Maerbani v Dell Cleaning Group Sydney Pty Ltd
[2013] FCA 237
•14 March 2013
FEDERAL COURT OF AUSTRALIA
Maerbani v Dell Cleaning Group Sydney Pty Ltd [2013] FCA 237
Citation: Maerbani v Dell Cleaning Group Sydney Pty Ltd [2013] FCA 237 Parties: ALI EL MAERBANI v DELL CLEANING GROUP SYDNEY PTY LTD (ACN 155 338 800), DELL CLEANING GROUP PTY LTD (ACN 135 652 327), LEE NGUYEN, A TO Z GROUP PTY LTD (ABN 61156279015) and AHMED DAIFALLA File number: NSD 337 of 2013 Judge: JACOBSON J Date of judgment: 14 March 2013 Cases cited: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Yorke v Lucas 158 CLR 661Date of hearing: 14 March 2013 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 33 Counsel for the Applicant: Mr J Lo Schiavo Solicitor for the Applicant: Macquaire Lawyers Burwood Counsel for the First, Second and Third Respondents: Ms L Friedwald Solicitor for the First, Second and Third Respondents: DCS Lawyers Pty Ltd Solicitor for the Fourth and Fifth Respondents: Mr A Stewart of Stewart & Associates
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 337 of 2013
BETWEEN: ALI EL MAERBANI
ApplicantAND: DELL CLEANING GROUP SYDNEY PTY LTD (ACN 155 338 800)
First RespondentDELL CLEANING GROUP PTY LTD (ACN 135 652 327)
Second RespondentLEE NGUYEN
Third RespondentA TO Z GROUP PTY LTD (ABN 61156279015)
Fourth RespondentAHMED DAIFALLA
Fifth Respondent
JUDGE:
JACOBSON J
DATE OF ORDER:
14 MARCH 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The interlocutory application filed on 1 March 2013 is dismissed.
2.The applicant pay the respondents’ costs of the interlocutory application.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 337 of 2013
BETWEEN: ALI EL MAERBANI
ApplicantAND: DELL CLEANING GROUP SYDNEY PTY LTD (ACN 155 338 800)
First RespondentDELL CLEANING GROUP PTY LTD (ACN 135 652 327)
Second RespondentLEE NGUYEN
Third RespondentA TO Z GROUP PTY LTD (ABN 61156279015)
Fourth RespondentAHMED DAIFALLA
Fifth Respondent
JUDGE:
JACOBSON J
DATE:
14 MARCH 2013
PLACE:
SYDNEY
REASONS FOR JUDGMENT
I have before me today an application for a freezing order under which the applicant, Mr Maerbani, seeks to restrain the respondents from dealing with a number of assets including a bank account and several items of real estate.
The only bank account is one with Westpac to which I will refer later. The interlocutory application lists three items of real estate but the evidence suggests that there is only one item which is located in Morely, Western Australia, and I will return to that later.
The claim in the principle proceedings is that the applicant was misled or deceived into paying a substantial sum of money for the purchase or allocation of shares in a company called Dell Cleaning Group Sydney Pty Ltd (Dell Sydney).
The essence of the representation is said to be that the third respondent, Mr Lee Nyugen (Mr Lee) and perhaps other respondents, represented to Mr Maerbani that Dell Sydney held a cleaning contract to clean vehicles located at Sydney airport which had been hired from the well known car rental company, Hertz.
Mr Lo Schiavo, who appears for Mr Maerbani, relies principally on a document called Company Share Offer from Dell Cleaning Group Sydney Pty Ltd. The evidence indicates that that offer was accepted by both Mr Maerbani and the fifth respondent, Mr Daifalla.
The terms of the offer were that Mr Maerbani and Mr Daifalla would acquire 50 per cent of the shareholding of Dell Sydney in return for a payment of $198,000. That payment was to be made in a number of instalments. The first two of three instalments were paid but there was a delay in payment of the final instalment of $126,000 which was due to be paid on Friday, 26 May 2012. Ultimately, the balance of the instalment, in an amount of approximately $72,000, was paid in circumstances to which I will refer later.
