Sayour v Elliott

[2018] NSWSC 59

Supreme Court

New South Wales

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• Amendment notes

Medium Neutral Citation:	Sayour v Elliott [2018] NSWSC 59
Hearing dates:	4 October 2017
Date of orders:	07 February 2018
Decision date:	07 February 2018
Jurisdiction:	Equity
Before:	Ward CJ in Eq
Decision:	(1) Declare that the sum of $5,000,000 deposited by the late Jamil Moustafa Sayour to Bank of Sydney Ltd ABN 44 093 488 629 on or about 9 February 2015 was money that was held on trust for the second plaintiff as trustee of the Sayour Family Trust established under trust deed dated 7 July 2008. (2) Declare that the money standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 is held on trust for the second plaintiff as trustee for the Sayour Family Trust. (3) Order that the first defendant do all things necessary to be done by her to cause the money standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 to be paid to the second plaintiff. (4) To the extent that the money now standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 is less than $5,003,080, enter judgment in favour of the second plaintiff against the estate of the late Jamil Moustafa Sayour in the amount of that shortfall. (5) Judgment in favour of the second plaintiff against the estate of the late Jamil Moustafa Sayour in the sum of $300,000. (6) Reserve the question of costs.
Catchwords:	EQUITY — Trusts and trustees — Alleged misappropriation of trust funds — Deposit of funds to bank account styled as trust account.
Legislation Cited:	Uniform Civil Procedure Rules 2005(NSW), r 14.26(1)
Cases Cited:	Alesco Corporation Ltd v Te Maari [2015] NSWSC 469 Ex parte Kingston; re Gross (1871) LR 6 Ch App 632 Gray v Gray [2004] NSWCA 408; (2004) BPR 22,755 Sayour v Elliott [2017] NSWSC 713 Schmierer v Taouk [2004] NSWSC 345; (2004) 207 ALR 301
Category:	Principal judgment
Parties:	Moustafa Sayour (First Plaintiff) Broadway Plaza Pty Ltd atf Sayour Family Trust (Second Plaintiff) Fatima Sayour (Third Plaintiff) Catharine Elliott (First Defendant) Sayour Holdings Pty Ltd (Second Defendant) JS 75 Pty Ltd (Third Defendant)
Representation:	Counsel: DA Smallbone with JP Gatland (Plaintiffs) D Allen (Defendant)   Solicitors: Adams Lawyers (Plaintiff) Mitry Lawyers (Defendant)
File Number(s):	2016/00369525
Publication restriction:	Nil

Judgment

1. HER HONOUR: In these proceedings the plaintiffs (Mr Moustafa Sayour, the first plaintiff; his wife, Mrs Fatima Sayour, the third plaintiff; and Broadway Plaza Pty Ltd as trustee of the Sayour Family Trust, to which I will refer as Broadway Plaza, the second plaintiff) bring claims against, relevantly, the administratrix of the estate of their late son, Jamil Moustafa Sayour, also known as Jamil Sayour (Ms Catharine Elliott, aka Sayour, the first defendant). It is alleged that before his death Jamil misappropriated substantial sums of money out of the assets of a family trust (the Sayour Family Trust) of which Broadway Plaza is the trustee; as well as certain funds of his mother, Fatima. The first defendant does not now dispute that the appropriation of trust funds occurred; but claims that Moustafa Sayour knew and assented to the appropriation. Without intending any disrespect, I will from time to time refer to the individual plaintiffs, their late son and the first defendant by their first names.

2. The second and third defendants, each of whom has filed a submitting appearance, are companies which it is said Jamil caused to be incorporated and of which it is alleged that Moustafa (in the case of the second defendant) and Jamil (in the case of the third defendant) was the sole shareholder. They have played no role in the proceedings before me.

Introduction

3. The matter first came before me for case management following disputes before Lindsay J as to Catharine’s application (which was unsuccessfully opposed by Jamil’s parents) for the grant of letters of administration in respect of Jamil’s deceased estate. At the time of Jamil’s death, Catharine and Jamil were either married (his parents say that the Islamic ceremony in which Catharine says she and Jamil were married was no more than a ceremony to permit the couple to be together in a sexual relationship - see T 22.45) or in a de facto relationship; and she and Jamil had three children together.

4. On 26 April 2017, I heard various interlocutory applications in the proceedings, relating to disputes as to requests for particulars and for production of documents. I published my reasons in relation to those applications on 6 June 2017 (Sayour v Elliott [2017] NSWSC 713). A further interlocutory application (Catharine’s 17 March 2017 notice of motion seeking access, on account of her legal costs and disbursements in defending the proceedings, to certain funds held in a Bank of Sydney account in respect of which restraining orders had been made on 10 October 2016 and continued on 12 December 2016 by Lindsay J) was not heard on 26 April 2017 and remains on foot. (At one stage I was informed by Senior Counsel then appearing for Catharine that the motion would not be pressed; yet later I was informed by Counsel now appearing for Catharine that it was to be pursued. It has not yet been heard.)

5. There was much complaint by both sides as to the conduct by the other side of the proceedings: the plaintiffs complained as to delay by Catharine in filing a defence on behalf of the estate, noting her duties as administratrix of the estate; whereas, on Catharine’s part, complaint was made as to the lack of provision of particulars of the claim, having regard to her claimed lack of personal knowledge of the events the subject of the pleaded claims. The conduct of the litigation on both sides has been particularly acrimonious (see [32] of my earlier reasons).

6. Ultimately, in the course of case managing the proceedings, I was persuaded that it was in the interests of the just, quick and cheap resolution of the real issues in dispute for there to be a separate determination of the plaintiffs’ primary claim (as to misappropriation of trust moneys) in advance of the so-called “back up claims” (relating to alleged secret commissions), on the basis that the primary claim raised discrete issues and it did not appear to be disputed that, if the primary claim were to be accepted, then the primary claim would exhaust the estate’s funds. It was indicated by the plaintiffs that the secondary or back-up claims might not be pursued depending on the outcome of the primary claim.

7. I also note by way of introduction that this is not the only litigation to which one or more of the present parties is party in relation to alleged dealings involving Jamil. In particular, there is a dispute on foot in relation to the dealings between a company, Broadway Plaza Investments Pty Ltd (BPI), with whom it is alleged Broadway Plaza was in partnership in relation to the two-staged development of property at Broadway into a shopping centre and residential units.

8. Pursuant to the order for separate determination of what I have referred to as the primary claim, on 4 October 2017 I heard that part of the proceedings involving the claims pleaded at [1]-[107] of the second amended statement of claim filed on 4 August 2017.

The primary claim

9. In summary, the claim now being determined relates to the alleged misappropriation of funds said to form part of the assets of the Sayour Family Trust. That claim is for an amount of between $5 million and $5.5 million. It is pleaded in the second amended statement of claim in alternative ways.

10. First, it is alleged (at [7]-[50]) that Jamil caused moneys (totalling some $5,003,080) to be deposited on or about 6 January 2015 ([sic]; in fact the relevant deposits were made on 6 February 2015) into a Westpac bank account (to which I will refer as WBC A/C 833) held in his name and that of his father, Moustafa, “as Trustee for Sayour Family Trust” (see [11] of the second amended statement of claim). The plaintiffs say that those are trust moneys; that they were withdrawn by the deceased from that account on 6 February 2015 without authorisation; and that they can be traced into various accounts held in the deceased’s name in the Bank of Sydney. Reliance is placed on Ex parte Kingston; re Gross (1871) LR 6 Ch App 632 for the proposition that, by naming accounts as trust accounts for the Sayour Family Trust and by depositing funds into the accounts so named, Jamil declared the funds to be trust funds. This is described by the plaintiffs as the “shortest way home” – namely to focus on the latest bank account (which when opened was designated as a trust account) in which the missing funds were located and to trace them from there into bank accounts and term deposits in Jamil’s name.

