Pham v Enterprise ICT Pty Ltd

The Proceedings

1. The plaintiffs are the purchasers of land at 11 Tutts Crescent, Chiswick, pursuant to a contract for sale of land dated 29 October 2014. At the date of the contract the registered proprietor of the property was Robert Sebie. The date of completion was 3 December 2014. Robert Sebie failed to complete the contract either by 3 December 2014 or in response to the service of a notice to complete dated 4 December 2014. On 23 February 2015 the plaintiffs commenced their first proceedings in this Court against Robert Sebie seeking specific performance of the contract. Certain parties that had lodged encumbrances over the property, including ENA Development Pty Ltd, were joined as additional defendants to these proceedings. In the meantime, the plaintiffs themselves lodged a caveat over the property.
2. During these first proceedings, between June and August 2015, Robert Sebie, without notice to the plaintiffs, and acting dishonestly, took steps to remove their caveat. Robert Sebie and his brother Richard also took steps, again without notice to the plaintiffs, and again dishonestly, to transfer the property for no consideration to Enterprise ICT Pty Ltd. The sole director of Enterprise ICT was and continues to be Richard Sebie.
3. Also during these proceedings, Mr Robert Sebie, once again dishonestly, took steps to defeat any claim that his former wife might have to the property. He ignored an order by the Federal Circuit Court made on 25 June 2015 that he be restrained from selling, transferring, mortgaging or any way encumbering or otherwise dealing with the marital home. He asserted that he was not aware of the order but I reject that evidence.
4. In October 2015 the plaintiffs became aware of the transfer of the property to Enterprise ICT. They then lodged a fresh caveat over the property. Enterprise ICT then served a lapsing notice which resulted in the plaintiffs commencing a second set of proceedings against Enterprise ACT. Ultimately, both the first and second proceedings were consolidated and the plaintiffs' claim against all relevant defendants was set out in a statement of claim filed on 15 March 2016. The former wife of Robert Sebie, Mrs Nadine Musabwasoni was joined on the basis that she had an interest in the outcome and was perceived to be a necessary party. Her possible interest gives rise to complications to which I will return.
5. Mr Sebie relied on eight affidavits which were included in the Court Book and produced two further affidavits at the hearing - making ten affidavits in total. He also relied upon several other affidavits from persons with whom he was associated or from whom he had obtained expert assistance. He did not read affidavits by his mother, Mr Jemmott and Mr Sarkis. Nor did he call evidence from his father or anyone else.

