Abdallah v Paco Nominees Pty Ltd

Catchwords: JUDGMENTS AND ORDERS — Amending, varying and setting aside — Correction under slip rule

Legislation Cited: Bankruptcy Act 1966 (Cth), ss 5, 58, 118
Uniform Civil Procedure Rules 2005 (NSW), rr 36.17, 39.15

Cases Cited: Newmont Yandal Operations Pty Ltd v J Aron Corporation (2007) 70 NSWLR 411; [2007] NSWCA 195
Kalifair Pty Limited v Digi-tech (Australia) Pty Limited (2002) 55 NSWLR 737; [2002] NSWCA 383
D’Angola v Rio Pioneer Gravel Co. Pty. Ltd. & Anor [1977] 2 NSWLR 22
Port Macquarie Hastings Council v Diveva Pty Ltd t/a Midcoast Road Services [2017] NSWCA 4

Category: Principal judgment

Parties: Georges Abdallah (Plaintiff)
Paco Nominees Pty Ltd (First Defendant/Applicant)
Liam Thomas Bailey in his capacity as trustee of the bankrupt estate of Georges Abdallah (Second Defendant/Respondent)

Representation: Counsel:
A Hopkins (First Defendant/Applicant)
A Rozary (Solicitor advocate) (Second Defendant/Respondent)
Solicitors:
Aquinas More (Plaintiff)
Brander Smith McKnight (First Defendant/Applicant)
McInnes Wilson Lawyers (Second Defendant/Respondent)

File Number(s): 2025/00016105

Publication restriction: N/A

JUDGMENT

1. By notice of motion filed 14 November 2025 the first defendant, Paco Nominees Pty Ltd, seeks orders pursuant to r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) (“the slip rule”), in order to give what it contends would be proper effect to the orders made by me on 28 August 2025.

2. On 15 August 2025 the plaintiff, Georges Abdallah, filed a notice of motion seeking a stay of further enforcement of a decision by the NSW Civil and Administrative Tribunal (NCAT) which was affirmed on appeal by the Appeal Panel, pending the outcome of a judicial review application to be heard on 2 September 2025 by his Honour Payne JA.

3. The stay application came before me on 28 August 2025 as Common Law Duty Judge and was heard that day or an urgent basis. The plaintiff contended that the effect of the orders sought were to prevent stultification of the judicial review application about to be heard 3 business days later by Payne JA.

4. NCAT had ordered the plaintiff to pay $500,000 to the first defendant in relation to its claim for defective building work carried out by the plaintiff. His subsequent appeal was unsuccessful, with the Appeal Panel refusing the plaintiff leave to appeal and otherwise dismissing the appeal. As a step in enforcing the NCAT judgment the first defendant lodged a writ for levy on the plaintiff’s former matrimonial home at 194 Edgar Street, Condell Park (the Property).

5. The writ on the Property was obtained by the first defendant on 28 January 2025 following the plaintiff’s filing of summons in this Court seeking judicial review of the decision of the Appeal Panel. The Property was then the subject of consent orders in proceedings in the Federal Circuit and Family Court of Australia (the Family Court) between the plaintiff and his former wife which required the plaintiff to transfer his share of the home to his former wife who would then refinance the home and transfer a sum of money to him. The evidence provided to the Family Court which led to the making of the consent orders included schedules of the plaintiff’s assets and liabilities but failed to make any reference to the judgment debt of $500,000 owed to the first defendant.

6. The relief sought by the plaintiff before me on 28 August 2025 had the effect of allowing the Family Court consent orders to proceed so that the Property could be transferred, the plaintiff’s former wife and son could become the registered proprietors, they could proceed with a refinance and the funds from that process could be distributed between the plaintiff and his former wife. The orders sought by the plaintiff and the undertakings that were attached to the proposed orders were intended to provide security to the first defendant for the majority of the judgment debt. The orders made on 28 August 2025 were as follows:

(1) Enforcement of the orders and judgment of the Appeal Panel, NSW Civil and Administrative Tribunal, dated 17 December 2024 in cases 2024/220171 is stayed until the determination of the proceedings before this Court or further order of the Court.

(2) Pursuant to s 135(2) of the Civil Procedure Act 2005 (NSW), the Registrar-General of New South Wales to cancel all recordings of the Writ of Property issued by the District Court of New South Wales in proceedings 2025/11197 on 28 January 2025, including, without limitation, the recordings made pursuant to dealing AV83846.

(3) The defendant to pay the plaintiff’s costs of the Notice of Motion dated 15 August 2025.

The Court notes:

(4) Within the evidence before the Court at the hearing on 28 August 2025 of the Notice of Motion dated 15 August 2025 was an email from the solicitors for Wafaa Abdallah and Markos Abdallah providing signed inter partes undertakings by their clients in relation to the property located at 194 Edgar Street, Condell Park NSW.

