Al Dakhili v Al Kheurallah - [2023] NSWSC 47 - NSWSC 2023 case summary — Zoe

NSWNSWSC

Al Dakhili v Al Kheurallah

[2023] NSWSC 47

Supreme Court of NSW|2023-02-02|Before: Meek J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2023-02-02

Before

Meek J

Catchwords

57 ER 239 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
[2009] HCA 27 ANZ v Mio Amico Pty Ltd [2013] NSWSC 716 Australian Hardboards Ltd v Hudson Investment Group Limited (2007) 70 NSWLR 201
[2002] HCA 5 Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124

Source

Original judgment source is linked above.

Catchwords

57 ER 239 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175[2009] HCA 27 ANZ v Mio Amico Pty Ltd [2013] NSWSC 716 Australian Hardboards Ltd v Hudson Investment Group Limited (2007) 70 NSWLR 201[2002] HCA 5 Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124

Judgment (39 paragraphs)

[1]

raise any estoppel argument in the event that a subsequent claim was made by the first defendant under the deed Legislation Cited: Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW) Corporations Act 2001 (Cth) Migration Act 1958 (Cth) Real Property Act 1900 (NSW) Retail Leases Act 1994 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Adderley v Dixon (1824) 1 Sim & St 607; 57 ER 239 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 ANZ v Mio Amico Pty Ltd [2013] NSWSC 716 Australian Hardboards Ltd v Hudson Investment Group Limited (2007) 70 NSWLR 201; [2007] NSWCA 104 Bauskis v Liew [2013] NSWCA 297 Cong v Shen (No 3) [2021] NSWSC 947 Central Gold Coast Animal Care Facility Incorporated v Wyatt [2022] NSWSC 1373 Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438 D Capital 2 Pty Ltd v Western [2022] NSWSC 1064 Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 Ford-Hunt v Raghbri Singh [1973] 1 WLR 738 Hamod v State of New South Wales [2011] NSWCA 375 Horn v GA & RG Horn Pty Ltd [2022] NSWSC 1519 JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600 Khattar v Hills Shoppingtown Pty Ltd (subject to a Deed of Company Arrangement) [2022] NSWSC 363 Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536 Lady Naas v Westminster Bank Ltd [1940] AC 366 Neylon v Dickens [1987] 1 NZLR 402 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 Quadrant Visual Communications Ltd v Hutchison Telephone (UK) Ltd [1993] BCLC 442 Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] VSC 467 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124; [2003] WASCA 263 Turner v Bladin (1951) 82 CLR 463 Wardley Australia Ltd v McPharlin (1984) 3 BPR 9500 Willis & Bowring Mortgage Investment Ltd v Belramoul [2009] NSWSC 125 Xenos v Wickham (1866) LR 2 HL 296 Zhang v Zhang [2022] NSWSC 924 Texts Cited: Halsbury's Laws of Australia (online) Seddon, Nicholas, Seddon on Deeds (2nd ed, Federation Press, 2022) Young, Peter, Clyde Croft and Megan Smith, On Equity (2009, Thomson Reuters) Category: Principal judgment Parties: Najah Hasan Dakhal Al Dakhili (Plaintiff) Mohammad Al Kheurallah (in person) (First Defendant) Jawad Al Ghadheeb (Second Defendant) Scissors Style Barber Pty Ltd (Third Defendant) Representation: Counsel: M Klooster (Plaintiff) Self-represented (First Defendant)

[5]

Parties

The parties in the proceedings and some related parties had involvement in three barber shops at Blacktown, Hornsby and Carlingford.
Apart from the parties mentioned so far there are other persons or entities referred to in the evidence.
For convenience, and without any disrespect, I will refer to these other parties by reference to the names adopted in the form of deed of settlement between them, including in the case of individuals by reference to their first or given names.
The second defendant (Jawad) claims to have had some involvement in the Hornsby business.
The evidence refers to two other gentlemen, Hussain and Emad, and another company with a similar name to the third defendant, which company I will refer to as "Scissors 2".
Emad is known by various names but his other names are not necessary to recite for the purposes of the judgment. Emad was, on the plaintiff's case, a former partner in the Blacktown business: T 68.
The company Perpetual Trustees WA Limited is the landlord of the relevant shop premises in Hornsby in respect of the Hornsby business (Hornsby landlord). The Hornsby premises are in Westfield Hornsby, and I note that in some of the evidence, the landlord of the Hornsby premises is sometimes referred to as "Westfield".
There is reference to a company N&J Barbershop Pty Ltd being a company which Jawad and the plaintiff incorporated on 12 March 2021 for the purpose of taking over the Hornsby lease.
It is described in the evidence as the "Former Assignee".
At some point of time seemingly near the end of April 2022, Jawad and the plaintiff incorporated another entity KM Blacktown Pty Ltd (KMB) which they intend to be the new proposed assignee for the Hornsby lease, subject to the landlord's approval.
As will become apparent below, although the issues brought by the plaintiff in the proceedings focused on the Hornsby lease, there were simmering, but un-litigated issues regarding the barbershop business in Blacktown (Blacktown business), in respect of premises within Westpoint Blacktown (Blacktown premises) leased from QIC Ltd (Blacktown landlord).
Angela Johnston is a retail manager at Westpoint Blacktown, being relevantly an agent or representative of the Blacktown landlord.
Some material in the proceedings pointed to the fact that the Blacktown premises were a particular shop within Westpoint Blacktown and that some arrangements have been made for the plaintiff to receive a lease of another shop within Westpoint Blacktown.
I have deliberately described what I have just stated loosely in terms of "material" rather than as an evidentiary finding.
That is to reinforce the fact that in these proceedings, other than as is strictly necessary to address the plaintiff's claims for relief (specifically in respect of what I describe below as the resignation relief and share transfer relief), the simmering matters regarding issues in respect of the Blacktown business whilst providing some context for the defendant's resistance to the relief sought by the plaintiff in the proceedings, have not been litigated in the hearing before me.
I expressly do not make general findings in respect of the parties' rights regarding the Blacktown business.

[8]

Interpreter

The defendant was born in Kuwait.
On several pre-trial directions hearings, the defendant, who was then in detention, required the assistance of an NAATI accredited Iraqi-Arabic interpreter.
I addressed the principles regarding the use of interpreters in Zhang v Zhang [2022] NSWSC 924 (Zhang v Zhang). In particular, I noted at [132(1)-(10)] the following: (1) There are various statutory provisions and general law which inform and explain the use of interpreters for court proceedings. (2) Proceedings in the Supreme Court are to be conducted in English, subject to Div 3 Pt 31: r 31.57 UCPR; (see also Standard 2.1 'Recommended Standards for Courts' RNSWICT Publication). (3) By r 31.58(1) UCPR, if the Court is satisfied that a witness cannot understand and speak the English language sufficiently to enable the witness to understand, and to make an adequate reply to, questions that may be put to the witness, then the witness may give: (a) oral evidence in the other language that is interpreted into English by an interpreter in accordance with this Division, or (b) evidence by an affidavit or statement in English that has been sight translated to the witness by an interpreter in accordance with r 31.62 UCPR. (4) At common law, whether an interpreter should be used is a matter for the discretion of the trial judge. The discretion will generally be exercised according to an assessment of whether the party seeking the use of an interpreter would without such use be placed at an unfair disadvantage: Aslan v Shehadie [1998] NSWCA 19 at 4-5 citing Dairy Farmers Co-operative Milk Co Ltd v Acquilina (1963) 109 CLR 458 at 464; [1963] HCA 59; Adamopoulos v Olympic Airways SA (1991) 25 NSWLR 75 at 78, 81, 84 (Adamopoulos). (5) The Evidence Act provides that a witness may give evidence about a fact through an interpreter unless the witness can understand and speak the English language sufficiently to enable the witness to understand, and to make an adequate reply to, questions that may be put about the fact: s 30 Evidence Act. (6) It is not entirely clear whether s 30 Evidence Act modifies the common law position, by affecting the discretionary nature of the use of an interpreter or the matters relevant to the discretion: Aslan v Shehadie at 5. However, Div 3 Pt 31 applies subject to the provisions of the Evidence Act: r 31.64 UCPR. (7) The party calling a witness requiring an interpreter is responsible for engaging an interpreter who meets the standards and requirements imposed by Div 3 Pt 31: r 31.58(2) UCPR; see also Model Rule 1.4. (8) If the Court is satisfied that a party cannot understand and speak the English language sufficiently to enable the party to understand and participate in the proceedings, the Court must permit the party to use an interpreter who meets the standards and requirements imposed by this Division so as to communicate with the court (but for no other purpose): r 31.58(3) UCPR; see also Model Rule 1.6. (9) The provision of the rules in this respect follows the general law in that ordinarily in civil proceedings the parties must provide any interpreter required for the purpose of proceedings. That is in contrast with the position in criminal proceedings where, if an accused person or a witness called by the accused requires an interpreter, that is arranged by the Court: New South Wales Crime Commission v Nguyen [2018] NSWSC 1858 at [4] per McCallum J (as her Honour then was); Model Rule 1.5. (10) The Court's decision regarding permitting an interpreter is clearly made in the context of facilitating a fair trial: Adamopoulos at 80G-81A per Mahoney JA.
It seemed to me that for the purposes of ensuring a fair trial it was appropriate that the defendant have some degree of assistance with interpretation both on the application for adjournment and on the hearing itself.
I addressed the principles regarding who bears the responsibility concerning arrangements for interpreters in Zhang v Zhang at [120]-[173].
Ultimately, as was the case in Zhang v Zhang (see [116]), I did not need to make any determination as to directions regarding the engagement of an interpreter having regard to the fact that independent NAATI accredited interpreters, engaged by the plaintiff's solicitors, were made available to assist not merely the plaintiff but also the defendant and the Court, in interpreting for necessary purposes from time to time during the hearing.
On the first day of the hearing, Mr Ayres Zaki, a NAATI accredited Iraqi-Arabic interpreter, who had previously attended the Court on a number of directions hearings, was sworn in, and present in Court to assist the defendant and the Court with interpretation.
On the second day, another NAATI accredited interpreter, Ms Malak Hijazi, who could speak all different dialects of Arabic language including Iraqi (T 50), assisted with interpretation.
For the most part, the defendant addressed me in English and appeared able to comprehend English, in my estimation, relatively well.
Nonetheless, to ensure that there was no aspect of the matter that he could not fairly and properly understand, I indicated to him that he should avail himself as he needed of the assistance of the interpreter.
There were clearly occasions on which the defendant needed such assistance.

[9]

Unrepresented litigants

In a context, detailed below, the defendant in or by early December 2022 withdrew his instructions from his then legal representatives. From that point, up to and including the hearing, the defendant was self-represented.
The approach of the Court in assisting an unrepresented litigant is properly understood and considered in the context of the Court's obligation to ensure a fair trial according to law for all parties in the proceedings.
In Bauskis v Liew [2013] NSWCA 297, Gleeson JA (Beazley P - as her Excellency then was - and Barrett JA agreeing) addressed the question of the Court's duty to unrepresented litigants in the context of procedural fairness: at [66]-[70]. His Honour referred to the decision of Beazley JA (as her Excellency then was) in Hamod v State of New South Wales [2011] NSWCA 375 at [309]-[316].
In summary, essentially the following principles were indicated: 1. The Court's obligation is to give sufficient information to the self-represented litigant as to the practice and procedure of the Court to ensure that there is a fair trial to both parties, noting that the extent of information provided will vary depending on the circumstances of the case. 2. The duty of the trial judge in assisting the unrepresented litigant in this regard does not extend to advising the litigant as to how his rights should be exercised. 3. The trial judge must remain at all times an impartial adjudicator of the matter, measured against the touchstone of fairness.
As will appear from the transcript, I provided information to the defendant regarding the Court's processes explaining amongst other things the order in which the hearing would proceed, the purpose of opening the proceedings, addressing evidence and objections, rights in relation to cross-examination and the purpose of cross-examination as well as re-examination and broadly speaking the purpose of final submissions.
I emphasised to the defendant on a number of occasions that I was not permitted to advise him as to how his rights should be exercised
Essentially, in covering those topics, my explanations drew upon what I have previously addressed in Zhang v Zhang at [180]-[182].

[10]