Chronological Facts

1. I should deal with the chronological facts. In June 2003, ENA Development Pty Ltd was registered. Robert Sebie was its sole director and shareholder until 2007. At a later stage, his sister Raymonda Gayed became its sole director. She did not give evidence and she appears to have played no effective role in the affairs of the company. Later still, his mother Rose, became the sole director. Raymonda remains the sole shareholder.
2. In September 2005 Mr Sebie purchased the land at Chiswick. He gave a mortgage to the Commonwealth Bank of Australia. He contends that he entered into a secured loan agreement with ENA Development Pty Ltd, which he says, resolved by special resolution to provide a loan to him of $1,379,315 secured over the property at Chiswick. I will return to those documents. The transfer of the Chiswick property to Robert Sebie took place on 15 September 2005.
3. Almost ten years later, seemingly out of the blue in February 2014, at a time when the marriage between Robert Sebie and Nadine had broken down, ENA Development Pty Ltd lodged a caveat on the title to the Chiswick land. The interest described in the caveat is: Unsecured loan provided with the purchase of the above land in the consideration of $1,379,315 on 15 September 2015. (emphasis added)
4. This occurred only a week or so before the date for final separation of Mr Sebie from his wife Nadine. On 30 April Nadine filed her initiating application in the Federal Circuit Court claiming, among other things, an order that she have exclusive and sole occupation of the matrimonial property at Chiswick. A week later on 7 May, Enterprise ICT Pty Ltd was established and registered. Initially Raymonda Gayed was its sole director, but from August 2014 Richard Sebie became its sole director and at all times Raymonda Gayed was its sole shareholder. I have grave doubts as to whether either Richard Sebie or Raymonda Gayed were ever intended to exercise independent functions in their roles as director of the company.
5. Robert Sebie then took steps to sell the property. On 10 September 2014 he signed an agency agreement for its sale with BresicWhitney. The agent negotiated with the plaintiffs. On 29 October, in the morning, Mr Sebie informed the agent, Mr Oddi, that he accepted the plaintiffs' offer. His email stated: Further to our discussion can you please make the following amendments: 1. $2.2 million offer accepted and I will sign a contract today. 2. Cooling off period to remain at five days. 3. Four week settlement. 4. Commission to BresicWhitney - you mentioned previously that you can bring this down to 1.4%, please confirm this stands.
6. Mr Oddi responded shortly afterwards saying among other things that he agreed that the $2.2 million offer was accepted and that a contract could be signed today. He pointed out that the cooling off period was only for the benefit of the purchasers and he resisted Mr Sebie's attempt to reduce his commission. The emails between Mr Oddi and Mr Sebie continued during the early afternoon. By 2.25pm they had agreed on the amount of the commission. Robert said in an email, 'Please call me tonight once you have the contract signed. Attached is the same contract which I previously sent to you'.
7. Later that afternoon Mr Oddi obtained the signature of the plaintiffs to the contract for sale and an authority from them in favour of him to exchange contracts. In the early evening he attended on Mr Robert Sebie at his home. Mr Oddi then obtained Mr Sebie's execution of the same authority to exchange as well as the contract itself. The next morning there were some communications in which Mr Sebie appeared to resile from his desire to sell the property, but it was too late, despite his vendor's remorse. He received legal advice from Mr McKenzie that he was bound. He chose to proceed.
8. The completion date for the contract for sale of land came and went. On 4 December the solicitors for the plaintiffs served a notice to complete on Mr Sebie's solicitors, Versace McKenzie and Mr Pham personally requested Mr Sebie to vacate the premises as soon as possible. Despite having expressed reservations about going ahead, on 11 December 2014 Mr Sebie wrote to Mr Pham saying: Further to our meeting on 1 December … we have asked for the settlement date to be postponed to 19 January based on certain factors.
9. On 13 January Mr Sebie wrote again to Mr Pham saying 'I'm afraid there will be a slight delay in settlement by three to seven days due to additional funds to release the caveat'. On 22 January Mr Pham sent an email to both Mr Oddi and Mr Sebie saying, among other things, 'I spoke to Mr Sebie in person this morning and Mr Sebie confirmed that settlement will go ahead on Wednesday, 28 January 2015'. On 27 January, the day before the then contemplated settlement date, Mr Sebie sent an email to Mr Pham saying 'I've been working on this all yesterday and this morning. It is a pain, and I'm sorry for the delay. I will come back to you with an update in the evening'. On 3 February the plaintiffs' solicitors reached the point where they doubted whether Mr Sebie would ever complete. They warned him that they were instructed to institute proceedings for specific performance unless settlement took place on 6 February 2015.
10. Settlement did not take place on 6 February and on that day the solicitors for the plaintiffs wrote to Mr Sebie's solicitors pointing out, among other things, that the property was encumbered by a mortgage to the Commonwealth Bank of Australia and a caveat lodged by ENA Development Pty Ltd. They stated that they were concerned that ENA Development did not have a proprietary interest in the property. This was understandable given that the caveat stated that the interest of ENA Development arose pursuant to an 'unsecured loan'. They requested evidence of the loan agreement. This was the beginning of what I have concluded was a blatant concoction by Mr Robert Sebie.