11. The alternative way in which the primary claim is pleaded (at [51]-[107]) is to trace the funds that were deposited into the Westpac bank account in January 2015 further back into other accounts, by reference to which it is again alleged that the moneys withdrawn by Jamil (without authorisation) from WBC A/C 833 on 6 February 2015 were trust moneys. The original source of the relevant funds is identified as being Sayour Family Trust distributions from the Broadway Plaza partnership: cheques drawn in favour of the Sayour Family Trust on the partnership account of Broadway Plaza, as trustee for the Sayour Family Trust, and BPI. When the matter was before me on the interlocutory applications it was said that this (alternative) basis on which the misappropriation claim is put provided the strongest grounds for concluding that Jamil was acting without authority and for dishonest gain (reference being made in this context to Alesco Corporation Ltd v Te Maari [2015] NSWSC 469 at [58]-[60]). This claim is, in total, for in excess of the amount of the primary claim as put in its first iteration.

12. In Catharine’s defence (from [1]-[22]), various of the allegations in relation to the bank account transactions are admitted. Catharine’s position, on the hearing of the issues in dispute in relation to the plaintiffs’ primary claim, is a simple one. She argues that the onus is on the plaintiffs to show that the money was not received by Jamil Sayour as a gift (referring to Gray v Gray [2004] NSWCA 408; (2004) BPR 22,755 at [16] per Young CJ in Eq, Sheller and Bryson JJA agreeing, and Schmierer v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 at [59] per White J, as his Honour then was) and says that whether the onus is discharged will depend upon whether the evidence of Moustafa (to which I will return in due course) is accepted.

13. The plaintiffs take issue with the suggestion that they bear an onus to disprove that the moneys withdrawn by Jamil were a gift. They maintain that Jamil constituted himself a trustee by putting funds into a designated trust account (WBC A/C 833) (on 6 February 2015) (the opening of which account in the names of Jamil and Moustafa “expressly as trustees for the Sayour Family Trust” being admitted by Catharine – see [7] of the second amended statement of claim; [1] of the defence).

14. The plaintiffs say that, by so doing, Jamil assumed the obligations of a trustee, including: to account for his dealings with the trust property; not to impeach the terms of the trust; to account for the trust property; to disclose what he knew about the trust and its property; and to keep proper records. The plaintiffs say that if Jamil went to his grave without justifying his transactions, or providing any account of them, his estate can be in no better position than he would have been in; and that it is for the administratrix of his estate to identify any basis for retaining that trust money.

15. The relief claimed in relation to the alleged misappropriation includes declaratory relief: that the sum of $5 million deposited by Jamil to the Bank of Sydney on or about 9 February 2015 was money that was held on trust for Broadway Plaza as trustee of the Sayour Family Trust (prayer 2) and that the money standing in the name of Jamil in a named Bank of Sydney account (to which I will refer as A/C 414) and two term deposits held with the Bank of Sydney is held on trust for Broadway Plaza (prayer 3). Orders are sought for the first defendant to do all things necessary to be done by her to cause the money standing in the name of Jamil in the said Bank of Sydney account and term deposits to be paid to Broadway Plaza (prayer 4) and for judgment in the sum of $5,003,080 against Jamil’s deceased estate (prayer 8). Relief is also sought by way of an order for judgment against the estate in relation to other amounts (see, for example, prayers 9 and 10).

16. To the extent that the plaintiffs’ complaint as to the source of the account from which funds for the administration of the estate were withdrawn in December 2016 is not upheld, the plaintiffs wish to pursue their claim for equitable compensation (see prayer [28]). Further, although there is a claim for interest on the compound basis (and calculations were handed up as to interest on that basis), the plaintiffs accept that this would be an arid exercise and that the primary claim, if successful, will exhaust the estate. If successful, they seek costs on an indemnity basis (and wish to be heard further on that issue).

Background

17. Some of the background to the present dispute is set out in my earlier reasons ([2017] NSWSC 713). For present purposes, it is convenient to start with the establishment of the Sayour Family Trust and a summary of relevant provisions of the trust deed by which it was established.

Sayour Family Trust

18. Broadway Plaza (formerly named Sayour Investments Pty Ltd) was appointed as the trustee of the Sayour Family Trust, which was established under a trust deed which is undated but bearing a duty stamp of 7 July 2008.

19. The trust is a discretionary trust with power to accumulate income and a default provision in favour of the Specified Beneficiaries (cll 3.1; 3.3; 3.4; 4.1; 4.2). The Specified Beneficiaries are Fatima and the five daughters of Moustafa and Fatima (cl 1.20; Schedule, cl 6). Under the Trust Deed, Moustafa has the role of both Appointor and Guardian (cll 1.3 and 1.12; Schedule, cll 9 and 10). The concurrence of the Guardian is required for the exercise by the trustee of reserved powers (specified in cl 11.7.1) or restricted powers (specified in cl 11.7.2) under the Trust Deed (cl 11.3).

20. The power to appoint the Trust Fund pursuant to cl 4.1 is a reserved power (cl 11.3; 11.7.1.6), as is the power (on the first occasion on which that power is exercised in relation to that General Beneficiary) pursuant to cl 3.1.1 to pay, apply or set aside any amount to a General Beneficiary (cl 11.7.1.5). The powers in relation to advances and payments to General Beneficiaries pursuant to cll 6.1-6.3 are restricted powers (cl 11.7.2.1).

21. Clause 7.20 provides power to the trustee to open bank accounts. The trustee may delegate authority to operate upon a bank account. Clause 7.28 provides power to permit any asset of the trust to be held or registered in the name of any nominee of the trustee. Clause 7.39 provides a power, limited to use for the purpose of investment, to blend the trust money with other money, and to join with others in making common investments.

22. The powers in cll 7.26 and 7.29 to appoint new trustees in any country, and to appoint income or capital of the Trust Fund to eligible trusts, are restricted or reserved powers, respectively, again requiring concurrence of the Guardian (cll 11.7.1.8; 11.7.2.2).

23. In their written submissions (at [24]), the plaintiffs note that these powers are all vested in the trustee (Broadway Plaza) and, so far as delegation is permitted in particular instances, no power of sub-delegation was conferred. Thus it is argued that, by constituting himself as a trustee, Jamil did not thereby obtain all the powers of the appointed trustee under the Trust Deed.

24. Clause 7.49 provides power to confer a power of attorney “for the purposes of administration of the trust”. Such a power was granted to Jamil by Power of Attorney dated 26 March 2012 (Registered 30 March 2012, Book 4630, No. 13). The plaintiffs note (at [25] of their written submissions) that that Power of Attorney contained an express restriction in cl 8 providing, inter alia, that Jamil was not empowered to “sell, dispose of, assign, give, part with or grant any part of my real or personal estates ...”.

25. Subject to the powers in cll 7 and 8 of the Trust Deed, cl 9 requires the trustee to keep the fund “entirely separate” from any other trust fund. Clause 19 requires the trustee promptly after the close of each accounting period to prepare and furnish to the Guardian an accounting report, which report was required to “include the names and addresses of all persons or firms having custody of all or any part of the assets of the Trust Fund”.

