahhoud signed the deed, including the matters referred to in s 12CC to the extent that they are applicable to the present case, the conduct of the plaintiffs was not “outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience”. ^[121] I would have reached that conclusion for the reasons that I have already canvassed extensively above in addressing Ms Chahhoud’s claims of duress, undue influence, and unconscionability at general law.

     121. Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission [2024] HCA 27 at [50]-[60] (Gageler CJ and Jagot J, Gleeson and Beech-Jones JJ agreeing at [310] and [340]), at [97]-[105] (Gordon J), at [282] (Steward J).

Contracts Review Act

333. As the plaintiffs submitted, s 17(3) of the Contracts Review Act provides that the Act applies to a contract only if the law of New South Wales is the proper law of the contract, or if the law of New South Wales would be the proper law of the contract but for a provision of the contract that stipulates the law of another place as the proper law of the contract.

334. As the plaintiffs submitted, the parties to the deed expressly selected the law of Queensland as the proper law by providing in clause 14.5 that the deed is governed by the laws of Queensland. ^[122] Neither the nature and terms of the deed, nor the circumstances in which it was entered into, support the view that the law of New South Wales would have been the proper law of the deed but for clause 14.5. ^[123] Mr and Mrs Leedman were resident in Queensland. Mr Taleb and Ms Chahhoud were resident in New South Wales. The deed concerned the surrender of shares by Trilam Developments (a company registered in South Australia) in the Akena and Steadiform companies (which were registered and conducted business in Queensland) and in Class 1 Form (which was registered in New South Wales, but which conducted business in the Australian Capital Territory and in Queensland). ^[124] It follows that the Contracts Review Act does not apply to the deed by reason of s 17(3) of the Act, and Ms Chahhoud’s claim for relief under the Act must be dismissed.

     122. See [262] above.

     123. Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 at 440-442; [1996] HCA 39 (Toohey, Gaudron and Gummow JJ).

     124. See [56]-[67] above.

335. If I had held that New South Wales was the proper law of the deed, I would have dismissed Ms Chahhoud’s claim for relief under the Contracts Review Act for two further reasons. First, I would not have held that the provisions of the deed were unjust in the circumstances in which the deed was entered into, for all of the reasons that I have already canvassed above in addressing Ms Chahhoud’s claims of duress, undue influence, and unconscionability. Second, as the plaintiff’s submitted, Ms Chahhoud would not be entitled to relief in any event by reason of s 6(2) of the Act, because the deed was entered into for the purpose of the business carried on by Ms Chahhoud as sole director and shareholder of Elias Pty Limited by investing in the Akena and Steadiform companies that were developing and commercialising structural formwork systems and products.

Judicial sale

336. The plaintiffs have established that they have an equitable charge over the Peak View property by reason of clause 7.1 of the deed, that the charge is enforceable, and that there has been default in the payment of the full Settlement Amount plus interest under the deed by the chargor Ms Chahhoud, as one of the Continuing Entities who is jointly and severally liable to pay the full Settlement Amount plus interest by 16 June 2019. The outstanding principal is $1,500,000, being the Deferred Payment component of the Settlement Amount.

337. As the plaintiffs submitted, judicial sale is the standard remedy of an equitable chargee upon default by the chargor. ^[125] In the present case, there is no registered mortgagee or caveator with an interest in the Peak View property who might be adversely affected by an order for judicial sale. I note that Ms Chahhoud made no submission against an order for judicial sale in the event that she did not succeed in her claims to set aside the deed, or to have it declared void or ineffective, and in the event that the Court did not uphold her contention that the deed does not create an equitable charge over the Peak View property, once acquired.

     125. King Investment Solutions Pty Ltd v Hussain (2005) 64 NSWLR 441; [2005] NSWSC 1076 at [81] (Campbell J); Sood v Christianos (2008) 14 BPR 26,101; [2008] NSWSC 1087 (Sood) at [16] (Brereton J); Ghannam v BB&B Penrith Pty Ltd [2022] NSWSC 1588 at [23]-[24] (Peden J).

