Gerar Sleiman v Paulette Afeich & Anor

Gerar Sleiman (plaintiff) PARTIES : Paulette Afeich (first defendant) Peter Solomon (second defendant)

J Dupree (plaintiff) COUNSEL : W Carney (defendants)

B J Macree & Co (plaintiff) SOLICITORS : Chris Jurd (defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

4672/05 Gerar Sleiman v Paulette Afeich & Anor JUDGMENT (ex tempore) 1 HIS HONOUR: By summons filed on 25 August 2005 the plaintiff, Gerar Sleiman claims an order extending the operation of caveat number AA373557L until further order of the court. The defendants, Paulette Afeich and Peter Solomon, who are the registered proprietors of the land affected by the caveat, oppose that relief. 2 For the purposes of this application, and without pretending to make findings of fact on a final basis, I take the relevant facts to be as follows. The plaintiff, Mr Sleiman and the second defendant, Mr Solomon (who is also sometimes known as Sleiman) are brothers. The first defendant, Ms Afeich, is the wife of Mr Solomon. 3 On 3 July 1978, Mr Sleiman and Mr Solomon became the registered proprietors of the land comprised in certificate of title volume 13244 folio 15 situate at and known as 46 Arnott Street, Marayong, as tenants in common in equal shares. They apparently remained so registered until, on or about 16 September 2003, Mr Solomon signed a transfer, purportedly as transferor of Mr Sleiman's share in the property, to Ms Afeich. Mr Solomon says that he signed in the place provided for the signature of the transferor at the request of Mr Sleiman in circumstances where Mr Sleiman's wife, Norma Sleiman, had instituted proceedings in the Family Court of Australia against Mr Sleiman also joining Mr Solomon and Ms Afeich as additional respondents, in which Norma claimed relief relating to Mr Sleiman's interest in Arnott Street. Ms Afeich has since accepted the transfer and it has been lodged as registered dealing 9977341T, with the result that the registered proprietors of Arnott Street are now Ms Afeich and Mr Solomon. For the purposes of this application, were it necessary to do so, I would accept that it was at least seriously arguable that Ms Afeich was on notice before the registration of the transfer that it had not been executed by the registered proprietor, Mr Sleiman, but had purportedly been executed on his behalf by Mr Solomon. 4 By the transfer the transferor, purportedly Mr Sleiman, acknowledges receipt of consideration of $160,000 and transfers to Ms Afeich an estate in fee simple in Arnott Street. There is at least a seriously arguable case that neither $160,000 nor any part of it has in fact been paid. 5 On or about 3 February 2004 Mr Sleiman lodged caveat AA373557L in respect of the Arnott Street property, claiming an interest in the following terms: Tenant in common as to one half share with Peter Sleiman (also known as Solomon) by virtue of the facts:

