Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 3)

[2018] NSWSC 381

Supreme Court

New South Wales

Medium Neutral Citation:

Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 3) [2018] NSWSC 381

Hearing dates:

20, 22 February & 15, 26 March 2018

Date of orders:

26 March 2018

Decision date:

29 March 2018

Jurisdiction:

Equity

Before:

Slattery J

Decision:

Leave is not granted to a director of the corporate caveator, ENA, to appear on its behalf. Hearing should proceed in the absence of legal representation of ENA. ENA’s motion to file a cross claim in support of its caveat dismissed. Orders made on the plaintiffs’ motion to remove ENA’s caveat.

Catchwords:

CIVIL PROCEDURE - appearance - director seeks leave to appear on behalf of corporation that seeks to support the maintenance of a caveat over certain real property - UCPR, rr 7.1 and 7.2 - no resolution passed by company authorising director to appear on its behalf - director declines to accept that he will be personally liable for the costs of the proceedings in which he represents the company, if leave were given for him to appear - director is of ill health and difficult to make himself understood by the Court - whether leave for the director to appear on behalf of the company should be refused.

 

REAL PROPERTY - Caveats - whether caveat should be removed under Real Property Act, s 74MA - whether caveat has or may have substance - no documents to support the substance of the caveat - no stamp duty paid on the document - caveat contains contradictory information - whether caveat complies with Real Property Act, s 74F(5).

  SECURITY FOR COSTS - company propounding caveat is said to be a $2 company – liberty to apply granted as part of final orders - case proceeded urgently for good reasons without security for costs application being made - Court indicates that if any liberty to apply that has been granted is to be taken up by the corporate caveator, that the plaintiffs will be at liberty to file a motion on the liberty to apply date granted for orders that the corporate caveator provides security for costs.

Legislation Cited:

Civil Procedure Act 2005, s 61
Duties Act 1997, ss 205, 211, 304
Real Property Act 1900, ss 74F, 74K, 74MA, 74O
Real Property Regulation 2014, Schedule 3
Uniform Civil Procedure Rules 2005, rr 7.1 and 7.2

Cases Cited:

21 Million Pty Limited v Clarence Street Pty Ltd [2003] NSWSC 1160
ACN 075 911 410 Pty Ltd v Almaty Pty Limited [2011] NSWSC 333
Arnautovic v Sutherland (2011) 199 FCR 1
Beechworth Land Estates Pty Ltd (Admin Apt) and
Boral Recycling Pty Limited v Wake [2009] NSWSC 712
Damjanovic v Maley (2002) 55 NSWLR 149
Griffith Estates Pty Ltd (Admin Apt) (No 2) [2015] NSWSC 336
Martyn v Glennan [1979] 2 NSWLR 234
Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie [2017] NSWSC 1509
Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 2) [2018] NSWSC 22
Scotts Head Developments Pty Ltd & Anor v Pallisar Pty Ltd & Ors [1994] NSWCA 281

Category:

Procedural and other rulings

Parties:

In proceedings 2015/325044:
First plaintiff: Andy Vuong Duc Pham
Second plaintiff: Thi Huong Giang Pham
First defendant: Enterprise ICT Pty Ltd
Second defendant: Nadine Musabwasoni
Third defendant: Robert Sebie

In proceedings 2015/56505:
First plaintiff: Andy Vuong Duc Pham
Second plaintiff: Thi Huong Giang Pham
First defendant: Robert Sebie
Second defendant: Commonwealth Bank of Australia
Third defendant: ENA Development Pty Ltd (ACN 105 235 363)
Fourth defendant: Mazen Zraika

Representation:

Counsel:

 

In proceedings 2015/325044:

 

Plaintiffs: B. Zipser
First Defendant: A. Rogers

 

Solicitors

 

Plaintiffs: John Bui, Bui Lawyers
First Defendant: Richard Killalea, Kazi & Associates
Leave was granted to withdraw on 26 March 2018.
First Defendant: Ramzy Sebie, director of ENA Developments Pty Ltd

Counsel:

 

In proceedings 2015/56505:

 

Plaintiffs B. Zipser

 

Solicitors:

  Plaintiffs: John Bui, Bui Lawyers
First Defendant: in person

File Number(s):

(2015/325044); (2015/56505)

Publication restriction:

No

EX TEMPORE Judgment

1. This is my third judgment in these proceedings. My first judgment was given on 8 November 2017: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie [2017] NSWSC 1509. My second judgment was given on 30 January 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 2) [2018] NSWSC 22. This judgment should be read together with my two previous judgments.

2. The first and second judgments set out the history of these unusual proceedings from September 2017 until late January 2018 but covering their earlier background as well. The present judgment explains the even more unusual course of these proceedings since then. Events, matters and persons are referred to in this third judgment in the same way that they are in each of my previous judgments.

3. These reasons decide two issues: (1) whether Mr Ramzy Sebie should be granted leave to appear on behalf of ENA Development Pty Ltd (“ENA”) for the further conduct of these proceedings; and (2) what orders should be made on two motions before the Court for hearing.

4. On 15 March 2018, these proceedings were adjourned to Monday 26 March 2018, with a view to the Court making orders and directions to assist in completing a part-heard hearing that commenced in February this year. The Court’s consideration included whether to proceed to hear the matter on an interlocutory or a final basis, and what should happen to any remaining balance of the proceedings. On 26 March I made the orders set out at the conclusion of these reasons and indicated that I would publish my reasons later. This judgment contains those reasons.

5. Two motions are before the Court: (1) a motion of 30 January 2018 brought by the plaintiffs, Mr and Mrs Pham, to remove ENA’s caveat from the title to the Chiswick Property; and (2) a motion dated 13 February 2018 brought by ENA for a grant of leave to file a cross-claim against the Phams to maintain its caveat on the title to the Chiswick Property.

6. The Court has decided: not to grant leave for Mr Ramzy Sebie to appear for ENA; to dismiss ENA’s motion of 13 February 2018; and to make orders on the Pham’s motion for the removal of ENA’s caveat over the Chiswick Property.

7. Mr Zipser continued to appear for the plaintiffs in these proceedings. ENA is no longer legally represented for reasons that will become clear below.

Prior History of These Proceedings

8. These proceedings have been before the Court on six occasions between 30 January 2018, when I gave my second judgment, and 26 March 2018, when the Court’s final orders were made. It is evident from the transcript of each of those occasions (30 January 2018, 12 February 2018, 20 February 2018, 22 February 2018, 15 March 2018, and 26 March 2018) that the Court has strenuously endeavoured to accommodate ENA's pursuit of its interests in relation to the Chiswick Property, despite its very late reappearance in these proceedings. The Court has done so whilst attempting to balance those interests against the need to give effect to Pembroke J's orders of May 2017 in circumstances where the Phams, who had the benefit of Pembroke J's May 2017 orders for the completion of the sale to them of the Chiswick Property, had finance approval to complete that purchase that was expected to run out in late March – early April 2018.

9. The circumstances of ENA's late reappearance in these proceeding are sufficiently described in the Court's judgment given on 30 January 2018 (at [22] - [29]). This section of these reasons briefly summarises the course of the proceedings since 30 January 2018, a course which demonstrates: that ENA's interests have been well accommodated before today; that ENA has been thoroughly warned of the need to be properly represented in the proceedings; and that ENA must have deliberately decided that it would be unrepresented by lawyers on 26 March in order to frustrate the orderly course of these proceedings. It is useful now to briefly examine what happened on each of these six hearing dates in turn to show how the Court reaches these conclusions.

30 January 2018

10. The Court delivered judgment on this date in which it dealt with the further conduct of the proceedings. The Court flagged an event which had just occurred: that ENA had just lodged another caveat over the Chiswick Property, a caveat which was threatening to become an obstacle to a timely settlement of the purchase of the Chiswick Property, as ordered by Pembroke J. The plaintiffs were given leave to file a motion to remove ENA's caveat, which motion was permitted to be made returnable on 12 February 2018, the next adjourned date.

