The Application for an Injunction and the Evidence in Support
Mr Ramzy Sebie's application in the 2 May proceedings was first foreshadowed to Ward CJ in Eq in an email to her Honour's Associate at 6.52am on 2 May 2018. That email is instructive, more for what it does not say, than what it says. Before listing his proposed Summons and a number of affidavits through which he planned to commence the 2 May proceedings, Mr Sebie's email said as follows:
"I have very urgent application to prevent the transfer of a property [the Chiswick property] which is scheduled to take place this afternoon between 12pm-2pm 2 May 2018. I seek an urgent injunction to stop the transfer from taking place. I have attached the following documents. I am wheel chair bound, however I can come in and see your honour at the earliest convenience this morning.
Basically my son has sold our home behind our backs and not disclosing any information to my wife or I. We found out on own accorded, the alleged purchaser took advantage of this talking the house at a discounted price, the house was neither advertised, marketed or put to auction. It was sold secretly behind our backs. My wife and I are elderly people and my wife does not have much longer to live. "
This email was misleading in several ways. The misleading impression it gave was reinforced when the application came on for hearing before her Honour. Mr Sebie's prior involvement in the related proceedings is a basis to infer that he was aware that the email was misleading and he was aware what he said to Ward CJ in Eq was misleading.
The email is misleading by omission about the settlement. The settlement was due to take place, by order of the Court, before the Registrar in Equity here in the Law Courts building at 2pm. Disclosure of that fact would have immediately alerted Ward CJ in Eq that this was a matter in which the Court had already intervened to make orders requiring the Registrar to execute the transfer, because of the uncooperativeness of the registered proprietor. The fact the settlement was taking place in the Court's own Registry would have made any judge cautious about hearing the matter ex parte, as there would probably be other parties to the litigation to be notified, who would be closely interested in the timing of the 2pm settlement.
And Mr Ramzy Sebie did not disclose where settlement was to take place when the matter came before her Honour. In answer to a direct question from Ward CJ in Eq "Do you know where completion of the sale is due to take place today?" Mr Ramzy Sebie told the Court "I mean, they said settlement - I mean, I don't know where but they said between 12 and 2 o'clock but I don't know where". Mr Ramzy Sebie was told by me on numerous occasions, and it was quite clear from affidavit evidence, that settlement was due to take place before the Registrar in Equity.
Ramzy Sebie's email did not mention any other party to any current related proceedings. Mr Ramzy Sebie had been in contest with the Phams against Mr Zipser for much of the previous day and had personally appeared before the Court to put submissions on 26 March, 24 April and 26 April 2018. The fact there was a party in a position to contradict his case who was legally represented and could no doubt be very easily contacted before 2.00pm was not disclosed in the email. And most importantly the email did not disclose that on 1 May 2018, only the day before, the Court had ordered that Mr Ramzy Sebie be restrained under Real Property Act 1900, s 74O from lodging or causing to be lodged any further caveat on the title to the Chiswick property. Nor was any of this disclosed when the matter came on before her Honour.
Mr Ramzy Sebie's communications also raised the false impression of having only recently discovered his son's misconduct. The email's references to "it was sold secretly behind our backs" and "not disclosing any information to my wife or I" were reaffirmed in Court when Mr Sebie said that he only knew about his son's deception recently, "And we just last couple of months we knew about it and we start to do something about it and then we engage a barrister there and we produce the affidavits and caveat". He has known since about March 2015, as these reasons show below.
Mr Ramzy Sebie commenced the 2 May proceedings by Summons, which in substance sought to restrain the completion of the sale of the Chiswick property from Mr Robert Sebie to the Phams, the sale scheduled to settle at 2pm on 2 May 2018. The form of Summons filed before Ward CJ in Eq in the matter was as follows. In the "relief claimed" portion of the Summons it sought both final relief and interlocutory orders as follows:
"1. Declaration that the First and Second plaintiffs has at all material times in and after September 2005 had a ownership interest in the land described in folio identifier [the Chiswick property] ("the Property").
2. Declaration that the said ownership interest operates in priority to any interest in the Property held by the First and Second Plaintiffs.
3. Declaration that the First and Second plaintiff is, and at all material times has been, entitled pursuant to section 74F of the Real Property Act 1900 to lodge and maintain a caveat in respect of the Property.
4. Order that, in so far as necessary, the First plaintiff be given leave to amend it existing caveat in respect of the Property.
5. Order that, in so far as necessary, the First plaintiff be given leave to lodge a further caveat in respect of the Property.
6. Order that the defendants be restrained from registering, or attempting to register, any interest in the Property unless and until the plaintiff's security interest in the Property has been satisfied or otherwise released.
7. Damages against first and second defendants
8. Such further or other orders as the Court considers appropriate.
9. Costs."
The Summons was supplemented by a section headed "Pleadings and Particulars" which was said to justify the relief claimed. Those "Pleadings and Particulars" were as follows:
"1. At all material times prior to September 2005 the registered proprietors of the Property were Rosario Gennusa and Donna Maria Gennusa.
2. In or about September 2005 and November 2006 the Plaintiffs and one Robert Sebie entered into Deed Trust Agreement (which was stamped by the Office State of Revenue) whereby:
(i) Where Robert Sebie will hold the property in trust for the plaintiffs.
(ii) The plaintiffs via their company ENA Development Pty Ltd would lend the sum of $1,379,315 ("the First Loan");
(iii) Robert Sebie would give to the plaintiffs a trust ownership interest in the Property.
(iv) Robert Sebie will give ENA Development Pty Ltd to secure the First Loan and interest accruing on the First Loan.