338. I am satisfied that an order for judicial sale is appropriate, subject to the question of the terms on which the order should be made, including who should have the conduct of the sale, whether that person should be authorised to sell the property by public auction, by an expression of interest campaign, or by private treaty, and what reserve price should be fixed in the event that the sale is to be by public auction.

339. Ordinarily, the Court gives the conduct of the sale to the party with the greatest interest in maximising the sale price. When the value of the property is insufficient to cover the debt secured by the charge, the conduct of the sale will typically be given to the chargee because it has an interest in maximising the amount that will be recovered from the sale of the property. ^[126]

     126. Sood at [23] (Brereton J).

340. In the present case, there is no evidence of the current value of the Peak View property. The only evidence adduced by the plaintiffs is evidence of opinions expressed to the plaintiffs by a real estate agent in 2022 that the likely selling price of the Peak View property was, at that time, in the range of $650,000 to $700,000. ^[127] No objection was taken to that evidence, but it carries no weight beyond the mere fact that the agent expressed that opinion in 2022. The plaintiffs did not adduce evidence of the reasons for the agent’s opinion, which would have been required if the Court were to accept the opinion as substantially based on the agent’s specialised knowledge or experience. Nevertheless, I consider that the evidence of the agent’s opinion, together with the evidence of the price of $575,000 that Ms Chahhoud paid to purchase the Peak View property in 2019,^[128] provides a sufficient basis to conclude on the balance of probabilities that the value of the property is materially less than the principal sum of $1,500,000 owing under the deed, even before taking into account the interest on that principal sum which has been compounding monthly at the rate of 1% per month since 16 June 2017. I am therefore satisfied that the plaintiffs have the greatest interest in maximising the price achieved for the Peak View property, and that the terms of the order for judicial sale should appoint the plaintiffs to conduct the sale.

     127. See [294] above.

     128. See [282] above.

341. A judicial sale is ordinarily conducted by public auction in order to ensure that the market is fully tested and the best price is obtained. However, the Court may order a sale by public tender or by private treaty. ^[129] As referred to at [295] above, the plaintiffs have adduced evidence that they were advised by three real estate agents in 2022 that a sale by auction would not be likely to obtain the best price for the Peak View property, and that a sale by private treaty would be the preferable method of sale for this particular property. For the reasons explained above, that evidence carries no weight beyond the mere fact that the agents expressed those opinions in 2022. The plaintiffs have not adduced any evidence that provides a sufficient basis for the Court to determine what directions should be made as to the method of sale and, if the sale is to be by public auction, the reserve price. Contrary to the plaintiffs’ submissions, I do not consider that it would be an appropriate exercise of the Court’s discretion in this case to circumvent this evidentiary deficiency by ordering judicial sale on terms that leave it to the plaintiffs to make those determinations as they see fit in the process of conducting the sale under the auspices and pursuant to the authority of the Court, subject only to a requirement that they consult with and obtain advice from a real estate agent as to the method of sale, and a valuer as to the reserve price (if the plaintiffs determine to conduct the sale by public auction), and without any requirement for any contract for the sale of the property by private treaty to be on terms that it is subject to the approval of the Court. ^[130]

     129. Sood at [20] (Brereton J).

     130. See Sood at [20]-[22] and the authorities there referred to.

342. For those reasons, orders will be made for judicial sale of the Peak View property on terms that the plaintiffs (jointly and severally) are appointed to effect the sale, but requiring the plaintiffs to obtain directions from the Court as to the method of sale and, if the sale is to be by public auction, as to the reserve price to be fixed, before proceeding with the sale. There will be an ancillary order for Ms Chahhoud to deliver up vacant possession of the Peak View property to the plaintiffs. As the plaintiffs submitted, vacant possession is an incident of judicial sale. ^[131]

     131. Boutros v Nationwide Capital Pty Ltd [2013] NSWCA 246 at [43] (Gleeson JA); Morris Finance Ltd v Free (2017) 18 BPR 37,223; [2017] NSWSC 1417 at [124] (Ward CJ in Eq, as her Honour then was); Retirement Village Bargo Pty Ltd v Anwar (2023) 21 BPR 44,177; [2023] NSWSC 209 at [138] (Peden J).

