Sinot Samy Assad v Eliana Construction and Developing Group Pty Ltd (ACN 132 817 362)
[2014] VSCA 152
•18 July 2014
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0046
| SINOT SAMY ASSAD | Appellant |
| v | |
| ELIANA CONSTRUCTION & DEVELOPING GROUP PTY LTD (ACN 132 817 362) | Respondent |
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| JUDGES: | ASHLEY and WHELAN JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 18 July 2014 |
| DATE OF JUDGMENT: | 18 July 2014 |
| MEDIUM NEUTRAL CITATION: | [2014] VSCA 152 |
| JUDGMENT APPEALED FROM: | Eliana Construction & Developing Group Pty Ltd v Sinot Samy Assad [2014] VSC 143 (Vickery J). |
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APPEAL – Leave to appeal – Extension of time within which to seek leave to appeal – Whether appeal would be incompetent – Whether leave to appeal required – Whether orders final or interlocutory – Whether leave to appeal should be granted – Whether reasons for decision adequate – Whether decision attended by sufficient doubt to warrant reconsideration – Whether substantial injustice if leave to appeal not granted – Whether particular order should be stayed pending hearing and determination of appeal – Leave to appeal granted, order stayed.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr F J J Tiernan QC with Dr M R Sharpe | Seoud Solicitors |
| For the Respondent | Mr J Stavris with Mr A T Conley | John Yianoulatos Barristers & Solicitors |
ASHLEY JA:
The application
Before the Court is a summons by which Sinot Samy Assad (Dr Assad) seeks orders that –
(1)That the time for applying for leave to appeal against the orders made by the Honourable Justice Vickery in paragraphs 2 to 6 of paragraph 96 of his Reasons for Decision [2014] VSC 143, be extended pursuant to Rule 64.03(3) of the Rules, to 9 May 2014 or such other date as the Court determines.
(2)That the Applicant have leave to appeal against the orders made in paragraphs 2 to 6 of paragraph 96 of the Reasons for Decision of the Honourable Justice Vickery [2014] VSC 143.
(3)That order No. 3 of the Orders made by the Honourable Justice Vickery, concerning the appointment of a special referee to conduct an account or enquiry into the joint venture, be stayed pending the hearing and determination of the application for leave to appeal, and of the appeal should leave be granted.
…
Order (2), which is at the heart of the application, is resisted by the respondent, Eliana Construction & Developing Group Pty Ltd (Eliana).
The orders at first instance
The application arises out of orders made by a judge in the Trial Division on 10 April this year, consequent upon reasons published that day. The orders were as follows:
(1)It is declared that between 1 September 2008 and 30 June 2011 a joint venture existed between Eliana on the one part, and Dr Assad and the S. Assad Family trust on the other part, for the purchase of the Property and its development with the constructions of 11 apartments thereon, and the sale of those apartments.
(2)The proceeding be adjourned for 30 days.
(3)Within a 30 day period either or both parties shall be at liberty to apply to the Court, on reasonable notice to the other and by arrangement with the Court, for a directions hearing to be conducted in relation to the appointment of a special referee to conduct an account or inquiry into the Joint venture and report thereon, which is to be conducted on the terms stated in paragraphs [90] to [95] of these reasons, if that is sought by either or both parties.
(4)If no account or inquiry is sought by either party, the profits and losses of the Joint Venture shall fall where they presently lie, with no money owing by one party to another, and a further declaration will be made accordingly.
(5)Within the 30 day period either or both parties shall be at liberty to apply to the Court, on reasonable notice to the other and by arrangement with the Court, for a hearing to be conducted in relation to the costs of the proceeding in the event that it is determined by both parties that no account or inquiry is to be conducted, and that the trial of the proceeding has concluded.
(6)I will otherwise reserve the costs of the proceeding to this point.
The notice of appeal
The applicant filed a notice of appeal on 24 April 2014. That was within the period of time within which an appeal may be commenced. The notice of appeal was later rejected by the Court of Appeal Registry on the basis that the judge’s orders were interlocutory rather than final. That rejection, notified by the Registry to the applicant’s solicitor on 7 May, led to the filing of the summons which is now before the Court.
In written submissions, the applicant challenged the correctness of the Registry’s rejection of the notice of appeal. Orally, however, senior counsel for the applicant conceded that the impugned orders were interlocutory in character. This is a matter to which I will return. For the moment, I refer to the notice of appeal only to highlight the nature of the attack upon the orders.
There are four proposed grounds of appeal:
(1)The learned Trial Judge (paragraph 58 of the Reasons) erred by failing to give any reasons or adequate reasons for rejecting the Appellant’s claim that the Appellant and the Respondent made a settlement agreement in settlement of the disputes that had arisen between them concerning the joint venture as found by the Trial Judge.