3. Thereafter, in or about September 2005:
(i) The ENA Development Pty Ltd advanced to Robert Sebie the First Loan; and
(ii) Robert Sebie became the registered proprietor of the Property.
4. By reason of the matters hereinabove pleaded, the plaintiffs obtained Trust Ownership interest in the Property upon Robert Sebie becoming the registered proprietor of the Property and such Trust Ownership interest has subsisted to the present.
5. By reason of the matters hereinabove pleaded, the ENA Development Pty Ltd obtained a security interest in the Property upon Robert Sebie becoming the registered proprietor of the Property and such security interest has subsisted to the present.
6. In or about September 2005 the Commonwealth Bank of Australia ("the Bank"):
(i) advanced certain monies to Robert Sebie to aid in the purchase of the Property; and
(ii) took, by way of security for the monies so advanced, a first registered mortgage ("the Mortgage") over the Property which mortgage subsisted as at October 2014.
7. In or about February 2014, the ENA Development Pty Ltd had a registered caveat on the property.
8. In or about October 2014 the First Defendant and the Second Defendant allegedly entered into a contract for purchase of the Property from Robert Sebie.
9. Thereafter, the Defendants maintained an alleged interest in the Property pursuant to an uncompleted contract for sale.
10. By reason of the security interests of the plaintiff and the Bank preceding in time the interest of the Defendants, the interest of the Bank and that of the plaintiff as at October 2014 operated in priority to the alleged interest of the First and Second Defendants in the Property.
11. In or about July 2015 the plaintiffs via ENA Development Pty Ltd paid out the Mortgage in the sum of $504,709 ("the Second Loan") and secured a discharge thereof and in so doing was subrogated to the rights of the Bank including the rights of the Bank with respect to priority over the interests of the Defendants.
12. Both the First Loan and the Second Loan are secured by interests in the Property in favour of the plaintiffs and ENA Development Pty Ltd which interests rank in priority ahead of the alleged interest of the First and Second Defendants.
13. By reason of the matters herein pleaded the plaintiff seeks the relief set out hereinabove."
The Summons in the 2 May proceedings does not plead a case that the Phams were aware of Ramzy and Rose Sebie's claimed beneficial interest in the Chiswick property at the time they acquired their equitable interest as purchasers under the October 2014 contract for sale. Nor does it plead a case that the Phams took unconscientious advantage of Robert Sebie so as to cause him to sell the property to them.
The Summons in the 2 May proceedings was supported by three affidavits: an affidavit of Ramzy Sebie of 28 April 2018; an affidavit Erkan Mentesh of 28 April 2018; and an affidavit of Albert David of 12 December 2017. Mr Ramzy Sebie's affidavit outlines a case that he and his wife Rose are elderly and very ill, and need to stay in the Chiswick property which has medical facilities to support Mrs Sebie, although the property is divided to accommodate non-family members as well.
The affidavit gives a history of the company ENA, which has featured in many of the Court's previous judgments in these proceedings. Mr Ramzy Sebie's affidavit explains that Mr Ramzy Sebie is a qualified accountant and has extensive experience working as a financial and administrative manager for several government departments.
Mr Ramzy Sebie claims that ENA had net equity of $2,910,000 in the Chiswick property as at 9 January 2018. But the "net equity" Mr Ramzy Sebie describes is something of a misnomer: it is more in the nature of a charge to secure the repayment to ENA of monies lent. The figure described as the "total combined net equity amount" as at 9 January 2018 of $2,910,000.06 is made up of two amounts: (i) unpaid principal and interest amounting to $2,264,516.01 on advances of $1,379.315; and (ii) interest accumulated on principal applied to pay out a Commonwealth Bank of Australia mortgage, with principal and interest totalling $645,484.05.
The two amounts totalling $2,910,000 are calculated as follows: interest is charged on advances amounting to $1,379,315 at an interest rate of 8%, then the repayment of some of that interest is credited, and then further interest accrues on the unpaid amounts, amounting to a total of $2,264,516.01. Mr Ramzy Sebie also claims that ENA paid out a Commonwealth Bank of Australia mortgage over the Chiswick property on 17 July 2015 in the sum of $504,759.79 and that accumulated interest on that payment, together with the principal, amounts to a total sum of $645,484.05.
But aspects of Mr Ramzy Sebie's evidence go beyond a claim for a charge to secure repayment of monies lent. Also in evidence is a one-page document, a "Deed Agreement - In Trust", purportedly signed by Rose Sebie and Robert Sebie (but not by Ramzy Sebie), which records as at 15 September 2005 that ENA had advanced $1,379,315 to purchase the Chiswick property and "it is agreed that Robert Sebie will hold the [Chiswick] property in trust for Rose Sebie and Ramzy Sebie".
This "Deed Agreement - In Trust" might potentially provide the basis for the plaintiffs having an equitable interest in the Chiswick property beyond a mere charge. It could potentially support Ramzy and Rose Sebie's pleading that they have a "trust ownership interest" in the property, as well as ENA having what is called a "security interest". But this "Deed Agreement - In Trust" is an inherently suspicious document that does not readily fit with contemporaneous events. Though called in its heading a "deed", it is not expressed in its terms to be a deed. It is not signed by Mr Ramzy Sebie, although he is said to be one of the parties acquiring an equitable interest under it. Stamp duty has not been paid on it, even though its transfer of an equitable interest in real estate would ordinarily attract ad valorem stamp duty. The Court has not been offered or seen any original. Mr Robert Sebie, who has often given evidence in the related proceedings, does not acknowledge that it binds him. And if the other contemporaneous document proffered by Mr Ramzy Sebie (see below) is to be taken at face value, this "Deed agreement - In Trust", lacks an essential party, TSI Pty Limited, who is said to be a co-trustee with Mr Robert Sebie of the Chiswick property.