Mr Lo Schiavo also relies upon one of the terms of the offer which appears to indicate on its face that the cleaning contract at Sydney airport was made not with Dell Sydney but with its parent company, Dell Cleaning Group Pty Ltd (Dell Group). Indeed, this is borne out by the terms of the cleaning contract which was in evidence in annexure AEM4 to Mr Maerbani’s affidavit. It shows that the agreement was between Hertz Australia Pty Limited and Dell Group.
Importantly, clause 17 of the agreement provides that Dell Group shall not be entitled to assign or subcontract the agreement without the consent of Hertz. The effect of this clause is or seems to be that in order for Mr Maerbani and Mr Daifalla to obtain the benefit of the profit share referred to in the share offer, Hertz would need to consent to the assignment of the cleaning contract to Dell Sydney or, alternatively, for there to be a subcontract to that company.
The contractual position, however, is quite complicated. The evidence adduced by Mr Maerbani is not entirely satisfactory in that regard. In particular, there is evidence from Mr Lee Nguyen which indicates that notwithstanding the apparent acceptance of the share offer the parties altered their contractual arrangement. In particular, the evidence indicates that there is alleged, at least by Mr Lee, to be a variation of the arrangements under which a franchise agreement was to be entered into to replace the share offer.
Although the franchise agreement which was in evidence does not seem to be signed I am satisfied that there is a very real issue as to whether the contractual arrangements between the parties are, in fact, reflected in that document rather than in the share offer. Whether or not that is so will need to be determined at a final hearing.
The share offer was dated 12 March 2012. The franchise agreement is said to have been made approximately three months later, on or about 18 June 2012. It appears from what I have been told that there may be a number of separate versions of the agreement, one of which was accepted by Mr Maerbani or possibly by the fourth respondent, A to Z Group Pty Ltd (A to Z) and possibly yet another by Mr Daifalla.
Whatever the true position in regard to the contractual arrangements, as I have said, there is a real issue as to whether the document, to which I was taken in evidence, represents the final contractual arrangements between the parties.
Indeed, the affidavit of Mr Lee, in particular at paragraphs 10 and 23, is quite inconsistent with the case put by Mr Maerbani. Importantly, at paragraph 23 Mr Lee says that during discussions between the parties it was made clear that permission had not been granted by Hertz to franchise the contract to Mr Maerbani or interests associated with him and moreover that if Hertz found out that Mr Maerbani and Mr Daifalla were to obtain a franchise Hertz could terminate the contract.
This is important because it receives some support in the document which is said to be the franchise agreement. The relevant clause is item 17. That clause seems to me to recognise that if Dell Group was not able to obtain the consent of Hertz to assign or otherwise grant a franchise to Mr Maerbani or interests associated with him, then the moneys paid would be at risk.
The effect of the clause is that in the event that the franchise was not approved, Dell Group or Dell Sydney would provide a replacement contract which would give Mr Maerbani and Mr Daifalla the benefit of a share of profits of a business with a turnover of approximately $1.8 million per annum. However, the clause goes on to say that if:
they [Hertz] are not happy to have the contract franchised out any time due to any other reasons than the Master Franchisees [Dell Sydney] will not provide a replacement contract to the Franchisee [A to Z, or Mr Maerbani and/or Mr Daifalla].
The effect of this clause and the other matters which I have mentioned indicate that there will be a real issue as to whether Mr Maerbani understood and accepted that the contractual arrangements made in March 2012 had been altered and that he understood that the moneys paid to him would have been applied toward a franchise agreement with the risk that if the franchise was not approved, the amount paid would not be refunded.
I should mention here that the final instalment of approximately $72,000 which I have averted to earlier in my reasons appears to have been paid by A to Z. That company appears to be a company in which Mr Maerbani has no shareholding interest. Nonetheless, the evidence at this stage is that Mr Lee was told that Mr Maerbani had an interest in A to Z, thus although it appears that Mr Maerbani paid the $72,000 to Mr Daifalla, those moneys were paid to A to Z and then on-paid to Mr Lee.