The Secured/Unsecured Loan

1. On 9 February Mr Sebie replied to Mr Pham saying that he would have a formal reply to the letter of 6 February requesting, among other things, evidence of the loan agreement, by Wednesday 11 February 2015. He said, 'It will take more than one business day to compile, it is simply not practical and I do not have enough time to provide all this information in less than eight business hours'.
2. On 11 February Mr Sebie sent an email to Mr Pham and the plaintiffs' solicitor responding to the 6 February letter requesting confirmation of the existence of the loan agreement. He purported to set out various pieces of information including 'the loan agreement between ENA Development and myself'. He said that he was providing his copy and that he had asked ENA Development for their copy which he said was sealed and filed with the Office of State Revenue. Accompanying the email was a three‑page document headed Secured Loan Agreement between ENA Development Pty Ltd as lender and Robert Sebie as borrower. It bore the date 5 September 2005. It stated that the loan was secured over the Chiswick property. There were several troubling aspects about the execution page. The signatures of the witness to the two signatures on the loan agreement purported to be that of Shelyn Gallado but they were forgeries and she denied that they were her signatures. The signature on behalf of ENA Development Pty Ltd was that of Raymonda Gayed but she did not become a director of ENA Development until July 2007. The only signature which appears to have been legitimate was that of Robert Sebie.
3. At the bottom of the third page there appears a section headed 'Required Disclosures' which refers to the National Credit Code, but it did not come into existence until 2010. Also included was a letter addressed to 'To whom it may concern' from ENA Development Pty Ltd dated 10 February 2015. It purported to confirm the existence of a secured loan over the property and appears to have been signed by Richard Sebie who is described as 'General Manager'. But Richard Sebie had no such role and there is real doubt as to whether the signature which appears above his typed name is his. It is markedly different to other versions of his signature. In the witness box he was evasive and said that he had changed his signature a long time ago, after his accident. But this document purported to be executed only two years ago. As I have said, Richard Sebie, like his brother Robert, was unreliable. On one version of this same letter, Richard Sebie does appear to have signed the document in the bottom right‑hand corner.
4. The solicitors for the plaintiffs replied to these alarming documents in a letter dated 12 February 2015. They took the precaution of lodging a caveat on behalf of the plaintiffs on 11 February. In their letter, they thanked Mr Sebie for his email sent on 11 February and expressed their concerns about the authenticity of the secured loan agreement. They pointed out that the National Credit Code, which was referred to on the third page of the agreement, did not come into existence until 2010 although the agreement purported to have been made in 2005. They pointed out that Raymonda Gayed purported to sign as the sole director of ENA Developments but she was not a director of that company. They pointed out that the signatures of Raymonda Gayed and Robert Sebie were purportedly witnessed by Shelyn Gallado, although if one compared her signature on certain other documents, it was clear that they were different.
5. They also pointed out that the purported minutes of a meeting of 5 September 2005 of ENA Development allegedly signed by Rose Sebie were problematic because Rose Sebie was not a director of ENA Development at the time but Mr Robert Sebie was. Finally they pointed out that the caveat lodged by ENA Development in February 2014 described its interest in the property as arising from an 'unsecured loan'.
6. For those reasons, the solicitors for the plaintiffs stated that they continued to be concerned that ENA Development did not have a proprietary interest in the property. They said that if Mr Sebie maintained his position that it did so, then he should provide certain further documents. They warned that if they did not receive a satisfactory reply they were instructed to promptly institute proceedings. They did so on 23 February 2015. On 12 June the matter came before Acting Justice Young. On that date Robert Sebie appeared in person. Counsel appeared for ENA Development and Richard Sebie was present instructing counsel. Three days later on 15 June Robert Sebie signed an application for the preparation of a lapsing notice in relation to the plaintiffs' caveat. In the meantime, on 15 May, ENA Development had filed a statement of claim against Robert Sebie seeking possession of the Chiswick land on the basis of default by him pursuant to the supposed secured loan agreement.
7. ENA's statement of claim was verified by an affidavit signed by Richard Sebie who stated that he was the general manager of ENA Development. He signed the document twice. The statement of claim asserted that ENA Development was entitled to judgment against Robert Sebie for possession of the Chiswick land and for judgment in the amount of $1,898,411. The basis of ENA's claim was that it was a secured lender pursuant to a written agreement dated 5 September 2005. Richard Sebie's evidence about the circumstances in which he came to cause these proceedings to be instituted and to sign the statement of claim was worthless. He had no idea; no recollection; no effective role in the affairs of the company; and no idea what he was purporting to sign. He was, I am satisfied, acting at the request of his brother or with his connivance.
8. Things moved quickly in relation to ENA's possession proceedings. A month later, on 16 June 2015, Richard Sebie on behalf of ENA Development and Robert Sebie on his own behalf signed a draft consent order, including an order that ENA Development have possession of the Chiswick land and that the amount owing by Robert Sebie to ENA Development of $1,898,411 be fully extinguished on the basis of ENA Development taking possession of the land. Later on 16 June Richard Sebie on behalf of ENA Development signed a document entitled 'Notice of Motion for Default Judgment'. It sought orders for possession of the land.
9. Mr Sebie contends that on 19 June, following these events, he served the plaintiffs with a lapsing notice in relation to their 11 February caveat. However, for reasons which I will explain, this evidence is impossible to accept. Among other things, Mrs Pham was overseas at the time, although Mr Sebie says he gave the notice to her. On 23 June more Sebie swore a statutory declaration which stated that he solemnly and sincerely declared that at approximately 2pm on 19 June 2015 he personally served Mrs Pham at 286 Great North Road with an original notice to caveator of the proposed lapsing notice. For reasons which will be clear, this was a false statutory declaration.
10. A few days later on 25 June the Federal Circuit Court ordered that Robert Sebie be restrained from selling, transferring, mortgaging or in any way encumbering or otherwise dealing with the marital home. On 2 July, in disregard of the orders of the Federal Circuit Court, Richard Sebie on behalf of ENA Development, and Robert Sebie on his own behalf, signed a consent order for possession and on 6 July in response to the application for default judgment, this Court made orders, no doubt unaware of the true facts, including an order that ENA Development have possession of the Chiswick land.
11. A fortnight later, a strange document was created described as 'Deed of Arrangement Between ENA Development and Enterprise ICT Pty Ltd'. It was signed by Rose Sebie as a director of ENA Development and Richard Sebie as director of Enterprise ICT. It provided that ENA Development will transfer the property at Chiswick to Enterprise ICT and that although the value of the transfer will be calculated at $2.04 million, no moneys will be exchanged for the transfer due to the identical shareholders in the companies. It then stated that ENA Development obtains possession of this property as full and final settlement for the loan against the property.
12. On about 20 July Robert Sebie signed the transfer of land in favour of Enterprise ICT. The discharge of the mortgage by CBA was paid out. A withdrawal of ENA Development's caveat was lodged. Stamp duty in the sum of $87,690 was paid. Following the transfer of the property to Enterprise ICT, the plaintiffs lodged a second caveat over the property. On 23 October 2015 Mr Pham was served with a lapsing notice in respect of that caveat. On 29 October, the Federal Circuit Court then made further orders restraining Enterprise ICT from selling, transferring or further encumbering the Chiswick property. By that stage the scene had been set for the unfolding of this litigation.