Evidence

Evidence was led in respect of the application for adjournment and also on the main hearing.
On the application for the adjournment, the defendant tendered and relied upon a bundle of emails which were marked Exhibit D1 and read an affidavit of the plaintiff affirmed 12 May 2022.
Mr Klooster relied upon matters appearing from the Court record which I set out below.
I drew to the attention of the parties the fact that there was on the Court file an affidavit by Jonty Alexander Player Simmons (Simmons Affidavit), a solicitor employed by Melbourne Law Studio (MLS).
The affidavit was affirmed on 14 September 2022. It indicates that MLS was on the record for the defendant.
I pause to note that it is not entirely clear what the phrase "on the record" means. There is a notice of appointment of solicitor by the defendant. However, at no stage has any notice of appearance been filed for or on behalf of the defendant.
The affidavit appears to have been prepared in the context, which I refer to in more detail below, of explaining and apologising to the Court for what at that point of time had been delay by the defendant in meeting the timetable imposed by the Court.
I gave the parties an opportunity to consider whether either of them wished me to consider the affidavit. In particular, I gave an opportunity to the defendant to have the contents of the affidavit translated to him by the interpreter. I was subsequently informed by the interpreter that the defendant was agreeable for me to consider the affidavit and that he agreed with its contents.
On the hearing of the claims of final relief the plaintiff read and relied upon an affidavit of himself affirmed on 28 April 2022 and an exhibit to that affidavit NHA-1 (which became Exhibit P1). The plaintiff also initially relied upon two affidavits of Mr Shokouhi affirmed on 4 July 2022 and 19 January 2023 respectively.
The plaintiff also relied upon the Joint Statement of Agreed Facts and Issues in Dispute which had been signed by the solicitor for the plaintiff and the defendant on 19 January 2023 (Joint Statement) (Exhibit P2).
The defendant, prior to the luncheon adjournment on the first day, indicated he wished to rely upon some material.
The defendant without any notice during that lunch adjournment arranged for an email and two attached documents to be sent to my Chambers.
The two attachments were a letter dated 17 January 2023 from the Office of the New South Wales Legal Services Commissioner and a form of complaint.
On resumption after the luncheon adjournment, I indicated to those present in Court, including Mr Klooster, that such documents had been received.
I noted that, ordinarily, emails should not be sent to the Judge's Chambers without at least being copied to the other party in the matter and that, in the context of a hearing of the matter over which there is any dispute, emails should not be sent but rather if any party wishes to draw to the attention of the Court a matter, that should be formally done in open Court.
In this regard, I repeat what I stated in Central Gold Coast Animal Care Facility Incorporated v Wyatt [2022] NSWSC 1373 at [153]-[157] regarding email communications with Judges' Chambers: 153. Generally there should be no communication with a judge's chambers in relation to any matter before the Court without the consent of all other active parties to the proceedings: Tugrul v Tarrants Financial Consultants Pty Limited (in liquidation) [No 2] [2013] NSWSC 1971 at [3] per Kunc J. 154. The reasons for that and the circumstances in which communications are and are not permissible are addressed by his Honour at [19]-[22]: "19 Email has done away with what might be thought to have been the last practical barriers to quick and easy communication with a judge's chambers. There are many types of communication, including by email, with a judge's chambers which can assist the parties and the Court in achieving a just, cheap and quick resolution of proceedings (see s 56 of the Civil Procedure Act 2005 (NSW)). This can include the advance provision of material proposed to be relied upon in court. 20 However, the natural and well intentioned desire on the part of legal practitioners to send a communication to a judge's chambers copied to all the parties, which, at first blush, might appear to promote the efficient conduct of proceedings must always be subordinate to the cardinal consideration that the impartiality of the judge must never be compromised (in fact or appearance) by communications sent without either the knowledge or consent of all parties. As I have said in paragraph [17] above, sending such a communication with a disclosure of the other parties' lack of knowledge or lack of consent does not cure any impropriety. 21 As a practical matter, and consistently with the principles and rules to which I have referred, I summarise the position as follows. There should be no communication (written or oral) with a judge's chambers in connection with any proceedings before that judge without the prior knowledge and consent of all active parties to those proceedings. Particularly in relation to written communications, given the ubiquity and speed of emails, the precise terms of any proposed communication with a judge's chambers should be provided to the other parties for their consent. There are four exceptions to this: (1) trivial matters of practice, procedure or administration (e.g. the start time or location of a matter, or whether the judge is robing); (2) ex parte matters; (3) where the communication responds to one from the judge's chambers or is authorised by an existing order or direction (e.g. for the filing of material physically or electronically with a judge's associate); and (4) exceptional circumstances. 22 There are three other matters. First, any communication with a judge's chambers which falls into any of the categories set out in sub-paragraphs [21] (2), (3) and (4) above should expressly bring to the addressee associate's or tipstaff's attention the reason for the communication being sent without another parties' knowledge or consent. Second, where consent has been obtained, that fact should also be referred to in the communication. Third, all written communications with a judge's chambers in relation to proceedings should always be copied to the other parties." 155. Specifically, absent consent, it is not an appropriate way to apply for an adjournment to send an email to a judge's chambers email or to the Associate (even if copied to an opponent). Whilst a judge may treat that sort of communication as amounting to an application, there is no obligation on the judge to do so: Magjarraj v Asteron Life Limited [2010] NSWCA 207 per Hodgson JA at [5], Macfarlan JA at [7] agreeing (facsimile communications sent to primary judge). 156. A party cannot properly expect a judge to consider privately materials emailed to a judge's chambers on a contested application, afortiori where the responding party has not been included in some of the communications allegedly because material is "highly confidential". 157. Such a practice should not be engaged in. Notions of expediency however well-intentioned must, as noted by Kunc J, be subordinate to the cardinal consideration that the impartiality of the judge must never be compromised (in fact or appearance).
It is perhaps understandable that an unrepresented litigant might in the exigencies of a hearing, particularly in the context of an application seeking an adjournment where no evidence has been marshalled prior to making the application, seek to urgently provide material to the Court in a way which seems expedient to such litigant.
There is no presumption that everyone knows the law. However, ordinarily, ignorance of the law does not excuse its breach: e.g. Krahe v TCN Channel Nine Pty Ltd (1986) 4 NSWLR 536 at 546F per Hunt J.
The above-mentioned principles regarding the appropriate means of communication with judges are underpinned by considerations of justice not only being done but being seen to be done and by procedural fairness for all the parties in the matter.
The principles apply to all practitioners and litigants, including self-represented litigants.
In making that observation, it may be that a Judge in dealing with such a communication takes steps to explain the principles and their purpose to the matter to a self-represented litigant, in a way that would not ordinarily be necessary to explain by way of reminder to a legal practitioner.
The approach of the Court will self-evidently vary according to the particular circumstances of any different case.
Often, if there has been a transgression (especially a first-time instance) by a self-represented litigant of such principles, the matter can be addressed in a sensitive and low-key way to ensure the important principles regarding transparency and fairness are upheld whilst not embarrassing the litigant nor overly detracting from progression of the hearing.
In some instances (which was not this case), if a self-represented litigant repeatedly sends such impermissible communications to a Judge's chambers, despite having been made aware on prior occasions of such principles, the approach of the Court to the matter may well differ to what I have described immediately above.
The defendant sought to read an affidavit of the plaintiff affirmed 12 May 2022, which affidavit was read and relevantly marked as MFI-1 (it being an affidavit in the "main proceedings" discussed below).
The defendant indicated that those materials concluded his evidence.
During Mr Klooster's submissions, the defendant raised an issue regarding compliance with clause 3 of the deed (I will outline the details of the deed in more detail below). The defendant sought to reopen his case.
I permitted the defendant to reopen his case. Having regard to the time of day, I adjourned the matter to the following morning to enable further evidence to be adduced.
The following morning, the defendant tendered a photocopy of a cheque which became Exhibit D3 and a trust account receipt and text message which became Exhibit D4.
The plaintiff on the reopening read an affidavit of Mr Shokouhi affirmed 1 February 2023 (Shokouhi February Affidavit) and tendered an email from Angela Johnston and a copy of a tenant reconciliation statement (and invoice) (Exhibit P3).
The purpose of the tender was to demonstrate that the tenant reconciliation statement, which had been an annexure to the Shokouhi February Affidavit, had in fact been received from the landlord and to demonstrate that a payment made by the defendant to his solicitors of the sum of $32,000 on 4 November 2020 (Exhibit D3) had not (according to the plaintiff) been received by the Blacktown landlord until 11 November 2020.
The defendant sought to tender two documents comprising three emails to demonstrate that the plaintiff was renting premises in Westpoint Blacktown. I rejected the tender as the emails seemed to me to go beyond the limited purpose of reopening. The emails were marked MFI-2: T 54-55. Finally, during the course of submissions, the defendant asserted that a new lease had been obtained for one of the businesses in Blacktown.
The plaintiff had progressed the case on the basis that the Blacktown lease had not been granted: Joint Statement of Agreed Facts at paragraph 12. Mr Shokouhi had given evidence that the Blacktown shop's lease had expired on 30 November 2020 and that the landlord eventually took possession of the business: CB 77 [17].
The defendant sought to reopen again to tender a number of emails (dated 22 February 2021, 10 June 2021 and 22 June 2021) for the purpose of demonstrating that a new lease had been granted in respect of the Blacktown business. I rejected the tender and had the emails marked MFI-3: T 73. The materials did seem to suggest that some arrangements have been negotiated, and possibly consummated, for the plaintiff to lease premises at Westpoint Blacktown.
Mr Klooster objected to the material noting that it referred to a Shop 2011 rather than the shop which the landlord's tenant reconciliation statement demonstrated was the relevant Blacktown premises being Shop 2003A.
He submitted that whatever new lease had been granted, it was not for the Blacktown premises the subject of the deed. Further, he indicated that had the material been served in a timely fashion and in chief his client would have taken steps to attempt to meet the material and essentially would be unable to meet the material now noting that this was the final day of the hearing.
I rejected the material on the basis that there was prejudice to the plaintiff.

[12]

Hornsby lease

On 25 September 2018, Scissors 1 entered into a lease of shop premises at Hornsby Westfield (Hornsby premises) as lessee with the Hornsby landlord.
The lease was for a term of seven years commencing on 12 November 2018 and due to terminate on 11 November 2025.
The lease provides, inter alia, for the defendant to be a Guarantor of Scissors 1's obligations under the lease.
The lease was executed as a deed by the Hornsby landlord and also relevantly by Scissors 1 with each of the defendant and plaintiff signing the lease in their capacities as "Director/Secretary" pursuant to s 127 of the Corporations Act 2001 (Cth) (Corporations Act).
Further, the defendant signed the deed in his capacity as Guarantor with his signature being witnessed by Fatema Alam.
The lease contains provisions in respect of transfer of the lease (assignment).
Clauses 21.1 and 21.2 are in the following form: 21. TRANSFERS OF LEASE 21.1 The Lessee will not sub let. assign, share or part with possession of the Premises, and will not allow the Premises to be sub let, assigned, shared or put into possession of any other corporation or person and will not mortgage or charge this Lease or any estate or interest in it. However, the Lessee may transfer the whole of this Lease on the following conditions precedent: (a) the lessee has complied with the procedure set out in Section 41 of the Act: (b) the Lessee proves to the reasonable satisfaction of the Lessor that the proposed transferee has financial resources and retailing skills equal to or better than the Lessee; (c) the Lessee obtains the execution by the transferee and by the Lessee of a deed to which the lessor will be a party in such form as the Lessor reasonably approves and prepares and in which: (i) there are repealed by the transferee with the Lessor such of the Lessee's covenants contained in this Lease as are reasonably required by the Lessor; and (ii) there is an acknowledgment by the Lessee that the Lessee will not by any transfer or by the Lessor's consent to it be released from any of its obligations under the provisions of this Lease, except where pursuant to the Act the Lessee is released from liability; (d) the Lessee will pay the reasonable costs of the preparation, execution and stamping of the deed referred to in clause 21.1(c) and will give the Lessor a duly executed and stamped copy of such deed; (e) where the transferee is a corporation (except a corporation the voting shares of which are listed on the Australian Securities Exchange) the Lessee obtains the execution of a guarantee of the Lessee's covenants on terms reasonably acceptable to the Lessor by guarantors reasonably acceptable to the Lessor and delivers the guarantee to the Lessor: (f) the Lessee pays the Lessor's reasonable costs, charges and expenses of and incidental to any reasonably necessary enquiries which may be made by or on behalf of the Lessor as to the respectability, solvency, responsibility, stature, experience and capability of any proposed transferee; (g) the transferee gives to the Lessor or procures the Lessee to give to the Lessor where the Lessor so requires a Bank Guarantee or supplemental Bank Guarantee for such sum as the Lessor reasonably determines as security for the performance by the transferee of all the covenants obligations and provisions on the part of the Lessee contained in this Lease. The Bank Guarantee and supplemental Bank Guarantee (if any) will be held by the Lessor on the terms and conditions set out in clause 11.13. Where clause 11.13 has been struck out it will for the purposes or any transfer, be deemed to be incorporated in this Lease: and (h) the transferee pays to the Lessor one (1) months Minimum Rent then payable under this Lease in advance. If the date of transfer is not the first day of the Month then the one (1) months Minimum Rent will be for the period commencing on the first day of the Month immediately following the date or transfer and the provisions or clause 11 will be modified accordingly. Change in Ownership of Shares in Corporation 21.2 If the Lessee is a corporation (except a corporation whose voting shares are listed on the Australian Securities Exchange) and there is a proposed change in Control of the Lessee or any Holding Company of the Lessee at any time then: (a) the Lessee will so notify the Lessor; and (b) the Lessee must obtain the Lessor's approval (such approval not to be unreasonably withheld) to the proposed change; and (c) the Lessee must comply with the provisions of clause 21.1 (except for subclauses (c), (d) and (h)) as if the person or persons acquiring Control were transferees of the Lessee (but such change of Control shall not for the purposes of the Act be deemed to be an assignment of lease).
The reference to s 41 of the Act in clause 21.1 is a reference to the provisions of the Retail Leases Act 1994 (NSW).
In general terms, clause 21.1 deals with assignment where a new entity is to become the lessee. Clause 21.2 deals with a form of deemed assignment situation in which there is a change in the share structure or control of the lessee, in which case consent is required: T 23.

[13]

Dispute in main proceedings

The plaintiff, defendant, Jawad, Emad and Hussain had disputes regarding the three businesses.
On 29 June 2020, the plaintiff commenced the main proceedings against a number of defendants relating to partnership issues in respect of the three barbershop businesses: CB 12.
Relevantly, the defendant was the first named defendant and there were five other defendants including two companies: CB 12.
Subsequently the plaintiff filed a statement of claim in the main proceedings.
On 27 October 2020 (according to Mr Klooster's submissions), a notice of motion filed (at some earlier point of time) by the plaintiff seeking the appointment of receivers and managers to the Blacktown business was listed for hearing before Williams J: [2.3]. The deed refers to another application for "vacation" (possibly of that hearing but unidentified by the evidence): CB 20 Recital F. It is unnecessary to make specific findings of what was actually listed on that day.
On 28 October 2020, the parties reached an agreement to resolve the proceedings and on the same day the defendant, Hussain, the plaintiff, Jawad, Emad, Scissors 1 and Scissors 2 entered into the deed (described as a "Deed of Settlement and Release").
The proceedings did not conclude on that day and in fact the proceedings are still on foot, I was informed, pending the outcome of these proceedings: T 22.
On 4 November 2020, the defendant in the afternoon (on or around 4:09 PM) corresponded with his solicitor Firas Hammoudi of Circle Bridge Legal (CBL) regarding payment of a sum of $32,000 referred to in clause 3a of the deed (which was due to be made by 4 PM on 4 November 2020 to the landlord).
The defendant's communication by text indicated that he would seek to make a $20,000 payment on that day (it being the daily transfer limit for his bank) and at midnight arrange to transfer the remaining $12,000 or alternatively proposed to make a cheque payment to the CBL's bank account the following day.
Mr Hammoudi was in conference at the time and indicated that he would call the defendant back. The evidence does not disclose precisely what happened. However, on 4 November 2020, the defendant caused Bankwest to issue a bank cheque in the sum of $32,000 payable to CBL Law Practice Trust Account: Exhibit D3.
On 5 November 2020, CBL issued to the defendant a trust account receipt for the sum of $32,000 being "[o]n account of rent for the Blacktown shop".
On 11 November 2020, (according to the tenant reconciliation spreadsheet (Exhibit P3)) the landlord received the $32,000 sum. Again, whilst there is no express detail regarding preparation of the reconciliation statement, I infer from the statement that was the date that those monies were received.
At some point the defendant was incarcerated because of unrelated criminal proceedings. The evidence discloses differing dates as to when that occurred. It might have been as early as on or from 1 July 2020 - according to Exhibit D1. On the other hand, it might have occurred later on or about 17 December 2020: Simmons Affidavit at [8].
Whilst the precise dating is obviously important to the defendant, it is not necessary for me to make a specific finding as to precisely when incarceration occurred. I accept that the defendant was incarcerated from at least mid to late December 2020.
On 9 February 2021, OLG caused a payment of $50,000 to be made to the Blacktown landlord, being the payment referable to the provision in clause 3b of the deed: Shokouhi February Affidavit at [5].
On 3 February 2021, Angela Johnston provided Mr Shokouhi with the latest tenant reconciliation statement for the Blacktown shop and February invoice. The statement showed an amount due of $80,687.47 including a deferred component of $7,883.90. The amount immediately due and payable was $72,773.57: Exhibit P3.