26. Clause 18 provides that, in the case of a sole corporate trustee, any power, authority or discretion conferred by the Trust Deed might be exercised by resolution of the trustee company or by its board of directors (cll 18.2.3; 18.4).

Family circumstances

27. As already noted, Jamil and Catharine had three children together. Before Jamil’s death they lived in a house owned by Fatima next door to Jamil’s parents’ house and Moustafa at times saw Jamil almost daily (T 21).

28. Moustafa had established a business operated by Biomed Technology Australia Pty Ltd, known as Biomed, which he says manufactured parts for a type of machine (and which business Catharine’s brother-in-law, Christian Olivares, described as the manufacture of sleep apnoea masks – see his affidavit of 14 September 2017 at [2]). The business was one in which Jamil, and one or more of his sisters, had a role. Moustafa did not accept that Jamil’s role in that regard was as extensive as was put to him in cross-examination (T 17). However, he did accept that, from 2001 until September 2015, Jamil was responsible for the business development and management of Biomed (T 18.7); that in that period he left it up to Jamil to take care of paying Biomed’s bills and workers (T 18.29) and permitted Jamil to operate Biomed’s bank accounts (T 18.33) and to undertake banking activities on the Biomed bank account (T 18.41); and that Jamil was responsible for hiring and firing people including external accountants (T 19.19ff). Moustafa was nevertheless adamant that he, Moustafa, was “the boss of Biomed”; and that his other children were also working at Biomed (T 17).

29. As to Broadway Plaza and the development in which it had engaged, Moustafa denied that Jamil was employed by Broadway Plaza and said that Jamil had “no role to work on Broadway Plaza” but that Jamil had begged him to look after Broadway Plaza to gain experience (see T 27.45-28.1).

30. In July 2014, according to Moustafa, he learnt that Jamil was suffering a terminal illness (T 20.4) (stage 4 lung cancer – see Moustafa’s affidavit sworn 2 September 2016 (the First Affidavit) at [14]). Jamil travelled to Germany to receive treatments for his cancer from time to time during the period from then until his death in early October 2015.

31. Moustafa’s evidence is that, in about late 2014, when his son was in Germany receiving treatment for his cancer, Jamil rang him and asked him to become a director of a company called Moulikyah and to sign some documents for him (First Affidavit at [55]), and that Moustafa did so. He did not recall signing any other documents to set up Moulikyah, or any other documents in relation to a trust called the Moulikyah Trust (First Affidavit at [59]). Moustafa was the initial director of Moulikyah. Jamil later became a co-director and/or shareholder (see T 4).

27. Moustafa’s evidence was that, in about June or July 2015, Jamil said to him (in Arabic) words to the effect “I want Biomed for my kids” (First Affidavit at [16]; T 20.8). Moustafa accepted in cross-examination that he understood that Jamil was asking him to give Jamil assets so that he could provide for his children after his death (T 20.33). Moustafa’s evidence was that he said to Jamil that Biomed was a family business, to benefit the whole family (Jamil and his sisters) (T 20; at [16] of the First Affidavit: “This is for the family. It’s a family business, for the whole family”).

28. Moustafa agreed in cross-examination that in December 2014 he understood that Jamil was going to die soon and was going to leave behind three young children. Moustafa said that (at T 27.35):

We discussed with Jamil and I said to him “I’m looking for his family”, I’m the one looking for his family.

However, he denied that one of the ways he was going to look after Jamil’s family was to provide him with $5 million so that this would be part of his estate when he died (T 27.40).

Property at Kyle Bay

34. In about June 2015, Moustafa exchanged contracts for the purchase of a property at Kyle Bay. Initially he was to be the purchaser, but he says he later decided that the land should be in his wife’s name (Moustafa’s affidavit sworn 25 August 2017 (Second Affidavit) at [32]-[33]). The initial contract was due for completion on 30 June 2015. Settlement did not take place at that time. (As I explain later, this was an important pillar in Catharine’s argument that Moustafa had known about, and acquiesced in, the transfer of trust funds to Jamil in February 2015.) In the Second Affidavit (at [33]), Moustafa gave (as reasons for the delay in settlement up to the time that Jamil died) his decision that the land should be in his wife’s name; and the fact that Jamil’s health had taken a sudden turn for the worse and that he, Moustafa, was unable to attend settlement and needed to be able to be with Jamil wherever he was being treated.

35. Moustafa was cross-examined at some length on this issue (see T 30ff). He agreed that he needed about $2 million to settle the completion of the purchase of the property but could not remember exactly why he did not settle (T 31). See the following exchange (at T 31.13 - T 31.22):

Q.  Why didn’t you go ahead and settle the purchase of 90 Kyle Parade in June 2015?

A.  I don’t know what you mean exactly.  What you mean why I don’t settle?

Q.  Why didn’t you settle the purchase of 90 Kyle Parade in June 2015?

A.  Because ‑ I don’t remember exactly why I don’t settle but ‑ why I didn’t settle, I don’t remember exactly.

Q.  Is it the case that in June 2015 you did not have the $2 million required to settle the purchase of the property?

A.  Well, in that comment ‑ could be I don't have enough money for it.

36. Moustafa was taken to a letter from the vendor’s solicitors referring to the settlement date extensions. There were then the following exchanges (at T 31.46 – T 37.31):

Q.  Do you see the second paragraph reads, “We note this is the third agreed extension.  The first extended the completion date from 18 September 2015 to 16 October 2015 at your client’s request”, do you see that?

A.  Yes, I see that.

Q.  Is it the case that as at 18 September 2015 you did not have the $2 million required to settle the purchase of 90 Kyle Parade?

A.  I don’t have the money here but I have it overseas.

Q.  Is it the case in order to obtain the money with which to settle the purchase of 90 Kyle Parade you had to go and get money from overseas?

A.  It’s not, I think, from overseas but I don’t have the money here.  I answer your question.  I don’t have the money here in that time.

…

Q.  Why did you not use the funds that you had deposited into your Westpac account, those funds being the $3.35 million and the $1.65 million to settle the purchase of the Kyle Bay property?

A.  Why I didn’t use them?

Q.  Yes.

A.  What do you mean exactly, I didn’t use them.

Q.  Do you agree that your evidence was in order to settle the purchase of the Kyle Bay property you had to obtain funds from overseas; do you recall giving that evidence?

A.  To bring money from overseas?

Q.  Yes.

A.  I have the money overseas, if I need it I can get it.

Q.  It was your understanding, was it not, in September 2015, in order to obtain the $2 million to settle the purchase of the Kyle Bay property you had to get money from overseas, that’s the case; isn’t it?

A.  If I need.

Q.  Is it the case that you did not have access to the funds created by the deposit of the two cheques, one for $3.35 million and one of $1.65 million because you no longer had access to that money?

A.  What do you mean, I can’t have access?

…

Q.  Do you agree that in September 2015 you were unable to use the money that had been deposited into your Westpac account, the money being the two cheques of $3.35 million and $1.65 million?

A.  In my personal account?

Q.  Yes.  Why didn’t you use that money to settle the Kyle Bay purchase?

A.  Why?  I can use them.

Q.  Do you agree that in September 2015 you had a need of $2 million in order to settle the purchase of the Kyle Bay property?

A.  Yeah, I ‑ yes.

Q.  It’s the case, isn’t it, that you looked to your money overseas for the $2 million required to settle the purchase?

A.  If need it I can get money.

Q.  The reason you didn’t go and get the money from the Westpac account is because you knew Jamil had that money now?

A.  No.

Q.  Is it the case that you gifted $5 million to Jamil Sayour?

A.  Why I should give my child five million when I have other children have nothing.

and:

Q.  Is it the case that after Jamil had died you wanted the $5 million back because you wanted to be in control of Jamil's family.  You wanted to be the boss?

