Refaat v Barry (no. 2)

[2017] VCC 1375

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
(Not) Restricted
Suitable for Publication

GENERAL LIST

No. CI-12-02108

SAMEH REFAAT	Plaintiff
v
MICHAEL BARRY	Defendant

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	21 September 2017
DATE OF JUDGMENT:	26 September 2017
CASE MAY BE CITED AS:	Refaat v Barry (no. 2)
MEDIUM NEUTRAL CITATION:	[2017] VCC 1375

REASONS FOR DECISION

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Catchwords:     Practice and procedure – Enforcement of judgment against Plaintiff – Instalment order – Applications for varied or substituted instalment orders refused – Warrant of seizure and sale issued – Applicant (Plaintiff) filed an affidavit with incorrect information in relation to the value of his house property – Applicant had previously entered into a contract for the sale of the property for a higher sum – Order made setting aside warrant of seizure and sale – Order revoked and settlement of sale of property only to be permitted on condition that judgement satisfied – Plaintiff permitted to make further application to set aside warrant of seizure and sale on proper affidavit material.               

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person
For the Defendant	In person

HIS HONOUR:

1        Sameh Refaat and Michael Barry are engaged in long running litigation over their previous business relationship.  On 14 September 2017, I delivered written reasons for orders I made that day in which I set aside a warrant of seizure and sale dated 14 July 2017.

2        Following that decision, the following further events have occurred:

(a)     On 19 September 2017, Mr Barry made an ex parte application seeking to restrain Dr Refaat from settling the sale of his house property at Chirnside Park without first paying out the judgment sum owing by him to Mr Barry.  I made interim orders to that effect and made Mr Barry’s  application returnable on 21 September 2017;

(b)     On 20 September 2017, the parties delivered to me written submissions on the issue of the costs of Dr Refaat’s application which I had determined on 14 September;

(c)     On 21 September 2017, after hearing argument from Dr Refaat and Mr Barry:

(i)     I revoked the order I had made on 14 September 2017 setting aside the warrant of seizure and sale;

(ii)     I extended the injunctive relief granted on 19 September 2017 to ensure that Dr Refaat did not settle the sale of his property without accounting to Mr Barry for the judgment sum;

(iii)     I gave directions to enable Dr Refaat to make a further application to set aside the warrant of seizure and sale dated 14 July 2017.

3        I now give reasons for the orders I made on 21 September 2017.  The primary reason was that Dr Refaat had not, in an affidavit sworn on 17 July 2017, properly disclosed the circumstances relating to the Chirnside Park property.

4        In the affidavit, Dr Refaat stated that the principal asset he had was the Chirnside Park property which had a “market value” of $560,000, and in respect of which he owed $541,000.  In fact, on 23 June 2017, Dr Refaat had executed a contract of sale for the Chirnside Park property for a price of $700,000 with settlement to be effected on 22 September 2017.

5 The affidavit Dr Refaat swore on 17 July 2017 was filed in support of an application by him under section 6 of the Judgment Debt Recovery Act 1984 (“the Act”) for a substituted instalment order. The affidavit was relied upon and/or referred to in the following applications:

(a) the application pursuant to section 8 of the Act refused by Judicial Registrar Tran on 17 July 2017;

(b) the application pursuant to section 6 of the Act refused by the proper officer of the Court on 24 July 2017;

(c)     the application by Mr Barry for leave to issue a warrant of seizure and sale determined by Judicial Registrar Tran on 25 July 2017;

(d)     the application by Dr Refaat to set aside the warrant of execution and sale dated 14 July 2017 determined by me on 14 September 2017.

6 The basis of the section 6 application, and the previous application pursuant to section 8 of the Act determined by Judicial Registrar Tran on 17 July 2017, was that the instalment order should be reduced because Dr Refaat’s financial circumstances had deteriorated and he was no longer able to afford to pay the monthly sum the instalment order required.