(2)The learned Trial Judge erred by failing to find that in May or June 2011 the Appellant and the Respondent made an agreement to settle the disputes and differences that had arisen between them under the Joint Venture Agreement (Settlement Agreement).
(3)The learned Trial Judge erred by failing to find that the Settlement Agreement was made upon the following terms:
a.the Appellant would become the sole registered proprietor of the properties described in Certificate of Title Volume 11285 Folio 804, Certificate of Title Volume 11285 Folio 805 and Certificate of Title Volume 11285 Folio 806;
b.the Respondent would become the sole registered proprietor of the property described in Certificate of Title Volume 11285 Folio 813; and
c.the legal relationship existing between the parties at that time was at an end.
(4)The learned Trial Judge erred by failing to make orders with respect to the Appellant’s counterclaim.
It can thus be seen that the applicant does not seek to challenge the declaration made by [1] of the judge’s orders, but rather the consequential regime, and provision for costs, put in place by [2] to [6].
The issues at trial
The judge’s orders reflect his Honour’s (partial) resolution of a dispute between Eliana, which was the plaintiff below, and Dr Assad, who was the defendant. The dispute arose out of an 11 unit development, at an address in Lower Templestowe, in the period between August 2009 and May 2011. Eliana was the builder. Eliana and Dr Assad provided the necessary funds.
At trial, two issues fell for determination. First, what was the nature of the relationship between Eliana and Dr Assad with respect to the development? Eliana claimed that it was a joint venture. Dr Assad asserted that he had made loans to Eliana. Second, a dispute having arisen between Eliana and Dr Assad relating to moneys provided by the latter, did the parties compromise their dispute?
The judge’s findings
The judge found, contrary to the case advanced by Dr Assad, that the parties were joint venturers. As can be seen from the proposed notice of appeal, Dr Assad does not seek to challenge that finding.
Respecting the second main issue, the judge found that no compromise had been concluded between the parties. Nonetheless, he rejected Eliana’s claim, put in various ways, that the transfer of three of four unsold units in the development to Dr Assad had been wrongful (the fourth unsold unit being transferred to Eliana). Yet it was Dr Assad’s case that the transfer of the four units — three to him, one to Eliana — was the implementation of the compromise which he claimed had been arrived at.
The judge’s conclusion that a settlement agreement had not been arrived at was of critical importance to [2] to [4] of his Honour’s orders, for they proceed upon the assumption that, in consequence of his Honour’s findings, there was an unresolved dispute between the joint venturers which one or the other might choose to ventilate if dissatisfied with the financial status quo. Indeed, Eliana was evidently dissatisfied. On 7 May this year, it initiated steps intended to lead to the appointment of a special referee.
Paragraph [5] of the judge’s orders, which addresses costs, proceeds from the same starting point, as does [6].
Is the proposed appeal incompetent?
Anterior to the questions whether leave to appeal is required, and, if so, whether time for making application should be extended and leave granted, is the question whether the proposed appeal would be incompetent.
According to the submission for the respondent, the appeal would be of that character because it would not be a challenge to an order, but a challenge to a finding. It is impermissible, counsel for Eliana submitted, to appeal against the effect of an order understood in light of the judge’s reasons for decision. An appeal would only lie from an order which the judge in this case might at some future time be expected to make, such order finally disposing of the rights of the parties. Counsel sought to draw an analogy between the circumstances of the present matter and Landsal Pty Ltd (in liq) v REI Building Society.[1]
[1](1993) 41 FCR 421 (‘Landsal’), 429-30.
In my opinion, orders [3] and [4] necessarily assume that there was not simply a joint venture agreement between the parties, but that the dispute between them had not been compromised by agreement. There could be no accounting or inquiry, nor any choice by the parties not to have an accounting or inquiry, if the joint venture was not still on foot. Orders [2], [5] and [6] proceed from the same starting point. In my opinion, Landsal is not analogous.
An appeal against orders [2] to [6] would in substance permit an attack upon the judge’s finding that the dispute arising between the joint venturers had not been finally compromised.
Is leave to appeal required?
Counsel for the applicant submitted in writing that the judge’s findings that the nature of the relationship between the parties was a joint venture which had not been ended by an agreement finally resolved the issues between the parties. All that remained was the possible investigation by a special referee of what might be owing by one party to the other. Counsel submitted that, in those circumstances, orders [1] to [5] were final. He cited Maybury v Atlantic Union Oil Co Ltd[2] and City of Camberwell v Camberwell Shopping Centre Pty Ltd.[3]
[2](1953) 89 CLR 507, 515 (Dixon CJ, per curium).
[3][1994] 1 VR 163.
Counsel for the respondent submitted in writing that leave to appeal was required because the focus must be upon the legal and not the practical effect of an impugned order. He cited Carr v Finance Corporation of Australia Limited [No 1].[4] Here, the impugned orders provide for the future conduct of the proceeding and, according to counsel’s submission, are to be characterised as interlocutory.