A.  I had all my family, all my children, family and relatives I help them until now.  I give every daughter ‑ child I give her a house, that’s my ‑ I help everyone.  I help their kids, I help my kids and their kids.

Q.  How many daughters do you have?

A.  Five.

Q.  Is it the case, upon each of them getting married, you gave each of the five daughters a house?

A.  Yes.

Q.  Is it the case that you never gave Jamil a house?

A.  No, he doesn’t ask me for a house, he wants all my entity.  He doesn’t want ‑ he want to take everything I own to his kids and he leave my children, the other girls, nothing.  He doesn’t want a house, he wants all my entity.  That’s what he want.

37. This is consistent with Moustafa’s affidavit evidence that he never intended to give Sayour Family Trust money to Jamil (see [81] of the Second Affidavit).

38. In the First Affidavit, Moustafa deposed that the “Original Sayour Family Trust Account” was a Westpac Bank account in the name of Sayour Investments Pty Limited as trustee for the Sayour Family Trust ([3]). This was a separate account from the Westpac bank account (WBC A/C 238) opened in the name of Jamil and Moustafa as trustees for the Sayour Family Trust. He distinguishes those accounts from the Commonwealth Bank account in the name of Broadway Plaza and BPI (that being one of two accounts into which he variously says the partnership distribution cheques should have been deposited – see [42] below).

39. In re-examination, there was the following exchange (at T 38.15-38.45):

Q.  Where did the partnership do its banking, the Broadway Plaza partnership do its banking, which bank?

A.  CBA.

Q.  You’ve seen the bank account statement I showed you a moment ago and perhaps you could be shown exhibit D again.  Do you recall giving evidence that the Sayour Family Trust account of Broadway Plaza was with the Commonwealth Bank.  With the benefit of looking at exhibit D, do you want to comment on your previous evidence that the trust account was at the Commonwealth Bank?

A.  Yes.

Q.  What can you add to that evidence?

A.  Of the trust account?

Q.  About where the trust account bank account was?

A.  Okay, when I set out the original Sayour Family Trust was the original Sayour trust account.  The trustee for Sayour trust account was Sayour Investment Pty Ltd, that's for Broadway Plaza.  This is the first trust I opened for, the original one.

Q.  Where was that bank account?

A.  The original one?

Q.  Which bank, yes?

A.  I think Westpac.

Q.  You’ve given evidence earlier today that the trust account was at Commonwealth Bank?

A.  That’s for Broadway Plaza.

Jamil’s death

40. Jamil died in Germany (to which country he had travelled with Catharine and members of his immediate family and the Sayour family for cancer treatment) in early October 2015. There is a dispute as to when and who, following Jamil’s death, asked Catharine to return banking “tokens” then in Jamil’s possession (which related to the Biomed and other bank accounts); and as to other aspects of the trip to and from Germany.

41. On the family’s return to Australia, Jamil’s sister (Yesmine aka Jasmine Sayour), an accountant, went to Westpac and, she says, cancelled the tokens and cancelled “any authority that Jamil had on any of [her] father’s accounts” (T 48). Elsewhere, she said this cancellation related to “our accounts” or “any accounts that he has authority on that my dad’s name is on”; “and business accounts, so any accounts in his name” (T 48). Pressed on this, she said:

When we asked the bank manager what – if – what accounts my father held to clarify because I was not aware at the time, and my father was very distraught. So, I was not aware of what bank accounts my father held. I asked the bank manager to provide for me any accounts that were held by my father, and I said to her “if Jamil’s authority is on any of them cancel them”.

42. Moustafa’s evidence is that after Jamil’s death he discovered that Jamil had opened a number of joint bank accounts in the names of himself and Jamil “as trustees for the Sayour Family Trust” (see [62] of the First Affidavit), including WBC A/C 833 and WBC A/C 295. Moustafa’s evidence is that he did not open any of those bank accounts; did not authorise Jamil to open them; and only became aware of them after Jamil’s death and after Yesmine started conducting some investigations into Jamil’s affairs ([63]-[64] of the First Affidavit). His evidence is that he deposited the $3.35 million and $1.65 million cheques (i.e., the distributions from the Broadway Plaza partnership – see [47] below) at the Westpac Bank branch in Lakemba, both times at Jamil’s direction, but was not aware that the cheques were not being deposited into the “Original Sayour Family Trust Account” (i.e., the Westpac Bank account referred to at [38] above), and was not aware that a Sayour Family Trust account had been opened in his name (see the First Affidavit from [91]-[99]). He says he handed those cheques to someone named Tamer (to whom Moustafa says Jamil had referred and who Moustafa said appeared to be expecting him).

43. Moustafa says that he first became aware that Jamil had a large sum of money in Bank of Sydney accounts when he was told this at Jamil’s wake by Mr Fouad Deiri (a director of BPI) (see [14] of the Second Affidavit); and that after that he was shown a screenshot of Jamil’s bank accounts by a Biomed employee (Zahi Salah) (see [15] of the Second Affidavit; [30] of the First Affidavit), showing a balance of $5.7 million. Moustafa deposes that he knew he had not paid Jamil “that sort of money” (First Affidavit at [28]). He denies knowledge, or authorisation, of the transactions by which the moneys deposited by him into the Sayour Family Trust were transferred to various other accounts, ending up in the Bank of Sydney accounts in Jamil’s name.

44. Moustafa also denies ever having used internet banking. He deposes to having discovered in about July 2015 that he had a customer ID at Westpac to operate internet banking (First Affidavit at [20]), after the discussion with Jamil when Jamil said he wanted the Biomed business. Moustafa deposes that he went with Yesmine to the Westpac Bank at Lakemba and said he wanted “to take Jamil’s authority away from the bank accounts” ([17]) because he wanted to prove to Jamil that he, Moustafa, was ultimately in charge and was worried that Jamil “would use his authority to withdraw money from Biomed” ([16]); but that he subsequently made up with Jamil and contacted the bank manager to “give Jamil back his authority on the bank accounts” ([23]). Moustafa’s evidence was unclear as to what, if any, bank accounts other than the Biomed account he was referring to when speaking of “the bank accounts” in the plural.

45. Moustafa denies ever having given Zahi Salah authority to log in to internet banking using details associated with his Westpac customer ID. There is in evidence an email that suggests that Zahi Salah had done so (see Second Affidavit at [11]). Moustafa says that he did not know that Zahi Salah was doing this and that he did not ask Jamil to give Zahi Salah permission or authority to do this.

The money trail

46. The “money trail”, which is largely admitted, can be summarised below.

47. The ultimate source of the money (as outlined by Counsel for the plaintiffs in submissions) was the Broadway Plaza Punchbowl CBA account used by Broadway Plaza and BPI.

48. In November-December 2014 and January 2015, a number of cheques were drawn on that account: a cheque dated 24 November 2014 (presented on 25 November 2014) for $3.35 million made out to Sayour Family Trust, the cheque stub notation for which was “BP Loan repayment towards land”; a cheque dated 28 November 2014, presented on 1 December 2014, for $1.65 million, bearing Mr Deiri’s signature (T 6) and again with a cheque stub notation “Sayour Family Trust” “BP payment towards land”; a cheque of 11 December 2014 made out to Sayour Family Trust for $300,000, again bearing Mr Deiri’s signature (with a notation “Payment towards loan from BP”); and a cheque of 5 January 2015 for $250,000 made out to Moulikyah Pty Ltd (but with a cheque stub notation recording the payee as “Sayour Family Trust” for “payment to BP towards land”).

