Sarkis v Moussa

Judgment 1BARRETT JA: Ward J will deliver the first judgment. 2WARD J: By Amended Notice of Motion filed on 18 June 2012, Mr Toufic Laba Sarkis seeks orders, among other things, setting aside the judgment and orders of Beazley JA on 14 May 2012 by which her Honour dismissed with costs a Summons by Mr Sarkis seeking leave to appeal from orders made by Latham J on 30 September 2011. Mr Sarkis seeks that, in lieu thereof, there be an order that the Notice of Motion filed on 13 March 2012 by the respondent in these proceedings (Mr Mahmoud Moussa) (in which Mr Moussa had sought the orders from which the appeal is now sought to be brought) be dismissed or stand adjourned to a certain date. 3Mr Sarkis' application is brought pursuant to s 46(4) of the Supreme Court Act 1970 (NSW) on the following grounds: (1)That her Honour erred and/or that the exercise of her Honour's discretion miscarried in that it was premature and/or unjust to dismiss the application for leave in circumstances where Mr Sarkis had commenced separate and unresolved proceedings pursuant to s 178 of the Bankruptcy Act 1966 (Cth). (2)That her Honour erred and/or that the exercise of her Honour's discretion miscarried in making an order for dismissal under Part 6 of Civil Procedure Act 2005 (NSW) or under Uniform Civil Procedure Rule 13.4(1)(c). (3)That her Honour erred in the construction of ss 58 and 60 of the Bankruptcy Act 1966 (Cth). 4In support of his application, Mr Sarkis has sworn an affidavit on 1 June 2012. In that affidavit, in effect by way of submission, Mr Sarkis says that there has been an injustice in his case in that damages have been awarded against him by O'Shane LCM "without any evidence of loss" to Mr Moussa; "contrary to the rule that damages for breach of contract are compensatory not punitive; and in circumstances where it was acknowledged by Counsel for the Respondent at the hearing before Latham J in the Supreme Court that there was no evidence of what happened to the valuable furniture which was the partnership property and hence there was no evidence of loss". (Mr Sarkis has referred to a portion of the transcript of the hearing before Latham J in that regard). 5Although the Amended Notice of Motion was filed by a solicitor acting for Mr Sarkis, and no Notice of Ceasing to Act has been filed by that solicitor (Mr George Khoury of George Khoury & Co), Mr Sarkis appeared for himself on the current application and is no longer legally represented. 6Mr Sarkis filed submissions on 21 August 2012 in which he asserts a belief that he has an arguable case. He attached to those submissions what is described as an argument dated 19 March 2012 from his previous barrister (Mr Peter E King) in support of his application. On the present application Mr Sarkis also places reliance on his affidavit filed 1 June 2012 by Mr Sarkis and the submissions made by Mr King on 19 and 27 March 2012 before Beazley JA, as recorded in the transcript in the Appeal Book. 7Mr Sarkis asserts that there has been judicial error and unfairness; and that O'Shane LCM originally acted "against the information on file and the evidence given under oath and unreasonably and unsubstantially accepted evidence of Mr Moussa over [Mr Sarkis'] evidence". Mr Sarkis invokes the principles of natural justice and fairness, asserting that O'Shane LCM and Latham J did not consider properly the damages argument and uncontested evidence before the Court. 8Counsel for the respondent to this application, Mr Rollinson, notes that the application made by Mr Sarkis to the Federal Magistrates Court pursuant to s 178 of the Bankruptcy Act 1966 (Cth) (appealing from the decision of the trustee not to prosecute the appeal from Latham J's decision) was dismissed on 1 August 2012. A notice of appeal from Raphael FM's judgment is included in the Appeal Book and Mr Rollinson has informed us that the appeal has been listed for hearing some time in February next year. Background 9The background to the present application (as opposed to the background to the overall dispute) is set out in Beazley JA's reasons for judgment of May this year. Briefly, Mr Moussa was successful in obtaining a judgment in the Local Court against Mr Sarkis in the sum of $53,136.50 plus interest in respect of an oral contract in relation to the sourcing of furniture to be sold in Mr Sarkis' retail store. Mr Sarkis denies the existence of the alleged contract. O'Shane LCM found that a contract existed as had been alleged by Mr Moussa (but denied by Mr Sarkis). Mr Sarkis considers that O'Shane LCM was in error in accepting the evidence of Mr Moussa over the evidence of himself in that hearing. 