12 February 2018

11. For the first time on 12 February 2018, Mr A. Rogers of counsel appeared for ENA. Mr Rogers indicated on that occasion that ENA wanted to sustain its caveat over the Chiswick Property. So the Court directed that it put on evidence in support of the caveat by 16 February and that the claim represented by the caveat should be reduced to points of claim to which the plaintiffs were then directed to file points of defence. The Court warned the parties on 12 February that on the next adjourned date, 20 February 2018, which was scheduled in a week when I was sitting as the Equity Division duty judge, that the parties should be prepared and ready for the matter to be fully heard at any time after 2pm on that day. The adjourned date apparently suited Mr Rogers.

12. The Court asked Mr Rogers on this occasion why the sale to the plaintiffs could not just proceed and the proceeds of sale be paid into Court until any dispute between ENA and the Phams was subsequently resolved. Mr Rogers explained that were ENA's claimed caveatable interest in the property to be established that it would arguably have priority over the Phams’ equitable interest as a purchaser, because at the time the Phams’ purchase took place ENA already had a caveat in place over the property, which earlier caveat had put the Phams on notice of ENA’s claim. Mr Rogers argued that in the circumstances the Phams remained on notice of ENA’s claim, and despite ENA’s later withdrawal of its caveat, ENA’s claimed interest had priority over the Phams’ equitable interests as purchasers under their contact to purchase the Chiswick Property. The merits of this argument were not immediately obvious, so to better understand them, the Court ordered ENA to plead the case it sought to propound in support of its January 2018 caveat and to seek leave to file that pleading by motion.

13. ENA filed its Motion on Tuesday, 13 February, attaching a proposed Cross Claim. The Motion was filed by an unknown and unstated person above the typed words “For ENA Development Pty Limited”. But the contact email details indicated for ENA was an email address of a Mr Ronald Jemmott, a person who has since corresponded from time to time with the Court.

20 February 2018

14. Although Mr Rogers of counsel was present on 12 February 2018 and the matter was adjourned in his presence to 20 February 2018, Mr Rogers did not appear on the next adjourned date. His non-appearance is not due to any fault or want of good conduct on Mr Rogers’ part. Quite the reverse. It appeared that Mr Rogers’ instructions to appear in the matter did not continue past 12 February 2018 and that he was not engaged to appear on 20 February 2018.

15. His non-appearance on behalf of ENA had the precise effect that might objectively have been expected. The matter was called at 10am. When Mr Rogers did not appear, the Court took the not unsurprising course of hesitating to proceed that day because it may have been procedurally unfair to ENA to do so. Instead the Court adjourned the matter to find out what had gone wrong and to give ENA an opportunity to appear. The Court allowed an adjournment from Tuesday, 20 February to Thursday, 22 February 2018. And in the meantime, under the Court’s close directions, short minutes of order were prepared by the plaintiffs, made, and served on Mr Sebie and ENA to warn them in their best interests of the adjourned date; it being assumed by the Court that lawyers were no longer involved for ENA and that it should be afforded procedural fairness. The adjourned date was reasonably close nevertheless, because of a concern on the Phams’ part that they would miss out on the opportunity to take advantage of their existing finance to complete the sale.

22 February 2018

16. The Court continued to manage the matter in the Duty Judge list, along with other pressing duty judge matters. When the matter was called at 10am on the adjourned date of 22 February, Mr Rogers was not present. But Mr A. Fernon of counsel appeared and explained that Mr Rogers “has at all times been unavailable to appear today” and “he has availability next week from Monday to Thursday, but is unavailable because he has existing commitments”. Mr Fernon applied for an adjournment for ENA.

17. The plaintiffs opposed the request for an adjournment, pointing out that Mr Ronald Jemmott, who had by then become a regular correspondent on behalf of ENA, had written to the plaintiffs late the previous afternoon requiring Mr Pham for cross-examination on 22 February. This seemed to be quite at odds with Mr Fernon’s submission that Mr Rogers was unavailable. Mr Rogers had been present on 12 February 2018, when the matter was listed on the morning of 20 February 2018, and when the parties were told that they should be ready for hearing in the duty list that week at any time from 2pm on Tuesday, 20 February 2018.

18. But a more fundamental problem emerged on 22 February 2018: it was doubtful whether Mr Rogers had indeed even accepted a retainer on a direct access or other basis from ENA. Mr Zipser informed the Court that he had ascertained that ENA was in the process of organising a solicitor and there was no solicitor then on the record. It was explained to the Court that Mr Rogers for good and sufficient reasons was not prepared to accept a brief on a direct access basis and was not prepared to appear if a solicitor was not retained. ENA put no evidence before the Court on 22 February that ENA had attempted to find any counsel other than Mr Rogers in the event that it could not negotiate acceptable terms for Mr Rogers to appear for ENA.

19. As Mr Zipser forcefully submitted, if ENA had been having serious but unsuccessful discussions from 12 February with Mr Rogers about retaining him, it is difficult to understand why ENA could not either have secured his professional services, or retained alternative counsel on a satisfactory basis.

20. One short aside is merited at this point. Mr Zipser’s other complaint on 22 February was that ENA is a $2 company. This may have merited a security for costs application by the Phams to the extent that ENA was a plaintiff in substance propounding its caveat and proposed cross claim in support. Mr Zipser submitted, and it is evident from the course of these proceedings, that the Phams have taken the view that they would get on with dealing with the issues rather than seek security for costs. But on 22 February 2018 the Phams foreshadowed they had already incurred about $25,000 in dealing with the issue of removal of caveat. The Phams had arranged finance with a view to completing the purchase of the Chiswick Property on Tuesday, 13 March and they preferred to get on with completion due to that time constraint, rather than deal with the inevitable delay that would be occasioned by applying for, and then allowing, the time required for ENA to comply with a security for costs order. This is an understandable calculation up to the present time. But the orders which follow these reasons give liberty to apply. To the extent from now on that ENA might take up that liberty as an applicant; it would be in order for the Phams to make an application for security for costs returnable at the same time.

21. Mr Fernon was not able to clearly explain to the Court on the morning of 22 February whether Mr Rogers was prepared to accept a direct access brief or whether ENA had retained a solicitor to brief him. There seemed to be little point in adjourning the matter beyond the 22 February 2018, if it were not clear that Mr Rogers would be able to appear at the adjourned date.

22. Ultimately the first defendant, Mr Robert Sebie (who is not a director of ENA), declared on 22 February 2018 that Mr Ronald Jemmott had been corresponding with the Phams by email on behalf of ENA. That was true. Mr Jemmott, who was neither a retained solicitor nor a director of ENA, had also purported to send emails to the Court on its behalf. No address for service for the company had been filed with the Court to that point, as there was no solicitor on the record for ENA.

23. Mr Robert Sebie intimated that a solicitor was going to go on the record for ENA that day, 22 February 2018. When asked why after two weeks of delay a solicitor was only then going on the record, all Mr Robert Sebie could say in explanation was “there was negotiation” and “he is officially going on the record today”. From this response I infer that the terms upon which ENA might retain its lawyers had not been finalised sufficiently to its financial advantage for a period two weeks, whilst the time to hearing was ticking away.

24. Then somewhat provocatively Mr Robert Sebie submitted to the Court that “Mr Zipser was well informed of Mr Rogers’ timetable”, as if to infer that the Phams must always have known Mr Rogers was not available on 22 February. But of course, Mr Zipser’s knowledge of Mr Rogers’ availability was of little use if Mr Rogers had not as yet been retained by ENA to appear.

25. Ultimately Mr Fernon left the courtroom. He was given leave to re-mention the matter after trying to reach Mr Rogers. The Court temporarily adjourned his application pending his obtaining further information.

26. Mr Rogers did not at first appear. And Mr Fernon sought to be excused. No commitment was given to the Court that Mr Rogers was going to be briefed for ENA. So after dealing with the other matters in the Duty List, the Court commenced dealing with the two motions. Mr Zipser also sought an injunction against Mr Robert Sebie from lodging any more caveats or taking other steps to encumber the Chiswick Property such as might thwart the settlement of the contract for sale which had been the subject of orders from Pembroke J.