[15]

Application for assignment of lease

On 28 October 2021, the plaintiff's solicitors sent to the Hornsby landlord a letter requesting their consent for an assignment of the Hornsby lease: CB 49.
The letter attached a directors' authority signed by the plaintiff and the defendant. The defendant's legal representatives were described in the document as being Abbas Jacob Lawyers Pty Ltd (AJL) with Abbas Jacob being described as the contact person: CB 51.
On 5 November 2021, Mr Shokouhi received a response from Indira Bundalo (Ms Bundalo), the Administration Manager of Westfield Hornsby.
The email outlined certain requirements for the Hornsby landlord to consent to the assignment of the lease and other matters which on the Hornsby landlord's part were considered necessary for assessment of the proposed assignee: CB 52-54.
The email attached two separate forms headed "Application for Consent to Assignment of Lease", one to be completed by each of the lessee and the proposed assignee: CB 55-60.
On 2 December 2021, Mr Shokouhi sent the plaintiff the forms to complete.
On 7 December 2021, Mr Shokouhi corresponded with the defendant's newly appointed solicitors AJL noting that the forms had been received and were being completed. The letter also addressed the issue of payment of the "Hornsby sum" under the deed.
The letter stated in part: Payment of the Hornsby Sum I confirm we hold approximately $50,000 in trust. I also spoke with the Third Defendant's wife who also told me that their former solicitor holds $20,000 in trust. In terms of the remaining $25,000, we note cl 13(e) of the Deed provided that it be paid to your client in 8 equal monthly instalments starting on 1 Jan 2021 (subject to consent to the assignment). Through earlier correspondence, we believe it was sufficiently demonstrated to you that your client's obdurate resistance to co-operating & approaching the Hornsby landlords in a mutually agreed way led to the extensive delays in this matter and no payment ever being made for Hornsby. Whilst our client reserves its right against your client for its clear repudiation of the terms of the Deed as it concerned the Hornsby shop, we are instructed to propose that the remaining $25,000 be paid within six (6) months from the date a Deed of Consent & Assignment of Lease is entered into between our client and the landlord ('Consent Date'). We note this proposal constitutes new terms under which our respective clients can agree to the payment of the $25,000 as the terms of the previous cl 13(e) were discharged by frustration as a a [sic] result of your client's refusal to co-operate from essentially 2 Jan 2021 when payments were no longer possible to be made in accordance with that agreed schedule (MacAndrew v Chapple 1866 LRD 1 CP 643). Please seek instructions and revert. Regards, Sina Shokouhi
On 17 December 2021, Mr Shokouhi emailed AJL requesting that the defendant sign the Application for Consent to Assignment form as a director of Scissors 1 (the current tenant). The letter noted that AJL should advise if they were unable to obtain the defendant's signature due to his incarceration in which case his attorney would need to sign.
The defendant's signature was not forthcoming.
Between 21 December 2021 and 25 February 2022 various requests were made for the defendant to sign: CB 66-72.
On 24 March 2022, there was a listing before this Court in the main proceedings.

[16]

Proceedings for specific performance

On 29 April 2022, these proceedings were commenced, with the plaintiff filing a summons naming the defendant as a party.
The plaintiff states that by the time of the commencement of these proceedings neither he nor his solicitors had received any correspondence from the defendant or his lawyers - relevantly in respect of signing the consent to assignment for the Hornsby lease.
In May 2022, in the main proceedings, the plaintiff obtained leave of the Court to issue subpoenas to the ANZ bank.
The basis for obtaining of leave is said to have been a concern over unauthorised transfers of funds from the business bank account of Scissors 1 controlled by the plaintiff and the defendant: CB 75 [7], 77 [16].
On 24 May 2022, the ANZ bank produced documentation. The documentation revealed a number of matters.
On 11 May 2022 a sum of $109,000 had been withdrawn (Mr Shokouhi says without authorisation) from Scissors 1's bank account to Scissors 2's bank account, Scissors 2 being an entity, according to Mr Shokouhi, controlled by the defendant: CB 75-76.
Mr Shokouhi indicates that the screenshot of a "related customer screen" shows three individuals who are authorised third parties to transact on the Scissors 2 bank account being the defendant, Maida Talib Al Khirallah and Sinin Al Khirallah, the Seventh and Eighth Defendants in the main proceedings: CB 76-77, 89.
On 11-13 May 2022, four payments totalling $56,660 were withdrawn from the Scissors 2 bank account and paid to Criminal Law Group (CLG): CB 76, 84-86.
On 17 May 2022, a payment of $8,000 was made to AJL: CB 76, 87.
Mr Shokouhi asserts that such payments were to lawyers engaged by the defendant. It appears to be a reasonable, and arguably irresistible, inference. The defendant did not object to the assertions made by Mr Shokouhi in the affidavit. Further, Mr Shokouhi was not cross-examined by the defendant.
On or after 24 May 2022, seemingly with the benefit of the materials produced by the ANZ bank, the plaintiff made a complaint to ANZ regarding the withdrawals.
In late May 2022 and early June 2022, it appears that the plaintiff was informed that without an order of the Court any freeze on the account would not be extended beyond a short period: CB 77-78.

[17]

Claim for specific performance and revised relief

The initial summons sought an order that the deed be specifically performed and that the defendant carry out certain steps necessary to assign the Hornsby lease referred to in clause 10 of the deed (assignment relief).
There were other consequential and ancillary orders sought.
On 5 July 2022, the plaintiff filed an amended summons which, apart from the assignment relief, also sought orders that the defendant resign as a director of Scissors 1 (resignation relief).
The catalyst for the amendment to the summons related to the alleged unauthorised taking of the sum of $109,000 from Scissors 1's bank account which, according to Mr Shokouhi, the plaintiff believes was done by the defendant or someone on his behalf: CB 77 [16].
On 7 December 2022, consequent upon an order I made on that occasion, the plaintiff filed a further amended summons naming Jawad and Scissors 1 as the second and third defendants respectively.
The summons also sought an order that the defendant transfer his shareholding in Scissors 1 (being 50 ordinary class shares) to the plaintiff (share transfer relief).
The assignment relief sought is that the defendant execute the following documents: 1. Application for Consent to Assignment of Lease - to be completed by the Lessee; 2. 01TL Land Registry form for assignment of lease; 3. A deed of assignment and consent of landlord form; and 4. A Client Authorisation form.
Further, the assignment relief sought includes an order that the defendant create a workspace via an electronic lodgement network operator (i.e. PEXA) to enable the registration of an assignment of lease.
As noted above, there was tendered a Joint Statement. I confirmed with the defendant during the hearing that he had in fact signed the Joint Statement.
The Joint Statement of Facts indicates that the defendant had recently agreed to sign the resolution of directors of Scissors 1, a resignation as a director and a share transfer form: paragraph 9(a).
As Mr Klooster opened the case initially, he indicated that he did not seek what I have described as the resignation relief.
However, following a brief adjournment to enable Mr Klooster to clarify with the defendant whether the defendant was still agreeable to signing the resolution of directors, resignation and share transfer forms, it was indicated to me that the defendant refused to sign those documents.
Accordingly, notwithstanding that part of the Joint Statement, Mr Klooster indicated that he would additionally seek the relief in paragraph 3 of the further amended summons.
Subsequently during the hearing, the defendant's position vacillated in relation to the resignation relief and share transfer relief.
Ultimately, I considered that the only safe course was to proceed on the basis that the defendant disputed that relief.
I did ask Mr Klooster, in light of the fact that clause 8 of the deed (which deals with signatories of bank accounts) appeared to be connected with clause 7, whether Mr Klooster sought to additionally seek specific performance of clause 8.
Initially he indicated that he would. However, subsequently, as I noted that it was not formally part of the relief and further amended summons, he sought to clarify the position.
As I understand it, if the plaintiff were to receive the resignation of the defendant as director of Scissors 1 and a transfer of the shares, the work that might be necessary to change signatories on the bank account could be separately attended to by the plaintiff without seeking that relief from the Court.
In that context, Mr Klooster indicated that he did not seek to specifically perform the obligation in clause 8 of the deed.

[18]

Directions listings

Relevant to the application for the adjournment were details of listings of the matter before the Court, who had appeared on those listings and what directions were made.
I note those relevant details below.
On 24 May 2022, the matter was listed for a first directions hearing. The defendant was given an opportunity until 7 June 2022 to serve evidence.
On about 10 June 2022, MLS was instructed by the defendant. Mr Simmons indicates that the defendant is not fluent in English, having arrived in Australia from Iraq on a protection Visa. The defendant was assisted by a niece who advised Mr Simmons that the defendant required an Iraqi-Arabic interpreter to provide comprehensive instructions.
On 20 June 2022, a notice of appointment of solicitor was filed with the Court by which the defendant appointed Ines Brcic (Ms Brcic) of MLS as his solicitor.
On 27 June 2022, the matter was listed on the second occasion this time before Registrar Walton. The defendant was given until 9 August to serve evidence.
Between approximately 1-8 August 2022, Mr Simmons made various attempts to contact the defendant and experienced difficulties with contact via JustCONNECT.
On 9 August 2022, Mr Simmons and a junior solicitor attended upon the defendant but were unable to obtain comprehensive instructions to support the drafting of documents to be filed with the Court on that date.
Mr Simmons indicates that part of the difficulties involved the fact that the interpreter was unable to attend the conference due to connectivity issues and the South Coast Correctional Facility had not provided all the documents they had sent for the defendant's attention.
On about 11 August 2022, Mr Simmons contacted OLG by way of email and advised them of the difficulties being confronted in obtaining comprehensive instructions.
On or about 12 August 2022, despite the above-mentioned communication, Mr Simmons states the plaintiff sought to have the matter listed for trial.
On or about 17 August 2022, the defendant's niece advised Mr Simmons that the defendant had successfully appealed his convictions.
On or about 18 August 2022, Mr Simmons wrote to the plaintiff's solicitors proposing a revised timetable.
Between 17-19 August 2022, the Court on behalf of Registrar Walton sent "multiple messages" through the messaging system on the Online Court to Mr Simmons. Mr Simmons indicates that he did not receive any message from the plaintiff's solicitor until seemingly about 22 August 2022.
On about 22 or 23 August 2022, the directions hearing which was listed was vacated.
On or about 25 August 2022, Mr Simmons had surgery and did not return to work until 5 September 2022.
Further, on or about 25 August 2022, MLG was advised by the defendant's niece that on or about 23 August 2022, the defendant, upon his release from incarceration at the South Coast Correctional Facility, was immediately taken into immigration detention by the Australian Border Force.
Mr Simmons indicates that the defendant's Visa, immediately following his convictions in 2018, had been cancelled on a "character ground" by a delegate authorised by the Federal Minister for Immigration, Citizenship and Multicultural Affairs (Minister). However, the Minister had not revoked the cancellation of the Visa.
On 31 August 2022, the matter was listed before the Registrar on a fourth occasion and there was a direction made for the defendant's solicitors to file an affidavit explaining delay by 14 September 2022.
On 14 September 2022, Mr Simmons affirmed his affidavit.
On 16 September 2022, the matter was listed before the Registrar on a fifth occasion and orders were made for the defendant to file evidence by 23 September 2022.
On or about 8 September 2022, Mr Simmons attended an AVL conference organised by the Villawood Detention Centre with the defendant alongside an accredited Iraqi-Arabic interpreter, counsel and Ms Brcic, the principal of MLS.
On 24 August 2022, the defendant was detained pursuant to s 189 of the Migration Act 1958 (Cth): Exhibit D1.
On 19 October 2022, the matter came back on the sixth occasion before Senior Deputy Registrar Hedge and was adjourned until 2 November 2022.
On 1 November 2022, the matter was listed on the seventh occasion and adjourned for another week until 10 November 2022.
On 9 November 2022 (the eighth listing), the matter was adjourned until 24 November 2022.
On 23 November 2022, the matter was set down for hearing before myself to commence on 1 February 2022, with an estimate of two days.