Evidence of ENA's alleged advances is very sketchy. Mr Ramzy Sebie deposes that the $1,379,315.80 ENA allegedly paid to purchase the Chiswick property was to pay out its vendors, their first mortgagee, and the Office of State Revenue. He claims that he and his wife channelled funds into ENA, which "then increased these funds via certain investments". The payments into ENA Mr Ramzy Sebie identifies were: $195,000 in August 2003, $107,000 in September 2003, and $221,410 in February 2005. These amounts add up to $523,410, a figure which is approximately $800,000 short of the advance of the $1,379,315.80 ENA is alleged to have made to enable the acquisition of the Chiswick property.
Mr Ramzy Sebie deposes that "I still need time to find all the deposits and corresponding bank statements". But Mr Ramzy Sebie has had many years to do this. He claims, for example, in his 28 April affidavit (paragraph 15) that he has "witnessed and was involved in ENA Development's past transactions which included both verbal written documents" and was a de facto director from late 2015. A last minute application with this many readily fillable gaps is inherently suspicious, especially given the tortured history of these proceedings.
Whatever those missing deposits were, unless they add up to about $800,000, there would need to be some explanation of how the "certain investments" were so successful that they allowed ENA to pay $1,379,315.80 to fund the purchase. Currently the evidence falls well short of explaining how ENA could possibly have funded the purchase.
ENA's caveat claiming a charge over the Chiswick property was dismissed on 26 March 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 3) [2018] NSWSC 381. ENA is not a co-plaintiff to the 2 May proceedings. The claim now pressed is that Rose and Ramzy Sebie separately hold interests in the Chiswick property as beneficial owners by reason of Ramzy and Rose Sebie both enabling and directing ENA's alleged advances, and by reason of trust documents to which they are said to be parties.
But little evidence that might support such a case is advanced. Apart from the problem of explaining how ENA could have accumulated the funds to fund the purchase, there is no direct evidence that Ramzy and Rose Sebie funded ENA from their own resources. The evidence suggests some money was paid into ENA's bank accounts between 2003 and 2005 but there is no evidence that it actually came from either Ramzy and Rose Sebie. The ENA bank statements annexed to Mr Ramzy Sebie's affidavit do not show where the funds came from, even though they say they controlled ENA at all material times. And if the money came from their own bank accounts, they should have readily been able to produce evidence of their own bank statements to prove they were the source of ENA's funds.
Ordinarily a plaintiff seeking interlocutory relief would not be much criticised for presenting a case for interlocutory relief with some evidentiary gaps. But here what the plaintiffs advance must be judged against the background of their knowledge for over three years that, if they did have a beneficial interest in the Chiswick property, in the end they may well have to seek to restrain completion of the sale of the property. In these circumstances, unexplained gaps in documents that could be expected to have been either readily available to them, or actually in their own possession, lead to the conclusion (at best) that their case must be very weak, or (at worst) that it is yet another attempt by members of the Sebie family to delay completion of the Chiswick property using documents of dubious provenance.
Mr Ramzy Sebie's affidavit then seeks to suggest a case of unconscionable conduct against Mr Andy Pham, the first defendant, despite the pleading not doing so. Mr Ramzy Sebie's evidence seems to amount to little more than a suggestion that Mr and Mrs Pham did not make any inquiries of Rose or Ramzy Sebie about their interest in the Chiswick property before purchase. The only basis upon which it seems to be suggested that Mr or Mrs Pham may have had any basis to make inquiries of Rose and Ramzy Sebie is that they were directors of ENA. No evidence is advanced that at the time of the transaction Andy Pham took unconscientious advantage of the vendor, Robert Sebie. Ramzy Sebie deposes that Mr Robert Sebie said to Ramzy Sebie that Mr Andy Pham observed to him in 2016, well after the purchase, "you are not in a good condition and need help". But this does not lay any foundation for a case that Mr and Mrs Pham took unconscientious advantage of Robert Seibie or that he was in a position of special disadvantage with respect to them.
Mr Ramzy Sebie's affidavit then says that Robert Sebie sold the Chiswick property without consulting him or Rose Sebie and that he is told that the property was worth at the time $2.5 to $2.7 million at the time of sale. Further evidence is then given that Mr Robert Sebie went through some sort of mental breakdown in 2014.
Ramzy Sebie's affidavit declares "the Phams took advantage of this, buying the [Chiswick] property at reduced price". But the fact of the alleged breakdown is not supported by any medical evidence. More fundamentally there is no evidence that would support a case that the Phams were aware of or took unconscientious advantage of Mr Robert Sebie on this basis. Indeed, the findings of Pembroke J suggest that the final negotiations for the Phams to acquire the Chiswick property took place between the Robert Sebie's real estate agent and the Phams.
Mr Ramzy Sebie's affidavit also annexes a trust deed of the EHM Family Trust dated 2 November 2006 ("the EHM Trust Deed"). The EHM Trust Deed provides for initial beneficiaries and unit holders to be Rose and Ramzy Sebie and ENA. The initial trustees of the EHM Trust are said by the EHM Trust Deed to be TSI Pty Limited and Robert Sebie. The EHM Trust Deed declares the property of the EHM Trust to be the Chiswick property and the trustee is declared to "hold the assets of the trust as a separate fund on trust for the unit holders". The initial beneficiaries of the EHM Trust are described as "initial beneficiaries - unit holders" and are identified as Rose and Ramzy Sebie, and ENA.