27. The Court decided to put costs issues between the Phams and Mr Robert Sebie to one side and deal with the injunction issue and the ENA issues that day, 22 February.

28. Interestingly, although Robert Sebie claimed to be very ill and unable to attend Court on 19 December 2017, whenever he has appeared since that date, and especially on 22 February when he put extensive submissions, he has shown no obvious indication of ill health; although health issues of course can be difficult to judge from the Bench.

29. Mr Robert Sebie then sought to put submissions on behalf of ENA at the hearing on 22 February. The Court pointed out to him that he did not act for ENA and that there was no solicitor on the record for ENA. But Mr Robert Sebie did indicate that he was prepared to undertake not to file any caveats over the title to the Chiswick Property and so that order was ultimately made on 22 February.

30. Ultimately, the Court decided to embark upon the hearing of the Phams’ motion shortly after 12 noon that day. The Court had a busy Duty List starting at 2pm. Mr Robert Sebie asked for an adjournment until after 2pm. But the Court declined to grant an adjournment, there being no clear news from Mr Rogers or anyone else that there was any point in an adjournment. Mr Robert Sebie started to blame a misunderstanding between Mr Rogers and a solicitor for Mr Rogers’ absence. The Court then began to deal with the matter in the absence of anyone on behalf of ENA, service of ENA in conformity with the Court’s order of 20 February 2018 having been proved.

31. But then Mr Rogers finally appeared. The Court was preparing to give judgment when Mr Rogers came to the Bar table. He frankly declared to the Court in relation to the matter “I had no instructing solicitor [in this matter] until about 10 minutes ago”.

16. The Court made clear to Mr Rogers that it would not hear from ENA unless ENA complied with Uniform Civil Procedure Rules 2005 (“UCPR”), rr 7.1 and 7.2. The Court indicated it would not receive correspondence from Mr Jemmott any further, and indicated to Mr Rogers that unless it was clear that there was a solicitor on the record by 2pm that the case would continue and the Court would give judgment at 2pm.

17. The matter resumed at 2.15pm. At that time Mr Rogers declared that he had an instructing solicitor, Mr Killalea from Kazi and Associates, and he handed up a Notice of Appointment of a Solicitor.

18. Mr Rogers and Mr Zipser then put submissions about the future management of the proceedings. Both of them focused upon the fact that whether or not stamp duty had been paid on any ENA claimed written charge over the Chiswick Property seemed to be a threshold point. But the Court reminded both sides that the loan which the Phams had obtained in January 2018 contained a condition that settlement should occur within three months and it was therefore important the matter be dealt with expeditiously.

19. The matter was then set down for hearing on the basis that it did not appear there would be any issue about the facts, that the various charges which it was said were sought to be enforced would be the subject of tender and then legal argument would take place.

20. So the matter was adjourned from 22 February. The following orders were made on the adjournment. The two Notices of Motion were listed for hearing on 15 March 2018, with argument to take place on paragraphs 15 to 39 of the plaintiffs’ Amended Points of Defence, which raised the stamp duty points and a number of other potential issues referred to below. Mr Robert Sebie was restrained from filing or causing to be filed any caveat on the title to the Chiswick Property until 21 March 2018.

21. In the course of the hearing on 22 February 2018 the Court received an important commitment on behalf of ENA from Mr Rogers. The commitment was a response to the Court’s questions in light of his very late retainer that day and was of vital importance to the Court in adjourning the matter that day.

“ROGERS:      I'm conscious‑‑

HIS HONOUR:   I have turned myself inside out for the parties in this case to try and give them all certainty.

ROGERS:   Yes. I can make one concession and make one request, the concession is‑‑

HIS HONOUR:   I'm not permanently available for this case alone. What was that?

ROGERS:   The Court has been generous to my client, that's the obvious concession, I hardly need to say it.

The second, if it has a good case, and it's for the want of a few days or a week or two, it would be better that it not be shut out.

HIS HONOUR:   I'm going to ask you the question I foreshadowed. There's been a history in this case of lawyers turning up and then matters being adjourned and people not turning up on the adjourned date. This is not your fault, Mr Rogers, but it's been a fact of history in this case. Why should I adjourn the matter now at all unless you can assure the Court that there are fund that you know are available to you for you to prepare, be ready and appear on the adjourned date?

ROGERS:      If the funds are not sufficient to meet my requirements on the adjourned date, I'll still appear.

HIS HONOUR:   You'll still be here? That's very noble of you.

ROGERS:      Not really. That's very kind of your Honour to say that.

But the alternative is to, as it were, leave a litigant that may or may not have a good case, swinging, or alternatively, cause the Court more inconvenience. As it turns out, I'm not inconvenienced next week, save for Friday and I haven't looked at my diary for the following week.

My friend opposes the application, I should say.

HIS HONOUR:   What do you want to say, Mr Zipser?

ZIPSER:   Your Honour, I oppose the application. I acknowledge your Honour has a difficult decision.

HIS HONOUR:   You've heard what I've said, Mr Zipser. I'm very conscious of what's happened in the past and I'm very conscious of how this pattern of non‑appearance of lawyers appearing and non‑appearances has repeated itself since I became involved in this matter in September of last year and just only happened in the last two weeks once more.

That's why I sought an assurance from Mr Rogers who is a respected member of the Bar and whose assurance, like yours, I would always accept.

He says that he has sufficient assurance about his position that he can assure the Court that he will appear on an adjourned occasion to complete the argument. And there's a Notice of Appointment of Solicitor. I'm going to double‑check the employee issue.

Sorry to be so technical, Mr Rogers, but this case requires close scrutiny and technicality.

Why shouldn't I allow the adjournment?

ZIPSER:      Your Honour‑‑

HIS HONOUR:   I'm conscious of the fact that you've got a settlement due on 13 March?

ZIPSER:   It doesn't go that far. So we'd like to settle but no settlement has been appointed so we're in a slightly weaker position than having a settlement. ”

38. The Court took Mr Rogers’ statement to mean the following: to give stability to the further conduct of these proceedings, Mr Rogers offered, meeting high standards as counsel, to continue to appear for ENA in this matter on any adjourned date of the motions whether or not he was paid on top of his initial fee. ENA must therefore have known that if ENA continued to retain Mr Rogers that he would appear further for the company in fulfilment of his commitment to the Court.

39. This commitment was ultimately not met but due to no fault of Mr Rogers, because his retainer was terminated before 26 March. It can only be inferred from this passage, because the Court has not been told since that Mr Rogers’ willingness to appear has changed, that his services were terminated so that his altruistic offer of continuing to appear in this matter on any adjourned date could not be fulfilled. The reasonable inference to draw from what occurred later is that Mr Rogers has not appeared because ENA took the view that the retainer should be terminated because it was perceived to be tactically more advantageous to ENA to be unrepresented than for Mr Rogers to be able to fulfil his commitment to the Court. This was a calculated abuse of the Court’s procedures.

40. On 26 March that calculation failed. The Court indicated it would proceed after refusing leave for Mr Ramzy Sebie to appear for ENA. Mr Robert Sebie attempted to scramble once more to find Mr Rogers. But by then the double-shuffle of sacking and re-hiring counsel had gone too far. What occurred on 26 March was a deliberate attempt to manipulate the Court into granting another adjournment by ENA appearing unrepresented. Such misuse of the Court’s process can neither be appeased nor indulged. It must be dealt with firmly. That is what the Court proposes to do. But this is later in the narrative. These reasons will return to this issue.

15 March 2018

41. When the matter commenced on 15 March 2018 the Court made clear that it would deal with the motions on the stamp duty point and invited the parties to put argument on that point alone. The Court pointed out that other issues, such as the existence of ENA’s claimed caveatable interest being res judicata, or the caveat and consequent claim being an alleged abuse of process, and the existence of conduct which might lead to the postponement of any allegedly prior caveatable interest maintained by ENA, would be time consuming. They might require detailed analysis of the effect of Pembroke J’s judgments or cross-examination of the parties, and were not apt to be dealt with on a motion to strike out a caveat.