The 11 February Email

1. I referred earlier to the documents that accompanied the 11 February email from Mr Sebie and the questions which they raised, which were set out in the letter dated 12 February from the plaintiffs' solicitors. Mr Sebie accepted that these documents were not genuine but contended that he did not send the 11 February email. I do not accept his evidence. It is obvious that the email was genuine, that it was sent and that it was received. There is no other explanation for the responsive later dated 12 February from the plaintiffs' solicitors, which clearly responds to the 11 February email and its attached documents.
2. No one other than Robert Sebie could have sent the 11 February email. Mr Sebie's improbable evidence was that he actually sent, on the previous evening 10 February, a different email with almost identical text but with different documents attached. I do not accept that any such email was sent to Mr Pham. On the morning of 13 February, Mr Sebie responded to the letter dated 12 February from Mr Pham's solicitors. This supports the conclusion that Mr Sebie sent the 11 February email. If he had not sent it, the content of his 13 February email would have been quite different. I am satisfied that Robert Sebie, probably shortly before 11 February 2015, created the alleged secured loan agreement and the alleged 10 February 2015 letter from ENA Development, which went with his 11 February email. Not only did he create those documents but he persisted in his evidence knowing that he was not telling the truth.
3. The 10 February email which Mr Sebie contends he sent included a different version of the secured loan agreement and a different version of the letter from ENA Development addressed to 'Whom it May Concern'. I do not accept that those documents are genuine. Indeed, neither are the documents that were attached to the 11 February email. But the documents attached to the 10 February email were designed to overcome the obvious queries that arose in relation to the 11 February email and its accompanying documents.