The EHM Trust Deed is another suspicious document. If it was genuine, one would have expected the Chiswick property to be conveyed into the name of TSI Pty Limited and Robert Sebie, not just Robert Sebie. Stamp duty was only paid on the document about three years after its creation. And the EHM Trust Deed recites that Rose Sebie was a director of ENA, which she was not according to Pembroke J's findings. The beneficiaries of the trust are said to include ENA, Rose Sebie and Ramzy Sebie. An interest under this trust deed is a wholly different basis for ENA to claim an equitable interest in the Chiswick property, a basis which was not advanced at any stage in the proceedings before Pembroke J, despite a vigorous contest on ENA's behalf claiming an equitable charge over the property. It is strange that this document was not advanced in ENA's own interests in the trial before Pembroke J in April 2017.
Two other affidavits are read in support of the 2 May proceedings. The affidavit of Mr Erkan Mentesh, an accountant, explains that he created and registered the EHM Trust Deed and that one of the purposes of its creation was so that the Chiswick property could be "deposited for safe custody in reference to that trust" and that stamp duty of $275.55 was paid on the EHM Trust Deed.
Finally, Mr Albert David's affidavit records that he witnessed the signing of a "Loan - Heads of Agreement between ENA and Robert Sebie" on 31 August 2005, a document recording a loan from ENA to Robert Sebie of $1.4 million creating ENA as a "fixed secured creditor". This "Loan - Heads of Agreement" allows for ENA to convert that loan to equity at any time. There is no evidence that it has been converted to equity. Aspects of this document featured in my previous judgments. But the overall transaction it represents has already been considered by Pembroke J in a judgment to which these reasons now turn.
So far, these reasons have looked at the plaintiffs' claims more or less at face value. But in his earlier judgment on 26 April 2017 Pembroke J made findings that overlap with the present proceedings, findings that throw a very different light on these alleged transactions, raise the question why this application was not brought years ago, and add further weight against any grant of interlocutory relief: Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446.
Pembroke J sets out this relevant history. The starting point is February 2014. ENA then lodged a caveat over the Chiswick property, describing its claimed interest in the property as arising from "unsecured loan". In February 2015 the Phams commenced proceedings against Robert Sebie for specific performance of the contract for sale and against ENA for withdrawal of the caveat. These first proceedings came on for hearing before Young AJA on 12 June 2015, when Young AJA dismissed ENA as a party to the proceedings: Pham v Sebie [2015] NSWSC 745. If ENA were controlled by Ramzy and Rose Sebie, as they now say it was, they would have been well aware of the plaintiffs' claim for specific performance by at least that time, if not many months before.
But ENA then commenced separate proceedings against Robert Sebie for possession of the Chiswick property, on the basis of affidavit evidence advanced by Richard Sebie ("the 2015 ENA proceedings"), to pursue a scheme to defeat the plaintiffs, as Pembroke J found. Even though the Federal Circuit Court had by then ordered Robert Sebie not to sell, transfer, mortgage or in any other way encumber the Chiswick property, which was his marital home, on 2 July 2015 in disregard of those orders, Mr Richard Sebie, apparently acting on behalf of ENA and Mr Robert Sebie on his own behalf, signed consent orders for possession of the Chiswick property in ENA's favour. Unaware of this dishonest scheme the Court made these consent orders for possession on 11 July 2015.
Pembroke J found that the document on which ENA based its alleged secured loan agreement to Robert Sebie was "a fiction": Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446 at [52]. Indeed, Pembroke J found that all Robert Sebie's supporting evidence that there was a loan from ENA to him to acquire the Chiswick property was false. Mr Robert Sebie claimed that ENA had sent him warning letters and letters of demand for repayment of the loan. Pembroke J found this evidence was false and that there was no evidence to support ENA making the loan to Robert Sebie, in part because no documents had been produced by ENA on subpoena to substantiate the loan: Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446 at [54] - [55].
Pembroke J ultimately found that Mr Richard Sebie and Mr Robert Sebie together sought to cheat the Phams of their specific performance claim and further sought to defeat the Phams' claim by transferring the Chiswick property to another company under their control, Enterprise ICT Pty Ltd, all of which conduct also incidentally placed the property out of the reach of Mr Robert Sebie's former wife, Ms Musabwasoni: Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446 at [56] - [57]. This dishonest scheme also involved ENA temporarily lifting its caveat to allow the transfer to Enterprise ICT to go through.
In the proceedings before Pembroke J, one of the plaintiffs to these 2 May proceedings, Mrs Rose Sebie, swore affidavits in her capacity as a director of ENA, to attempt (unsuccessfully, as it turned out) to prove the existence of a valid loan agreement that was signed between ENA and Robert Sebie in September 2005. This was the secured loan which Pembroke J ultimately found to be a fiction.
Rose Sebie's actual involvement as a witness in the proceedings before Pembroke J, and Mr Ramzy Sebie's presently claimed knowledge of the affairs of ENA during that period, raise other significant obstacles to the success of the claim in the 2 May proceedings. The plaintiffs, Ramzy and Rose Sebie, do not even begin to explain on the present application why they did not advance before Pembroke J their claim in these 2 May proceedings, when they previously had an opportunity to do so.