42. The Court further reminded the parties: that motions to strike out caveats not infrequently dealt with issues about whether there was any admissible evidence to support a caveat; and that the Court was prepared to enter upon such hearing. Another difficulty in pursuing the other issues is that they could only be dealt with on a final basis by the Court now (rather than being sent for final hearing later) if ENA’s Cross Claim were to be filed and determination of that Cross Claim could then take place on a final basis. But in the first instance the Phams were still opposing the filing of the Cross Claim and resisting ENA’s motion.

43. So the Court decided to give the parties limited time to argue the stamp duty point. And the Court indicated that it would not join ENA as a defendant at that time, but would decide that question at the same time as deciding whether ENA would have leave to file a Cross Claim.

44. It was made clear to Mr Robert Sebie early on 15 March that any costs or other issues between the plaintiffs and himself, as the first defendant, would be dealt with later and not at that hearing and that there was no need for him to continue to appear.

45. It was then that Mr Rogers dropped something of a bombshell. A version of the Secured Loan Agreement that founded the charge claimed in the caveat was tendered which showed that stamp duty had apparently been paid on the instrument on 5 September 2005. If this was a valid duty stamp then the Phams’ point, that no stamp duty had been paid and the document was inadmissible, had no substance. That immediately raised the question as to whether stamp duty had been paid. That, in turn, caused a change in the nature of the proceedings such that urgent enquiries were sought to be made with the Office of State Revenue (“OSR”) as to whether stamp duty had been paid at about that time.

46. The Phams immediately challenged the authenticity of this document. Mr Rogers stated for the record, in response to the Court’s questions, that this document came into his possession between about 9.20am and 9.30am that day from Mr Sebie and that Mr Rogers had been unaware of it prior to that time. Mr Sebie then said that he discovered it that morning among other documents he held. Mr Rogers’ lack of awareness of the document is entirely consistent with submissions that have been drafted on his side, predicated, as they were, upon the assumption that stamp duty had not been paid.

47. The obvious possibilities were that it had been stamped at the time or perhaps that something had been done to create the appearance of it being stamped at the time, but all of that could be verified by enquiries at the OSR. The Court encouraged the parties to ascertain from the OSR as to whether or not stamp duty had been paid. To assist the process, the Court released copies of the document in question to Mr Rogers and his instructing solicitor, Mr Killalea, so it could be taken to the OSR.

48. It is not necessary for the Court to go through all the arguments advanced by Mr Zipser and Mr Rogers on 15 March on the stamp duty point. But the “Secured Loan Agreement” dated 5 September 2005, that Mr Sebie alleged he had found, was tendered and became Exhibit 1, whilst it was acknowledged that at a later hearing its authenticity might well be challenged. It was only tendered so that its form could be examined to determine the stamp duty issue.

49. The argument proceeded on the basis that the form of the document Exhibit 1 has not had stamp duty paid on it prior to the filing of the caveat. The Court commenced to deal with that point of law on a final basis. The question is whether or not there was a caveatable interest that “has or may have substance” within Real Property Act 1900, s 74K upon the documents that are relied upon to support the caveat, on the basis that they are not enforceable because stamp duty has not been paid. If a caveatable interest was found to be maintainable despite the non-payment of stamp duty it would still be open to the Phams to challenge the authenticity of the document at a final hearing on the other non-stamp duty issues.

50. The Court ultimately also embarked upon issues of the form of ENA’s January 2018 caveat. As to the latter, Mr Rogers conceded that there may also be form difficulties with the caveat. After the tender of the documents argument proceeded but did not finish on that day, on the basis that Mr Killalea and Mr Rogers would keep Exhibit 1 in their possession, and make enquiries of the OSR as to whether stamp duty had been paid as the stamp on Exhibit 1 might indicate. The Court made the following orders at the conclusion of the hearing on 15 March:

“1.   Adjourn these proceedings part heard before me for mention to Monday, 26 March 2018 at 9.30am, with a view to making orders and directions on that occasion:

(a)   to receive any further evidence or agreed facts;

(b)   for the filing of final submissions for the determination of the issues presently before the Court;

(c)   to determine in what scenarios the parties are desirous of completing the hearing on an interlocutory or a final basis;

(d)   to formally join ENA Developments Pty Limited (“ENA”) as a defendant; and

(e)   to manage the disposition of the balance of the proceedings.

2.   Note the undertaking of Mr Rogers, counsel for ENA, and Mr Killalea the employed solicitor acting for ENA, to keep Exhibit 1 in their possession will continue up to and including 26 March 2018 on which date they are required to return the Exhibit 1 to Court.

3.   Order ENA to pay the plaintiff’s costs of today.

4.   Note the Court has not yet decided the question of whether, if ENA fails to pay the costs ordered in (3), they may be recoverable by the plaintiffs from Mr Robert Sebie.

5.   Direct ENA to make all reasonable endeavours to secure for itself and the plaintiffs an answer before 26 March 2018 from the Office of State Revenue to the two questions: (a) whether stamp duty was paid on Exhibit 1 on 5 September 2005; and (b) in the event that stamp duty was not so paid, to obtain information as to whether the stamp duty stamp on Exhibit 1 is a genuine stamp of the Office of State Revenue, or of its predecessor at that time.

6.   Direct the plaintiff to provide to the Court by 26 March 2018 and to serve on the other side by that date any proposed amendments to its motion of 30 January 2018 requesting the proceedings be expedited.”

51. But when the matter was called on for hearing on 26 March a familiar pattern emerged: ENA was once again unrepresented.

The Hearing on 26 March 2018

52. When the matter was called on 26 March there was no appearance on behalf of ENA. Mr Killalea attended as a matter of courtesy to inform the Court that at 7 o'clock this morning, 26 March, his retainer had been terminated. He informed the Court that in fact on the afternoon of 15 March, or possibly on 16 March, he had received an email terminating his retainer. But because the email had only come from Mr Jemmott and had not been confirmed separately by Mr Ramzy Sebie, the Director of ENA, he did not regard it as final. He says he only received on Friday, 23 March a final copy of a document entitled "Notice of Removal of Solicitor" signed by Mr Ramzy Sebie, which has become Exhibit 6 in the proceedings. Mr Killalea acted on that this morning and there is no doubt that document terminated the authority of Kazi & Associates to act on behalf of ENA, and it is dated Friday, 23 March.

53. The Court received another email from Mr Jemmott before 9.30am this morning, 26 March, but at that stage, the Court’s filing record visible in JusticeLink did not show that Kazi & Associates had been terminated as ENA’s soliciors, presumably because the Notice of Removal of Solicitor had only been filed at 7 am. Here is Mr Jemmott’s email:

“As per court order 1.(c) dated 15/03/18, ENA will like to complete the hearing on an interlocutory basis on Monday 26 March 2018.

ENA will hand up to your honour a folder containing, the following evidence to read. Some of the evidence has been e-filed.

a)   Affidavit of Ramzy Sebie, dated 16 February 2018 (primary), served at 18 February 2018.

b)   Affidavit of Ramzy Sebie 27 February 2018 (secondary affidavit), served respectively, 27 February 2018 and 18 February 2018.

c)   Affidavit of Robert Sebie, dated 21 February 2018,. served respectively, 27 February 2018 and 19 February 2018.

d)   Forensic Information Technology Report – Charlton Wilson dated 8 February 2018, served at 19 February 2018.

e)   Affidavit of Albert David 12/12/17, Justice of Peace (professional witness), served at 10 February 2018.

f)   Affidavit of Shelyn Nassif 09/02/18 (creditable witness), served at 10 February 2018.

Other Evidence which ENA will call upon which has been previous served.

g)   Previous Subpoenaed Banks Statements of ENA Development Pty Ltd and Robert Sebie, which show the original 2005 transaction and matching repayment

h) CPA Accountants Report of Satish Kumar (A2Z Accountants, dated 25 August 2016) confirms the original 2005 transaction and reconcile the matching repayments via the bank statements.

i)   Digital Forensics Report – Professor Dr Allan Watt

j)   Sam Sarkis – IT Report 2016

ENA will also hand a brief affidavit addressing the Duties stamping.