[19]

Pre-trial directions

On 7 December 2022, the matter was listed before me for pre-trial directions. At that stage the defendant was still in Villawood Detention Centre.
Mr E Vuu of counsel attended the listing. Mr Vuu was instructed by MLS. He informed me that his solicitors' instructions had been withdrawn by the defendant. He indicated that the matter had had a chequered history and believed that his instructing solicitors were the third set of solicitors (that had acted for the defendant).
Mr Klooster on that occasion noted that the matter had been before the Equity Registrar on numerous directions hearings and indicated that at some point a representative on behalf of the defendant had raised the prospect of or foreshadowed a cross-claim although no such cross-claim had ever eventuated.
I asked Mr Vuu whether he had appeared for the defendant at the time that the matter was listed for hearing. He indicated that he thought the solicitors had done so through the Online Court.
I further requested whether the defendant or anyone on his behalf had articulated what the "defence" was to the claim. Mr Klooster indicated that the plaintiff took the view that there was no defence and certainly that they had not been informed of any defence.
Mr Klooster noted that at the time there was mention of a cross-claim there was a suggestion by the then legal representative for the defendant that the deed signed did not have the authority to bind the defendant in these proceedings noting "but that is the only articulated defence, if one wants to call it a defence": T 4 (7 December 2022).
I raised on that occasion a question regarding parties and also whether clause 10 of the deed raised joint and several obligations or several obligations or a joint obligation.
I gave leave to the plaintiff to file and serve a further amended summons joining Jawad and Scissors 1 as second and third defendants respectively.
I directed that the further amended summons be served personally on the defendant by 9 December 2022 and that the matter be stood over to 16 December 2022 before me. Being mindful of the fact that the defendant was in the detention centre, I ordered that an AVL link be made available to him for that listing.
On 16 December 2022, the matter was listed. However, no interpreter was available and, accordingly, I stood the matter over further to 19 December 2022 with directions for another AVL link to be sent to the defendant.
On 19 December 2022, the matter was listed at 10 AM. My staff attempted to make contact with the detention centre via AVL for the defendant to appear that way. However, that had not been able to be achieved. Eventually, at approximately 10:45 AM, the defendant appeared on the AVL, and an Iraqi-Arabic interpreter was sworn in.
I attempted to understand what the issues were in relation to the plaintiff's claim. I informed the defendant through the interpreter (Mr Zaki) that the summons sought specific performance of certain obligations in the deed and that the plaintiff wanted the defendant's cooperation to do a number of things including consenting to the assignment of the lease, resigning as a director of Scissors 1 and transferring shares.
The defendant indicated that there was "[n]o problem" and appeared to indicate that he was "not objecting" to the relief being sought. In light of that, I gave the parties an opportunity to see if the matter could be resolved by signing appropriate forms although making it clear that I was not directing the defendant to do that.
I stood the matter over to 16 January 2023 to receive an update of the matter, noting that if the matter was able to be resolved orders could be made, and also noting that if the matter was not resolved, I would need to make orders on that day to finalise the preparation of the matter for hearing to commence on 1 February 2023.
On or about 26 December 2022, the defendant was released from the immigration detention: Exhibit D1.
On 27 December 2022, the defendant emailed Mr Shokouhi from his personal email address requesting the provision of documents for him to sign.
On 30 December 2022, the defendant emailed Mr Shokouhi referring to a request apparently made by email on 23 December 2022 for Mr Shokouhi to provide "the documents regarding the contracts for Hornsby Shop in order for me to progress": CB 102, 105.
I pause to note that the email did not assert any basis as to why the relief sought by the plaintiff should not be provided.
On 10 January 2023, the day following Mr Shokouhi's return from a Christmas New Year vacation, he emailed the defendant five documents being relevantly: Application for Consent to Assignment of Lease; Transfer of Lease 01TL form; resolution of directors; resignation of director and a share transfer form: CB 102, 106-113.
On 12 January 2023, Mr Shokouhi says he called the defendant as he had not heard from him and had a conversation to the following effect: 11 On Thursday, 12 January 2023, I called the First Defendant as I had not heard from him in relation to my email 2 days prior. During the phone call, we had a conversation to the following effect: Me: 'Hi Mohammad, I want to know if you received my email I sent on the 10th and whether you have any questions?' First Defendant: 'Yes I got your email, but I am not signing the document because I don't have to transfer the lease to another company. The contract only says I have to get out of the company' Me: 'No that's not correct. You have to co-operate so we can get the landlord's consent for an assignment of lease. My client wants to assign the lease to a different company that he controls with Jawad' First Defendant: 'No I am not signing for a new company. I will only resign as director' Me: 'You will be removed as director also. This is the effect of documents 3, 4 and 5 in my email. But you will still need to sign the assignment of lease application form because you are still a director of Scissor Style Barber and you have a duty to co-operate under the deed' First Defendant: 'No, I am not signing that document. I also want a contract to say Najah is not going to sue me or claim cost against me. Send me that contract and I will look at it otherwise I am going to explain everything to the Judge' Me: 'If you sign these documents, we will not have to go to a hearing for the substantive dispute and everyone will save lots of money and time' First Defendant: 'I don't care about the money. You either fix the documents or we go to Court' Me: 'Okay, well unfortunately we are not going to achieve anything here. We will tell the Court on this coming Monday that you refused to sign the documents'.
According to Mr Shokouhi's version of the conversation, which I accept, the defendant's objection to signing the documents is based on the fact that he asserts that the contract only says that he has to get out of the company but does not require him to transfer the lease to another company. The defendant apparently asserted that he would only resign as a director.
The conversation indicates that additionally the defendant wanted a "contract" to say that the plaintiff was not going to sue him or claim costs against him.
On 13 January 2023, my Chambers received an email from Mr Shokouhi noting that the defendant had been released from detention (said to be as of 27 December 2022 - though evidence tendered by the defendant suggests it was 26 December 2022).
Mr Shokouhi had spoken with the defendant the prior day and informed him of the upcoming pre-trial directions and would send him another email confirming the time and place of attendance.
On 16 January 2023, the matter was listed before me for directions. Mr Zaki was sworn in and he interpreted in the matter. I was informed that settlement negotiations had not progressed.
Accordingly, I made directions to finalise the matter for hearing including directions in relation to cooperation in respect of an agreed list of facts and issues (as noted above).
The orders included an opportunity, albeit brief, for the defendant to put on any affidavit evidence and to provide a list of affidavits intended to be relied upon by Thursday, 19 January 2023.
Other directions were made for lodging of objections, preparation of the court book and the provision of submissions and authorities. I stood the matter over for hearing and gave liberty to the parties to restore on two days' notice by email correspondence to my Associate.
On 19 January 2023, the defendant made a request to extend the time for evidence or more particularly under order 2 regarding the provision of notification of affidavits to be relied upon, such extension being requested up to and including 4 PM on 20 January 2023.
My Associate sent to the parties an email on my behalf noting that if there was consent to the extension of time that I would make such an order but if any extension was opposed would not make any variation unless there was a formal application to vary the order supported by appropriate evidence.
In the early evening of 19 January 2023, Mr Shokouhi informed my Associate that the plaintiff consented to the extension of time but reserved a right to reply and in respect of any "prejudice" that might arise in respect of material served in circumstances where the evidence closed.
I was provided with the plaintiff's materials as directed including an indication that Mr Shokouhi was waiting for the defendant, whom he described as receiving assistance from a family friend, before finalising the Joint Statement.
By 31 January 2023, the plaintiff had effectively complied with the Court's directions, but no materials had been received from the defendant, other than the Joint Statement.
On 31 January 2023, the defendant sent email correspondence to my Chambers requesting a further extension of time.
My Associate responded to the parties on my behalf indicating that unless there was any consent any application for extension would need to be made in open court.

[21]

Principles

The Court has statutory power to adjourn proceedings pursuant to s 66 of the Civil Procedure Act 2005 (NSW) (CPA).
The Court also has an incidental power to adjourn the hearing of any matter in appropriate circumstances.
The power of adjournment is to be exercised in accordance with the overriding purpose of the CPA and rules, to facilitate the just quick and cheap resolution of the real issues in the proceedings (s 56 CPA) and in accordance with the dictates of justice described in s 58 CPA.
For the purposes of determining what the dictates of justice are in a particular case, the Court must have regard to the provisions in ss 56 and 57 CPA and may have regard to the matters set out in s 58(2)(b) CPA to the extent which the Court considers them relevant.
The provisions of s 58(2)(b) CPA are as follows: (2) For the purpose of determining what are the dictates of justice in a particular case, the court- … (b) may have regard to the following matters to the extent to which it considers them relevant- (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
The principles discussed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 are often applied analogously to applications for adjournment: ANZ v Mio Amico Pty Ltd [2013] NSWSC 716 at [58] per Davies J.
In this respect, the Court considers not merely the interests of the parties to the immediate proceedings but also the effect on other litigants in the Court who are or may be prejudiced by adjournment applications necessitating further appointment of hearing dates which have already been fixed.
As was observed by Schmidt AJ in Willis & Bowring Mortgage Investment Ltd v Belramoul [2009] NSWSC 125 at [8], adjournment applications are frequently made, and it is not uncommon that they arise when there has been a change in legal representation. It is well-settled that whether an adjournment should be granted in such a situation depends upon what is just in the particular circumstances.

[22]

Basis for application

The essential basis for the defendant's application for an adjournment was to obtain legal representation and he indicated that he had insufficient time to do so.
Exhibit D1, being the bundle of emails which the defendant tendered, relevantly demonstrated that he had applied on 25 January 2023 to Progressive Legal Pty Ltd to seek assistance with the hearing and that on 31 January 2023 that firm declined to assist. The defendant additionally relied upon the affidavit of the plaintiff affirmed on 12 May 2022 (an affidavit previously used in the main proceedings in support of an application for injunctive relief).
The defendant drew my attention to short minutes of order dated 2 July 2020 signed apparently by number of solicitors on behalf of the parties. The orders were made by Lindsay J.
The solicitor's name was identified to me by Mr Klooster as being (on his instructions) Dickran Yakenian who was at the time working for the firm Legal Edge Australia and who appeared in Court on that day (2 July 2020): T 9.
The defendant asserted that at the time the short minutes of order were signed he was incarcerated. There was some vagueness in the defendant's assertion as to whether he had instructed the solicitor or not.
The defendant essentially indicated that Mr Yakenian was a lawyer from the firm representing the defendant regarding his criminal law matters and not a lawyer from the firm representing the defendant in relation to his business law matters.
The defendant indicated that, as at 1 July 2020 (the day before the short minutes of order were signed), whatever work was to be done by the criminal lawyers had been completed by that time.
I understood the defendant's assertion to be essentially that Mr Yakenian (a lawyer from the criminal law firm) had no authority to act for the defendant in relation to "business" matters and allegedly no authority to sign such short minutes of order on the defendant's behalf.
That is a serious allegation. However, Mr Klooster indicated for his part it was not necessary for me to resolve that issue as the claim for the relief in the proceedings did not rely upon that document.
Mr Klooster indicated that a lawyer, Sabir Amad being a representative of AJL, appeared before the Court on the first four listings (24 May 2022, 27 June 2022, 27 August 2022 and 31 August 2022) and thereafter a solicitor Ms Tremayne Symss from MLS appeared on the remaining occasions before the Registrars until MLS ceased to act on 6 December 2022: T 11.
I sought to confirm from the defendant whether he disputed that those two legal representatives had appeared on his behalf. He did not dispute that: T 12.
Mr Firas Hammoudi of the firm CBL appeared or acted for the defendant up to July 2020: T 14-15.
The defendant asserted that CBL or Mr Hammoudi had some documents since July 2020 which the defendant had wanted and that he had made a complaint about Mr Hammoudi: T 14-15.
I confirmed with the defendant that he agreed that apart from the evidence provided on the adjournment application on the first day of the hearing that from the commencement of the hearing up until then he had not provided any evidence to the Court in respect of the claims for relief: T 15.
I asked the defendant whether he agreed that at no stage since the proceedings had commenced had he or anyone representing him informed the Court of his defence to the claim up to the time of the hearing: T 15. His response was that he did not know "because I was in gaol": T 15.
I heard submissions from Mr Klooster and also the defendant. The defendant essentially submitted that he had only got out of the detention centre on 24 December 2022 (noting that is a little at odds with the date indicated above being 26 December). Further, as it was a holiday and the New Year he had not had time to obtain representation: T 17.
Further, he indicated that when he was in the correctional facility, his opportunity to speak with his lawyers was limited to ten minutes on the phone and one hour on a video call being one hour a week.
Mr Klooster had earlier recited the interlocutory history of the matter.
In particular, he drew my attention to the evidence of Mr Simmons to the effect that since the engagement of counsel in Sydney and being able to attend a further audio-visual conference with the defendant assisted by an interpreter, his office (MLS) had been able to obtain fulsome instructions: Simmons Affidavit at [48].

[23]

Reasons for refusal of adjournment

Having considered the evidence and heard the submissions I refused the application for adjournment. My essential reasons for refusing the application were as follows: 1. I accept that the defendant had had some communication difficulties with his solicitors during the time that he was incarcerated and in detention. 2. However, it appeared that the defendant had been represented on at least all occasions the matter had been before the Court, at least between 24 May 2022 up to and including 24 November 2022 when the matter was set down for hearing. 3. None of the directions that the Court had made (leaving aside the solicitor's affidavit explaining non-compliance for directions) had been complied with in terms of the defendant putting on substantive evidence addressing the relief sought by the plaintiff in the proceedings. 4. No defence had been indicated to the Court to the substantive claim for relief since the proceedings had been commenced (leaving aside reference to an issue in respect of clause 5 of the deed in the Joint Statement of Issues signed on 19 January 2023, which I will address below). 5. Albeit that the defendant had been released from detention on 26 December 2022 (or according to his assertion perhaps two days earlier on 24 December 2022) and that late December-early January was described by the defendant as a "holiday and New Year" period (T 17), it appears the first approach made by the defendant to obtain representation was on or about 25 January 2023, a week prior to the hearing. 6. The defendant seemingly provided fulsome instructions to Mr Simmons or some representatives at his firm at least by 15 September 2022 (or perhaps by 8 September 2022).
The defendant, to my mind, had sufficient opportunity to instruct lawyers of his choosing yet, for reasons that are not explained, at no stage prior to the commencement of the hearing had ever articulated an arguable defence to the claim (leaving aside the belated incorporation of a reference to an issue regarding clause 5 of the deed in the Joint Statement dated 19 January 2023).
In addition to the abovementioned considerations, I accept there would be some general prejudice in the form of delay to the plaintiff if the proceedings were to be adjourned.
Overall, having regard to the dictates of justice and the purpose of the CPA and rules to facilitate the just, quick and cheap resolution of the real issues in the proceedings, I refused the adjournment.