[4](1981) 147 CLR 246, 248 (Gibbs CJ), 256-257 (Mason J).
The issue whether leave to appeal was required evaporated when, in oral argument, as I earlier noted, senior counsel for the applicant conceded that the impugned orders were interlocutory in character. Counsel accepted that this was so, notwithstanding that the orders were founded upon final conclusions that there was a joint venture between the parties in the course of which a dispute had arisen which had not been compromised.
The Court’s concern is with the nature of the orders made. In my opinion, counsel’s concession as to the nature of the impugned orders was correctly made. Eliana claimed a money sum at trial. That claim depended upon there having been a particular relationship between the parties which had not been the subject of compromise, and then the determination of any money entitlement flowing from those conclusions. A finding by a special referee that Eliana was owed moneys would become in time the subject of a final order dispositive of the proceeding.[5] It would be likewise if a special referee determined that neither party owed the other any amount. The character of the orders would be no different, I add, if neither party sought an accounting or inquiry.
[5]See r 50.04 of Chapter 1 of the Supreme Court Rules.
In the event, leave to appeal is required. For reasons which I will now explain, I would extend the time for applying for leave to appeal to this day, would grant leave to appeal, would order that the notice of appeal dated 24 April 2014 stand as notice of appeal served and filed this day, and would order that the note of proposed contents of appeal book dated 5 May 2014 stand as a note of proposed contents of appeal book served and filed this day.
Extension of time
The notice of appeal which the Registrar rejected was filed and served within time. The applicant acted promptly when advised of its rejection — that is, by issuing the summons now before the Court. Eliana, sensibly, does not oppose the extension of time sought by the applicant. Extension should be granted, not simply because the delay was short, but because it is readily explicable, because it resulted from a misunderstanding upon a somewhat difficult legal issue, because — in my opinion — there is merit to the proposed appeal, and because no (or no significant) prejudice has been demonstrated by the respondent.
Grant of leave to appeal
In my opinion, leave to appeal should be granted. I consider that the decision below is attended by sufficient doubt to warrant appellate reconsideration. The judge rejected Dr Assad’s assertion that the dispute between the parties had been compromised, but his Honour’s reasons for that conclusion are certainly brief. It can be contended, not without some force, that they do not relevantly address the circumstances in which the four unsold units were transferred to the joint venturers — transfers upon which Dr Assad relied as implementing the alleged compromise. Apart from the brevity of his Honour’s reasons, there is also a question worthy of reconsideration: whether the transfers did in fact evidence a compromise of the dispute between the parties. That question is not answered conclusively, in my opinion, by the fact that the judge rejected Dr Assad’s case, on the first main issue, that he was a financier and not a joint venturer. The judge’s reasons show that he did not favourably assess the credit of any of the main players — Mr Sowiha of Eliana, Dr Assad and Mrs Ellen Assad. In those circumstances, documented events assumed particular importance. The transfers were, obviously enough, documented. If Dr Assad’s explanation for the transfers was not accepted, how were they to be explained?
I consider also that substantial injustice would flow to the applicant if he was unable to agitate the matters just mentioned at this stage. As the relevant orders stand, he is exposed to the risk of a finding that he owes Eliana some amount, in circumstances where — on his case — he should face no such potential liability.
There is also the matter of costs. I do not think that it is a sufficient answer to the prospect of substantial injustice that, if the matter were to proceed to accounting or inquiry, and if it was determined that the applicant was obliged to pay Eliana some amount, and if that determination was incorporated into an order by the judge, there would then be the opportunity for appeal. The prospect of additional — and unnecessary — costs being incurred would be very real.
Stay
The applicant seeks a stay on [3] of the judge’s orders, which sets out a regime whereby a special referee might be appointed to conduct an accounting or inquiry into the joint venture. As I have already said, the respondent initiated that regime on 7 May 2014.
If the appeal succeeds, there will be no reason to appoint a special referee. It would defeat the purpose of the appeal if a special referee was to be appointed, and was to conduct an accounting or inquiry, in the period before the appeal is heard and determined.
The respondent did not oppose grant of a stay in the event that the Court granted leave to appeal.
I would stay [3] of the judge’s orders pending the hearing and determination of the appeal.
WHELAN JA:
I agree.
ASHLEY JA:
The Court orders that:
(1) The time for applying for leave to appeal from [2]-[6] of orders made on 10 April 2014 is extended to this day
(2) Leave to appeal is granted.
(3) The notice of appeal dated 24 April 2014 stand as notice of appeal served and filed this day.
(4) The note of proposed contents of appeal book dated 5 May 2014 stand as a note of proposed contents of appeal book served and filed this day.
(5) Paragraph [3] of the orders made 10 April 2014 is stayed pending the hearing and determination of the appeal.
(6) Costs of the application are costs in the appeal.
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