Warmest of Regards,

Ronald Jemmott

ENA Development Pty Ltd”

54. My associate replied, indicating that the Court would not receive correspondence from parties where they had solicitors retained, the Court believing that Kazi & Associates were still retained.

“…

On 22 February in Court ENA Development filed a Notice of Appointment of Solicitor to act for it appointing Mr Mofazzal Haque Kazi of Kazi and Associates as its solicitor. The contact name and telephone was Mr Killalea.

The Court has not received notice that Kazi and Associates are no longer acting. The Court will not receive correspondence from parties who have solicitors retained to act for them. Mr Jemmott has not been given leave to appear for ENA Development.

The Court6 will not be acting on the correspondence below. Any applications in this matter should be made in the proper way by the proper representatives of the parties.

…”

55. A copy of that email, which has been made available to all parties, is now Exhibit 9 in the proceedings.

56. Mr Ramzy Sebie appeared this morning and asked, as a Director of ENA, whether he could appear on its behalf. The Court heard that oral motion on his part. The Court needs now to put order into these proceedings in light of the termination of the retainer of Kazi & Associates and Mr Rogers. So the Court gave reasons for judgment on this issue first.

Mr Ramzy Sebie

57. Mr Ramzy Sebie claims to be a director of ENA. An ASIC search (Exhibit 5) shows that there is at least prima facie evidence of that fact. He said that he replaced his wife, Ms Rose Sebie, as a director of the company when she became less capable in recent times. That he is a director is disputed, but for the purpose of this application, the Court is prepared to assume that he is.

58. The principles that apply in superior courts such as the Supreme Court of New South Wales as to whether a company can appear by someone other than a lawyer, are provided for in Uniform Civil Procedure Rules 2005 (“UCPR”), rr 7.1 and 7.2, as follows:

“7.1   BY WHOM PROCEEDINGS MAY BE COMMENCED AND CARRIED ON

(1)   A natural person may commence and carry on proceedings in any   court, either by a solicitor acting on his or her behalf or in person.

(1A)   Despite subrule (1), but subject to subrule (5), the court may order that proceedings commenced by a natural person acting on behalf of another person pursuant to a power of attorney be carried on, on behalf of that other person, by a solicitor.

(2)   A company within the meaning of the Corporations Act2001of the Commonwealth:

(a)   may commence and carry on proceedings in any court by a solicitor or by a director of the company, and

(b)   may commence and, unless the court orders otherwise, carry on proceedings in the Local Court by a duly authorised officer or employee of the company.

(3)   In the case of proceedings in the Supreme Court, subrule (2) (a) authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings.

(4)   A corporation (other than a company within the meaning of the Corporations Act 2001of the Commonwealth):

(a)   may commence and carry on proceedings in any court by a solicitor, and

(b)   may commence and carry on proceedings in any court (other than the Local Court) by a duly authorised officer of the corporation, and

(c)   may commence and, unless the court orders otherwise, carry on proceedings in the Local Court by a duly authorised officer or employee of the corporation.

(4A)   Despite subrules (1)-(4), any person may commence and, unless the Commission orders otherwise, carry on proceedings in the Industrial Relations Commission by an industrial agent within the meaning of the Industrial Relations Act1996.

(4B)   Subrule (4A) does not apply to or in respect of proceedings in the Industrial Relations Commission when constituted as the Industrial Court.

(5)   Despite subrules (1)-(4), any person may commence and, unless the court orders otherwise, carry on proceedings in the Local Court:

(a)   by a commercial agent with respect to debt collection (within the meaning of the Commercial Agents and PrivateInquiry Agents Act 2004), in relation only to proceedings on an application for:

(i)   an instalment order, or

(ii)   an order for examination, or

(iii)   a writ of execution, or

(iv)   a garnishee order, or

(b)   by a person holding a licence as a real estate agent, strata managing agent or on-site residential property manager within the meaning of the Property, Stock and Business Agents Act2002in relation only to:

(i)   proceedings on an application referred to in paragraph (a), or

(ii) the filing of a certificate under section 51 of the Consumer, Trader and Tenancy Tribunal Act 2001 .

(6)   A solicitor who is a person's solicitor on the record must hold an unrestricted practising certificate.

Note:The term "solicitor on the record"is defined in the Dictionary.

7.2   AFFIDAVIT AS TO AUTHORITY TO COMMENCE AND CARRY ON PROCEEDINGS IN SUPREME COURT OR DISTRICT COURT

(1)   A person who commences or carries on proceedings in the Supreme Court or District Court:

(a) as the director of a company within the meaning of the Corporations Act 2001 of the Commonwealth, or

(b) as the authorised officer of a corporation (other than a company within the meaning of the Corporations Act 2001 of the Commonwealth), must file with the originating process, notice of appearance or defence, as the case may be, an affidavit as to his or her authority to act in that capacity, together with a copy of the instrument evidencing that authority.

(2) The affidavit made by the director of a company within the meaning of the Corporations Act 2001 of the Commonwealth must contain:

(a)   a statement to the effect that:

(i)   the director is a director of the company, and

(ii)   the director has been authorised by a resolution of the directors duly passed at a meeting of directors held on a specified date (which must not be earlier than 21 days before the date of the affidavit) to commence and carry on the proceedings, as the case requires, and

(iii)   the authority has not been revoked, and

(iv)   the director is aware that he or she may be liable to pay some or all of the costs of the proceedings, or

(b)   a statement to the effect that:

(i)   the director is the managing or governing director of the company and has authority to exercise the powers of the directors, and

(ii)   the director is aware that he or she may be liable to pay some or all of the costs of the proceedings.

(3) The affidavit made by the authorised officer of a corporation (other than a company within the meaning of the Corporations Act 2001 of the Commonwealth) must contain a statement to the effect that:

(a)   the officer is the holder of a specified office within the corporation, and

(b)   the officer has been authorised by the corporation to commence and carry on the proceedings, and

(c)   the authority has not been revoked, and

(d)   the officer is aware that he or she may be liable to pay some or all of the costs of the proceedings.”

59. Those rules serve the better of administration of justice so that the Court is appropriately assisted in proceedings where corporations are involved.

60. Mr Ramzy Sebie has not indicated any intention to engage a solicitor on ENA’s behalf. In fact, the situation is quite the contrary. Mr Ramzy Sebie said that all solicitors and barristers acting on behalf of the company in the past have sought to delay the proceedings for their own financial advantage. No application has been made today on behalf of ENA to adjourn the proceedings, so that a solicitor could be engaged. The Court infers it is therefore unlikely that the company will be engaging any solicitors in the future and that it is Mr Ramzy Sebie’s wish to continue indefinitely to represent the company himself.

61. In short summary, the rules provide that if the company is not represented by a solicitor, it can be represented by a natural person with the leave of the Court who is a director of the company, but only if that person is also a plaintiff in the proceedings, or as r 7.2 provides, on the basis that an affidavit is made by a director of the company containing a statement that that the director has been authorised by a duly passed resolution of the meeting to represent the company and that the authority has not been revoked and that the director is aware that he or she may be personally liable to pay some or all of the costs of the proceedings.

62. No affidavit of that kind has been provided by Mr Ramzy Sebie. Indeed, Mr Ramzy Sebie, when pressed by the Court in submissions as to whether or not he was prepared to pay some or all of the costs of the proceedings personally should such an order be made, indicated very clearly that he was not prepared to do so.

63. The law is clear that it is usually undesirable to give leave to a non-lawyer for representation and that leave is often only granted on occasional expedients or in emergency situations when counsel is not available: see Damjanovic v Maley (2002) 52 NSWLR 149; [2002] NSWCA 230; Scotts Head Developments Pty Ltd & Anor v Pallisar Pty Ltd & Ors [1994] NSWCA 281).

64. In my view, there are many reasons why the Court should not grant leave to Mr Ramzy Sebie to appear on behalf of the company, and I decline to do so. These reasons are set out below.