49. The first three cheques (totalling $5.3 million) were deposited into a Westpac account styled Moustafa Sayour ATF Sayour Family Trust account, at Lakemba (WBC A/C 238); i.e., an account designated as a trust account. The fourth, being the cheque drawn in favour of Moulikyah was banked into a Westpac account in the name of Moulikyah at Lakemba (WBC A/C 316).

50. Between 2 and 5 January 2015, amounts totalling $4.52 million (mostly in $100,000 amounts) were transferred from WBC A/C 238 to WBC A/C 833. And on the same days (2 to 5 January 2015), amounts totalling $4,463,000 (again mostly in $100,000 amounts) were transferred out of WBC A/C 833 into the Moulikyah account (WBC A/C 316).

51. On 6 February 2015, $3.1 million was transferred (in $100,000 amounts) from Moulikyah’s WBC A/C 316 to another Moulikyah account (WBC A/C 324) and on the same day that amount was transferred back to WBC A/C 833. The balance of the money that had been transferred to WBC A/C 316 between 2 and 5 January 2015 (see [50] above) went direct to WBC A/C 833 (i.e., not via WBC A/C 324). Therefore, as at 6 February 2015, payments totalling $5,002,480 (together with one deposit of $600) ended up in WBC A/C 833 (the account in the name Jamil Sayour and Moustafa Sayour - Trustee for Sayour Family Trust).

52. Then, still on 6 February 2015, $5 million was transferred in $100,000 amounts from WBC A/C 833 to WBC A/C 295 (a Westpac Pennant Hills account in the names of Moustafa and Jamil Sayour).

53. Finally, two bank cheques were drawn on the WBC A/C 295 account on 9 February 2015 (one for $3 million and one for $2 million) from the Lakemba Westpac branch. Those amounts went to Jamil’s accounts held in the Bank of Sydney.

Payments relevant to first way the primary claim is put

54. First, it is admitted (as noted above) that WBC A/C 833 was opened with Westpac Banking Corporation in the names of Jamil and Moustafa, as trustees for the Sayour Family Trust (see [7] of the second amended statement of claim; [1] of the defence), though Catharine does not admit that Jamil caused the account to be opened nor does she admit that it was opened without the knowledge or authority of Moustafa or Broadway Plaza (see [8]-[10] of the second amended statement of claim; [18] of the defence). (I address the extent of Moustafa’s knowledge or authorisation of Jamil’s banking transactions at [83] and [92] below.)

55. It is also admitted that, by deed of settlement entered into on or about 7 July 2008 a trust called the Sayour Family Trust was established, of which Broadway Plaza was trustee (see [6] of the second amended statement of claim; [1] of the defence).

56. Next, it is admitted that Jamil caused $5,003,080 to be deposited into WBC A/C 833 (see [11] of the second amended statement of claim; [1] of the defence) (although the allegation pleaded and admitted was that this occurred on 6 January 2015, in fact it occurred on 6 February 2015). The particulars to [11] identify a number of deposits effected by electronic funds transfer or “internet on-line banking funds transfer” as described on the bank statement for WBC A/C 833 by which the total of $5,003,080 was deposited into the account.

57. It is further admitted that, by making those deposits into WBC A/C 833, in the names of Moustafa and Jamil as trustees for the Sayour Family Trust, Jamil acknowledged and declared that that money was held upon trust for the Sayour Family Trust (see [12] of the second amended statement of claim; [1] of the defence).

58. Pausing there, the plaintiffs argue that, upon that starting point, it is established by admission that the sum of $5,003,080 was trust money of the Sayour Family Trust, of which Broadway Plaza was the trustee and which it was therefore entitled (if not bound) to recall.

59. Next, it is admitted that on or about 6 February 2015, $5 million was withdrawn from WBC A/C 833 and deposited into WBC A/C 295, which had been opened on about 1 February 2013 in the names of Jamil and Moustafa (see [14]-[17] of the second amended statement of claim; [1]; [2] of the defence). The withdrawals and deposits were particularised as having been effected in 50 withdrawals of $100,000 each, effected by internet on-line banking funds transfer, and the 50 electronic deposits of $100,000 each.

60. Catharine does not admit that WBC A/C 295 was opened by Jamil “claiming to act in the names of himself and [Moustafa]”; nor that WBC A/C 295 was opened without the knowledge or authority of Moustafa (see [15]-[16] of the second amended statement of claim; [18] of the defence). Nor does Catharine admit that the withdrawals and deposits described in [59] above were made by the deceased without the knowledge and authority of Moustafa or Broadway Plaza or the allegation that the withdrawals were in breach of trust and that, after the deposit of those funds into WBC A/C 295, the money continued to be held by Jamil upon resulting or constructive trust for Broadway Plaza as trustee for the Sayour Family Trust (see [18]-[21] of the second amended statement of claim; [18]; [3] of the defence).

61. Pausing again here, the plaintiffs note that WBC A/C 295 was not denominated as a trust account and they point to Moustafa’s evidence that on 6 February 2015 (the date of the deposits) Moustafa was overseas; and that Moustafa did not bank at Pennant Hills and had never been to the branch through which the deposits were effected.

Payments relevant to the alternative way the primary claim is put

62. The alternative way in which the primary claim is put (from [51]-[107] of the second amended statement of claim) traces the money back to before the stage at which it was deposited in WBC A/C 833 (i.e, before the event referred to at [56] above).

63. A diagrammatic representation of the money trail is included in the interim accountant’s report, a revised copy of which was handed up as an aide memoire by Counsel for the plaintiffs – the revision being the added reference (based on account statements produced by Westpac) to a second Moulikyah account (WBC A/C 324) (interposed on 6 February 2015 between Moulikyah account WBC A/C 316 and the return of the funds that day to the J & M Sayour atf Sayour Family Trust WBC A/C 833), which account the funds passed through before being transferred out again the same day into the Pennant Hills account (i.e., the money passing through four bank accounts in one day).

62. The amounts involved in the claims pleaded at [51]-[107] total $5,550,000. Those amounts (being the amounts referred to at [48] above) are as follows:

1. $3,350,000 on 24 November 2014 - from the Broadway Plaza partnership account (see [55] of the second amended statement of claim; admitted at [1] of the defence);

2. $1,650,000 on 28 November 2014 - from the Broadway Plaza partnership account (see [61] of the second amended statement of claim; admitted at [1] of the defence);

3. $300,000 on 11 December 2014 - from the Broadway Plaza partnership account (see [67] of the second amended statement of claim; admitted at [1] of the defence); and

4. $250,000 on 5 January 2015 - from the Broadway Plaza partnership account (see [91] of the second amended statement of claim; admitted at [1] of the defence).

65. The first three cheques, as noted earlier, were drawn payable to “Sayour Family Trust”, the fourth was drawn payable to “Moulikyah Pty Ltd” (though the cheque stub recorded a similar notation of the payee to that in respect of the first three cheques).

66. On 6 February 2015, $5,002,480 of this money was transferred back into WBC A/C 833 (second amended statement of claim at [104]) (see [51] above), before being deposited that same day to WBC A/C 295 (T 4.20) (see [52] above). On 9 February 2015, the money was used to fund the payments totalling $5 million to the Bank of Sydney account (which are the foundation for the declaration and orders sought in prayer 2 of the second amended statement of claim).

