Napper v Hadchiti

[2006] NSWSC 855

CITATION:	Napper v Hadchiti [2006] NSWSC 855 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	03/08/06
JUDGMENT DATE :	3 August 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	White J
EX TEMPORE JUDGMENT DATE:	08/03/2006
DECISION:	Summons dismissed.
CATCHWORDS:	PRACTICE & PROCEDURE – Mareva orders – Parties involved in proceedings before Consumer, Trader and Tenancy Tribunal – Plaintiff sought asset preservation orders to protect his position if successful in proceedings before Tribunal – Whether plaintiff able to demonstrate prima facie case in Tribunal – Whether plaintiff able to demonstrate danger that defendants intend to deal with assets in way which would defeat execution of any judgment by plaintiff – Mareva relief refused – Summons dismissed - No question of principle.
LEGISLATION CITED:	Home Building Act 1989 (NSW) Supreme Court Act 1970 (NSW)
CASES CITED:	Aspermont Ltd v Lechmere Financial Corporation (2002) 27 WAR 1 P M Biscoe, Mareva and Anton Piller Orders: Freezing and Search Orders, 2005 Patterson v BTR Engineering (Aust) Limited (1989) 18 NSWLR 319
PARTIES:	Peter Robert Napper v George Hadchiit & Anor
FILE NUMBER(S):	SC 4097/06
COUNSEL:	Plaintiff: Mr L Judd Defendant: N/A
SOLICITORS:	Plaintiff: MBA Lawyers Defendant: N/A
LOWER COURT JURISDICTION:	Compensation Court

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Thursday, 3 August 2006

4097/06 Peter Robert Napper v George Hadchiti & Anor

JUDGMENT

1 HIS HONOUR: This is an application made ex parte for asset preservation orders. The plaintiff is an applicant in the Consumer, Trader and Tenancy Tribunal. Before that Tribunal he has joined the first defendant, Mr George Hadchiti, Mr George Eid and a Mr Fenianos as respondents. He seeks compensation in the amount of $339,313.60 in a building claim brought pursuant to the Home Building Act 1989 (NSW).

2 In those proceedings, he claims that the respondents contracted to do home building work for which they were unlicensed, complains as to the quality of the work done, and alleges that insurance was not obtained. He also claims that the Council has required the construction work to be demolished.

3 No relief is sought in the summons except for the asset preservation orders, and ancillary orders to require the defendants to give discovery of their assets. The proposed orders would exempt from their operation payments by both the first and second defendants of amounts up to $150 a week for living expenses and $300 a week for reasonable legal expenses, as well as any dispositions made in the ordinary course of business, or to discharge obligations properly incurred before the date of the orders.

4 I am prepared to assume that jurisdiction under s 23 of the Supreme Court Act 1970 (NSW) extends to the granting of relief by way of asset preservation orders which are protective of the position of parties in proceedings in the Tribunal (see Aspermont Ltd v Lechmere Financial Corporation (2002) 27 WAR 1, referred to in P M Biscoe, Mareva and Anton Piller Orders: Freezing and Search Orders, 2005 at [5,298]).

5 For the plaintiff to be entitled to such orders, it is necessary that he demonstrate a prima facie case in the Tribunal, and also that there is a danger, by reason of the defendants absconding, or of assets being removed out of the jurisdiction, or disposed of within the jurisdiction, or otherwise dealt with in some fashion, that the plaintiff, if he succeeds, will not be able to have his judgment satisfied (Patterson v BTR Engineering (Aust) Limited (1989) 18 NSWLR 319).

6 Asset preservation orders are not designed to provide security for the judgment which a plaintiff expects to obtain, but to prevent the processes of a court being abused by a defendant dealing with his or her assets in a way which may frustrate the plaintiff from executing a judgment.

7 The plaintiff gives evidence that the first and second defendants were the registered proprietors of land in folio identifier 19/F/2042. It appears that the land was transferred to a Ms Sylvia Eid by transfer dated 30 June 2006. The consideration for the transfer is expressed to be the sum of $450,000.

8 The plaintiff’s solicitor has conducted property searches which disclose a number of properties registered in the name of Mr George Hadchiti. He deposed, however, to believing that the property apparently transferred to Ms Eid may be the only real property in New South Wales owned by the first or second defendants because, prior to 6 May 2005, the first defendant’s name was Gerges Hadchity, and instruments in relation to the other properties signed prior to that time were not signed by a person using that name.

9 The plaintiff says that Ms Sylvia Eid is the daughter of Mr George Eid, and that the second defendant is also his daughter.

10 An application filed on 21 March 2006 came before the Tribunal for hearing on 11 July 2006. On that day, the first defendant and Mr Eid appeared and successfully obtained an adjournment. It appears from a letter from their solicitors, addressed to the plaintiff, that they instructed solicitors shortly before 11 July 2006. There is no evidence as to when the application of 21 March 2006, or the evidence in support of that application was first served on the first defendant. There is evidence that the first defendant is in default of subsequent orders made by the Tribunal. I accept that the plaintiff has demonstrated a prima facie cause of action for the obtaining of at least some of the relief sought in the Tribunal. However, I am not satisfied that the evidence of the transfer of land from the first and second defendants to Ms Eid, apparently for valuable consideration, demonstrates an intention on the part of the first defendant to deal with his assets so as to deprive the plaintiff of the fruits of a judgment to which the plaintiff might become entitled as a consequence of a successful application before the Tribunal.

11 The evidence does not show that the transfer was prompted by the pendency of the Tribunal. The only evidence of the involvement of the first defendant in the proceedings is after the date of the transfer and, in any event, it is not suggested that the transfer was for less than valuable consideration.

12 The plaintiff’s solicitor has demanded that the first and second defendants provide undertakings, including that the defendants not incur any liabilities on credit cards, not spend any more than $150 per week for living expenses or $300 per week for legal expenses, and otherwise not dispose or deal with their assets in an amount of up to $339,313.60.

13 I do not infer from the defendants’ failure to respond to that demand that the defendants intend to deal with their assets in a way which would defeat the plaintiff from executing a judgment if he becomes entitled to do so. Such an apprehension cannot be generated merely by the plaintiff’s demanding an undertaking, and relying upon the defendants’ failure to respond as evidence of a threat.

14 Moreover, any order, if made, could not, in my view, be in the form sought: that is to say, in a form which would allow the first and second defendants only $300 a week for living expenses and $600 a week to pay legal costs when the defendants are facing legal proceedings in the Tribunal, and would be entitled to bring proceedings to discharge such an injunction, and thereby incur legal expenses in these proceedings.

15 Once a proper allowance is made for living expenses, legal costs and the discharge of mortgages over the property (which appear to have amounted to at least $382,500), there would be little left from the proceeds of sale of the property to be available to meet a judgment debt.

16 It is a serious matter to restrain a party from dealing with his or her assets in advance of judgment. I do not consider that the utility of the order, if made, is such as to warrant the making of the order, even if I were satisfied, which I am not, of the defendants’ intention to deal with their assets in a way which may defeat a judgment to which the plaintiff may become entitled.

17 As no substantive relief is sought in the summons, other than the asset preservation orders and ancillary orders thereto, I think the appropriate order, having regard to these reasons, is that the summons be dismissed. The exhibit may be returned.

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22/08/2006 - Extra catchword added. - Paragraph(s) 0