Why the Court Will Not Grant Leave to Mr Ramzy to Sebie Appear on behalf of ENA

65. The first reason is Mr Sebie's health. Mr Sebie was born in 1993 and is 85 years of age. If I may say so, with respect to him for his age, he is alert and able to present submissions to the Court with some capacity. He has tendered a medical report which he asked the Court to take into account, which shows a degree of osteoporosis and a number of other ailments that appear to be associated with his age. He is quite hard of hearing. He declared to the Court that his hearing difficulty was so pronounced that he needed help. The Court granted him leave to have assistance from his son, Mr Robert Sebie, to translate to him what the Court said, whilst he put submissions.

66. As a result, he was able to respond in person in submissions. But these proceedings commenced at half past 9 this morning and it is now half past 11. An application which should have taken about half an hour, has taken two hours, in part because of the Court's need to repeat itself to make itself heard and understood by Mr Ramzy Sebie, even with the assistance of Mr Robert Sebie. To allow Mr Ramzy Sebie to appear on behalf of the company, in my view, would introduce its own severe procedural burdens and become impractical in some situations: there are times when Mr Sebie's hearing problems seem to supervene and slow proceedings down or just send them in circles.

67. There are other reasons why the Court should not grant leave to Mr Ramzy Sebie to appear on behalf of the company. Next the Court asked Mr Sebie, in light of what Mr Killalea said about notice of termination of his retainer having been given by no later than 16 March, why he had not organised another solicitor. Indeed, he was asked why the company terminated Mr Killalea and Mr Rogers' instructions at all.

68. The answer to those questions weighs in the balance against the grant of any leave in this case. Mr Ramzy Sebie said: that the company’s lawyers were only looking out for themselves; that they were only seeking to delay their proceedings; and that they would not follow instructions. Despite this Mr Ramzy Sebie did not, at any stage, indicate that ENA wanted to find other lawyers. So far as Mr Rogers is concerned, there is no truth whatsoever in allegations that he was only seeking to delay the proceedings and was motivated by self-interest. In my view, Mr Rogers' submissions, exchanged as they were with Mr Zipser, were appropriately crafted to deal with the real issues between the parties and his willingness to appear over more than one day for a single fee is already demonstrated.

69. The response that Mr Ramzy Sebie gave to the Court’s questions, that ENA’s lawyers were not following instructions, is not a matter into which the Court can enquire, other than to say on the days that Mr Killalea and Mr Rogers appeared before the Court, they seemed to be meticulous in attempting to obtain the adequate instructions of their client. The Court cannot make any further judgment on that issue.

70. A further reason weighing against the grant of leave is that ENA does not say it cannot afford lawyers. It does not say that it seeks an adjournment to retain lawyers, or that in the past it has attempted to engage lawyers, notwithstanding the fact that it has had a week to do so.

71. The next factor which weighs against the grant of leave is that Mr Ramzy Sebie has made it perfectly clear that if he does get leave to appear for ENA, he will not accept any personal financial responsibility for legal costs incurred in him doing so. That is the antithesis of what is expected of a director before leave is granted.

72. The next reason why I decline to grant leave is that to grant leave to Mr Ramzy Sebie to appear is to open the door to Mr Robert Sebie to appear in the proceeding. Mr Robert Sebie has demonstrated today that, even though the Court has allowed him to assist Mr Ramzy Sebie to put submissions to the Court, Mr Robert Sebie has been doing more than just assisting Mr Ramzy Sebie and has, at times, been putting his own submissions and reminding his father what he is to say. If the Court grants Mr Ramzy Sebie leave to appear, the Court would in effect be granting leave in substance to a number of people to appear on behalf of ENA. That is unwieldy and unworkable.

73. The next reason why leave will not be granted is that the history of these proceedings, which the Court has attempted with only limited success to manage through various applications since September last year, indicates a general lack of cooperation with the Court's orders mainly by Mr Robert Sebie. That is why his involvement with assisting his father creates its own difficulty.

74. The next thing which goes against the grant of leave is that ENA has been well aware since early February of the issue that it needed to be represented by lawyers and that leave may not be granted to it if it was not represented by lawyers. So, its non-appearance by lawyers today must be regarded as a deliberate forensic decision once again to seek an adjournment. It is well able to retain lawyers and well-aware of the consequences that it might face in not being granted leave to appear by a director. That this is a factor in play here has been analysed above.

75. The next reason why I should not grant leave is that Mr Ramzy Sebie sought to tender an affidavit which became Exhibit 7 as to what evidence he would seek to adduce were he able to seek leave to appear. That affidavit sworn on 23 March this year seeks to adduce evidence, which amongst other things, seeks to re-contest aspects of Justice Pembroke's judgment of May last year by collateral means (and I will refer to annexure D to that affidavit) by the material that he tenders. If that affidavit were tendered it would appear to me to seek to protract the current application in ways that are potentially not relevant to the discretion the Court has to exercise.

76. Finally, in a case where Justice Pembroke has already found that there have been fabrications of documents involving Mr Robert Sebie and in which ENA may be implicated, this is a case where, without re-deciding such questions, the Court should be cautious about granting leave.

77. All these reasons taken together, in my view, are a sound basis to decline leave for Mr Ramzy Sebie to appear and I decline to do so. The matter will now proceed without representation on behalf of ENA.

ENA’s Motion of 13 February 2018

78. The history of these proceedings is sufficient to demonstrate obstructive lack of co-operation on the part of Mr Robert Sebie. I have already given two detailed reasoned judgments in these proceedings. The obstructiveness and delay were not just those of Robert Sebie. But as the Court’s 30 January 2018 judgment shows, ENA has demonstrated a casual disregard for appointed and notified hearing dates and shown a marked lack of respect for the Court’s procedures: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 2) [2018] NSWSC 22 at [26].

79. On 30 January 2018, despite ENA’s behaviour, the Court made orders specifically designed to bring rigour into its dealings with the Court, to ensure that whoever sought to act for ENA was demonstrably authorised to do so and only applied for orders formally by motion. ENA’s motion was filed on 13 February 2018.

80. That motion sought to join ENA as the defendant to the proceedings and to give liberty to file a Cross Claim in the terms of a draft Cross Claim annexed to that motion.

81. The plaintiffs now apply to dismiss the motion filed by ENA on 13 February 2018 for leave to file a cross-claim.   As there is no-one here to present such a motion on behalf of ENA, the Court will accede to the application and the motion is dismissed.  And it is appropriate that upon dismissal of the motion in the circumstances explained earlier in this judgment as to why there was no-one to represent ENA here, that the costs of that motion be paid by ENA.  The plaintiffs have foreshadowed the possibility of seeking to have costs paid by some other third parties.  I will reserve that, but the plaintiffs will have to file a motion to pursue that course. 

82. Finally, Mr Zipser on behalf of the plaintiffs sought orders on their 30 January 2018 motion on two bases. First Mr Zipser asked for orders under Civil Procedure Act 2005 (“CPA”), s 61(3)(c) that the Court should enter judgment on the basis of non-compliance by ENA with the orders and directions of the Court - the procedural argument. Secondly, he asked for a termination of the merits of the motion but in the absence of any further argument from ENA - the substantive argument.

The Plaintiffs’ Motion of 30 January 2018 - the Procedural Argument

83. The Court made directions on 15 March 2018 to ENA, who was the party best placed with clear authority to deal with the OSR, to make all reasonable endeavours to ascertain whether stamp duty was paid upon Exhibit 1 on 5 September 2005, and in the event that stamp duty was not so paid, to obtain information as to whether the stamp on Exhibit 1 is a genuine stamp of the OSR.

84. That information was not obtained before this morning. The Court expected that ENA would be in a clear position to obtain direct admissible evidence from the OSR that stamp duty either had or had not been paid on 5 September 2005 on Exhibit 1. After all, in the digital age such information should be readily accessible by OSR officers directly from OSR’s databases. Instead, all Mr Robert Sebie sought to do on Mr Ramzy Sebie’s application for leave to appear for ENA was to tender an affidavit of purported email inquiries he had made on 15 and 16 March with the OSR as to the genuineness of the OSR stamp on Exhibit 1, together with an email giving instructions to lodge a document for stamping at the Stamp Duties office on 30 September 2005.