The Lapsing Notice

1. I have concluded that the statutory declaration which Robert Sebie made on 23 June 2015 in relation to service of the lapsing notice was false. The evidence comfortably establishes that Mr Sebie did not serve the lapsing notice on that date on Mrs Pham or on anyone else at the address for service nominated. Mr Sebie gave four different versions of his alleged service of the lapsing notice, each of which shifted as the developing evidence indicated that the earlier version was impossible or unlikely. Specifically, on 23 June 2015 he swore in his statutory declaration that on 19 June 2015 he 'personally served' Mrs Pham at 286 Great North Road. He knew that Mrs Pham was a woman and that she was the wife of Mr Pham. On 5 November 2015 Mr Pham swore an affidavit in which he explained with supporting evidence, including his wife's passport, that she had been overseas on 19 June. When Mr Sebie received and read that affidavit it must have been apparent to him that his first version was impossible.
2. On 1 December 2015 Mr Sebie swore an affidavit in which he gave a second version of the service of the lapsing notice. He said that he walked into the shop and stated to the person behind the counter that the document was for Mrs Pham. He said 'I asked, are you that person'. He said that the person first stated, 'yes, then, no, then did not want to accept the document. I left the lapsing caveat application at the front counter'. As Mr Sebie knew that Mrs Pham was a woman, this alleged conversation must have been with a woman. But no woman was there. In his affidavit of 4 December Mr Pham explained: When my wife is overseas a male relative of my wife and my wife's younger brother work in and look after the shop. I live at the rear of 286 Great North Road and see the shop business operating every day. Based on my observations and knowledge in 2015 there have been no female workers (other than my wife occasionally when she is in Sydney) who work in the shop.
3. When Mr Sebie received and read this affidavit he would have recognised that his second version of events was also implausible. On 8 April 2016 Mr Sebie swore a further affidavit in which he gave a third version of service of the lapsing notice. He repeated and expanded this version in affidavits made on 5 September and 29 September 2016. In each of these repetitions, he left out reference to the fact of his supposed conversation with a person behind the counter. When asked during cross‑examination whether he maintained the alleged conversation with a woman behind the counter which had been set out in his second version, Mr Sebie gave yet another version.
4. In all of the circumstances I am not satisfied that Mr Sebie is telling the truth. But the story does not end there. In the second version that Mr Sebie gave, he added that he took a photograph of the lapsing notice, a copy of which he annexed to his affidavit. But a close examination of the photograph indicates that it is far more likely to have been a photograph of the second lapsing notice which was served on 23 October 2015 after the transfer to Enterprise ICT.
5. In summary I am satisfied that on 19 June 2015 Mr Sebie did not serve the lapsing notice. Either on 23 October 2015, when the plaintiffs were served with a second lapsing notice, or at a later date, Mr Sebie photographed the lapsing notice on the counter of the shop. In Mr Sebie's affidavit made on 8 April 2016 he added yet another detail in relation to the service of the lapsing notice. He said that a friend called Aiman Elleissy accompanied him to deliver the lapsing notice. Mr Sebie's evidence was that he served the lapsing notice on the afternoon of 19 June. In contrast, Mr Elleissy was certain that whatever happened, it occurred in the morning around 10am. Whatever Mr Elleissy was referring to, I do not think it was the supposed service on 19 June in the afternoon. In any event, he stayed in the car and could not have known what happened.
6. Finally, Mr Pham explained the process by which mail addressed to the business at 286 Great North Road was delivered by being placed at the front counter of the shop following which there was a system in place by which the mail came to the attention of those who operated the shop. The existence of that system and the fact that on or around 19 June the plaintiff did not receive the first lapsing notice contributes to the conclusion that Mr Sebie did not serve it on that date and that his evidence in relation to this issue, which he perceived to be vital, was false.
7. In summary, in relation to Mr Sebie's credit: 1. I am satisfied that he did not send the 10 February 2015 email which he asserts he sent. It is contrary to the probabilities and contradicted by the letter dated 12 February from the plaintiffs' solicitors which responds not to a 10 February email but to the 11 February email; 2. I am satisfied that the original statutory declaration relating to service of a lapsing notice made on 23 June 2015 was false and that Mr Sebie has compounded his dishonesty by swearing a number of affidavits in the proceedings which repeat the falsity; 3. I am also satisfied that Mr Sebie's evidence that he signed a secured loan agreement in September 2005 was false and that his continued insistence that he did so in a number of affidavits, and in evidence in this Court, also compounded his dishonesty.