But secondly, the route by which Ramzy and Rose Sebie claim an equitable interest in the Chiswick property, upon the supply of funds to Robert Sebie through ENA, has been found to be a "fiction" by Pembroke J. For the plaintiffs' claim in the 2 May proceedings to an equitable interest to succeed, it is inevitable that the Court will be asked to make a finding that the secured advances by ENA to Robert Sebie were not "a fiction". It has not been explained to this Court on this application why that would not be so. For that reason, there is a prospect of other powerful defences being raised to this claim, as follows.
Notwithstanding that they were not parties to the proceedings before Pembroke J, the Phams can field arguments in answer to the plaintiffs claim in the 2 May proceedings, that the claim is caught by an Anshun estoppel (Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 at [81] - [84] and Ekes v Commonwealth Bank of Australia [2014] NSWCA 336, at [131]) on the basis that this action would give rise to a conflicting judgment with that of Pembroke J.
Alternatively the current action could well be characterised as an abuse of process because it would lead to conflicting judgments: see Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 and Secretary of State for Trade and Industry v Bairstow [2004] Ch 1; [2003] 1 BCLC 696 at 12-17 ([28] - [38]). It is not possible in an interlocutory judgment to say more than that these are powerful additional obstacles that this plaintiffs' case will have to surmount at a final hearing.
[2]
Legal Principles - Interlocutory Injunctions
In deciding whether or not to grant an interlocutory injunction, the Court must consider whether there is a serious question to be tried and then, whether the balance of convenience, questions of hardship and related factors warrant the grant of an interlocutory injunction. First, the plaintiff must prove a serious, not a speculative, case which has a real possibility of ultimate success and that property or other interests might be jeopardised if no interlocutory relief is granted: JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (5th ed 2014, LexisNexis Butterworths) at [21-350] ("Equity Doctrines and Remedies"), discussing the requirements of the Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 prima facie case test. Put another way, the plaintiff must show a sufficient likelihood of success to justify the preservation of the status quo pending the trial: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46 at [70] - [71].
Then, it becomes a matter of analysing if, in all the circumstances of the case, considering the balance of convenience and issues of hardship, the Court should nonetheless exercise its discretion by declining to issue an interlocutory injunction: Equity Doctrines and Remedies at [21-350]; and see also Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 and Beese v Woodhouse [1970] 1 All ER 769; [1970] 1 WLR 586. Other factors to which the Court will have regard include: the adequacy of damages; the possibilities of alternative remedies; whether there has been any laches or delay; the strength of the grounds of defence suggested by the defendant; and what, if any, undertakings the defendant is prepared to give. But hardship and the balance of convenience are very important: Equity Doctrines and Remedies [21 - 375]. If any infringement of a plaintiff's right between writ and hearing would be properly compensated in damages, that fact alone can, but not must, be a ground for declining an injunction: McCarty v Council of the Municipality of North Sydney (1918) 18 SR (NSW) 210.
Here, the interlocutory decision the Court had to make was in the nature of final relief. The interlocutory restraint that Mr Ramzy Sebie sought would, if granted, have the practical effect of deferring once again the much-delayed settlement of the Chiswick property. On the other hand if the restraint sought is refused, that refusal will have the practical effect of giving final relief to the Phams, who would gain a Real Property Act 1900 transfer in registrable form, obtain the protection of Real Property Act, s 43A and then proceed to registration.
Such an interlocutory dilemma raises special considerations. In Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 ("Kolback") McLelland J (as His Honour then was) when considering what must be established to obtain an interlocutory injunction, including when the restraint in question may have implications for the disposition of the proceedings at final hearing, said:
"As I see it, the position is as follows. Where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled: see, eg, Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 216; A v Hayden (No 1) (1984) 59 ALJR 1 at 4-5; 56 ALR 73 at 79. Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question: see, eg, A v Hayden (No 1) (at 4; 78); Cohen v Peko-Wallsend (1986) 61 ALJR 57 at 59;68 ALR 394 at 397. If the Court does decide the question of law the uncertainty is to that extent removed.
Unless the plaintiff shows that there is at least a serious question to be tried which if resolved in its favour would entitle it to final relief, then the requirements of justice as between the parties will dictate that an interlocutory injunction should be refused: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 57 ALJR 425; 46 ALR 398; Tableland Peanuts Pty Ltd v Peanut Marketing Board (1984) 58 ALJR 283; 52 ALR 651; A v Hayden (No 1); Castlemaine-Tooheys Ltd v South Australia (1986) 60 ALJR 679; 67 ALR 553 and Cohen v Peko-Wallsend Ltd.
Apart from this, although normally the Court "does not undertake a preliminary trial, and give or withhold interlocutory relief upon a forecast as to the ultimate result of the case" (Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622), there are some kinds of case in which for the purpose of seeing where lies the balance of convenience (or more specifically "the balance of the risk of doing an injustice" - see per May LJ in Cayne v Global Natural Resources plc [1984] 1 All ER 225 at 237, cf per Brennan J in Brayson Motors Pty Ltd v Federal Commissioner of Taxation (1983) 57 ALJR 288 at 292; 46 ALR 279 at 285), it is desirable for the Court to evaluate the strength of the plaintiff's case for final relief: see, eg, Brayson Motors Pty Ltd v Federal Commissioner of Taxation (at 292; 285); Castlemaine-Tooheys Ltd v South Australia at 682; 559. One class of case to which this applies is where the decision to grant or refuse an interlocutory injunction will in a practical sense determine the substance of the matter in issue: see, eg, NWL Ltd v Woods [1979] 1 WLR 1294 at 1306-1307; [1979] 3 All ER 614 at 625-626 per Lord Diplock; Cayne v Global Natural Resources plc. The present is such a case. The substantial matter in issue is whether Epoch should be permitted to proceed with the issue of non-renounceable rights in accordance with the announcement of 13 March 1987. That will be irrevocably determined in a practical sense by the grant or refusal of an interlocutory injunction."