85. The Court warned the parties on 15 March that an argument about whether or not someone had gone to the OSR in 2005 must be avoided, as there should be an internal OSR computer record of any payment, which the Court expected to see. Despite that warning what ENA produced is thoroughly unhelpful. The purported email suggesting documents were going to be lodged with the OSR in 2005 is dated 30 September 2005, whereas the stamp on Exhibit 1 claiming the payment of duty is dated 5 September 2005. The email hardly assists ENA. And the purported OSR email does not directly address the question of whether stamp duty was actually paid on the instruments in question, instruments which on all sides are conceded to be dutiable.

86. The plaintiffs’ evidence presents a wholly different picture. Mr Pham did not have the rights of access to the OSR’s information about Exhibit 1 that ENA did: it was not a party to the document. But Mr Pham’s hearsay evidence from OSR, as follows, suggests that stamp duty was first paid only in March 2018:

“Around 5:30pm on 15 March 2018 a person phoned me. She said her name was Frances and she was a senior officer from OSR. We had a conversation which included words to the following effect:

Frances:    Earlier this afternoon I was made aware that an issue has arisen in a matter in the Supreme Court as to the date on which stamp duty was paid on a document titled “Secured Loan Agreement” dated 5 September 2005. I have seen a copy of the instrument. I was made aware that earlier today the Supreme Court made an order directing one of the parties to the instrument to obtain an answer from the Office of State Revenue. I am also aware that a solicitor named Richard Killalea attended our office in Parramatta earlier today to enquire about this matter. I have investigated this matter this afternoon. On 1 March 2018 duty of $5,541 was paid on the principal instrument titled “Loan Heads of Agreement”. On 14 March 2018 ad valorem duty of $10 was paid on the document titled “Secured Loan Agreement”. The date of 5 September 2005 in the OSR stamp on the document the subject of the Supreme Court order was an error by one of our counter staff. The ad valorem duty of $10 was paid on 14 March 2018. No duty was paid on 5 September 2005. This was explained to Mr Killalea when he attended our office in Parramatta. This information will also be recorded in OSR records. If you want to obtain the records, you must issue a subpoena to OSR.

Me:       OK.”

87. The plaintiffs had offered in correspondence to issue subpoenas to get the underlying documents from the OSR. I infer from the absence of action on ENA’s part that it did not take up that offer.

88. So the plaintiffs submitted, in all the circumstances elaborated here, that there was a basis for the entry of judgment under CPA, s 61. In my view these circumstance are quite sufficient for the Court to take the procedural course of striking out the defendant’s evidence under CPA s 61(3)(e), namely Exhibit 1 and the other Exhibits (see below) purporting to show any stamp duty paid may have been on those documents in 2005.

89. ENA had lawyers acting for it until 7am today, and was in a position to provide information in conformity with those directions. It chose instead to sack its lawyers rather than give the explanation to the Court that it would surely have anticipated the Court would want: to hear as to what had been found from the OSR database inquiries. ENA should not now be permitted to rely on any of these documents in the circumstances, especially given the full history of calculated delay in this matter to hear.

90. But the caveat can be removed on other substantive grounds in any event, as the next section shows.

The Plaintiffs’ Motion of 30 January 2018 - the Substantive Argument

91. Exhibit 1 relevantly provides as follows:

“IN CONSIDERATION OF the Lender loaning $1,379,315 (the "loan) to the Borrower, and the Borrower replaying (sic) the loan to the lender, both parties agree to keep, perform and fulfil the promises and conditions set out in this Agreement:

Loan Amount & Interest

1.   If the Lender premises (sic) to loan $1,379,315 AUD to the Borrower and the Borrower promises to repay this principal amount to the Lender, with interest payable on the unpaid principal at the rate of 8.00% compounded interest per annum, calculated yearly not in advance.

If any additional monies are provided to the borrower, these funds will be deemed by this agreement. These funds will be added to the principal loan amount and subject to the mentioned interest rate.

Payment

2.   This loan will be repaid in full on June 22nd, 2014.

Default

3   Notwithstanding anything to the contrary in this Agreement, if the Borrower defaults in the performance of any obligation under this Agreement, then the Lender may declare the principal amount owing and the interest due under this Agreement at the time to be immediately due and payable.

4.   If the Borrower defaults in payment as required under this Agreement of the after demand for ten (10) days the Security will be immediately provided to the Lender and the Lender is granted all rights of repossession as a secured party. The Lender will have the right to Possession of Whole Land of the mentioned Title Folio Identifier [address not published] Tutt Crescent, Chiswick NSW 2046.

Security

5.   This loan is secured by the following security ((the “Security"): Property [address not published], Tutt Crescent, Chiswick NSW.

6.   The Borrower grants the Lender a security interest in the Security until this Loan is paid in full. The Lender will be listed as a lender on the trite of the Security whether or not the Lender elects to perfect the security interest in the Security. The Borrower will do everything necessary to assist the Lender in perfecting its security interest”

92. Two other documents were tendered by ENA on 15 March in addition to Exhibit 1, the Secured Loan Agreement. Another copy of the Secured Loan Agreement of the same date but with the duty stamp from the OSR exhibiting the words “no duty payable” was also tendered (Exhibit 3). In addition to that, an agreement entitled “Loan (Heads of Agreement)” dated 31 August 2005 made between ENA and Robert Sebie was tendered (Exhibit 2). The document Exhibit 2, records a loan from ENA to Mr Sebie for an amount of up to $1.4 million. The document declares that ENA “will be fixed secure creditor for the real estate of [the Chiswick property]” and gives ENA the right to convert the loan to equity unless the loan is repaid in full. This document bears the printed stamp of having New South Wales Stamp Duty paid on 1 March 2018 in an amount of $5,541 in respect of the dutiable amount of $1.4 million. The document seems to have been signed by Mr Robert Sebie on his own behalf and Rose Sebie, apparently on behalf of ENA. Stamp duty was payable on all those documents.

93. Exhibit 1 is an inherently suspicious document. This is so for reasons in addition to those already recounted in this judgment. It is not wholly an original document. Only the last page of its three pages is signed on 5 September 2005. The second last page appears to be an original but unsigned page. But the first page which contains both the OSR stamp showing mortgage duty of $10 paid on 5 September 2005 and containing the charging clause is a photocopy. If stamp duty was indeed paid on 5 September 2005 (and the Phams’ evidence makes that extremely doubtful) it is quite extraordinary that on the same day the document was apparently executed that a photocopy of page 1, rather than the original first page was taken to the OSR for stamping.

94. Without a great deal of explanation no Court would place any weight on a document such as Exhibit 1. The same applies to the other documents, Exhibit 2 and Exhibit 4, which seem to be enmeshed in the same web of contradiction. In my view, so defective and contradictory are these documents, that to the extent that they constitute the material put up to support ENA’s caveat of 16 January 2018, that when the Court is considering under Real Property Act, s 74K(2) on the basis of this material “that the caveator’s claims has or may have substance” the Court is entitled to conclude that they have neither and that the operation of the caveat should not be extended.

95. A court would normally allow a caveat to lapse or will order its withdrawal, unless the caveator can establish an entitlement to an interlocutory injunction restraining the registered proprietor from dealing with the land pending trial of the caveator’s claim: Martyn v Glennan [1979] 2 NSWLR 234 and 21 Million Pty Limited v Clarence Street Pty Ltd [2003] NSWSC 1160. Here in my view the material put on would not raise a serious question to be tried and so no balance of convenience issues arise. The plaintiffs seek orders under Real Property Act, s 74MA to remove the caveat. In my view they should have those orders.