Other Witnesses

1. To the extent that a witness called Mr Harrington, who purported to be an IT expert, said that the 10 February email was genuine, I am afraid I cannot accept that evidence. Mr Harrington's evidence was problematic and I allowed it with some reservations. I stated at the time of its tender that I was inclined to receive it, but to give it limited weight and to note that counsel for the plaintiffs was not in a position to respond or cross‑examine with the benefit of any expert input on the plaintiffs' side. I stated that, in the interests of fairness to Mr Sebie, I wanted to have the evidence before me - for what it was worth - and that I preferred not to reject the evidence outright.
2. It is impossible to know what instructions, or potentially manipulated documents, Mr Sebie gave to Mr Harrington which may have led to his conclusion that the email was genuine. It was obvious that Mr Sebie himself was an expert in relation to the operation of computers and the alteration of emails. In fact, the conclusion that he was skilled and adept in this regard seems clear. The more reliable conclusion is that the 10 February email was not sent. The recipient denied it and the plaintiffs' solicitors responded to the 11 February email, not to any email sent on 10 February.
3. There were several other emails that Mr Harrington said were genuine, but they largely related to Mr Sebie's supposed decision to not go ahead with the exchange of contracts. Mr Oddi, whose evidence I accept, stated that he did not receive the three questionable emails sent on 26 September 2015, 29 October 2014 at 4.26pm and 30 October 2014. There is no reason not to act on the basis that Mr Oddi's evidence is accurate and honest. He was a witness of truth. In reality however, these emails do not matter even if they were sent, because Mr Sebie made it clear that he had, despite his reservations and concerns, elected to affirm the contract. In the circumstances, his conduct constituted a very clear case of estoppel which would have prevented him from denying that he was bound by the original exchange of contracts.
4. Furthermore, each of the questionable emails seems to be inconsistent either with other unchallenged contemporaneous documents or the evidence from Mr Oddi of his meeting with Mr Sebie on the evening of 29 October 2014. Fundamentally however, Mr Harrington's evidence cannot stand in relation to the 10 February email. And having been proved to be unreliable in relation to it, its probative value in relation to the other emails is doubtful. I should add that Mr Sebie also made fanciful submissions that Mr Oddi was part of a conspiracy against him but I regard this evidence as having no foundation in fact.
5. Ms Shelyn Nassif was a credible witness but her evidence was of no utility. In her affidavit she identified her signature on the signature page of a document dated 5 September 2005. It appears to be an alternative version of the signature page of the 'secured loan agreement' whose discrepancies I canvassed in paragraph [27] above. However, she gave no evidence of the nature or content of the document to which that signature page was attached. If that signature page is genuine, it could have been the signature page from a document that had nothing to do with a loan from ENA Development Pty Ltd to Robert Sebie in September 2005. Her evidence was of no assistance.
6. As to Aiman Elleissy, I accept that one morning in 2015 or 2016 he accompanied Robert Sebie in a car to the laundry and dry cleaning business at 286 Great North Road. Mr Elleissy sat in the car while Mr Sebie quickly entered and exited the shop. I do not accept that Mr Elleissy's recollection of the date of 19 June 2015 is correct. Mr Elleissy was unable to explain why he supposedly recalled this date. And he accepted that he was unable to see what Mr Sebie did inside the shop. His evidence was of no assistance.