Transfer of the caveator's interest as a former registered proprietor to Paulette Afeich was procured by the fraud of Paulette Afeich. 6 On 10 August 2004 Mr Sleiman instituted proceedings number 1797/04 in this court ("the 2004 Proceedings"), claiming a declaration that he was entitled to an estate in fee simple as to one undivided one-half share in Arnott Street, a declaration that he was entitled to be registered as proprietor of that estate, an order that Ms Afeich and Mr Solomon produce to the Registrar General the duplicate of the certificate of title, and also an order that Ms Afeich sign a transfer in registrable form transferring from her to Mr Sleiman the interest referred to in the transfer. 7 The statement of claim in the 2004 Proceedings pleads that Mr Sleiman at all material times from 30 July 1978 held Arnott Street as registered proprietor in tenant in common with Mr Solomon; that on or before 16 September 2003 Mr Solomon wrongly and contrary to law signed a form of transfer of Mr Sleiman's interest in the subject land to Ms Afeich, which she subsequently signed and which together they caused to be stamped and registered; that the signature of the transfer by Mr Solomon was not at any material time authorised by Mr Sleiman or permitted or authorised by law; that Mr Sleiman did not at any time transfer his interest in the subject property to Ms Afeich; and that Mr Sleiman did not at any material time receive from Ms Afeich the sum of $160,000 referred to in the purported transfer or any other sum. 8 Ms Afeich and Mr Solomon filed a defence in the 2004 Proceedings in which, while admitting that Mr Sleiman was a documentary title holder, they did not admit that he was entitled to be registered as proprietor; they admitted that Mr Solomon signed the transfer and that Ms Afeich accepted it; they asserted that Mr Solomon was authorised by Mr Sleiman to sign the transfer by placing his own signature on it as transferor; they admitted that Ms Afeich had the transfer stamped and lodged for registration; and they denied that Mr Sleiman had been deprived of any estate or interest in Arnott Street, on the basis that at all material times Mr Solomon was entitled to be registered as proprietor of Mr Sleiman's interest, as Mr Sleiman held his interest upon trust absolutely for the benefit of Mr Solomon. 9 Mr Solomon also filed a cross-claim in the 2004 Proceedings, in which he alleged that there was an oral arrangement between him and Mr Sleiman to the effect that he, Mr Solomon, would be solely responsible for the repayment of the loan raised to purchase the property; that the property was purchased in their joint names so as to satisfy the lender's requirements as to a minimum income test but on the footing as between them that Mr Solomon would be the sole beneficial owner; that the deposit and the full balance of the purchase price was to be and was borne by Mr Solomon; that all costs relating to and arising out of the contract for purchase, including stamp duty, were paid by Mr Solomon; that all repayments relating to the loan had been paid by Mr Solomon, who had repaid the balance of the loan and obtained a discharge of the mortgage in February 1987; that all council rates and other expenses had been paid by Mr Solomon and Ms Afeich, who had also paid substantial amounts for renovations and improvements; and that Mr Sleiman had made no payments or contributions to the purchase, the repayment of the loan or the improvement of the property or outgoings in respect of it. Mr Solomon claimed a declaration that at all material times Mr Sleiman held his (legal) interest in the property as a tenant in common with Mr Solomon, upon an express or implied trust for the benefit of Mr Solomon. 10 Mr Sleiman filed a defence to that cross-claim, in which he denied those allegations in the cross-claim to which I have referred. 11 The 2004 Proceedings were the subject of various interlocutory applications and hearings, and in due course was set down for final hearing to commence on 15 August 2005. As that hearing approached, on 19 July 2005 Ms Afeich and Mr Solomon made an offer pursuant to (then) Supreme Court Rules Pt 22 Div 1, "to settle the entire matter herein on the following basis", namely:- 1. The defendants jointly and severally consent to judgment being entered for the plaintiff in the sum of $100,000.

2. The defendants jointly and severally pay the plaintiff's costs of these proceedings. 12 At least by 20 July 2005, a memorandum of acceptance of that offer in the following terms:

I Gerar Sleiman, the plaintiff, having been advised by my solicitor as to the effect of this offer of compromise accept the terms of this offer of compromise. had been endorsed by Gerar Sleiman, and on 20 July 2005, at 15.57, his solicitors, B J Macree & Co, forwarded by facsimile to the defendants' solicitors, C E Jurd, a letter in the following terms: We are instructed to accept the defendants' offer of settlement of 19 July 2005. We enclose acceptance duly signed by the plaintiff, Gerar Sleiman, and witnessed.

13 The 2004 Proceedings came before Palmer J in this court on 2 August 2005, when judgment was given is in the following terms: 1. There be a verdict and judgment in favour of the Plaintiff against the First and Second Defendants, jointly and severally in the sum of $100,000.00.

2. Leave be granted to the Plaintiff to amend his Statement of Claim by adding the following: … 25. In the alternative the Plaintiff claims $100,000.00 in respect of the matter hereinbefore pleaded.

3. The First and Second Defendants pay the Plaintiff's costs jointly and severally, such costs to be as agreed or assessed.

5. The hearing date listed on 15 August 2005 be vacated.

7. The Cross Claimant is ordered to pay the Cross Defendant's costs of the Cross Claim, such costs to be as agreed or assessed. 14 Although the judgment is not expressed in terms to be by consent, I infer that it was in fact a consent judgment, arising from the acceptance of the offer of compromise. That inference is drawn from the absence of any hearing, from the terms of the offer of compromise and memorandum of acceptance to which I have referred, from the correspondence of the substance of the terms of the judgment with the terms of the offer, and from the provisions of the judgment which vacated the appointed hearing date.