7. The plaintiff undertook to deposit the funds resulting from the transfer into the trust account of his solicitors. The plaintiff’s former spouse and son made undertakings upon the removal of the writ from the property not to transfer, further encumber or deal with the property.

8. On 30 October 2025 his Honour Payne JA handed down judgment in Abdallah v Paco Nominees Pty Ltd [2025] NSWSC 1267, dismissing the plaintiff’s judicial review application and making the following orders:

(1) Leave to appeal on grounds 1, 2 and 4 refused.

(2) Appeal dismissed.

(3) Plaintiff to pay the defendant’s costs.

(4) The funds the subject of the undertaking to the orders of 28 August 2025 held in the trust account of the plaintiff's solicitors in these proceedings, Aquinas More Lawyers, not be distributed without further order of the court.

(5) Leave granted to the defendant, after a period of 7 days from the date of these orders, to apply to the chambers of Payne JA by email (copied to the plaintiff’s lawyers) for an order releasing the funds referred to in order 4.

9. The first defendant then contacted the chambers of Payne JA to seek a direction for the release of the funds the subject of order (4). Before that order was made the plaintiff became bankrupt by way of a debtor’s petition. The plaintiff’s trustee in bankruptcy was then joined in these proceedings as the second defendant. The second defendant contends that those funds are “property of the bankrupt” such that they vest forthwith in the trustee pursuant to s 58 of the Bankruptcy Act 1966 (Cth).

10. The position of the first defendant is that the event of the plaintiff’s bankruptcy necessitates the clarification of the orders made on 28 August 2025 in order to give them their true effect by the application of the slip rule, that they be corrected by the deletion of the costs order made and insertion of a further order in the following terms or to the effect of:

“a. Order that as a condition of the granting of orders 1 and 2 that the Plaintiff is to provide security in favour of the Defendant (and as security for the Defendant’s judgment debt). Such security being in the form of the balance of funds referred to in Order 4 of the orders made by the Federal Circuit and Family Court of Australia on 2 June 2025 in proceedings (P)PAC2094/2025, and following any deduction for the plaintiff’s reasonable legal costs in these proceedings up to a limit of $20,000 from such amount.

…”

Legislation

11. Rule 36.17 of the UCPR provides as follows:

If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.

The first defendant’s submissions

12. The first defendant submits that that the only way the orders made on 28 August 2025 could possibly be read was that the funds which were to be obtained from the transfer (excluding the carve-out for legal fees) were to be held on trust for the benefit of the first defendant, having regard to the reasons for judgment and the transcript of the proceedings. Assuming success on appeal, those funds would be the property of the first defendant without any further need for enforcement or any other mechanism for the release of those funds.

13. The first defendant repeated that submission in different terms by contending that the objective intention of the Court was that the “price” the plaintiff was to pay for the granting of the stay and the removal of the writ was that the plaintiff was to give security for its judgment debt to the benefit of the first defendant, such security crystallising upon the outcome of the judicial review application. The orders made on 28 August 2025 were not intended to disturb the priority the first defendant contends it enjoyed with respect to the funds paid into the trust account held by the plaintiff’s solicitor.

14. The first defendant submits that the natural and ordinary meaning of “correction” in r 36.17 extends to the amendments of an order with unforeseen or unintended legal consequences: citing Newmon**t Yandal Operations Pty Ltd v J Aron Corporation (2007) 70 NSWLR 411; [2007] NSWCA 195 (Newmont Yandal).

15. The first defendant relied on a passage from Kalifair Pty Limited v Digi*-tech* (Australia) Pty Limited (2002) 55 NSWLR 737; [2002] NSWCA 383 at [28] (per Handley, Sheller and Ipp JJA) (Kalifair) in support of the contention that the Court’s intention had to be that the first defendant was given security over the funds:

“A successful party is prima facie entitled to the fruits of his judgment. He is entitled to be protected, as far as practicable, from the risk that if the appeal fails assets which earlier were available to satisfy the judgment will no longer be available for that purpose. The Court will endeavour to see that a stay does not cause that kind of prejudice to a judgment creditor. An appellant may be required to provide appropriate security as the price of a stay which may make the judgment creditor a secured creditor. Otherwise a requirement for security is only intended to protect the status quo, that is the existing value of the judgment and not to improve the position of the judgment creditor by increasing that value.”