The Supposed Loan

1. I should return to the supposed loan to Robert Sebie. There may well have been some sort of financial arrangement within the Sebie family and one or other of the companies controlled by them, to assist Robert Sebie to purchase the Chiswick property in 2015. But the documented secured loan agreement on which he based his case was a fiction. I accept that Mr Sebie made a number of 'repayments' to ENA Development. But the suggestion in his evidence that he was servicing the particular secured loan for which he contended, and making regular payments pursuant to it, before eventually falling behind, is implausible and not supported by the evidence.
2. A review of all 'repayments' that Robert Sebie allegedly made to ENA Development and which are set out in the report of Satish Kumar, indicates the following: 1. The first 'repayment' made was $4,250 on 7 January 2012. The fact that Robert made no repayments between October 2005 and December 2011 suggests there was no secured loan agreement signed in September 2005. 2. The table of 'Repayments' at page 7 of Mr Kumar's report indicates that, apart from two one-off large payments, the 'repayments' comprise irregular electronic transfers of $4,250 from Robert to ENA Development between January 2012 and February 2014 marked by Robert in his bank statements with the description 'TRANSENAD NOVLOAN'. The amount, timing and description of the repayments bear no relationship to the terms of the loan agreement said to have been made in September 2005. One possible explanation is that shortly prior to January 2012 (perhaps in November 2011 which would explain the letters 'Nov' in the description in Robert's bank statements), ENA Development lent an amount of money to Robert. 3. One of the one-off payments, in the amount of $38,250, was made on 14 February 2014. This was the day on which Robert Sebie and his wife finally separated. It was also the day on which Mr Sebie lodged a caveat on the title to the Chiswick land asserting that ENA Development had an interest in the property on the basis of an unsecured loan from ENA Development to Robert. 4. The other one-off payment in the amount of $378,000 was made on 9 January 2012. The documents annexed to Mr Kumar's report indicate that on 9 January 2012 Robert transferred $378,000 out of an account at the Commonwealth Bank in his name and on the same day a term deposit was opened at the Commonwealth bank in the report of ENA Development in the amount of $378,000. The amount of $378,000 may have come from the account of Robert Sebie. However, the transfer does not prove repayment of a loan. A possible and more likely explanation is that, in the face of his deteriorating marriage, Robert Sebie was attempting to transfer assets out of his name and into the name of a company he controlled. 5. Further, Robert Sebie does not refer to the two one-off payments in his affidavit dated 1 December 2015. This contributes to a conclusion that the two payments were not 'repayments' in respect of his supposed secure loan agreement.
3. Finally, Robert Sebie stated in one of his many affidavits that 'in 2014 and 2015 ENA Development has sent me warning letters about the loan ...'. In July 2016 the plaintiffs served a notice to produce seeking production of, among other documents, the alleged warning letters. Robert Sebie produced no documents prior to the commencement of the hearing. The likely reason why no documents were produced is that no such letters existed. Predictably, at the hearing, Mr Sebie produced two alleged warning letters. However, the authenticity of those letters dated 6 August 2014 and 14 October 2014 is problematic. Among other reasons: 1. The language of the two letters, like that of many other documents that appear to have been created by Robert Sebie, is unusual. The first letter, purportedly written by a person called Ronald Jemmott, is written as if the lender and creditor is Ronald Jemmott (rather than ENA Development). Mr Sebie elected not to call Mr Jemmott although he had sworn several affidavits. 2. The alleged warning letters purport to be signed by Mr Jemmott on behalf of ENA Development. However, Robert Sebie gave evidence that ENA Development was in effect a shelf company, in which case it seems unlikely that ENA Development employed anyone to write letters on its behalf. Second, if ENA Development engaged anyone to do activities on its behalf, such evidence as there was, indicates that that person was more likely Richard Sebie from at least February 2015. 3. After taking into account a typographical error, the letters contain a mobile phone number at the bottom of the letters (0430 706 550) which is the mobile number of Richard Sebie. If Mr Jemmott was the general manager, it is unclear why Richard's phone number is on the bottom of the page.
4. Lastly, in July 2016 the plaintiffs served a subpoena to produce on ENA Development. The subpoena sought production of documents which would assist in assessing whether there was a loan agreement from ENA Development to Robert Sebie in September 2005. By email dated 26 July 2016, the plaintiffs warned Robert Sebie and Richard Sebie that the plaintiffs considered that Robert or Richard controlled ENA Development and that 'If ENA Development does not comply with the subpoena, at the trial in this matter the plaintiffs will ask the court to draw adverse inferences against Enterprise ICT Pty Ltd and Robert Sebie'. ENA Development produced no documents in response to the subpoena.