67. The earlier three payments totalling $5.3 million had originally been paid into the WBC A/C 238 which was in the name of Moustafa Sayour ATF the Sayour Family Trust. From that account, $4,520,000 was transferred over 2 to 5 January 2015 into WBC A/C 833, from which account over the same dates $4,463,000 was passed to Moulikyah account WBC A/C 316.

Plaintiffs’ submissions in relation to the withdrawal on 6 February 2015

68. The plaintiffs allege three alternative causes of action in relation to the money withdrawn from WBC A/C 833 on 6 February 2015 and deposited that same day in WBC A/C 295 (see [51]-[52] above): first, (at [21]) that the money was held on resulting or constructive trust for the Sayour Family Trust (which is not admitted by Catharine); second, that Jamil wrongfully converted the trust money to his own use by making the withdrawals ([22], also not admitted by Catharine); and third, that the $5,000,000 was money had and received by Jamil to the use of Broadway Plaza ([23]). As Catharine does not plead to this last alternative cause of action, the plaintiffs say that this allegation stands as admitted (Uniform Civil Procedure Rules, 14.26(1)).

69. The plaintiffs argue that the non-admission of Jamil’s role in effecting the transfers into WBC A/C 295 (see the defence at [2]) is inconsistent with the deemed admission of the allegation at [23] of the second amended statement of claim, noting that it is later admitted in the defence that this money was paid on 9 February 2015 into accounts in Jamil’s name in the Bank of Sydney (see [31]-[32] of the second amended statement of claim; [1]; [7] of the defence) and remained there at the time of commencement of the suit (those accounts since having been frozen other than for the payment out of up to $100,000 for administration expenses).

70. The plaintiffs submit that if the money deposited on 9 February 2015 into Jamil’s Bank of Sydney account remained at that time trust money, and is recoverable as such, then Broadway Plaza has a proprietary remedy. Second, they argue that Jamil made the transfers on 6 and 9 February 2015 in breach of trust giving rise to a proprietary remedy, as well as a right to equitable compensation for consequential loss (compound interest at the trustee rate) and costs on the indemnity basis.

71. The plaintiffs argue that the non-admission by Catharine of the allegation that Jamil made the transfers from WBC A/C 833 to WBC A/C 295 and thence to the various Bank of Sydney accounts is of no significance to the first of those issues, since the fund began as trust money and is still in existence (and since its identity with the original fund is admitted). They argue that therefore it remains trust money of the Sayour Family Trust and can be recovered as such by Broadway Plaza as trustee of that trust, without the need to establish any breach of trust (simply because it is trust property). The resulting trust is presumed from the application of trust money.

72. The plaintiffs argue that it would be necessary for Catharine to allege and prove some circumstance by which the money ceased to be trust money; and that there has been no such allegation. They argue that even a plea of consideration would not avail because a trustee cannot purchase the trust estate.

73. Pointing to the provisions of the Trust Deed establishing the Sayour Family Trust, the plaintiffs accept that, on one view, it might theoretically have been possible for Jamil to have held the fund as nominee under cl 7.28 without any breach of trust occurring (had Broadway Plaza (the appointed trustee) known, authorised and appropriately minuted such an arrangement) but they say that even then the money would still remain trust money, recoverable by Broadway Plaza on demand.

74. As to the allegation of breach of trust, the plaintiffs argue that the facts strongly indicate that the transactions of 6 and 9 February 2015 were unauthorised, noting that: Moustafa denies knowing of them or authorising them and that before the fund came into WBC A/C 833 it passed through a series of other accounts, going in and out of accounts denominated as Sayour Family Trust accounts, and into other “quite extraneous intermediate” bank accounts, culminating in the passage of the funds through multiple bank accounts on the same day. The plaintiffs submit that there is no honest reason for the multiplicity of accounts through which the funds were passed. They submit that the artificiality of the many accounts and transfers between them provides strong grounds for concluding that Jamil was acting without authority and for dishonest gain; and say that an authorised, honest and open transaction would have involved no need for such chicanery. They maintain that it is clear that the money was misappropriated from the Sayour Family Trust (and refer by way of comparison to Alesco Corporation Ltd v Te Maori at [58]-[60]).

75. The plaintiffs also point in their submissions to matters (the relevance of at least some of which to the issues now to be determined is moot) such as: the financial embarrassment in which it ultimately left the family; the “secrecy” which Jamil attached to his control of bank accounts (a description with which Catharine cavils); the use of an account at Pennant Hills when the normal practice was to bank through the Lakemba branch; the apparent frustration of Jamil with his exclusion from the Sayour Family Trust and disappointment of his aspiration to be the primary successor of his father; the lack of regular record keeping; and Jamil’s ambition to take part in other projects with Mr Deiri, including a project at Arncliffe.

76. The plaintiffs note that Jamil was capable of falling within the definition in cl 1.11.2 of “General Beneficiaries”, provided he did not fall within the Excluded Class but they say that it is not necessary to examine whether or not Jamil was within the class of General Beneficiaries. They argue that his exclusion from the class of Specified Beneficiaries (see [19] above) indicates at least that he was not at the centre of this trust; and has significance for the contextual appreciation of his role in the family and his actions. They point to the First Affidavit (at [8]) as explaining Moustafa’s reasons for excluding Jamil as a Specified Beneficiary (those reasons including that Moustafa did not “fully trust” Jamil’s judgment and that, over the years Jamil had made a number of “mistakes”, examples of which were there given).

77. The plaintiffs say that, were it necessary, the claim to recover the $5 million can be supported in the “abstractions and defalcations” pleaded at [51]-[107], but that this is superfluous, noting that the allegations culminate at [107] in what is a recapitulation of [12] (which is admitted in the defence). They say that, if added together, the available causes of action in the aggregate would multiply the lost fund of $5.55 million and so the rule against double recovery means that they would be netted off.

78. Thus, the submission of the plaintiffs is that they have traced $5 million into specific funds in respect of which they are entitled to the proprietary relief claimed in prayers 2 and 3; and that they are entitled in addition to a money judgment for the shortfall of $550,000, plus interest and costs. In the event that there is not a finding that the accounts comprising the $5 million should be reconstituted by re-addition of the $100,000 taken by Catharine in December 2016, then they say that the money judgment should be $650,000 plus interest and costs.

First defendant’s submissions

79. I have noted earlier (at [12] above) Catharine’s submission that the onus lies on the plaintiffs to establish that the moneys in Jamil’s Bank of Sydney accounts were not a gift. (I will address this in due course.) Insofar as Moustafa gave evidence denying an intention to make a gift of the money, Catharine’s submission is that that evidence should not be accepted.

80. In essence, Catharine argues that an inference should be drawn that Moustafa knew and intended that Jamil have a gift of the amount of around $5 million that stood in the account in their joint names (as trustees for the Sayour Family Trust) because Moustafa did not attempt to use that money in order to settle the Kyle Bay purchase. (Of course, had Moustafa attempted to use the money in the Sayour Family Trust account to settle the purchase in June 2015, he would then have discovered that there was no money there, it having already been withdrawn by February 2015.)

81. The argument, as I understand it, is that: Moustafa in cross-examination gave evidence that when the Sayour Family Trust was established in 2008 he was under the (erroneous) apprehension that he was the sole beneficiary of the trust; Moustafa was in any event the person in control of the trust with the power to make distributions to beneficiaries; and (described as “the telling matter” from which the inference of a gift can be drawn), when the Kyle Bay purchase was first due for settlement on 30 June 2015, Moustafa did not look to draw upon the money in the Sayour Family trust account to settle the purchase (see T 50-51).