These principles give guidance as to what course should be followed at this interlocutory hearing.
[3]
Analysis of the Application
Serious question to be tried. The plaintiffs do not have an arguable case that the Phams engaged in unconscionable conduct to take advantage of Robert Sebie's alleged mental weakness to sell the Chiswick property in October 2014. The plaintiffs have advanced no evidence the Phams knew of or acted upon any weakness on Mr Robert Sebie's part in October 2014. There is not a serious question to be tried on this issue.
All that remains is the plaintiffs' claim to an equitable interest as the beneficiaries of a trust in alleged priority to the Phams claimed equitable interest as purchasers under the October 2014 contract. In my view, for the reasons already given, the plaintiffs have a barely arguable case of such an alleged prior equitable interest. These proceedings raise considerations to which McLelland J's observations in Kolback are relevant. To use McLelland J's words in Kolback "there is a serious question to be tried but that is as far as it goes".
Mr Ramzy and Mrs Rose Sebie's alleged priorities case is barely arguable for the several reasons given above: it is supported by documents of dubious providence; during three years of public litigation involving the Chiswick property, Mr Ramzy Sebie has not been able to gather basic material to present the basis for a coherent case; if the gaps in case must be bridged by Mr Ramzy Sebie's testimony, he has shown himself as prepared to mislead the Court; and, if the case is maintainable after Anshun and abuse of process defences are fielded, the potential priority of their interest must deal with a powerful case of postponing conduct.
The Balance of Convenience. On the balance of convenience, to which these reasons now turn, the Court can take into account the evidentiary weakness of the plaintiffs' claim. The Court can also take into account in what is a claim for discretionary relief at final hearing, the plaintiffs' unclean hands. For the reasons discussed earlier, were there a serious question to be tried in my view, this is a very weak evidentiary case. And it is a claim for discretionary relief badly tainted by Mr Ramzy Sebie's past conduct. The strength of the plaintiff's case should be given little weight on the balance of convenience.
A number of other discretionary factors and the balance of convenience weigh heavily against the granting of interlocutory injunctive relief in this case.
Mr Ramzy Sebie's attempts to mislead this Court set out above tell against him on this application. Ultimately, his attempts to mislead the Court have been unsuccessful. But had his misconduct been successful it would have seriously disrupted a long appointed settlement here in the Court simply because the late timing of his application would have given insufficient time for proper notice to be given to the Phams to come to the Court and explain the true situation before the time for completion had passed. I find on the balance of probabilities this was deliberate conduct on Mr Ramzy Sebie's part. The Court is disinclined by that fact alone to grant interlocutory relief to the plaintiffs in the 2 May proceedings. But there are many other reason why interlocutory relief should be refused.
Mr Ramzy Sebie's delay in bringing these proceedings is gross, unexplained, and causes significant prejudice to the Phams. The interest which Mr Ramzy Sebie and Mrs Rose Sebie claim was the subject of a caveat in January this year, the last of which caveats was ordered to be withdrawn in my judgment given on 1 May 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 5) [2018] NSWSC 567. Mr Ramzy Sebie has been well aware for over three years, as is evident from the history of these proceedings, that his son, Robert Sebie, then the registered proprietor of the Chiswick property had sold it to the Phams, and that if the sale were to proceed, the Phams would take possession of the Chiswick property.
Whatever the inadequacy of the form of the caveats, it was always open to Mr Ramzy Sebie to commence proceedings such as these as early as March 2015. His only excuse for not doing so earlier, declared from the Bar table but not supported by evidence, is that he had received bad legal advice. He was prepared to blame his lawyers for their alleged self interest in failing to give him proper advice. But to the extent that Mr Ramzy Sebie has been legally represented his representation appears to the Court to have been of a high standard. There is not the slightest objective basis to support anything Mr Ramzy Sebie says about receiving inadequate legal advice.
Mr Ramzy Sebie claims now to be able to judge the quality of his legal representation. It is inherently improbable that poor advice would have stopped him long ago from getting alternative legal advice, or even doing what he has just done and acting in his own name. The delay goes unexplained.
The prejudice to the defendants from further delay is ultimately either incurable or unreasonably burdensome. As Mr Zipser pointed out, the defendants have bought this property so that they can live in it. Their domestic lives have been put in suspension for well over three years by these proceedings. They now have an order for specific performance and they want to move into the Chiswick property, so they can get on with their lives. They have arranged finance to acquire the property for settlement this afternoon, 2 May. That finance has already been extended several times because of delays of the other applications considered by the Court. Even if the defendants are able to arrange other finance or extend existing finance, the grant of an injunction would put their domestic lives further on hold. In my view, that delay should not be allowed to continue to their prejudice.
Prejudice to the defendants cannot now readily be mitigated. They have incurred substantial legal costs in defending a series of unsuccessful claims to restrain settlement. During submissions, the idea was debated that Mr Ramzy Sebie might give security for any undertaking as to damages that he would be proffering to the Court. Without such security, Mr Ramzy and Mrs Rose Sebie, who are not parties to the contract for sale between Mr Robert Sebie and the Phams, would potentially cause loss to the Phams should their undertaking as to damages be called upon and not honoured. The Court indicated to Mr Ramzy Sebie that if the Court had any inclination to grant an injunction in this case, it would probably only do so on the basis that his undertaking as to damages was secured by an unencumbered property held in his name.