16. The first defendant submitted that the proper way of viewing the orders made was that the first defendant became a secured creditor who would not have to take additional steps to access the funds paid into the trust account in the event the appeal was not successful. The fact that the Court allowed the funds to remain in the plaintiff’s solicitor’s trust account should not be allowed to diminish the fact that the intention of the Court was that those funds were security for the first defendant’s judgment debt and that the funds were not the property of the plaintiff. That would be inconsistent with the priority accorded to the first defendant’s writ pursuant to r 39.15 of the UCPR which cannot be restored but can be reflected in the amendment of the orders presently applied for.

17. It was submitted that if the Court did not in fact have in mind that the surplus funds resulting from the Property transfer were to be the property of the first defendant (assuming the judgment debt survived the appeal) then the Court would have to had objectively manifested a desire to (a) remove any priority enjoyed by the first defendant on an interlocutory basis and (b) treat the first defendant as having no right to the funds to be held on trust. The first defendant submits that this could not have been the intention of the Court.

The second defendant’s submissions

18. The second defendant was only joined as a party to these proceedings on 13 November 2025. He was not involved in the hearing on 28 August 2025.

19. It is the position of the second defendant that the orders in the form sought in the notice of motion do not create a security over the funds nor do the orders sought have any utility even if they were made, because the first defendant would not be a secured creditor within the meaning of s 5 of the Bankruptcy Act and the orders would have no ultimate effect.

20. The second defendant submits that the slip rule does not confer a power to supplement final orders by making substantive alterations to determine points that were not argued, considered or decided at the hearing. The second defendant cites D’Angola v Rio Pioneer Gravel Co. Pty. Ltd. & Anor [1977] 2 NSWLR 227 as support for the proposition that it is only if the judgment entered fails to express the real intention of the Court that those orders can be amended.

21. The second defendant submits that the concern of the Court in making the orders on 28 August 2025 was clearly to maintain the status of quo until determination of rights and to put in place a mechanism to preserve assets formerly subject to the writ so they could not be dissipated. Neither the judgment entered nor the writ registered by the first defendant gave it any better security than what was ordered by way of asset preservation undertakings pursuant to the orders.

22. The real intention of the Court was achieved by creating a form of security in the way of preservation of the funds by the undertakings. No mortgage, charge, lien or declaration of trust was contemplated in the judgment given or apparently sought, meaning that the proposed new order has no practical utility since s 5 of the Bankruptcy Act limits the definition of a secured creditor to the holder of those interests in land only.

23. The second defendant submits that what the first defendant is attempting to do is create a new form of security that did not exist even prior to the removal of the writ. In circumstances where the writ is not a security itself and did not create a security, even if it remained registered, upon the appointment of the Trustee the first defendant would not only have been prevented from taking any steps to execute the writ, but would have been required to disgorge funds received as a result of any execution in the 6 months prior: s 118 Bankruptcy Act.

24. The second defendant submits that the first defendant is not a secured creditor as defined by the Bankruptcy Act even if the order sought is to the effect that the fund itself is somehow security (as opposed to being secured property). Ultimately, the orders would have no utility or practical effect. Instead, funds held in the trust account of the plaintiff’s solicitor are presently available to creditors of the Bankrupt’s estate for distribution under the Bankruptcy Act and should continue to be.

Consideration

25. It is the objective intention of the Court that is determinative of an application under the slip rule. That objective intention is to be discerned from the words of the judgment: Newmont Yandal at [91], [95], [102], [185] and [194].

26. In the judgment of 28 August 2025 I said [T 5] “Next the Court has to consider, as a condition of the stay, requiring payment of the whole or part of any judgment sum or the provision of security” identifying the relevant principle. The judgment then stated “Here the plaintiff argues that the orders sought and the undertakings that are attached to the proposed orders provide sufficient security to the defendant for the majority of the judgment debt”.

27. In order to properly understand the references in the judgment and the objective intention of the Court it is appropriate to consider the submissions made on 28 August 2025 by the plaintiff on the issue of security to the defendant.