15 About the judgment the following points should be noted. 16 First, the judgment is for $100,000, and reflects to that extent at least the acceptance of the offer of compromise. 17 Secondly, the leave to amend the statement of claim granted by para 2 permits the addition of a claim which is described as an alternative claim for $100,000. Presumably, that means in the alternative to the claims in the statement of claim which preceded it, it not previously having included a claim for a money sum. 18 Thirdly, the first costs order in favour of the plaintiff was one that the first and second defendants pay the plaintiff's costs jointly and severally. Though not in terms limited to the costs of the claim (as distinct from the cross-claim), it ought to be interpreted as being so limited, because para 7 separately ordered the cross-claimant to pay the cross-defendant's costs of the cross-claim. However, it also ought to be inferred that para 3 was intended to capture all of the costs of the plaintiff's claim, not excising from it any costs associated with claims for relief which remained undisposed of: together paragraphs 3 and 7 were intended to cover the whole of the costs of the proceedings. 19 Fourthly, although specific provision was made that the cross-claim be dismissed, no specific provision was made for the balance of the claims in the statement of claim (other than the single claim for relief for $100,000 on which relief was granted) to be dismissed. It is essentially upon the absence of an express dismissal of those other claims for relief that Mr Dupree, who appears for the plaintiff, founds his argument that Mr Sleiman retains an equitable interest in Arnott Street, or at least an arguable claim to such an interest. 20 Some time before 11 August 2005, Ms Afeich procured the Registrar General to issue a lapsing notice pursuant to Real Property Act s 74J in respect of the caveat, and caused that notice to be served on Mr Sleiman. By letter dated 11 August 2005 B J Macree & Co, solicitors, who continue to act for Mr Sleiman, sought an assurance that the lapsing notice would be withdrawn, and foreshadowed these proceedings if that assurance were not forthcoming. On 12 August Sid Hawach & Co, solicitors for Ms Afeich and Mr Solomon, asserted that there was no bona fide reason for maintaining the caveat, and foreshadowed that should it be sought to maintain the caveat, they would seek indemnity costs. 21 It was in those circumstances that on 25 August the plaintiff approached McDougall J, sitting as duty judge, for an abridgment of time for service of the summons, which His Honour granted, together with an order making the summons returnable today and an interim extension of the caveat up to and including today, Mr Sleiman having given the usual undertaking as to damages. 22 On an application for extension of a caveat, considerations analogous to those which apply to an application for an interlocutory injunction are relevant: see Martyn v Glennan [1979] 2 NSWLR 234. On an application for an interlocutory injunction, the question is whether the applicant has demonstrated a sufficiently seriously arguable case for final relief to justify the grant of interlocutory relief having regard to the balance of convenience. I express the test in that form to emphasise two requirements: first, that before one reaches the consideration of the balance of convenience at all there must first be demonstrated a sufficiently arguable case; but secondly, that the balance of convenience will itself be influenced by the strength or weakness of such arguable case as may be demonstrated. 23 Although it is dangerous to generalise, there are some cases in which a higher standard may apply to the requirement for a seriously arguable case. For example, applications for interlocutory injunctions in the context of patent cases are sometimes thought to require firmer proof of a prima facie or triable case than the ordinary case: see Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, 623-624; Appleton Papers Inc v Tomasetti Paper Pty Limited [1983] 3 NSWLR 208 (McLelland J). 24 There are a number of features of the present case which incline me to the view that something more than a merely arguable case should be required before interlocutory relief is granted. The first is that what is sought is the continuation of, in effect, a statutory injunction which restricts the freedom of a registered proprietor to deal with interests in his or her land. A caveator should be prepared, when the caveat is challenged, to furnish strong prima facie proof of his or her claim, and under the lapsing procedure provided by s 74J will usually have had at least 21 days in which to do so. The second is that, in this case, the question arises in circumstances where the issues have already been the subject of litigation and compromise. 