To satisfy this he first provided unsatisfactory evidence from a real estate agent that he owned a property in Mount Druitt. After the proceedings were stood down till about 2.30pm, he provided a Certificate of Title for a strata title property at Mount Druitt. But the Certificate of Title he produced showed the property was subject to a first mortgage to St George Bank Limited. He was not able to supply any further information about the value of the property or the quantum of that mortgage. Should an injunction be granted, given the existing history of delay these proceedings, it could readily be anticipated that significant legal costs would be occasioned to the Phams. Whether Ramzy Sebie's equity in the Mount Druitt property would be adequate to meet those costs is unknown. In these circumstances, the Court was not prepared to treat the Mount Druitt property as security for Mr Ramzy Sebie's undertaking as to damages. For discretionary purposes the Court will treat the undertaking as unsecured.
Completion of the sale will probably cause little financial prejudice to Ramzy and Rose Sebie. They now also claim an equitable interest in the Chiswick property. But the ENA documentation at best suggests only the creation of a charge to secure repayment of monies, ENA's caveat has now been struck out, and evidence of anything more than ENA's charge interest is weak for the reasons already given. But if ENA does have a legitimate claim to an equitable charge over the Chiswick property, it could still be maintained against the proceeds of sale in Court and the sale will not prejudice that claim. But as Pembroke J's first judgment makes clear, ENA's claim to a secured interest in the Chiswick property is fraudulent.
And the best available evidence is that the sale from Robert Sebie to the Phams was not at an undervalue. When Ms Musabwasoni, Mr Robert Sebie's former wife, was minded to challenge the sale on the ground that it was an undervalue, the Court authorised a valuer to go into the Chiswick property on her behalf to value the property as at the sale date in October 2014. After a valuation was obtained for her, she abandoned her contention that the sale was at an undervalue on the express basis that the argument could no longer be maintained. All of this has been on the public record since then through my various judgments in these proceedings. Thus it is improbable that any party would be prejudiced by having to look to the fund in Court, rather than restraining the sale itself. Protecting the alleged advances by ENA is therefore not a reason to restrain completion.
Completing the sale will prejudice Rose and Ramzy Sebie's additional claim to an equitable interest in the property and they will ultimately lose the right to live in it. But apart from their recent misconduct, their pursuit of this additional claim is so weakly supported by evidence, so grossly delayed without adequate explanation, so reliant on suspicious documents and transactions, and so causative of further prejudice to the Phams, that I am not prepared to act on it to restrain completion.
[4]
Referral to the Prothonotary
The administration of justice would be seriously impaired if a party were able to appear before one judge of this Court without disclosing that only shortly before, the party had received an adverse decision from another judge of the Court on substantially the same matter. Were this permitted to occur, the business of the Court would descend into chaotic judge-shopping. What Mr Ramzy Sebie did on the morning of 2 May 2018 were replicated, that is, to go to the Duty Judge in Equity and seek an injunction without informing her of the lengthy proceedings before me, that would risk the creation of chaos.
Circumstances can arise where a judge hearing a case is not available and a party needs to go before another judge. But in this case, no inquiry was even made of my Associate before Mr Ramzy Sebie approached Ward CJ in Eq on the morning of 2 May 2018, and no notice was given to my Associate that the approach to another judge was going to be made. Mr Ramzy Sebie had previously shown no hesitation in sending correspondence to my Associate about the conduct of these proceedings. There is a reasonable case to be made that Mr Ramzy Sebie deliberately chose not to inform my Associate that he was going to approach Ward CJ in Eq and that he made that choice, so that Ward CJ in Eq would proceed without knowledge of the history of these proceedings, and therefore would be more likely to grant an injunction that would abort the settlement at 2pm. The scheme almost succeeded.
The transcript before Ward CJ in Eq at one point makes indirect reference to prior proceedings. But what was said to her Honour never conveyed to her Honour that another judge of this Court was presently actively managing the proceedings and had recently made several related decisions. At no point did Mr Ramzy Sebie make any reference before Ward CJ in Eq to the prior proceedings before me. The inference is available that this was a deliberate decision not to disclose highly relevant matters to the Court. This had the effect of the Court making orders that it would not have otherwise have made.
If a party deliberately misleads the Court by giving the Court false information or by denying information to the Court, that party may thereby commit a contempt of Court. Misleading a Court has a tendency to create dysfunction in the Court's processes.
I am not deciding any of these matters, other than to say that on the materials before me, a case of contempt of Court may, upon further investigation, be maintainable against Mr Ramzy Sebie. In my view, this requires further investigation.
Such conduct is unacceptable. But I do not propose to take any other action with respect to it in these proceedings at this time. I have decided to refer the papers in this matter to the Prothonotary for the Prothonotary to further investigate the facts and take advice as to whether or not this is a matter in which Mr Ramzy Sebie should be proceeded against for contempt of Court.
[5]
Costs and Further Directions
The Court has dismissed Mr Ramzy Sebie's interlocutory application in his and Mrs Sebie's new proceedings. The future course of the new proceedings is uncertain. Upon the dismissal of the interlocutory application Mr Zipser for the Phams applied for costs of the application. The Court indicated that a claim for an order for costs of a dismissed application for an interlocutory injunction raises special considerations that may depend upon what is to happen to the rest of the proceedings. It was not possible to have that issue argued on 2 May 2018. So the issue was adjourned along with issues in other proceedings to Monday, 28 May 2018 at 10am for further argument.
[6]
Conclusion and Orders
For these reasons the Court orders as follows:
1. Leave is not granted to the first plaintiff lodge any further caveats over the property the subject of the Summons ("the Chiswick property").