96. But the plaintiff can have Real Property Act, s 74MA relief on another basis: its stamp duty argument. There is still an active debate on the authorities as to whether a non-payment of stamp duty at the time of a transaction can be retrospectively cured by the later payment of stamp duty, so as to render the document enforceable ex post facto. A number of cases say that the correct operation of Duties Act 1997, ss 205, 211 and 304 stand for the proposition that “any stamping that may in future occur cannot operate in a retrospective way to create as at the date of the caveat any interest that would have existed by virtue of the charge had it been enforceable”: ACN 075 911 410 Pty Ltd v Almaty Pty Limited [2011] NSWSC 333; (2011) 15 BPR 29,071 (“Almaty”), at [16]-[18] per Barrett J, citing McDougall J in Boral Recycling Pty Limited v Wake [2009] NSWSC 712. But these decisions have been doubted: Arnautovic v Sutherland (2011) 199 FCR 1 (Katzmann J) and In the matters of Beechworth Land Estates Pty Ltd (Admin Apt) and Griffith Estates Pty Ltd (Admin Apt) (No 2) [2015] NSWSC 336 (Robb J). It is not necessary or feasible to resolve this debate on an application such as this.

97. But another point is available to the plaintiffs which on the evidence makes the stamp duty point effective, even if a later stamping has retrospective effect. The only evidence now before the Court is that adduced by the Phams that no stamp duty was paid before March 2018 and certainly not by 16 January 2018, when the caveat was filed. Caselaw supports the conclusion that ENA therefore did not have a caveatable interest in the Chiswick Property at the time its caveat was filed on 16 January 2018 and therefor the caveat should be withdrawn or removed: In the matters of Beechworth Land Estates Pty Ltd (Admin Apt) and Griffith Estates Pty Ltd (Admin Apt) (No 2) [2015] NSWSC 336 at [157] and [146]. In my view this reasoning also supports the removal of the caveat.

98. There is yet another reason for the removal of ENA’s caveat on 16 January 2018: its form. ENA's 16 January 2018 caveat in Schedule 1 gives particulars of the estate or interest claimed as "ENA Development Pty Ltd has equitable estate (as an owner and mortgagee) over [the Chiswick property]". The estate is said to arise by virtue of the following instrument[s]: Nature of Instrument - "Owner and secured agreements"; Date - "09/01/2019, 31/08/2005"; and Parties - "ENA Development Pty Ltd (ACN 105 235 363) and Robert Sebie." And the estate is said to arise by virtue of the following facts: "The caveator provided original equity which was used to acquire [the Chiswick Property] on 15/07/2015. Reference to annexure A for further details."

99. Annexure A to the caveat is reproduced here in full:

“ANNEXURE "A" TO THE CAVEAT OF ENA DEVELOPMENT PTY LTD

SECHEDULE 1. EQUITY, ESTATE AND INTERESTED CLAIMED

By virtue of the facts stated below

ENA DEVELOPMENT PTY LIMITED A.C.N 105 235 363 HAS EQUITABLE ESTATE AND SECURITY IN THE LAND, LOT 2 IN DEPOSITED PLAN [address not published] Chiswick, CHISWICK NSW 2046.

ENA DEVELOPMENT Pty Ltd A.C.N 105 235 363 is owner of the LAND,[Address not published], CHISWICK NSW 2046.

ENA DELELOPMENT Pty Ltd A.C.N 105 235 363 is the mortgagee of the AND, [Address not published], CHISWICK NSW 2046.

THE EQUITABLE AMOUNT as of 9 January 2018 is $2,910,000.86.

1)   On the 15 September 2005, ENA Development Pty Ltd A.C.N 105 235 363 provided the original equity over [Address not published], Chiswick NSW 2046 or known the property folio [Details not published] in the consideration of $1,379,315. These funds of $1,379,315 was specifically used to purchase the property of [Address not published], Chiswick NSW 2046 or known the property folio [Details not published]. This date of the 15 September 2005 was the date of original purchase of the [Address not published], Chiswick NSW 2046 by Robert Sebie.

2)   On the 17 July 2015 ENA Development Pty Ltd A.C.N 105 235 363 jointly with Mrs R Sebie obtained complete 100% secured equity in property of [Address not published], Chiswick NSW 2046 or known as property folio [Details not published]. ENA Development Pty Ltd A.C.N 105 235 363 discharged the Commonwealth Bank Mortgage AB803613 (registered on the 28/09/2005) in the consideration of $504,759. This equity is secured over [Address not published], Chiswick NSW 2046 or known the property folio [Details not published].

3)   ENA Development Pty Ltd entered secured agreements with Robert Sebie on the 31

August 2005, 5 September 2005 and 17 July 2015.

4)   Attached is a Supreme Court Order dated 8 July 2015 2015/00145498 stating ENA

Development Pty Ltd possession of title of the property.”

100. Real Property Act, 74F(5)(b)(v) refers to the prescribed particulars of the legal or equitable estate which must be specified by the caveator. These are then set out in Real Property Regulation 2014, Schedule 3. The face of Schedule 1 of the caveat claims an “equitable estate” but in a wholly contradictory fashion “as an owner and mortgagee”. It then refers to “secured agreements” which could possibly be referred to Exhibit 1, except that none of the dates of the Secured Agreements given include 5 September 2005. Then the facts stated refer to a range of documents that do not make the position any clearer.

101. The caveat as a whole is a self-contradictory grab bag of claims that does not tell the reader exactly what estate is claimed arising out of what documents, and on what facts. The intent of Real Property Act, s 74F and the Regulation is not to allow ambit claims such as this caveat, which in my view is not able to be looked at in the softer light of s 74L, which permits the Court to “disregard any failure of the caveator to comply strictly with the requirements of this part”. No application to amend the caveat is made. It should be struck out on this ground as well.

Conclusion and Orders

102. Accordingly, the Court makes the following orders and directions:

1. Dismiss Mr Ramzy Sebie’s application for leave to appear for the respondent to the plaintiffs’ motion dated 30 January 2018, ENA Developments Pty Limited (referred to in these orders as “ENA”)

2. Dismiss the Notice of Motion brought by ENA on 13 February 2018 for leave to file a Cross Claim.

3. Order ENA pay the costs of and incidental to its 13 February 2018 motion.

4. Reserve for further argument the question of whether the costs ordered against ENA pursuant to Order 3 should also be paid by any other person.

5. Order pursuant to s 74MA of the Real Property Act 1900 that by 4.00pm on 29 March 2018 ENA remove the caveat which bears dealing number AN33247 (referred to as “the Caveat” in these orders).

6. Order for the purpose of Real Property Act, s 74MA(3) that if ENA fails to remove the Caveat by 4.00pm on 29 March 2018 the Caveat will lapse and the Registrar General is thereafter authorised to remove it from the Register.

7. Pursuant to Real Property Act, s 74O ENA is restrained from lodging, or causing to be lodged, any further caveat or other dealing on the title to the Chiswick Property.

8. Order ENA to pay the plaintiffs’ costs of and incidental to the plaintiffs’ motion of 30 January 2018.

9. Reserve the question of whether the costs ordered against ENA pursuant to Order 9 may also be paid by any other person.

10. Extend to 2.00pm on 11 April 2018 the date by which completion of the contract for sale of the Chiswick Property is to occur before the Registrar in Equity pursuant to Order 2 of the Court’s orders made on 30 January 2018.

11. In the event that Mr Robert Sebie does not attend before the Registrar upon the amended date for completion of the contract for sale the Chiswick Property, which is 2.00pm on 11 April 2018, the court notes that all the orders made by Pembroke J on 15 May 2017, concerning that completion are of continuing effect and in particular Order 7, which is as follows:

“(7)   Order that the Registrar in Equity be authorised, in default of the third defendant’s compliance with Order (6), to execute all such documents and take all such steps in the name of the third defendant as may be necessary to ensure the performance and completion of the Contract”.

12. Adjourn these proceedings for mention to 9.30am on 3 May 2018 and grant leave to make returnable any notices of motion for the recovery from third parties of the costs orders made against ENA, or any other supplementary motions.

13. Grant liberty to apply.

14. Note that should the plaintiffs seek the issue of a writ of possession of the Chiswick Property after completion of the contract for sale of that property, then the plaintiffs may for that purpose take advantage of the liberty to apply hereby granted.

15. Order the plaintiffs serve a copy of these orders at the email address for service in the proceedings for ENA and Mr Robert Sebie by 6.00pm today, 26 March 2018.

16. These orders may be taken out forthwith.

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Decision last updated: 29 March 2018