25 To my mind, the fundamental issue on the present application involves construction of the consent judgment in the 2004 Proceedings. Mr Dupree argues that the absence of an explicit dismissal of all the plaintiff's claims (other than that for a money sum, on which relief was granted) means that the claim for an equitable interest in Arnott Street survives those proceedings - either directly, in the sense that the equity of Mr Sleiman in the property has never been transferred to anyone else, or indirectly, in the sense that the $100,000 referred to in the consent judgment is secured on Ms Afeich's interest by way of or analogously to an unpaid vendor's lien. 26 It would be completely unrealistic to attribute to the parties to the 2004 Proceedings an intention that Mr Sleiman might not only receive a payment of $100,000, but also retain an equitable interest in Arnott Street. Such an outcome would exceed anything that he sought, or could have hoped to obtain, in the 2004 Proceedings, in which his principal claim was simply to retain an equitable interest as tenant-in-common. I have already referred to four notable features of the consent judgment, and to the opening words of the offer of compromise which was expressed to be an offer "to settle the entire matter herein" on the terms of the offer. In circumstances where Mr Sleiman had on foot in the 2004 Proceedings an express claim for a declaration that he retained an equitable interest in Arnott Street and consequential orders, it would hardly be a settlement "of the entire matter" if he were to receive a judgment for $100,000 and yet still preserve a claim to an equitable interest in the property. And that is all the less likely given the circumstance that, far from it being conceded that, but for the disputed transfer, Mr Sleiman had an equitable interest in Arnott Street, it was, as I read the pleadings and so much of the evidence from the 2004 Proceedings as has been put before me, firmly in dispute that he ever had any equitable interest in it in the first place. In those circumstances it would be straining credulity to attribute to the parties or the Court, in agreeing to and giving the consent judgment, an intention that Mr Sleiman should receive not only a payment of $100,000, but also the very equitable interest in the subject property which had, until that point, been hotly disputed, and it would be inconsistent with the terms of the offer of compromise, duly accepted, to do so. 27 That view is reinforced by the circumstance that the relief granted was granted on the amended, alternative, claim for $100,000, which was added by order 2 made on 2 August 2005. To my mind it is practically unthinkable that, relief being granted on the alternative claim for $100,000, the primary claims to which it was an alternative were to remain on foot and undetermined. Rather, judgment was given on the alternative claim in full satisfaction and discharge of all the plaintiff's claims in the 2004 Proceedings, so that his claims for an equitable interest were implicitly dismissed. Still further support for this view is provided by the doctrine, analogous to estoppel, which required Mr Sleiman to bring forward in the 2004 Proceedings the whole of his case, and not to reserve some relevant part of it to be renewed on a later occasion: Henderson v Henderson (1843) 3 Hare 100, 105; 67 ER 313, 319; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. 28 As to the suggestion that the $100,000 is the subject of an unpaid vendor's lien, that is not the interest claimed in the caveat. But leaving that point to one side, had the parties wished to provide that the judgment for $100,000 be secured on the subject property, they could easily have done so expressly, by providing that that sum stand charged upon the interest of one or other or both of the defendants in the property. In circumstances where the very existence of any equitable interest of Mr Sleiman in the property was in dispute, and his claim to such an interest was implicitly dismissed, there is no basis for attributing to the parties any intention that the $100,000 be purchase moneys for any such interest. Rather, it was a compromise money sum which he agreed to accept, unsecured, in return for giving up his other claims. 29 Thus, insofar as Mr Sleiman may arguably have had an equitable interest in Arnott Street up to 2 August 2005, the orders of 2 August 2005 reduce the arguability of that proposition to the extent that, to my mind, it is barely if at all, and in my judgment not seriously, in the relevant sense, arguable. 30 For those reasons in my opinion Mr Sleiman does not have a seriously arguable case for final relief sufficient to justify the grant of interlocutory relief, and I propose to refuse the application for an interlocutory extension of the caveat. 31 [Discussion ensued as to whether the Summons should be dismissed or adjourned]. 32 What I propose to do is this, subject to anything either of you might say as to form:

(1) Order that the summons be dismissed, upon terms that such dismissal does not preclude the present plaintiff from further applying (in proceedings 1797/04) for the issue of a writ of levy as sought in the summons.

(2) Order that the plaintiff pay the defendants' costs of the summons. 33 [Orders accordingly].

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