82. Catharine did not point to any particular time at which it is said that it should be inferred that Moustafa “gave up his interest in the money” but says that it was at least by June 2015 (when Jamil was still alive) because otherwise the “easy rational thing to have done” to settle the Kyle Bay purchase would have been to take the money out of the account (T 52). Emphasis is placed on Moustafa’s evidence in cross-examination that is extracted above at [36] (see T 50-51).

83. It is submitted that Moustafa’s evidence that he did not know about the other accounts, or know that Jamil had the authority or at least the ability to control them, should not be accepted. It is noted that Moustafa was aware that Jamil operated the Biomed bank account and had authority on that account (T 18). Emphasis is placed on the fact that, when Moustafa and Yesmine attended the Lakemba branch after Jamil’s death to stop his authority to act on the Biomed account, they asked to terminate Jamil’s authority to act on all accounts in which Moustafa had an interest. It is submitted that this would indicate that they knew that Jamil had the ability to operate accounts in which Moustafa had an interest.

84. The argument for Catharine therefore seems to be that, while the money was sitting in WBC A/C 238, Moustafa gave up any beneficial interest in the money (though logically if this was Sayour Family Trust money at the time it was deposited in, or by reason of the deposit into, that account then Moustafa had no direct beneficial interest in it anyway).

85. As to why it should be inferred that the money was intended to be Jamil’s beneficially (given that there were multiple withdrawals and deposits on the same day in and out of different bank accounts in different names until the moneys ended up in the Bank of Sydney accounts), Catharine accepts that there is a gap in the evidence in that regard (since Jamil is now deceased) but argues that evidence of earlier transfers in multiple amounts from the Sayour Family Trust WBC A/C 238 account in 2013 that end up in WBC A/C 295 suggests that, for whatever reason, there is precedent for the Sayour family undertaking “strange banking transactions” (T 53.5). (That submission, however, suffers from the difficulty that the 2013 transactions may all have been done by Jamil, not Moustafa, since they appear to be internet banking transactions and Moustafa’s evidence pointed to an inability on his part to use internet banking.)

86. Against any inference of nefarious conduct, it is said by Catharine that there was “apparently no secrecy about these accounts”, because Moustafa was able to obtain the information about the Bank of Sydney account simply by asking a staff member of Biomed (Zahi Salah) (T 54.3). Thus it is submitted that the Bank of Sydney account was not kept in some secret manner and that, had Jamil been looking to steal $5 million, there would be “better ways of doing it than just washing it through a number of accounts controlled by the same entities” and putting it into his own bank account (T 54.15).

87. Ultimately, from Catharine’s perspective, the “big point of the case” (T 54.23) is that when there was a need to settle the Kyle Bay property purchase Moustafa did not consider the money received from the Broadway Plaza joint account as then being available to him to settle the property. It was said by Counsel for Catharine that:

… Moustafa Sayour is, on his view, either the beneficial owner and legal owner of the money in the AB account, or he is the only beneficiary of the trust which holds the money in the AB account.  When it comes time to settle the purchase of the Kyle Bay property Mr Moustafa Sayour needs $2 million.  He must know that there is either $2 million in the AB account, or that something has happened to that $2 million to make that $2 million no longer available to him and his answers in cross‑examination are, maybe equivocal, maybe unequivocal, that he had to look to his money overseas or at least money overseas in order to obtain the $2 million. (T 56.7-T 56.17)

88. (Counsel for the plaintiffs argue against this that the way the topic was introduced in cross-examination has coloured the witness’ answers; and says that what was not put squarely to Moustafa was that he was conscious on 18 September 2015 that he did not have the funds to complete and that that is why he postponed the completion date: T 58.43.)

Determination

89. As to the question of onus, the admission by Catharine as to the depositing of the funds in the bank account styled as a trust account means that this is a very different case from that considered in Gray and in Schmierer. In those cases there was the fact of payment and no more; and the question was who bore the onus of proving that the payment was a loan. Here the money becomes impressed with a trust by the time, if not before, it is deposited into a designated trust account. There is then a duty on the part of the trustee to preserve the trust fund and to account for it. If Catharine seeks to argue that there is no obligation on the part of the estate to account for the moneys withdrawn from the trust account (because they were a gift to Jamil) the onus lies on her to establish that that is the case.

90. In any event, questions of onus assist only if there is a doubt as to whether, on the balance of probabilities, the relevant matter in dispute has been established. I am here satisfied on the balance of probabilities that Moustafa did not make a gift of the $5 million to his son and that the inference sought to be drawn from the delay in completion of the Kyle Bay property is not one that is compelling. I consider that Moustafa’s reaction in the witness box to the proposition that he should give $5 million to Jamil when he had five other children rang true; as did Moustafa’s affidavit evidence as to his reaction to the proposition put to him by Jamil that Jamil should have Biomed for his children.

91. The demand for return of the bank “tokens” and the terms in which Jamil’s bank authority was cancelled do not persuade me, on the balance of probabilities, that Jamil had authority to disburse $5 million in trust funds to himself (nor to disburse to himself the $300,000 represented by the cheque made payable to the Sayour Family Trust and banked into WBC A/C 238 (see [48] and [49] above)). I would accept that the circuitous way in which the funds were withdrawn, passed through various accounts, and then ended up in Jamil’s Bank of Sydney accounts invites suspicion (though it is not necessary here to make any such finding).

92. As to the submission that Moustafa should be taken to have known that Jamil had the ability to access accounts other than the Biomed account (and to have authorised him to do so), I do not accept that the request made to Westpac after Jamil’s death to cancel his authority establishes any such knowledge or authorisation. That cancellation request can be explained by Yesmine’s evidence that she saw more than one banking token in Jamil’s bag on the last flight to Germany. The manner in which Jamil’s banking authority or customer ID with Westpac was cancelled similarly does not persuade me that it should be inferred that Moustafa had authorised the sizeable withdrawals of funds for deposit ultimately into Jamil’s personal accounts.

93. As to the reliance placed on the fact that Moustafa believed that the moneys in the Sayour Family Trust account were his but did not seek to have resort to them when he needed to settle the Kyle Bay purchase, I am not persuaded that the inference to be drawn is that this was because Moustafa knew the moneys belonged to Jamil beneficially (because they were a gift). Moustafa’s evidence in this regard was for the most part expressed in conditional terms and it is by no means clear to me that he understood the concept of what money was available to him beneficially (or of what money was trust money the disbursement of which to him would have required a decision as to distribution to be made). Moreover, the explanation given as to delay in completion by reference to his son’s terminal illness is perfectly plausible.

94. I cannot conclude on the balance of probabilities that Moustafa did not complete the Kyle Bay purchase sooner than he did because he knew he could not access the funds that Jamil had already transferred out of the accounts (which is the foundation for Catharine’s contention that the estate is not obliged to account for those moneys). I accept Moustafa’s evidence that he did not become aware of the transfer of funds out of the accounts until after Jamil’s death.

95. As the plaintiffs contend, the admission that WBC A/C 833 was styled as a trust account means that Jamil was obliged to account to the beneficiaries for the moneys (being trust moneys) that were withdrawn therefrom. I accept Moustafa’s evidence that he did not intend to make a gift of those moneys to Jamil. That means that the first way in which the plaintiffs put their primary claim (set out above at [54]-[61]) is established.