[25]

Issues

The Joint Statement of Issues in Exhibit P2 specifies five issues for the Court's consideration as follows: 1. Whether clauses 10 and 13, properly construed requires the First Defendant to sign the Assignment Documents. 2. Whether the First Defendant is in breach of clauses 10 and 13 of the Deed. 3. In the event the First Defendant is in breach of clauses 10 and 13 of the Deed, whether specific performance should be granted as a matter of discretion. 4. The First Defendant says that the Deed is unenforceable or should be set aside as the Plaintiff did not comply with Clause 5. 5. Whether the deed is binding and enforceable.
Mr Klooster, in his preliminary written submissions dated 27 January 2023 and on the first day at the hearing during submissions (T 41), framed the issues in a slightly different way, though not materially different from the above description.
Essentially the issues to be addressed are as follows: 1. Is there a binding agreement? 2. Is the deed unenforceable or should the deed be set aside by reason of alleged non-compliance with clause 5? 3. Do clauses 10 and 13 of the deed properly construed require the defendant to sign the assignment documents? 4. Is the defendant in breach of clauses 10 and 13 of the deed? 5. Does clause 7 of the deed require the defendant to resign from Scissors 1 and execute a share transfer? 6. Should specific performance be granted as a matter of discretion?
The principal issues with respect to the proceedings related to assignment of the lease in respect of the Hornsby business.
Although the defendant did not file any defence or cross-claim raising specific issues in relation to the Blacktown business, there were clearly simmering issues from the defendant's perspective in relation to the Blacktown business and lease which appeared to underpin his resistance to cooperation in respect of assignment of the Hornsby lease.
Such simmering issues were raised a number of times during the hearing as the defendant sought to explain his position in the case.
That is least in part understandable because, as will be noted below, the resignation relief and share transfer relief founded on clause 7 of the deed is contained in a part of the deed which deals with the Blacktown business and clause 7, at least in its terms, connects reference to the obligation of the defendant to resign from Scissors 1 and transfer shares to "timing" to payment of the Blacktown sum.

[26]

Operation of an order for specific performance

I was concerned towards the end of the hearing as to the mechanism of how an order for specific performance would work out in relation to un-litigated matters regarding the Blacktown business raised by the defendant.
Ordinarily, when an order is made for specific performance, the contract comes under the supervision of the Court: e.g., Peter Young, Clyde Croft and Megan Smith, On Equity (2009, Thomson Reuters) at 1103.
Since the Court takes control of the contract when ordering specific performance, supplemental orders can be made after a decree of specific performance: On Equity at 1103 citing Neylon v Dickens [1987] 1 NZLR 402 at 409 per Cooke P for the Court.
A decree for specific performance gives rights to both parties under the contract or deed: On Equity at 1103 citing JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600 at 603-604 per Hope JA (Glass and Mahoney JJA agreeing).
All parties are at liberty to apply to the Court for clarification about their rights under the contract and the working out of the specific performance order: On Equity at 1103 citing Turner v Bladin (1951) 82 CLR 463; Australian Hardboards Ltd v Hudson Investment Group Limited (2007) 70 NSWLR 201; [2007] NSWCA 104 (Australian Hardboards) at [77] per Campbell JA (Tobias JA agreeing).
When considering supplemental orders, it does not matter that the relevant facts arose after the decree for specific performance was made: On Equity at 1103 citing Ford-Hunt v Raghbri Singh [1973] 1 WLR 738; Australian Hardboards at [125].
Many specific performance cases may involve a single substantive hearing, and the making of orders which may be sufficient for the parties. Other cases may involve a single substantive hearing and a number of consequential listings in which the order is worked out.
Nonetheless, there may well be instances in which substantive issues arise between parties to a contract or deed and are debated by them even after a substantive hearing regarding specific performance in respect of only one or some of such issues.
Occasionally, there will be issues that might occur in connection with a contract or deed in which one or both of the parties following the hearing of a contested issue in a specific performance case raises another substantive issue, which, might be said to not, strictly speaking, arise under any reservation of liberty to apply or reservation of further consideration of the matter.
Australian Hardboards is an example of the sort of difficulties that can arise where parties may assert that (1) the initial specific performance proceedings or earlier proceedings were the occasion for dealing with issues regarding the contract or deed and (2) further applications are an abuse of process being contrary to the principle of avoiding multiplicity of proceedings.
Indeed, in Australian Hardboards (on an application for leave to appeal which application was heard concurrently with the appeal) there was an application to stay the proceedings on the basis that they were an abuse of process: at [6].
In Australian Hardboards, Campbell JA, with whom Tobias JA agreed, addressed the law in respect of multiplicity of proceedings, in particular within the realm of what is or may be properly covered by the reservation of liberty to apply and of further consideration: at [49] ff.
Young CJ in Eq, whilst noting little difficulty with Campbell JA's survey of the procedural law, dissented and addressed what he considered to be other key issues: at [90]-[93].
I adjourned the matter prior to the ordinary timing for the luncheon adjournment on the second day to enable consideration to be given to such issues: T 76.
Some possible solutions to address the simmering issues in relation to the Blacktown business and lease crossed my mind.
Some possibilities which occurred to me, and which on the resumption of the matter I mentioned to the parties, included making a general order for specific performance and giving particular directions for the carrying out of certain obligations and reserving consideration on further issues on the one hand or potentially making orders for separate determination of issues on the other hand.
Ultimately, I was not attracted to the notion of making orders for separate determination of issues as such orders often have the potentiality to create other issues and to fail to take into account latent issues not readily foreseen at the time of the making of the order.

[28]

Terms of the deed

The parties to the deed are as I have noted above.
The deed contains seven recitals A-G.
Recital A records that the defendant and plaintiff are directors and shareholders of Scissors 1.
Recitals B, C and D respectively address claims of the parties regarding each of the Blacktown business, the Carlingford business and the Hornsby business.
Recital E elaborates in respect of the issue regarding the Hornsby business.
Recital F refers to the main proceedings and the application to appoint receivers.
Recital G records an intention to resolve disputes on a "without admissions" basis but qualifies, in part, recital E.
For the purposes of these reasons, it is appropriate to set out the terms of recitals B, D, E and G: B. Najah claims that he is a partner in a partnership with Mohammad and Emad that runs the business of a barbershop in Blacktown (Blacktown Business), whereas Mohammad claims that Scissors 1 is a partnership with Emad, which partnership runs the aforementioned business. … D. Najah claims that Najah and Jawad both are partners in the business of a barbershop in Hornsby with Mohammad (Hornsby Business), whereas Mohammad claims that the aforementioned business is conducted solely by Scissors 1 and that Jawad has no interest in that business. E. Jawad claims that Najah and Mohammad promised Jawad a 50% interest in the Hornsby Business in consideration for the payment of certain monies towards the establishment of the Hornsby Business, whereas Mohammad disputes Jawad's claim while Najah admits Jawad's claim including that Jawad has a 50% interest in the Hornsby business. … G. Without admissions, other than the admission provided by Najah in Recital E (which admission is not binding or made on behalf of Scissors 1 or Mohammad), the Parties have agreed to resolve the Proceeding, including the Applications, and their disputes concerning the circumstances pertaining to the Proceeding, including the Applications.
In the operative part of the deed, clause 2 contains a definition of "claims".
Clauses 3-9 address provisions regarding the Blacktown business and are as follows: The Blacktown Business 3. Before 4pm on 4 November 2020: a. Mohammad or his agents or attorneys shall cause $32,000 to be paid to the landlord of the Blacktown Business, QIC Limited (Landlord); b. Emad and Najah or their agents or attorneys shall cause $50,000 to be paid to the Landlord. 4. Emad shall cause the outstanding balance for the rent of the Blacktown shop to be paid out of the takings of the Blacktown Business, so as to bring the balance of the outstanding rent up to date. 5. Mohammad, Emad, Najah and Scissors 1 are to cooperate and must take all necessary steps to obtain a new lease for the Blacktown shop in favour of Emad, Najah or their nominees. 6. On the condition that Emad or Najah or their nominees obtain a new lease for the Blacktown shop: a. Najah shall pay to Mohammad the sum of $115,000 (Blacktown Sum) in consideration for all of Mohammad's and Scissors 1's rights and interest in the Blacktown Business within 14 days from the date of the signing of or entering into the new lease; b. Najah must do all things necessary, including signing any agreement or issuing any letter evidencing his agreement to the release of the Blacktown Sum to Mohammad in accordance with clause 6(a) above; c. ln the first instance, theBlacktown [sic] Sum is to be paid, within 14 days from the date of this Deed, into the trust account of One Law Group (BSB 062 121 and account number 1111 6860 named One Law Group Pty Ltd Law Practice Trust Account), and is to remain in that trust account until agreement in writing between the parties for it to be released; d. The payment of the Blacktown Sum in accordance with clause 6(a) to Mohammad is to be made by payment into the trust account of Circle Bridge Legal with the following details: i. Account BSB: 062 424 ii. Account number: 1078 9675 iii. Account name: Circle Bridge Legal Law Practice Trust Account e. Najah and Emad shall change the name of the Blacktown Business from "Scissors Style Barber" (Business Name) on all of the signage (subject to obtaining the Landlord's consent) to be so changed within 14 days from the date of the obtaining of the new lease; f. Najah and Emad shall not use the Business Name thereafter. 7. Within 14 days from the date of the payment of the Blacktown Sum, Mohammad is to resign as director of Scissors 1 and is to transfer all of his shares in Scissors 1 to Najah or his nominee. 8. Within 21 days from the date of his resignation in accordance with clause 7 above, Mohammad shall, by his agents or attorneys, remove himself as signatory of all bank accounts operated in the name of Scissors 1. 9. Mohammad is to keep all monies in the account with BSB 062 339 and account number 1089 7707 and none of the Parties shall have any Claim in relation to that bank account upon the execution of this Deed.
Clauses 10-15 of the deed address the Hornsby business.
Clauses 10-15 are in the following terms: Hornsby Business 10. Mohammad, Jawad, Najah and Scissor 1 [sic] are to cooperate and must take all necessary steps to obtain the consent of the landlord under clause 21 of the lease 25 September 2018 and which bears registration number AN867550X (Hornsby Lease). 11. Najah and Jawad shall cause the outstanding balance for the rent of the Hornsby Business to be paid out of the takings of the Hornsby Business, so as to bring the balance of the outstanding rent up to date. 12. Najah, Mohammad and Scissor 1 [sic] must cause the monies in the ANZ Bank account with BSB 012 325 and account number 4185 67936 in the name of Scissors 1, the balance of which is $29,000 as at the date of this Deed, to be paid forthwith to to [sic] bring the balance of the outstanding rent up to date. 13. On the condition that Jawad or Najah or their nominees receive consent from the landlord under clause 21 of the Hornsby Lease, Mohammad agrees to receive a total of $95,000 (Hornsby Sum) in consideration for all of Mohammad's and Scissors 1's rights and interest in the Hornsby Business as follows: a. The Hornsby Sum is to be plaid [sic] into the trust account of Circle Bridge Legal with the following details: i. Account BSB: 062 424 ii. Account number: 1078 9675 iii. Account name: Circle Bridge Legal Law Practice Trust Account b. Najah must do all things necessary, including signing any agreement or issuing any letter evidencing his agreement to the release of the $50,000 of the Hornsby Sum to Mohammad within 7 days from the date of consent in accordance with clause 10; c. Jawad must do all things necessary, including signing any agreement or issuing any letter evidencing his agreement to the release of the $20,000 of the Hornsby Sum to Mohammad within 7 days from the date of consent in accordance with clause 10; d. In the first instance, the payments in accordance with 13(b) and (c) about shall, within 14 days from the date of this Deed, be made, respectively, into the trust account of One Law Group (as identified above) and New South Lawyers (New South Lawyers Law Practice Trust Account, BSB 112 879 and account number 424 089 424), and is to remain in that trust account until agreement in writing between the parties for it to be released; e. Subject to consent being provided in accordance with clause 10 Najah must pay to Mohammad the balance of the Hornsby Sum, namely the sum of $25,000 as follows: i. $3,125 by 1 January 2021; ii. $3,125 by 1 February 2021; iii. $3,125 by 1 March 2021; iv. $3,125 by 1 April 2021; v. $3,125 by 1 May 2021; vi. $3,125 by 1 June 2021; vii. $3,125 by 1 July 2021; and viii. $3,125 by 1 August 2021. 14. Jawad and Najah must indemnify and keep indemnified Mohammad in relation to the guarantee he has given in relation to the Hornsby Lease for any liability arising thereunder, provided such liability arose or accrued from the date of this Deed. 15. If Jawad or Najah fail to make any of the payments set out in clause 13 above strictly in accordance with that clause and: a. Mohammad, through his agents or attorneys, gives written notice by email to Najah (to the email najahaldakili@gmail.com) and Jawad (to the email ); b. and such failure is not rectified within 7 days of the dated [sic] of the notice (which shall be the date on the face of the email); then, c. The entirety of the remaining balance of the Hornsby Sum shall become immediately due and payable by Jawad and Najah [in accordance with their obligations as set out in clauses 13(b), 13(c) and 13(e) above (HANDWRITTEN ANNOTATION ADDITION TO THIS CLAUSE)].
Clause 16 records that the clauses relating to payment of the Blacktown sum and the Hornsby sum are essential terms of the deed.
Clause 17 addresses the Carlingford business.
Clause 18 provides mechanics of how the parties would resolve the Supreme Court proceedings including forms of consent orders.
Clauses 19 to 24, 27 and 28 of the deed set out certain releases between the parties, a covenant not to sue in relation to the subject matter of the releases and provide for the deed to be pleaded as a bar to any such claim or action in connection with the subject matter of the releases.
Clause 25 provides that Jawad and the plaintiff acknowledge and agree as part of the settlement that their respective interests in the Hornsby business are held by Jawad as to 50%, the plaintiff as to 25% and the defendant as to 25% but goes on to state that "such acknowledgement is not binding on Scissors 1 or [the defendant]".
Clause 26 provides that Jawad and the plaintiff acknowledge and agree that their respective interests in any future business operating from the Hornsby premises must be held by Jawad as to 51% and the plaintiff as to 49%.
There are other more general provisions in the deed being clauses 29 to 37 and 39 which deal with various matters including the governing law of the deed, a stipulation that the deed contains the whole agreement between the parties and severability.
Clause 34 deals with severability and is in the following terms: SEVERABILITY 34. If any provision of this Deed is unenforceable in accordance with its terms, other provisions which are self-sustaining and capable of separate enforcement with regard to the unenforceable provision, are and continue to be, enforceable in accordance with their terms.
Clauses 36 and 37 deal with counterparts of the deed (which is relevant because the deeds were signed in counterpart).
Clause 38 deals with various warranties as to capacity, representations and legal advice.
Annexed to the deed are forms of agreed consent orders which included provision for the proceedings to be dismissed with each of the parties to bear his or its own costs of and pertaining to the proceedings.
One counterpart of the deed was executed by the plaintiff and his signature was witnessed by Mr Shokouhi. Additionally, the plaintiff signed that counterpart in his capacity as a director of Scissors 1 and in accordance with s 127 Corporations Act: CB 28-29.
Another counterpart of the deed was executed by the defendant and witnessed by Firas Hammoudi, and that counterpart also included the defendant signing the deed in his capacity as a director/secretary in accordance with s 127 Corporations Act on behalf of each of Scissors 1 and Scissors 2.