7        Whereas both Judicial Registrar Tran and the proper officer had decided the applications before them contrary to the interests of Dr Refaat, on 14 September, I determined to set aside the warrant of seizure and sale.  I made that decision in the exercise of my discretion.  Among the factors I took into account were the facts Dr Refaat had stated in relation to the Chirnside Park property; essentially that his equity in the house was minimal.

8        I took this matter into account when considering whether it was appropriate that Mr Barry should be permitted to proceed with a sale of the property by the Sheriff, when weighed against the defaults Dr Refaat had made in complying with the instalment order for the payment of the judgment sum.

9        I granted ex parte relief on 19 September 2017 as it appeared, from the documents produced by Mr Barry, that:

(a)     the contract of sale of the Chirnside Park property in June 2017 for a price of $700,000 indicated that Dr Refaat had a significant equity in the property;

(b)     Dr Refaat’s conveyancer had, in email correspondence with Mr Barry, indicated that the judgment sum may be paid out at settlement;

(c)     the settlement date in the contract of sale was 22 September 2017;

(d)     in a subsequent email from the conveyancer, Mr Barry had been informed that the settlement may not proceed.

10       Dr Refaat appeared before me on 21 September 2017.  He did not file any affidavit material in opposition to Mr Barry’s application for continued injunctive relief.  Dr Refaat informed me, at various times during the hearing, of the following matters:

(a)     his wife had inserted the figures relevant to the Chirnside Park property in the affidavit he swore on 17 July 2017;

(b) she probably copied the figures from the earlier affidavit he swore on 31 May 2017 in support of the section 8 application (that is, before the contract of sale);

(c)     the figure of $560,000 was the correct value as the contract of sale was conditional on finance and that condition had not been fulfilled. Dr Refaat submitted that therefore the settlement of the sale of the property could not proceed;

(d)     the figure of $560,000 took into account his wife’s interest in the property, though Dr Refaat was unable to say what interest his wife had or how it was reflected in that figure.

11       It was difficult, in the absence of affidavit material from Dr Refaat or his wife to determine whether there was any truth in these statements.  Dr Refaat also said, and these statements appear to be more likely to be correct, that:

(a)     he was selling his property so that he could buy another house (that is, simply replacing one asset with another). Although at present he had not entered into a purchase agreement, he had other properties under consideration;

(b)     if he could not buy another house (because the equity available to him was insufficient), he would not wish to proceed with the sale of the Chirnside Park property;

(c)     there had been correspondence in late June 2017 with the purchaser’s conveyancer about an extension of the time under the financing condition, and Dr Refaat had asserted to his conveyancer recently that the sale may not proceed;

(d)     however, until Dr Refaat was served with the order I made on 19 September 2017, he had proposed to proceed with the settlement of the sale of the Chirnside Park property.

12       In these circumstances, I considered that I should revoke the order setting aside the warrant of seizure and sale, whilst allowing Dr Refaat the opportunity to make a further application for that relief, supported by appropriate affidavit material.  In that material, an explanation would need to be given as to why his 17 July 2017 affidavit included the “market value” of the Chirnside Park property as $560,000 and why no mention was made of the contract of sale of the property entered into some weeks earlier.

13 I considered that in circumstances where Dr Refaat was self-represented and had previously sworn an affidavit with incorrect and/or incomplete information, that I should give a certificate under section 128 of the Evidence Act 2008 to protect Dr Refaat from the risk of incriminating himself in a further affidavit if, for example, he were to admit that the earlier affidavit was made knowing that it was inaccurate or misleading.

14       The present restraining orders will remain in place until it is known whether Dr Refaat will make a further application to set aside the warrant of seizure and sale dated 14 July 2017, and to allow that application to be determined.  In the meantime, it would not be appropriate to finally determine the effect of the warrant.

15       I shall also delay my consideration of the written submissions filed by the parties in relation to the costs issues arising from the orders I made on 14 September 2017.

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Certificate

I certify that the preceding 5 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 26 September 2017.

Dated: 26 September 2017

Havovi Panthaki

Acting Associate to his Honour Judge Anderson