2. Dismiss the plaintiffs' application for an interlocutory injunction.
3. Stand the balance of the proceedings over for mention at 10am on 28 May 2018.
4. If completion of the sale of the Chiswick property occurs today I will permit any party to file motions returnable before me for 28 May 2018 either seeking possession or regulating the time over which possession is given.
5. Costs of the contest for an interlocutory injunction are reserved.
6. Refer these reasons for decision to the Prothonotary to consider whether proceedings for contempt of court should be brought against Mr Ramzy Sebie.
[7]
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: 07 May 2018
Parties
Applicant/Plaintiff:
Ramzy Sebie & Anor
Respondent/Defendant:
Andy Duong Duc Pham & Ors
Cases Cited (30)
Judgment
This is my sixth judgment in these proceedings. This judgment should be read together with my five previous judgments. Events, matters and persons are referred to in this sixth judgment in the same way that they are in each of my previous judgments. All judgments concern the settlement of certain residential real property in Chiswick ("the Chiswick property"). Preceding my six judgments, Pembroke J gave judgments in April and May 2017: Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446; Pham v Enterprise ICT Pty Ltd (No 2) [2017] NSWSC 583.
My first judgment was given on 8 November 2017: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie [2017] NSWSC 1509. My second judgment was given on 30 January 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 2) [2018] NSWSC 22. The first and second judgments set out the history of these unusual proceedings from September 2017 until late January 2018. My third judgment was given on 29 March 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 3) [2018] NSWSC 381. That judgment deals with the course of the proceedings between late January 2018 and 29 March 2018. It removed the sole remaining caveat of ENA, which was preventing settlement of the sale of the Chiswick property. ENA sought a stay pending an appeal from that decision but on 9 April Simpson JA refused the stay: Enterprise ICT Pty Ltd v Pham [2018] NSWCA 74.
More caveats were then lodged. My fourth judgment was given on 24 April 2018 striking out a caveat of Mr Mazen Zraika: Pham v Mazen Zraika; Pham v Sebie (No. 4) [2018] NSWSC 566. My fifth judgment, restraining Mr Ramzy Sebie from filing any further caveats over the Chiswick property, was given on 1 May 2018: Pham v Enterprise ICT Pty Ltd and Others; Pham v Sebie (No. 5) [2018] NSWSC 567.
This judgment, my sixth judgment, deals with an application brought by Mr Ramzy Sebie for an interlocutory injunction to restrain the settlement of the Chiswick property that was scheduled for 2pm on Wednesday, 2 May 2018. Because of the many applications brought in relation to the conveyancing transaction the subject of these proceedings, the Court has set out the full relevant procedural history.
After the Court gave the fifth judgment on Tuesday, 1 May 2018, ordering the removal of a caveat lodged by Mr Ramzy Sebie, completion of the contract for sale of the Chiswick property was scheduled to proceed in accordance with existing Court orders before the Registrar in Equity at 2pm on Wednesday, 2 May 2018. Despite my being the judge who had decided all applications in these proceedings since September 2017, my chambers received no communication from Mr Ramzy Sebie that he proposed to make any further application to prevent completion of the contract before 2pm on Wednesday, 2 May 2018.
Without further notice to me, on the morning of 2 May 2018 Mr Ramzy Sebie approached the Equity Duty Judge, then Ward CJ in Eq, and commenced fresh proceedings in his own name and in the name of his wife, Mrs Rose Sebie, to seek injunctive relief to restrain completion. Based on Civil Procedure Act 2005, s 56 considerations of efficiency, I had made clear to Mr Ramzy Sebie that all applications concerning the Chiswick property should be made to me, as I had extensive experience with the proceedings and knew the details of the many contests between these and related parties.
Based on what Mr Ramzy Sebie said to the Chief Judge on the morning of 2 May, her Honour granted a temporary injunction in the fresh proceedings (which became numbered 2018/137809) and directed the plaintiffs, Mr Ramzy Sebie and Mrs Rose Sebie, to notify the Phams of the grant of the ex parte injunction. Brought by both Mr and Mrs Sebie, these fresh proceedings will often be referred to in these reasons as "the 2 May proceedings". Mr Ramzy Sebie was the active party in advancing them.
The transcript of what occurred before Ward CJ in Eq is available. It is evident from that transcript that Mr Ramzy Sebie did not inform her Honour of any of the history prior to the 2 May proceedings. Mr Ramzy Sebie's conduct in applying to the Duty Judge in fresh proceedings to restrain a settlement without disclosing the prior involvement of any other judge of the Division in earlier proceedings over the same settlement is a serious matter. For the reasons set out below, after applying the requisite standard of proof of such a serious matter (see Evidence Act 1995 s 140 and Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 and Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) 110 CLR 445; [1992] HCA 66) I have concluded on the balance of probabilities that his conduct in this respect was deliberate. Determining whether what Mr Ramzy Sebie has done here might be a contempt of court is addressed separately at the end of this judgment.
Ward CJ in Eq subsequently on 2 May discovered through the Court's internal administration that the earlier proceedings had been before me on multiple occasions and that I had made orders as recently as 1 May 2018. Her Honour rescinded the injunction on the grounds of Mr Ramzy Sebie's non-disclosure to her Honour and directed the matter be re-listed before me by 2pm on the afternoon of 2 May 2018.
The matter in fact came on before me at about 1.25pm. Mr Ramzy Sebie appeared for himself and his wife. Mr Zipser appeared for the Phams. These reasons now set out more detail of the making of the application, how it was misleading and the evidence put in support of it. That is followed an analysis of whether or not an injunction should be granted.