Costs

343. The plaintiffs seek an order that Ms Chahhoud pay the whole of the plaintiffs’ costs of these proceedings to date on an indemnity basis, relying on clause 4.4(c)(B) of the deed, which in terms relates to commencing proceedings for payment of any amount owing under the deed as a liquidated debt, but which the plaintiffs construe as a contractual entitlement to indemnity costs in respect of their claim in these proceedings for declaratory relief, an order for judicial sale, and the judgment for a monetary sum (being the claim that the plaintiffs have deferred, as explained at [16] above). I did not have the benefit of any submissions from the plaintiffs in support of that construction of clause 4.4(c)(B) of the deed. In the circumstances, the most appropriate and efficient course is to defer determining the costs of the proceedings until the proceedings have been concluded.

Conclusion and orders

344. For all of the foregoing reasons, the orders and directions of the Court are as follows:

1. DECLARE that the plaintiffs hold an equitable charge (the Charge) over the whole of the land identified as [redacted] in Deposited Plan [redacted] (the Peak View Property), which secures all money owing by the first defendant to the plaintiffs pursuant to the deed entered into between the plaintiffs, the first defendant, the second defendant and others on or about 16 June 2017 (the Deed).

2. ORDER that the Peak View Property be judicially sold.

3. ORDER that the plaintiffs (jointly and severally) be appointed the Court’s agent in order to effect the judicial sale of the Peak View Property.

4. ORDER that the first defendant deliver up vacant possession of the Peak View Property to the plaintiffs within 14 days of the date of these orders.

5. ORDER that the Peak View Property be sold by the plaintiffs in such manner and on such terms as the Court directs on the application to be filed in accordance with order 6 below, and in accordance with such other directions as the Court may make from time to time, and otherwise in accordance with the duties that a mortgagee owes when selling mortgaged land.

6. ORDER that the plaintiffs are to make an application for directions concerning the sale of the Peak View Property, including the manner of sale and any reserve price, by filing and serving a notice of motion, together with all supporting evidence and an outline of the plaintiffs’ submissions in support of the directions sought, within 42 days after the date of these orders, and direct that the notice of motion be returnable before Williams J five business days after the date of filing for directions in the first instance.

7. ORDER that, in the event of the sale of the Peak View Property in accordance with these orders, and in accordance with the directions to be made by the Court pursuant to orders 5 and 6 above, the plaintiffs are to pay the proceeds of sale in the following order:

1. first, payment of all of the plaintiffs’ proper costs and expenses relating to the sale (including any commission to be paid and expenses to be reimbursed to any real estate agent retained for the purpose of the sale);

2. second, payment to the plaintiffs of the amount secured by the Charge, subject to the plaintiffs providing 14 days’ notice in writing to the first defendant of the amount which the plaintiffs contend is secured by the Charge as at the date of completion of sale of the Peak View property; and

3. third, payment of any remaining proceeds of sale into Court.

8. ORDER that, in the event of any dispute in relation to the amount referred to in order 7(b) above, the plaintiffs are to pay the disputed monies into Court.

9. ORDER that, in the event of the sale of the Peak View Property in accordance with these orders, and in accordance with the directions to be made by the Court pursuant to orders 5 and 6 above, the plaintiffs are appointed to transfer the Peak View Property to the purchaser.

10. ORDER that the cross-claim is dismissed.

11. Without limiting order 6 above, GRANT LIBERTY to the parties to apply on five business days’ notice, including liberty to the plaintiffs to apply to move on their claim in prayer 11 of the statement of claim for judgment against the first defendant in the amount owing under the Deed.

12. ORDER that all questions of costs are reserved.

**********

Endnotes

Decision last updated: 17 October 2024