It seems to me that in the circumstances which I have set out above, Mr Maerbani has failed to establish anything more than an arguable case in relation to any of the respondents. The claim against the first and third respondents is the misrepresentation claim, which I have summarised above.
The claim against the fourth and fifth respondents, A to Z and Mr Daifalla, is that Mr Daifalla was aware of a false representation made to Mr Maerbani and was therefore knowingly involved under the accessory liability provisions of the Competition and Consumer Act, Schedule 2, The Australian Consumer Law.
It seems to me that even if I were to be satisfied that the representation was made, there is no evidence at present to suggest that Mr Daifalla was aware that the representation was false. Knowledge of the falsity of the representation is an essential element of the cause of action upon which Mr Maerbani apparently relies: see Yorke v Lucas 158 CLR 661.
In summary, therefore, I do not consider that the cause of action outlined to me by Mr Lo Schiavo is more than arguable. Although Mr Lo Schiavo submitted that the claim was one of fraud, which would provide a stronger basis for a freezing order, I do not consider that submission to be made out: see Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319.
Accepting all of that, I should indicate that the position which is agitated on behalf of Mr Maerbani is one to which some consideration ought to be given.
On its face, Mr Maerbani has paid an amount of nearly $200,000 and has not received the benefit of either the issue of shares in Dell Sydney or a franchise agreement. On the case put to me by the first to third respondents, Mr Maerbani would simply forfeit the substantial sums of money paid by him by reason of what are said to be the contractual arrangements between the parties. I do not need to say anything further about this at present, but it is a matter to which the parties should give some serious attention.
Since Mr Maerbani fails at the threshold on the claim for a freezing order, I do not need to say anything about the question of balance of convenience and risk of dissipation of assets. Nevertheless, it seems to me that on that issue, the evidence is all one way.
The only bank account which is the subject of the application appears to be the working account of Dell Sydney. It has only a small sum of money as a credit balance. The funds are needed by Mr Lee or the company because of ongoing business commitments.
It is true that those commitments include trips overseas to conduct business in other countries, but I do not think that there is anything to suggest that Mr Lee is likely to take the small sum of money in that account out of the jurisdiction in order to frustrate the effect of any judgment which might ultimately be given against the respondents at the conclusion of the proceeding.
The only item of real estate owned by Mr Lee is the property at Morley, but that property was, until recently, owned jointly by Mr Lee and his former partner, who is the mother of his children.
The evidence establishes that Mr Lee and his former partner have separated and that agreement was reached between them that Mr Lee would transfer his interest in the property to his former partner, who would also take over and assume the liability to the mortgagee for payment of the mortgage. The form of transfer was only signed recently. It has not been registered. Mr Lee has quite frankly disclosed in his affidavit the details of the agreement reached with his former partner and the transfer itself. I do not think that it would be appropriate to delay the completion of that transaction.
As to Mr Daifalla, there is evidence that he owns a share in A to Z, which is one of the respondents, and that his wife is the registered owner of a vehicle. Mr Daifalla has children and the vehicle is obviously needed by his wife. There is simply no basis to place a freezing order on him, which would prevent him from dealing with the vehicle.
Finally, although an undertaking as to damages is offered, there is no evidence that would satisfy me as to the ability of Mr Maerbani to honour it.
Yesterday, Mr Maerbani’s wife swore an affidavit which indicated that she was prepared to support the undertaking as to damages but there was nothing in the evidence of Mrs Maerbani to suggest that she has substantial means to honour an undertaking which will be called upon in the event that the proceeding is unsuccessful.
The evidence as to the business dealings in particular of Mr Lee and his companies weigh strongly against the grant of any freezing order, even I were otherwise minded to make one, without being satisfied that Mr Maerbani could honour an undertaking if it were to be called upon.
For these reasons the interlocutory application filed on 1 March 2013 is dismissed.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate:
Dated: 14 March 2013
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