[29]

Scheme of the deed provisions

Clearly, the context of the deed is that the parties were operating a number of businesses and fell into dispute.
The recitals indicate the nature of that dispute in broad terms (although not necessarily the details) and how it is that it was proposed to resolve it.
The deed in its operative provisions addresses what is to happen with each of the three businesses.
As is evident from the deed, more detailed provisions were made in relation to the Blacktown business and Hornsby business with only limited provisions being made in relation to the Carlingford business.
Broadly speaking, having regard to the recitals and the operative terms, it appears as a fair inference that the deed provides for disengagement between, in particular, the plaintiff and the defendant, so that they could sever their business and financial ties and go their separate ways.
The fact the deed contains releases relating to the conduct of each of the three businesses strongly supports that inference.
Each of clauses 20, 21 and 22 involve releases as between the plaintiff, the defendant and Scissors 1 in respect of the conduct of the business of Scissors 1.
Clause 21 is more extensive than the other two clauses and provides for the defendant to release the plaintiff, Emad and Scissors 1 in relation to all of his claims arising, relating to or connected with the claims in respect of the conduct of the three businesses.
Of some note is that each of those clauses provides for the releases to occur upon execution of the deed rather than upon satisfaction of obligations referred to in the deed.
There are particular releases in clauses 23 and 24 which are connected with satisfaction of the conditions in clauses 10 and 13 whereby Jawad and the defendant release each other in relation to claims in respect of the Hornsby business.
To address the construction issues in respect of clauses 7, 10 and 13, I sought to understand the commercial context.
Mr Klooster submitted that, with respect to the Blacktown business and Hornsby business, provisions of the deed allow for payments consequent upon (1) obtaining a new lease for the Blacktown shop (clause 6) and (2) consent to assignment of the Hornsby lease (clauses 10, 13): T 60.
Mr Klooster agreed with the proposition which I advanced (essentially for the purpose of testing the commercial context of the deed) when I asked whether he contended that the parties, in settling their differences in the way they did under the deed, attributed certain value to the businesses but also took the risk that no new lease would be obtained for the Blacktown premises and potentially no approval in respect of the Hornsby premises: T 60-61.
The fact that any grant of a new lease or approval in respect of assignment of a lease (in the case of both the Blacktown premises and the Hornsby premises) were in the hands of landlords which were not parties to the deed is understandable but also informs the nature of the benefits to be received and risks to be borne under the deed.

[30]

Issue 1 - Is the deed binding and enforceable?

Paragraph 4 in the Joint Statement of Facts (Exhibit P2) states that it is agreed that the deed is binding and enforceable.
Nonetheless, having regard to some vacillation in the defendant's position in respect of matters contained in that document, it is appropriate to consider this issue briefly.
Mr Klooster submitted that the Court should find that the deed is binding and enforceable for the following reasons.
First, that the Court has before it two duly executed counterpart deeds that have been signed by the plaintiff and the defendant.
Second, there is no evidence to suggest that each deed has not been properly executed and, accordingly, a binding contract has been entered into.
Third, there is no evidence to establish any positive defence (which has not been identified at any time by the defendant) that would permit the Court to set aside the deed.
I accept those submissions.
In New South Wales, a deed must be signed and sealed and attested by at least one witness was not a party to the deed: s 38(1) Conveyancing Act 1919 (NSW) (Conveyancing Act). It is not necessary to indent the deed: s 38(2) Conveyancing Act.
Delivery is also required by the common law for the formal execution of deeds: see e.g. Halsbury's Laws of Australia, 140 - Deeds and Other Instruments, Execution of Deeds (online) at [140-58].
Delivery occurs where there are acts or words sufficient to show that the party making the deed intends the deed to be presently binding on such party: Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124; [2003] WASCA 263 at [25] per Steytler J (McKechnie and Hasluck JJ agreeing).
Intention is ascertained by considering the nature and circumstances of the case: Wardley Australia Ltd v McPharlin (1984) 3 BPR 9500 (Wardley Australia) at 9503 per Rogers J (as his Honour then was) citing Lady Naas v Westminster Bank Ltd [1940] AC 366 at 399 per Lord Wright.
If all one knows about a document is that it purports on its face to have been signed sealed and delivered, then the fair inference in the absence of other evidence is that it is in fact a deed: Wardley Australia at 9503 citing Xenos v Wickham (1866) LR 2 HL 296 at 312 per Blackburn J (Pigott B agreeing) and 322 per Lord Cranworth.
In some cases, issues might arise as to whether the deed has been delivered unconditionally or in escrow. No such issue arises here.
In particular, clause 37 of the deed indicates that upon signing the deed the party who has signed it is immediately bound by its terms and shall remain so bound until all the parties have signed the deed, after which the deed shall bind all parties.
Whilst the defendant raised an issue as to whether he had signed or given authority for others to sign short minutes of order in the main proceedings, there was no suggestion by the defendant that he had not signed the deed.
I am satisfied the deed is binding.

[31]

Issue 2 - Is the deed unenforceable for failure to comply with clause 5?

Clause 5 of the deed provides that the defendant, Emad, the plaintiff and Scissors 1 are to cooperate and must take all necessary steps to obtain a new lease for the Blacktown shop in favour of Emad, the plaintiff or their nominees.
Although this matter has been raised as an issue in the Joint Statement of Issues in dispute, it is difficult to understand how it could be properly termed as a "real issue" in dispute between the parties: s 56 CPA.
As it has been raised by the parties, I address below this "issue" of whether the plaintiff had not co-operated or taken necessary steps to obtain a new lease in respect of the Blacktown premises or shop.
However, I note that despite a general connection between clauses 5 and 7 within the raft of seven clauses (3-9) dealing with the Blacktown business, whether the plaintiff has cooperated in obtaining a new lease (clause 5) is a different question from whether a new lease for the Blacktown shop was at any stage obtained or even now able to be obtained (clause 6) and the reasons for that.
That later question which focuses upon clause 6 is relevant to the question of payment of the Blacktown sum which in turn bears upon clause 7.
Dealing simply with clause 5, I note that one of the agreed facts is that the Blacktown lease was not granted: Joint Statement of Facts at paragraph 12.
The plaintiff's position is that the Blacktown business no longer exists, and that the Blacktown landlord did not offer a renewal of the lease for the Blacktown shop, which lease expired on 30 November 2020 and the Blacktown landlord eventually took possession of the "business" (premises): CB 77 [17].
I have already referred to the unconventional way in which questions regarding what happened with the Blacktown lease arose during the hearing.
I did not permit reopening as noted above.
The defendant did not prior to 19 January 2023, by cross-claim or any other appropriate document raise as an issue an assertion that the plaintiff had not co-operated or taken necessary steps to obtain a new lease in respect of the Blacktown premises or shop. He did not prior to the hearing adduce or attempt to lead any particular evidence in respect of such an issue.
If the defendant intended at the hearing of the matter to make out a case that the deed was unenforceable or should be set aside as a result of the plaintiff not complying with clause 5 of the deed, the defendant had an obligation not merely to raise that as an issue in the conventional way, but he also had the onus of adducing evidence in support such a defence. He did not do that.
The defendant was given the opportunity to cross-examine the plaintiff on the matter and did not do so.
I reject the assertion that the deed is unenforceable or should be set aside by reason of non-compliance with clause 5 of the deed.

[32]

Issue 3 - Do clauses 10 and 13 of the deed require the defendant to cooperate to assign the Hornsby lease?