28. Relevant references to the plaintiff’s submissions include:

(a) the proposed regime was “appropriate [sic] preserve the defendant’s reasonable interests” [PWS [1]]; (b) “transferred funds (less an amount for legal costs, whether $60,000 or such other amount the Court considers appropriate) will be preserved, pending the outcome of the proceedings in this Court” [PWS [6]]; (c) citing Payne JA in Port Macquarie Hastings Council v Diveva Pty Ltd t/a Midcoast Road Services [2017] NSWCA 4 (at [29]) (Port Macquarie Hastings Council), that: “As a condition of a stay the Court may require payment of the whole or part of the judgment sum or the provision of security”; (d) “the $460,000 [sic] is held on trust” [POS at T 6.46]; (e) “if the Court accepts those undertakings to provide security” [POS at T 6.48]; (f) “might then make an ex temp judgment and done a judgment within a week or two, or a month. That money would then be available to pay a very large portion, about 60 or 70% if not more, I think, of the judgment debt.” [POS at T 8.36]; (g) “Or alternatively it may be that the defendant no longer presses the Family Court proceedings, they take that money which is held on trust if they win the appeal, which would be 440-odd thousand, and then in terms of the remainder of the amount up to 500 - and of course, there’s costs as well, which are not the subject of protection - that then they may take alternative means for garnishee and so forth.” [POS at T 28.30]; (h) “Your Honour, then (f) is, “As a condition of the stay may require payment of the whole or part as security,” well, effectively that’s what the undertakings seek to do.” [POS at T 29.19]; (i) “but the gist is, and my friend will address this, that one point is that they required $600,000, and so they wanted some security not just for what was the best case in terms of the judgment debt at the time, but also, it would appear, for their costs.” [POS at T 29.35]; (j) “One would rely upon my instructing solicitor as an officer of the Court with obligations to the Court which would bear out very poorly for him if he didn’t preserve trust property. Just as, that my friend would treat that as being effectively safe money.” [POS at T 29.44]; (k) “I would have thought the arrangements we propose actually are very favourable because they put cash available for vast majority of the judgment debt.” [POS at T 34.2]; (l) “Well, if my friend wins on Tuesday, then my friend has available $440,000 [sic] of the $500,000 debt.” [POS at T 35.5] (m) “They can either take the $440,000, try to then enforce against the husband for the rest.” [POS at T 35.45]; (n) “Then the question becomes if there is no then recourse against the family property because of the arrangements that are in place or a problem with the security in place, how do they have recourse against that? So my first answer is it’s part of a balancing act, because they’re already getting at least $440,000 [sic]. Now, that’s not a complete answer, but that’s part of the mix.” [POS at T 49.11].

29. The application of the slip rule extends beyond the correction of a clerical mistakes. The corrections of errors arising from an accidental slip or omission in a judgment is specifically contemplated in r 36.17. I accept that the natural and ordinary meaning of “correction” extends to the amendments of an order with unforeseen or unintended legal consequences: citing Newmont Yandal*.*

30. The objective intention of the Court, as revealed in above passages from the judgment and the acceptance of the principle in Kalifair and Port Macquarie Hastings Council was that the Court intended that the funds to be paid into the trust account were security for the first defendant’s judgment debt in accordance with such a principle.

31. The failure of the orders made to reflect that objective intention were an accidental slip or omission in the judgment, which arose in part from the fact that the application was heard on an a urgent basis in a busy duty list requiring the delivery of an ex temporised judgment.

32. The second defendant’s submissions concerning the operation of the Bankruptcy Act and that the first defendant would not become a secured creditor in the bankruptcy do not assist. The objective intention of the Court on 28 August 2025 could not be rationally affected by the subsequent event of the plaintiff’s bankruptcy or its subsequent legal consequences. Those legal consequences are to be determine by another court at a later time and are not relevant to the slip rule application.

33. The correction to be corrected in this case is not a supplemental substantive alteration to accommodate an issue which was not argued, considered or decided at the hearing. The passages referred to above establish that the issue was argued at length by the plaintiff and considered in the judgment.

34. I am satisfied that the judgment entered fails to express the real intention of the Court and that the orders must be amended to correct that error.

35. In addition, the orders as entered contain a clerical error relating to the issue of costs. That clerical error arose because after I had made a costs order the parties provided short minutes of order which contained a reference to another, inconsistent, order. That other inconsistent order was not brought to the Court’s attention and appears to have been included in the short minutes through an error of the parties. The correct order was entered as well as the an order in terms of the short minutes. As a result the other inconsistent costs order was also entered.

Orders

36. I make the following orders:

37. Pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), the orders of 28 August 2025 made by McGuire J be corrected by the deletion of the portion of those orders that reads “3. The defendant to pay the plaintiff's costs of the notice of motion dated 15 August 2025”;

38. Pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), the orders of 28 August 2025 made by McGuire J be corrected by the insertion of a further order in the following terms:

(a) Order that as a condition of the granting of orders 1 and 2 that the plaintiff is to provide security in favour of the defendant (and as security for the defendant’s judgment debt). Such security being charged in favour of the defendant in the form of the balance of the funds referred to in order 4 of the orders made by the Federal Circuit and Family Court of Australia on 2 June 2025 in proceedings (P)PAC2094/2025, and following any deduction for the plaintiff's reasonable legal costs in these proceedings up to a limit of $20,000 from such amount; and (b) Such security is to be immediately released to the defendant upon the plaintiff's summons seeking leave to appeal filed 14 January 2025 being dismissed.

3. The second defendant pay the first defendant's costs of the notice of motion filed 14 November 2025.

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