96. The alternative way in which the primary claim is put (set out above at [62]-[67]) depends on the identification of each of the four cheques drawn on the Broadway Plaza/BPI CBA partnership account referred to at [48] above being trust moneys; i.e., not simply the $5.3 million deposited into WBC A/C 238 (a Sayour Family Trust designated account) but also the cheque for $250,000 made out to Moulikyah (which was deposited into WBC A/C 316).

89. Catharine admits that this last cheque (in the sum of $250,000) drawn upon the (Broadway Plaza/BPI) CBA partnership account was in favour of the Sayour Family Trust (though the copy cheque in evidence was one that was made out to Moulikyah) (see [91] of the second amended statement of claim, admitted at [1] of the defence). Catharine also admits that the cheque was paid to WBC A/C 316, a Moulikyah account, on or about 5 January 2015 (see [94] of the second amended statement of claim, admitted at [13] of the defence). However, it is not admitted that it was the deceased who deposited that cheque into the Moulikyah account, nor does Catharine admit that the deceased had control of that account. Catharine does not admit the allegations at [101]-[102] of the second amended statement of claim to the effect that, by making the deposit to the Moulikyah account the deceased wrongfully converted to his own use the $250,000 or that this amount is money had and received by the deceased to the use of the second plaintiff. However, Catharine does not plead to the allegation at [100] that the money continued to be held by Moulikyah upon resulting or constructive trust for the second plaintiff as trustee of the Sayour Family Trust.

90. In those circumstances, notwithstanding the admission by Catharine that the cheque made payable to Moulikyah was a cheque drawn in favour of the Sayour Family Trust, I am not persuaded that the $250,000 was held by Moulikyah on trust for the second plaintiff (without further enquiry into the dealings involving the Broadway Plaza/BPI partnership, which is beyond the scope of the present application).

91. I do, however, accept that the three cheques drawn on the partnership account and banked into WBC A/C 238 (totalling $5.3 million) (set out at [64] above) were moneys held on trust for the Sayour Family Trust as designated on the cheques themselves and that, being styled as such when banked into WBC A/C 238, they remained trust moneys such that the estate of the late Jamil Sayour should account for those funds. To the extent that there is a shortfall between the sums deposited into Jamil’s Bank of Sydney accounts (around $5 million) and the first three cheques deposited into WBC A/C 283 ($5.3 million), there should therefore be an order for judgment against the estate of the late Jamil Sayour.

92. I do not here deal with the alleged misappropriation of separate funds of Fatima – as to which there was no debate on this hearing.

93. Finally, I note that the plaintiffs say that Catharine should be obliged to restore, from other funds remaining in her control, the amount of $100,000 withdrawn since the commencement of the proceedings from one of Jamil’s Bank of Sydney accounts (to which I will refer as “BoS A/C 414”) on the basis that, for administration of the estate, Catharine should first have resort to funds other than funds of which the estate is trustee.

94. The relevant order made by Lindsay J on 12 December 2016 was as follows:

13.   ORDER, subject to further order, that, in her capacity as representative of the estate of the late Jamil Sayour (whether pursuant to the limited grant of administration made in her favour on 10 October 2016 or pursuant to the general grant of administration made in her favour by these orders) be authorised to pay out of the estate of the deceased funeral, testamentary and administration expenses (including costs and disbursements incurred in the conduct of the proceedings respectively numbered 2015/00308327 and 2016/00369525) not exceeding $100,000.00.

103. What was said in this regard at the hearing before me was:

HER HONOUR: When you say that the money should be restored from other funds in the control of the first defendant does that amount to an application for a variation of the order that Lindsay J made because the withdrawal was a withdrawal permitted by Lindsay J, was it not?

SMALLBONE: I suppose I wouldn’t have characterised it as a variation, it's more a matter of supplementation because the position we put about that is that administration expenses should fall on estate assets before they fall on assets which are held by the executor upon trust for another.

HER HONOUR: And there is evidence that shows there are other estate assets out of which this 100,000 could come?

SMALLBONE: There were at the time of the deceased’s death about $5.7 million in funds in the Bank of Sydney, and there is a list of bank accounts and balance in evidence and I’ll take your Honour to that.  There’s a screenshot at p 706 which the evidence is that that was taken shortly after the death of the deceased in the offices of Biomed when Ms Sayour asked an employee who had been working closely with Jamil to show the account balances and this screenshot was taken and that showed a series of account balances at that time, shortly after his death.

Then there was some correspondence from Bank of Sydney which was also in the book which is a bit more up to date than that and I’ll find that and take it to your Honour in a little while.  Yes, that’s at p 731A and this was a letter that was written by the Bank of Sydney to the solicitor who was then acting for the first defendant who’s preparing to make her application for letters of administration.

HER HONOUR: This was a letter for the solicitors acting for the first defendant who were then preparing for the application for letters of administration.

SMALLBONE: Yes.  The order Lindsay J didn’t specify a particular account and we felt somewhat aggrieved when the defendant took it from account which we were specifically alleging was trust money, but our submission is that in the final wash up it should fall on estate assets and not on trust assets.  It’s O 13 on p 60 of the Court Book and it authorised there to pay out of the estate of the deceased.  We did contend that money held on constructive trust for the second plaintiff is not money that is properly to be considered as part of the estate of the deceased available for the payment of his funeral, testamentary and administration expenses, or costs.

If your Honour were against us on that that would become part of our claim for equitable compensation, the shortfall. (T 9)

104. One difficulty in this regard is that it is not clear to me that there remain estate funds (not otherwise being held in trust) that would be available to meet such an order – indeed, as noted at the outset, the case for separate determination of the issues considered in this judgment was put to me on the basis that a judgment in the order of $5 million on the primary claim would be likely to exhaust estate funds.

105. In any event, I am troubled by any suggestion that Catharine was not acting in accordance with the Court order permitting withdrawal of funds in that amount, in circumstances where there was no limitation placed by Lindsay J to preclude the withdrawal of funds that occurred and it was suggested that similar concerns to those now expressed had been raised before his Honour. I think the more appropriate order is to require the shortfall in trust funds (by reason of that withdrawal) now to be made good.

Orders

106. For the above reasons, I make the following orders:

1. Declare that the sum of $5,000,000 deposited by the late Jamil Moustafa Sayour to Bank of Sydney Ltd ABN 44 093 488 629 on or about 9 February 2015 was money that was held on trust for the second plaintiff as trustee of the Sayour Family Trust established under trust deed dated 7 July 2008.

2. Declare that the money standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 is held on trust for the second plaintiff as trustee for the Sayour Family Trust.

3. Order that the first defendant do all things necessary to be done by her to cause the money standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 to be paid to the second plaintiff.

4. To the extent that the money now standing in the name of the late Jamil Moustafa Sayour in account no 811414 and term deposits 1145895 and 1162098 with Bank of Sydney Ltd ABN 44 093 488 629 is less than $5,003,080, enter judgment in favour of the second plaintiff against the estate of the late Jamil Moustafa Sayour in the amount of that shortfall.

5. Judgment in favour of the second plaintiff against the estate of the late Jamil Moustafa Sayour in the sum of $300,000.

6. Reserve the question of costs.

107. As to the question of costs (on which the plaintiffs indicated at the hearing they wished to be heard when these reasons were published) I will make directions either for submissions to be filed with a view to costs being dealt with on the papers or, if I am persuaded that oral submissions are required for the purpose of determining that issue, for the hearing of those submissions. Directions will also need to be made for the future conduct of the proceedings as necessary.

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Amendments

09 February 2018 - Representation on coversheet

Decision last updated: 09 February 2018