The principles regarding construction with respect to agreements are set out in numerous cases. Mr Klooster drew my attention to the principles summarised by Sackar J in Khattar v Hills Shoppingtown Pty Ltd (subject to a Deed of Company Arrangement) [2022] NSWSC 363 at [23]-[33].
His Honour there stated: Legal Principles 23. There are a number of legal principles at play which both the plaintiff and the defendant have invoked throughout the course of these proceedings. I have briefly set out the relevant principles below. Construction 24. A commercial contract is to be construed by reference to the language used by the parties, the circumstances known to them and the commercial purpose or objects to be secured by the contract (Lepcanfin Pty Ltd v Lepfin Pty Ltd (2020) 102 NSWLR 627 at [80] per Bell P (Payne JA and McCallum JA agreeing) citing Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 ("Electricity Generation Corporation") at [35] and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [47] ). This is reflective of the objective approach to determining the rights and liabilities of parties to a contract involving "the meaning of the terms of a commercial contract [being] determined by what a reasonable businessperson would have understood those terms to mean" (Electricity Generation Corporation at [35]). 25. In de L'Isle v Knight [2021] NSWSC 809 ("de L'Isle v Knight"), Gleeson J discussed the principles governing the construction of commercial contracts as follows: 74. …An objective approach is to be adopted in determining the rights and liabilities of parties to a contract. The contract is to be construed by what a reasonable businessperson would understand it to mean. That requires consideration of the language used by the parties, the surrounding circumstances known to them, and the commercial purpose or objects to be secured by the contract: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; see also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]-[52]; Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392 at [51]; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [18] and [78]. 75. Regard can be had to the surrounding circumstances objectively known to the parties: Codelfa at 352 (Mason J). However, care must be exercised in considering evidence of negotiations between the parties. Evidence of negotiations is inadmissible for the purpose of construction insofar as it is no more than evidence of what the individual parties were subjectively trying to do when they negotiated the language of their agreement. Negotiations may be considered only to the extent that they identify mutually known facts which form part of the background to the transaction: Codelfa at 354. As Heydon and Crennan JJ said in Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26 at [98]: … evidence of pre-contractual negotiations between the parties is inadmissible for the purpose of drawing inferences about what the contract meant unless it demonstrates knowledge of "surrounding circumstances". (Citation omitted.) 26. Generally, the principles applicable to the construction of deeds do not differ from those applicable to the construction of simple contracts - see J D Heydon, Heydon on Contract (2019, Sydney, Thomson Reuters) at [8.70] citing Seddon v Senate (1810) 13 East 63; 104 ER 290 at 74 (East), 295 (ER) and Total Transport Corp v Arcadia Petroleum Ltd [1998] 1 Lloyd's Rep 351 at 362. Recitals 27. Traditionally, a different approach might be thought to exist for the interpretation of recitals in deeds as opposed to contracts which has been stated by Lord Esher MS in Ex parte Dawes; In re Moon (1886) 17 QBD 275 at 286: If the recitals are clear and the operative part is ambiguous, the recitals govern the construction. If the recitals are ambiguous, and the operative part is clear, the operative part must prevail. If both the recitals and the operative part are clear, but they are inconsistent with each other, the operative part is to be preferred. 28. More recently, Gleeson J summarised the proper approach to recitals in de L'Isle v Knight, where his Honour noted: 103. …is explained in Schwartz v Hadid [2013] NSWCA 89, where Meagher JA said at [80], referring to the analysis of Campbell JA in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [379]-[380]: As Campbell JA observes in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [379]-[380], although there is a common and longstanding practice of including recitals in an agreement, those recitals can be of various kinds including "statements of the factual background to the transaction, statements of the intention or object of the parties in entering the transaction, or statements that the parties (or one or other of them) have agreed to do or will do certain acts". Because that is so and because the task of a court is to interpret the particular document in dispute, statements that recitals should always be treated in some particular way when construing an agreement must "be treated with caution, and as subject to the context in which they were uttered". 104. Subsequently, in Lachlan v HP Mercantile Pty Ltd (2015) 89 NSWLR 198; [2015] NSWCA 130, the Court of Appeal (Bathurst CJ, Beazley P and McColl JA) said at [52]-[53]: 52. A recital is part of a deed or agreement, usually set out as a statement or series of statements prior to the operative part of the deed or agreement. It can serve a variety of functions, including providing the factual background to the transaction and stating the parties' intentions or object in entering into the transaction: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603. In that case, Campbell JA, in a detailed review of the authorities, examined the manner in which recitals may be used for the purposes of the construction of the deed or agreement in which they appeared. 53. As his Honour pointed out, at [380], although not part of the operative provisions of the deed or agreement, a recital may be used as an aid to construction. There is well-established authority that a recital can be used to construe a provision of a deed or agreement that is ambiguous. Relevantly for present purposes, his Honour further observed, at 380, that recent authorities supported the proposition: [380(4)]…that recitals can provide a means of proving background facts that are themselves legitimate aids to construction. They can be at the least an admission by the party to the deed of the truth of the matter stated, under the general law concerning evidence. (Citations omitted.) 105. If the language of a release is broader than indicated by a recital, then it should not be read down: Crossman v Sheahan [2016] NSWCA 200 at [235]-[236] (Ward JA, Payne JA agreeing); Chacmol Holdings Pty Ltd v Handberg [2005] FCAFC 40 at [91]-[92] ; Karam v ANZ Banking Group Ltd [2001] NSWSC 709 at [406] (appeal allowed on other issues: Australia and New Zealand Banking Group Ltd v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344 ). 29. In Onesteel Manufacturing Pty Ltd v Bluescope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1 at [63], Allsop P (with whom Macfarlan and Meagher JJ agreed) stated (original emphasis): The recitals to the agreement set out those aspects of the background that give explanation to the transaction. There may be other background facts, but the recitals reveal the background chosen by the parties by way of the identification of relevant context. The recitals can assist in interpretation of operative provisions, though they do not control the latter's operation when clear and unambiguous …". Surrounding Circumstances 30. The question of whether prior negotiations can be used in construing a commercial contract has been considered in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 ('Codelfa'), Cherry v Steele-Park (2017) 96 NSWLR 548 ('Cherry v Steele-Park') and Zoobury Pty Ltd v Cariste Pty Ltd [2022] NSWSC 18 ('Zoobury'). 31. In Codelfa at 352, Mason J discussed the limitations of using evidence of prior communications to construe a commercial contract: Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. 32. In Cherry v Steele-Park at 562 [60]-[65], Leeming JA discussed the principles in relation to using the evidence of surrounding circumstances in the process of construction, extracted below. [60] In some cases (and only where it is relevant - see below) construction is legitimately assisted by evidence of surrounding circumstances. An example is the point made by Gleeson CJ in International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3 at [8]: "[8]… This is a case in which the Court's general understanding of background and purpose is supplemented by specific information as to the genesis of the transaction. The Agreement has a history; and that history is part of the context in which the contract takes its meaning." (Footnote omitted) [61] Counsel for the appellants pointed to decisions in this court in which this had occurred. One instance may be seen in Lahoud v Lahoud [2009] ANZ ConvR 9-032; [2009] NSWSC 623 at [446], where Ward J (as her Honour then was) applied what had been said by Beazley JA (as her Honour then was) in Boreland: 446 In Boreland, Beazley JA treated (at [72]) the fact of a known and communicated desire of one party as a relevant objective fact. Here, I think what emerges from the evidence of the conversation between Victor and Joseph Lahoud on the morning of 6 February 2001 is that the provision for an audit was included in the Terms of Settlement in circumstances where Joseph Lahoud had expressed disbelief as to the profit attributed by his brother to the Cammeray project. The relevant objective fact is that the parties were seeking a mechanism by which any doubts or concerns by the parties as to the profit could be independently resolved. [62] Essentially the same reasoning was applied in Angas Securities Ltd. Sackville AJA, with whom McColl JA agreed, said at [112] that: "[112] … the correspondence between the parties evidencing the arrangement is an objective fact that formed part of the surrounding circumstances that can be taken into account in construing the Deed of Release." I made the same point at [16]-[21]. [63] The same distinction between the inadmissibility of one party's uncommunicated belief and the legitimacy of using a letter of offer as an aid to the construction of a release later entered into was made by Sackville AJA (with the agreement of Beazley P and White JA) in Taouk v Assure (NSW) Pty Ltd [2017] NSWCA 227 at [106]: "[106] The submissions made on Mr Taouk's behalf at times seemed to suggest that the surrounding circumstances that can be taken into account include the negotiations between the parties preceding execution of the Variation Deed, even if the negotiations reveal only the parties' subjective intentions. Clearly, however, it is only the objective circumstances known to both parties that can be considered in construing the Variation Deed." [64] In the present case, I regard the initial proposal in the email of 19 May 2014 as analogous with the evidence of the party's communicated desire contained in an undisputed conversation in Boreland, with the evidence of the conversation explaining the reasons for the audit mechanism in Lahoud v Lahoud , and with the letter of offer in Angas Securities Ltd. I am also conscious that the subsequent emails, especially insofar as they reflect the negotiating positions of the parties, are less clearly within this area of admissible evidence of objective surrounding circumstances. However, neither party submitted, either at trial or on appeal, that the correspondence between the solicitors should be treated differentially. Because ultimately nothing turns on this point for the purposes of this appeal, I take the matter no further. [65] It is true that this distinction, as repeatedly formulated in recent decisions of this court, might be thought to cut across two aspects of the objective surrounding circumstances which bear very different characters. On the one hand there is evidence as to the negotiating position of the parties; on the other there is evidence as to the objective background facts known to both of them. Lord Wilberforce drew the distinction in Prenn v Simonds [1971] 1 WLR 1381 at 1385: "… evidence of negotiations … ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the 'genesis' and objectively the 'aim' of the transaction." [66] This distinction was reviewed, but maintained, in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101; [2009] UKHL 38. But the resolution, at least in this country, is as stated by Mason J in Codelfa at 352: "Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable." That passage also well illustrates that although reference is made to "admissible" and "receivable", what is meant is the use of such evidence. 33. In Zoobury at [120]-[122], extracted below, Parker J explains the relevance of identifying a specific construction issue that necessitates referring to evidence of prior negotiations. [120] In support of this argument, counsel relied on the Court of Appeal decision in Cherry v Steele-Park (2017) 96 NSWLR 548. That case concerned the interpretation of a guarantee given by the directors of a company which was purchasing land. The guarantee was given as part of a variation agreement under which the time for completion was extended and the company was to make an additional payment on top of the purchase price under the original contract. The question was whether the guarantee covered the whole of the company's obligations or only the obligation to make the additional payment. [121] Correspondence between the parties in the course of negotiations suggested that the commercial purpose of the guarantee had been to secure the company's obligation to make the additional payment; this had been the only obligation mentioned in the correspondence. Counsel for the director guarantors sought to rely on the correspondence to support their argument on construction. White JA considered that the correspondence was inadmissible on the construction issue. But Leeming JA, with whom Gleeson JA agreed, held that it was, although in the end that did not overcome the language of the agreement, which was held to extend to all of the company's obligations. [122] In Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, Mason J referred to what he described as a "difficulty" with using evidence of prior negotiations to construe a commercial contract (at 352): Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. Analysis of Leeming JA's judgment shows that his Honour did not intend to cast any doubt on the principles stated by Mason J in this passage. At [66] the judgment actually quoted the first three sentences of the passage. In his reasoning at [60]-[67] Leeming JA pointed out that, consistently with those principles, in some circumstances a communication between the parties can itself be admissible as part of the matrix of fact where it shows the "aim" or "genesis" of the transaction; his Honour considered that the communications in question fell into this class (or at least the initial proposal did, and there was no argument that subsequent communications should be treated differently). There may be a question about how far the receipt of evidence of negotiations between the parties goes when it is said to be relevant because it discloses the "aim" or "genesis" of the ultimate contract. If the negotiations were oral, there may be a factual contest about what was said. Even where the negotiations were in writing, there may be an argument that it is necessary to refer to further matters of background, or earlier dealings between the parties, to put them into proper context. It might be thought that these are precisely the sort of collateral enquiries that the parol evidence was designed to exclude. But there was no need to consider this in Cherry (note, however, the comments at [67]). As will be seen, I have not found it necessary to do so in the present case either. As Leeming JA pointed out in Cherry at [89]-[90], where a party seeks to have evidence admitted as part of the matrix of fact for the purposes of construction, that party ought to be able, readily and precisely, to identify how that evidence bears on the construction issue. It follows that it is critical to identify what the construction issue is.
The rules that apply to the interpretation of deeds are the same as those which apply to contracts: Nicholas Seddon, Seddon on Deeds (2nd ed, Federation Press, 2022) 217-218; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 at [9]-[10] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Cong v Shen (No 3) [2021] NSWSC 947 at [1187] per Ward CJ in Eq (as her Honour then was).
Clause 10 of the deed requires the parties to cooperate and take all necessary steps to obtain the consent of the landlord under clause 21 of the Hornsby lease.
In particular, Mr Klooster referred to the aspect of clause 13 which entitles the defendant to receive a sum of $95,000 (Hornsby sum) on condition that Jawad or the plaintiff or their nominees receive consent from the Hornsby landlord.
Mr Klooster states that KMB is the relevant nominee within the meaning of clause 13: T 27.
I accept that submission.
He further states that the obligation has not arisen at this stage and, accordingly, need not be considered by the Court.
Whilst clause 13 forms part of the overall deed and is in that sense to be considered under the principles of construing a deed, it does not seem to me that it bears materially on the proper construction of clause 10.
The wording in clause 10 ("all necessary steps") begs the question of, practically speaking, what is required to achieve the consent of the Hornsby landlord.
I have set out above the correspondence with the landlord and the landlord's response.
The ordinary English meaning of "necessary" connotes something that is "requisite" or "indispensable": Macquarie Dictionary, online ed.
The email from Ms Bundalo (the Administration Manager of Westfield Hornsby) to Mr Shokouhi dated 5 November 2021 addresses matters necessary for the lessor to provide its consent to the proposed assignment of the lease.
The matters set out included: 1. The prospective assignee has the financial capacity and the experience and/or expertise necessary to carry on the business presently carried on. The landlord requested completion of the forms attached to that email (referred to above); 2. The proposed assignee is required to have an interview with the lessor as part of the lessor's assessment; 3. The lessee and prospective assignee must execute a deed in a form reasonably approved by the lessor; 4. If the prospective assignee is a company the lessor requires provision of personal guarantees; 5. The lessor requires payment of an administration fee, provision of security and payment of one month's rent; and 6. Other provisions regarding insurances are also addressed by the email.
Paragraph 2 of the further amended summons, as noted above, seeks an order that the defendant execute four documents and create a PEXA workspace to enable the registration of an assignment of lease.
One of those four documents is the document titled "Application for Consent to Assignment of Lease - to be completed by the lessee" (Application for Consent). The document is referred to in the email by Ms Bundalo. I accept that it is essential.
The second document is the Land Registry form 01TL. Although not referred to in the letter by Ms Bundalo, I accept that it is a necessary document as it is clear that the title to the property is Torrens Title held under the Real Property Act 1900 (NSW).
The third document is a Deed of Assignment and Consent of Landlord form. This appears to be the document referred to in the letter from Ms Bundalo. It appears unsurprising that there would be such a form of deed of assignment and consent.
The fourth document which it is sought that the defendant sign is a Client Authorisation form. There is no particular document referred to in the evidence that identifies what this is.
The Transfer of Lease form 01TL is certainly one of the documents provided by Mr Shokouhi to the defendant under cover of the email dated 10 January 2023: see CB 106, 110.
I am satisfied that the first three documents (Application for Consent; Land Registry Transfer of Lease form 01TL; and Deed of Assignment) are necessary documents to be signed.
In the event that an order for specific performance is made, part of the working out of that order could, I consider, include some identification of what is required by means of a "Client Authorisation form". Further, there is no particular evidence indicating that the landlord requires (or the plaintiff has agreed to) assignment of the lease in an electronic conveyancing transaction.
Whilst it would hardly surprise me that such an arrangement might be convenient or perhaps assumed or expected, there is simply no detail before me at least at the moment addressing that part of the relief. I considered, in some detail, electronic conveyancing and the provisions of PEXA in my decision in D Capital 2 Pty Ltd v Western [2022] NSWSC 1064 (D Capital 2 Pty Ltd v Western).
I would not decline specific performance merely because there is no specific evidence regarding that at this stage. However, for there to be a particular order regarding the defendant to create a workspace, there would need to be some evidence in respect of that.
The defendant did not address any specific submissions in relation to the above-mentioned matters.
As indicated above, I am satisfied that at least the first three documents identified in subparagraphs 2(a)-(c) of the further amended summons are documents the signing of which are necessary steps in order to obtain the consent of the landlord.

[34]

Issue 5 - Does clause 7 require the defendant to resign from Scissors 1 and execute a share transfer?