The Legal Consequences

1. It follows from what I have explained that the plaintiffs have an equitable interest in the Chiswick land. Their interest arises pursuant to their contract for sale dated 29 October 2014 and is not defeated by the registration of the transfer to Enterprise ICT. The transfer to Enterprise ICT was fraudulent within the meaning of Sections 42 and 43 of the Real Property Act 1900 (NSW). The designed object of the transfer was to cheat the plaintiffs of their existing rights. The conduct of Robert and Richard Sebie involved actual fraud or dishonesty.
2. Richard Sebie shared his brother's intention to defeat the plaintiffs claim. At the very least, he was recklessly indifferent to their rights and did his brother's bidding, knowing that there was no secured loan agreement. ENA Development's statement of claim seeking possession of the Chiswick land from Robert Sebie, was a dishonest artifice. And Richard Sebie knew it. He signed it twice. And he performed an essential role in ensuring that the land was transferred to Enterprise ICT - and out of the hands of the plaintiffs and his brother's former wife. He signed an affidavit of service on his brother, a consent order dated 16 June 2015, a notice of motion seeking default judgment with affidavit in support, another consent order dated 2 July 2015, a transfer of land of the same date and a 'deed of arrangement' dated 20 July 2015.

Relief

1. The plaintiffs are entitled to the substance of the relief which they seek. That includes equitable damages or compensation for their proved consequential loss as a result of the failure of Mr Sebie to complete the contract of sale. Since 3 December 2014, they have had to continue to lease a property for which they have paid rent in the amount of $4,300 per month. If Mr Sebie had completed the contract in accordance with his contractual obligation, they would not have continued to incur this cost. The registration of title in the name of Enterprise ICT should be set aside. The contract for sale with Robert Sebie should be specifically performed. Care should be taken with all necessary ancillary orders
2. I said that I would return to the position of the second defendant, the former wife of Mr Sebie. The plaintiffs did not seek relief against her. However, she filed a cross claim against Mr Sebie and Enterprise ICT. Her cross claim sought a declaration that the 'first cross defendant's title is defeasible for fraud'. As the cross claim named Robert Sebie as the first cross defendant and Enterprise ICT as the second cross defendant, this makes no sense. The cross claim also seeks a declaration that the cross claimant has an 'equitable interest in the land', 'possession or recovery of the land pursuant to Section 118(1)(d) of the Real Property Act' and 'compensation pursuant to Sections 120 and 129(1)(b) of the Real Property Act under the Torrens Assurance Fund'.
3. It seems obvious that the second defendant has been badly advised. This is all the more clear when reference is made to the pleaded allegations set out in the cross claim. Paragraph 7 simply alleges that the second defendant has an equitable interest in the land 'as a result of her marriage'. Nothing else is alleged. This is not enough. The cross claim is misconceived. In its current form, it serves no useful purpose given my findings on the plaintiffs' claim, and should be dismissed. The second defendant may or may not have some relevant right or interest under the Family Law Act 1975 (Cth). I do not know and I was not told. But her participation in this hearing, through both solicitor and counsel, was largely a waste of time. Her counsel contributed nothing except to ask a few innocuous questions of one witness. He did not prosecute the cross claim and simply foreshadowed an application by motion pursuant to the Family Law Act 1975 (Cth) at the conclusion of the hearing.

Orders

1. The plaintiffs' solicitors should provide draft declarations and orders reflecting these reasons to my associate and circulate them to all parties. When orders are made, there should be a stay for 21 days pending the making by the second defendant of such application as her legal advisors consider appropriate to protect her possible interest in the land. I do not know what precise application is contemplated, nor the grounds on which it may be based, nor whether it has any merit. Ultimately, the second defendant must establish, if she can, that she has an equitable interest in the land based on something more than the fact of her marriage. This may be difficult. If she can establish that she has an equitable interest, a question of priority then may arguably arise as against the plaintiffs. There is however, considerable force in the plaintiffs' contention that all of these matters should have been raised and addressed in these proceedings. I do not understand quite what the second defendant's legal representatives thought they were doing.
2. The first and third defendants should pay the plaintiffs' costs of these proceedings. The second defendant should pay her own costs of the proceedings. I will list these proceedings before me on 10 May at 9.45am for the making of the final orders. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 May 2017