Of all the issues in the proceedings this issue was, in a sense, the most vexed.
Yet in a practical sense the plaintiff, as I understand it, was somewhat ambivalent as to whether the relief identified in paragraphs 3 and 3A of the further amended summons was truly necessary in a practical sense for the plaintiff's purposes.
As I understand it, if the relief sought in respect of the defendant signing the resolution of directors, resignation of directors and a transfer of shares was not granted, the plaintiff would not be stymied from operating the Hornsby business in the event that the defendant did sign necessary documents to assign the Hornsby lease.
Mr Klooster frankly conceded on the first day of the hearing that commercially it makes little difference to the plaintiff whether or not those forms are signed on the basis that the new entity (KMB) will run the Hornsby business in the event that an assignment is effected: T 43.
Mr Klooster, in addressing submissions in relation to clause 7 of the deed, accepted that construction of that clause is somewhat more challenging than clauses 10 and 13 which he described as stand-alone obligations.
That is because clause 7 is introduced by wording which connects the statement that the defendant is to resign as a director of Scissors 1 and to transfer his shares to the plaintiff or his nominee by reference to a time "[w]ithin 14 days from the date of payment of the Blacktown Sum".
A very important part of construing written materials and, in particular, contracts and deeds is the starting point of identifying the possible meanings the words chosen by the parties can bear: Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 (Fitness First Australia Pty Ltd v Fenshaw) at [32] per Leeming JA (McColl and Payne JJA agreeing).
Normally, though not exclusively, it is only once possible available meanings are identified and there is consideration of text, context and purpose, that informed provisional views and, ultimately, conclusions can be derived regarding the meaning.
Sometimes, the parties by dint of adducing limited evidence restrict the scope of contextual considerations which may be considered by the Court in construing the relevant text in question. Making that observation is not necessarily a criticism of parties.
Sometimes, there may be very little known about the surrounding circumstances or context of the text and the absence of such materials in such cases has little to do with forensic choices made by a party or parties to place material before the Court.
Rather, it may have more to do with the fact that in the outworking of life, little or no information may be recorded about circumstances surrounding the contract, deed or text in question or if recorded such recording may be no longer available because it is or has been unable to be located, lost or destroyed.
In Fitness First Australia Pty Ltd v Fenshaw, Leeming JA noted that the parties had chosen to restrict the scope of the contextual considerations which may be considered by the Court. His Honour simply observed that that decision should be respected, not least because of considerations of fairness: at [32].
Mr Klooster submitted that the question of construction, which was a difficult one, involved determining whether or not the obligation under clause 7 is conditional upon payment of the Blacktown sum being made: T 43.
He submitted that if I found that it was conditional then the plaintiff's specific performance case, with respect to the relief in paragraphs 3 and 3A of the further amended summons, could not succeed: T 43.
He submitted that the resignation and share transfer provisions are not conditional upon payment of the Blacktown sum: T 43. When I asked him how that worked, he diverted attention away from the wording of clause 7 and directed my attention to the Joint Statement: T 43.
The argument was not developed at that point because attention was further diverted then away to clause 3 of the deed which then became the springboard for the defendant's application to reopen evidence in the matter.
Clause 7 sits within a group of seven clauses (clauses 3-9) under the heading "[t]he Blacktown Business" in the deed.
One possible interpretation is that the requirement for the defendant to resign as a director and transfer his shares in Scissors 1 is conditional upon payment of the Blacktown sum.
That construction appears from the terms of clause 7 itself and so is an available possibility and, on the face of it, not an absurd or unreasonable possibility.
The other possibility is that is that it is not conditional upon payment of the Blacktown sum.
The first possibility of it being conditional is to be considered by looking how the clause fits in relation to the clauses around it.
Although clause 3 does not expressly indicate that the payments of $32,000 and $50,000 are expressly referable to outstanding rent, that much may perhaps be inferred by clause 4.
The trust account receipt from CBL (Exhibit D4) indicates that $32,000 was received on account of rent for Blacktown.
Whilst there might be some issue as to whether the receipt is a matter which could be used in respect of construction of the deed, neither party seriously contended that clause 3 did not relate to outstanding rent.
I consider that clauses 3 and 4 could properly be said to be addressing outstanding rent and matters in relation to the Blacktown lease up to the time of the deed.
Clauses 5-8, on the other hand, have a connectedness about them.
Clause 5 refers to an obligation to cooperate to obtain a new lease for the Blacktown "shop".
Clause 6 is premised upon the condition that a new lease is obtained and provides for payment of the Blacktown sum.
Clause 7 is introduced by reference to timing for payment of the Blacktown sum and goes on to provide for the defendant to resign as a director and transfer his shares in Scissors 1 to the plaintiff or his nominee.
Finally, clause 8 provides for the defendant to remove himself as a signatory of bank accounts of Scissors 1 within a timing from the date of resignation in clause 7.
On one view, those clauses provide for a series of cascading obligations which are conditional upon satisfaction of the preceding obligation.
I consider that that way of viewing the matter provides a reasonable construction and has a degree of logical coherence to it.
The argument in favour of the resignation and transfer obligations in clause 7 not being connected to or conditional on payment of the Blacktown sum is somewhat more challenging.
One possibility of looking at it is that if the deed was supposed to facilitate the disentanglement of the parties from their respective business disputes, it might seem unlikely that the removal of the defendant from involvement in Scissors 1 should be tied to payment of the Blacktown sum in circumstances where the decision as to whether the lease would be renewed or not was in the hands of a third party, namely, the Blacktown landlord.
Further, in understanding the commercial context for what was to occur, as noted above, I, in testing possible constructions, raised with Mr Klooster the possibility that the parties in settling their differences under the deed attributed certain values to outcomes but took the risk that no lease would be obtained in relation to the Blacktown premises.
I then posited that one way of looking at clause 7 is that if the Blacktown sum never becomes payable then one might simply give no effect to the words "[w]ithin 14 days from the date of the payment of the Blacktown Sum". That would then leave at large the timing for the defendant to resign as a director of Scissors 1 and to transfer all of his shares in Scissors 1 to the plaintiff or his nominee: T 61.
There are principles in relation to implication of terms where a contract or agreement provides either no period or an indefinite period for certain matters to take place. It may be that a term can be implied that it will take place within a reasonable time. For consideration of issues in a somewhat different context see Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 438.
In considering the matter in submissions from Mr Klooster, I asked why it was that the obligation to resign as a director and transfer shares had in clause 7 been "connected" to the payment of the Blacktown sum: T 61.
Mr Klooster frankly indicated that the only explanation he had, which he accepted was unsatisfactory, was "bad drafting": T 61.
His only argument which made any reasonable sense was to come back to questions of what he described as the commercial reality of the matter.
However, he tied this to the fact that the Blacktown store was not trading and had not traded for a long time so that Scissors 1 was dormant and the only asset of value which his client pursued was the Hornsby business which required the assignment of the lease.
That commercial context, whilst conceptually possible, was not really undergirded by any direct evidence in the matter other than the fact that the lease for the Blacktown shop had expired and that the landlord had taken possession of the premises.
Mr Klooster accepted that, notwithstanding the commercial reality, it was difficult to escape the introductory words in clause 7 and he accepted that it appeared on a reading of those words with their ordinary meaning that the defendant is only to relinquish his interest as a director and shareholder in Scissors 1 on payment of the Blacktown sum.
Another matter of significance which was not addressed in submissions but appears from the terms of the deed is that under clause 16 it is provided that clauses relating to the payment of the Blacktown sum and the Hornsby sum are essential terms of the deed.
It may be, as Mr Klooster says, that the parties in the context of settling their differences did not think through all the implications and the drafting of provisions was, to use a more neutral expression, less than ideal.
Nonetheless, in the circumstances, I am not persuaded that the resignation and share transfer provisions of clause 7 are not conditional upon payment of the Blacktown sum. Accordingly, as is accepted by Mr Klooster, the relief in paragraphs 3 and 3A of the further amended summons is not, at least at this point of time, susceptible to a particular order.
I have addressed above the cooperation issue arising out of clause 5 which was belatedly raised as an issue on or about 19 January 2023.
I have also dealt with the issues arising out of clause 7 in a limited way as litigated by the parties.
I have done that because of how the parties chose themselves to frame issues in the proceedings.
As is evident from my discussions with the defendant and Mr Klooster in Court on the second day of the hearing, prior to Mr Klooster proffering to the Court the undertaking of the plaintiff recorded above, what I have determined regarding the resignation and transfer obligations under clause 7 is not intended to preclude the possibility that the defendant may wish to, at some point of time, assert that events have occurred which enliven an obligation to pay the Blacktown sum under clause 6 potentially making relevant the resignation and transfer obligations under clause 7.

[35]

Discretionary considerations

Mr Klooster submitted that specific performance is a discretionary remedy, and the discretion cannot be fettered by the contract citing e.g. Quadrant Visual Communications Ltd v Hutchison Telephone (UK) Ltd [1993] BCLC 442 at 451 per Stocker LJ (Butler-Sloss LJ and Sir George Waller agreeing).
He submitted that it was necessary to establish that damages are not an adequate remedy citing Adderley v Dixon (1824) 1 Sim & St 607; 57 ER 239; Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 at 151 per Barwick CJ (Kitto J agreeing).
Although Mr Klooster accepted that there had not been strict compliance by the plaintiff with the provisions of clause 3(b) of the deed in relation to payment of the sum of $50,000 for the arrears of the Blacktown rent, he indicated that that payment had subsequently been made and that there was no existing breach at the time of the commencement of the proceedings or even at the time of the hearing by the plaintiff of his obligations under the deed.
Understandably, the defendant was unable to assist me in relation to the legal position in respect of principles of specific performance.
Some of the factors relevant to the exercise of granting specific performance were identified by Connock J in Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] VSC 467 at [566]: The requirements and discretionary factors taken into account when considering whether or not a decree of specific performance ought to be made depend upon the circumstances of a particular case, although a number of them are frequently raised or in issue. They include: (a) whether there is an enforceable agreement; (b) whether there has been a breach of the agreement; (c) whether any issue of impossibility of performance arises; (d) whether damages are an adequate remedy; (e) whether the plaintiff has demonstrated, at least at the time when any order is to be made, it is ready, willing and able to perform all other substantial obligations; (f) whether there is mutuality in the sense that it is possible to award the remedy against both parties; (g) the plaintiff's conduct and whether the plaintiff comes to equity with clean hands; (h) hardship to the defendant of awarding specific performance; (i) the involvement or impact from third parties; (j) laches or delay (footnotes omitted).
Mr Klooster addressed a number of other matters which bear upon the question of whether specific performance might be awarded or denied.
He asserted that the plaintiff was ready willing and able to perform his obligations under the deed and in fact had done so since its execution.
Although the case was not pleaded, it may be noted that under rules of Court if it is a condition precedent necessary for a party's case in any pleading that the party is ready and willing, or was at all material times ready and willing, to perform an obligation, a statement to the effect that the condition has been satisfied is taken to be implied in the party's pleading: r 14.11(d) Uniform Civil Procedure Rules 2005 (NSW).
The defendant did not assert that the plaintiff is not ready and willing to perform obligations under the deed. No such assertion was put to the plaintiff in cross-examination.
Other discretionary issues such as mutuality and delay whilst mentioned by Mr Klooster were done so in a context in which he submitted that no such issues precluded relief.
The defendant's main or material basis for not cooperating in relation to the assignment harked back to issues in relation to the Blacktown business and non-payment of the Blacktown sum: T 67.
For reasons, as noted above, those matters were not brought forward in any fairly disclosed way prior to the commencement of the hearing and were not litigated as part of the hearing.
I am satisfied that in the circumstances specific performance in relation to the defendant's obligation to take all necessary steps to obtain the consent of the landlord at clause 10 of the deed should be granted.

[36]

Delay

Having regard to the fact that there was a delay of one year between the date of the deed and the date when the plaintiff's solicitors sent a letter to the Hornsby landlord requesting their consent for an assignment of the Hornsby lease and a further six months delay before commencing these proceedings, it is appropriate to reflect on whether any such delay precludes a claim for specific performance.
I considered principles regarding delay in an application for specific performance in D Capital 2 Pty Ltd v Western at [932]-[940].
I stated as follows: 932. Quite apart from the discretionary consideration of unclean hands, specific performance may be denied because of delay: e.g. Lamshed v Lamshed (1963) 109 CLR 440 at 452-6; [1963] HCA 60 per Kitto J. 933. The degree of promptness required depends upon the nature of the case and all its circumstances. Thus, Kitto J indicated there is little point in citing cases for the purpose of comparing the period of delay in the case before the court with delay which is being considered fatal to claims for specific performance in circumstances in other cases: at 453. 934. It is clear that the bare fact of delay is not enough: at 453. 935. His Honour said that equity will not allow the possibility of its making such a degree to be held unfairly long over the head of the party who denies the existence of the contract and asserts a right to deal with property as his own. This is tied back to being a particular application of the general principle of laches: at 453. 936. In the context of matters which may preclude relief of specific performance Spry refers to delay in the context of laches. It is said that laches is established when two conditions are fulfilled. First, there must be unreasonable delay in the commencement or prosecution of proceedings for specific performance. Secondly, in all the circumstances the consequences of the delay must render the grant of relief unjust: I C F Spry, The Principles of Equitable Remedies (9th ed, Lawbook Co, 2014) at 233. 937. Here there is no delay in the commencement of proceedings. 938. Spry specifically deals with the concept of prejudice to the parties opposing the specific performance or third parties. 939. There is not really in the authorities any satisfactory comprehensive description of the combinations of circumstances which will enable a Court to precisely determine whether gross delay or laches ought preclude equitable relief. In Orr v Ford (1989) 167 CLR 316 at 340-341; [1989] HCA 4 Deane J expressed this sentiment as follows: "One searches in vain in the judgments in the above-mentioned cases (and, for that matter, elsewhere) for any satisfactory comprehensive description of the combinations of circumstances which will suffice to attract the label "gross" for the purposes of that qualification. That is not surprising since any attempt to specify exhaustively those combinations of circumstances would be likely to introduce an inappropriately arbitrary and technical element into an area of equity doctrine which has traditionally been kept free of arbitrary and technical constraints. On balance, the preferable approach is to treat the phrase "gross laches" as an intentionally imprecise one which involves not merely considerations of the period of the relevant delay but which invokes the traditional notions of equity and good conscience which are the general determinants of whether a plaintiff should be refused relief by reason of laches in the circumstances of a particular case." 940. Deane J continued at 341: "The ultimate test effectively remains that enunciated by Lord Selborne LC (not, as is often said, Sir Barnes Peacock (see Errata)), speaking for the Privy Council, in Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 239-40 , namely, whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable "to place him if the remedy were afterwards to be asserted": see Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1279 , and also, per Rich J, Hourigan at 629-30."
As I have noted above, the plaintiff gives evidence which addresses that delay. At least part of the delay, according to the plaintiff, arose from issues in relation to the Blacktown lease and the COVID-19 pandemic.
The defendant did not specifically complain of the delay in the period of time up to the commencement of these proceedings. The defendant did not point to any aspect of the matter in which the plaintiff could be said to have benefited from the delay.
Whilst the delay following the entry into the deed is regrettable, it does not seem to me that there has been any prejudicial delay by the plaintiff in commencing the proceedings.
The plaintiff has not delayed the prosecution of the proceedings but has, in my estimation, relatively promptly prosecuted the proceedings. As is evident from my recitation of the facts regarding the various directions hearings above, the delay arising from that has been delay on the defendant's part rather than the plaintiff's part.
Overall, I am not persuaded that there is any basis to preclude an order for specific performance arising from any matters of delay.

[38]

Default ancillary orders

Order 4 of the further amended summons was a form of default order.
In Horn v GA & RG Horn Pty Ltd [2022] NSWSC 1519, I addressed the making of default orders empowering a Registrar to execute necessary documents in the event that a party might not do so if ordered to do so. I noted at [1284]-[1288] the following: 1284. The plaintiffs seek an order empowering the Registrar of the Court to execute the necessary documents for the transfer should Barbara fail to do so. 1285. The Court has power in the event that a person does not comply with an order directing the person to execute any conveyance, contract or other document to order that such document be executed by "such person as the court may nominate for that purpose": s 94(1)(a) CPA. 1286. If any such order is made it is common practice of the Court to appoint the Registrar of the Court to be "such person": e.g. Hill v Dunn [2019] NSWSC 419 at [53]-[55]. 1287. If such an order is made the instrument executed operates for all purposes as if it had been executed by the person originally directed to execute it: s 94(2) CPA. 1288. Historically the practice of the Court is that orders should not be made under this section merely because of an anticipated refusal to execute a document: e.g. Savage v Norton [1908] 1 Ch 290 at 297 per Parker J.
My impression of the matter at the moment is that the defendant, whilst he has resisted relief for the reasons he explained on the hearing in connection with the Blacktown payment, did not intimate that he would not sign the necessary documents required to effect an assignment of the lease.
In circumstances in which I have raised an issue regarding the client Authorisation Form on the one hand and the necessity for creating a PEXA workspace on the other, I do not consider it appropriate at least in these reasons for judgement to foreshadow any default order.
I do not consider that order 4 ought to be made at least at this point.
In relation to an order for costs sought in paragraph 5 of the further amended summons, the plaintiff has succeeded at least in relation to the relief sought in paragraphs 1 and 2 of the further amended summons.
The plaintiff has not succeeded in relation to the relief in paragraphs 3 and 3A of the summons.
My tentative view is that some costs order ought to be made in the plaintiff's favour. However, whether or not that is an order for the entirety of the plaintiff's costs on the ordinary basis in light of the fact that the relief sought in paragraphs 3 and 3A has not been given (at least not at this point) is a question I consider should be subject of some further submission.
In light of the issues that I raised regarding disputes over the Blacktown sum and in light of the undertaking proffered by Mr Klooster on behalf of the plaintiff, I consider that the orders for specific performance should be conditioned upon that undertaking.
The orders of the Court are: 1. Direct the parties to submit to my Associate agreed short minutes of order to give effect to the reasons for judgment, including as to costs, or if there is no agreement between them, their respective draft orders, submissions (not exceeding five pages) and any affidavits by 4 PM on 16 February 2023. 2. Adjourn the proceedings to 9:30 AM on 17 February 2023 or such other time as may be arranged with my Associate.

Al Dakhili v Al Kheurallah

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