10Mr Sarkis' appeal against that decision was heard by Latham J and was unsuccessful. On 30 September 2011, her Honour ordered that Mr Sarkis' summons be dismissed with costs. 11Mr Sarkis then filed (on 14 October 2011) a summons seeking leave to appeal to the Court of Appeal from Latham J's order dismissing his summons. However, before that summons was heard, a sequestration order was made against Mr Sarkis' estate (on 31 October 2011) and trustees were appointed to Mr Sarkis' estate. (Mr Sarkis filed an application for review of the sequestration order on 7 November 2011 but subsequently withdrew that application and was ordered to pay the costs of both the trustees and Mr Moussa in relation to that application.) 12On 2 December 2011, Mr Moussa's solicitors wrote to the trustees of Mr Sarkis' estate invoking s 60 of the Bankruptcy Act 1966 (Cth) and requesting that the trustees provide notice in writing within 28 days of their intention to prosecute or discontinue the application for leave to appeal. The response by the trustees (by letter dated 20 December 2011) was that they did not propose to prosecute the bankrupt's application for leave to appeal and would not be appearing at the directions hearing in the Court of Appeal then listed for 6 February 2012. 13On 9 March 2012, Mr Sarkis filed an application in the Federal Magistrates Court under s 178 of the Bankruptcy Act, apparently seeking leave to press the appeal from the decision of Latham J. 14Beazley JA noted that the underlying basis for the orders sought in Mr Moussa's Notice of Motion was Mr Sarkis' bankruptcy. For Mr Moussa it was contended that the summons seeking leave to appeal had either been discontinued pursuant to s 60(2) of the Bankruptcy Act 1966 (Cth) or abandoned pursuant to s 60(3) of that Act. 15Beazley JA found that the trustees' letter of 20 December 2011 was sufficient to constitute an election by them to discontinue the action but that (if adherence to the precise words of s 60(2) were necessary for such an election) that the action would be deemed to have been abandoned pursuant to s 60(3) on 30 December 2011 (her Honour noting that Mr Sarkis did not fall within the meaning of "other person" in s 60(3), citing Aware Industries Ltd v Robinson [1997] FCA 571; 75 FCR 600; Campbell v Metway Leasing Ltd [2001] FCA 1311; 188 ALR 100). (One of the grounds on which Mr Sarkis now seeks a review of her Honour's decision is that the trustees took no action within the 28 day period, which I understand to encompass a review of the above finding.) 16Her Honour considered the arguments advanced by Mr Sarkis in opposing the relief sought by Mr Moussa and held, in summary, that (i)the summons seeking leave to appeal constituted an "action" for the purposes of sub-ss 60(2) and 60(3) (referring to the definition of "action" in s 60(5), the definition "civil proceedings" in the Civil Procedure Act 2005 (NSW) and the manner in which proceedings are conducted under the Uniform Civil Procedure Rules 2005 (NSW), and the following authorities: Want v Moss (1889) 10 LR (NSW) 274 per Manning J at 279; Daemar v Industrial Commission of New South Wales, (1988) 12 NSWLR 45 per Kirby P, Samuels and Clarke JJA agreeing, at 54-55; and particularly the observation in Cummings v Claremont Petroleum [1996] HCA 19; 185 CLR 124 of Brennan CJ, Gaudron and McHugh JJ at 130 that the institution of an appeal by a defendant against a judgment in favour of a plaintiff is the commencement of a proceeding). (ii)that even if the 20 December 2011 letter of the trustees did not satisfy the requirements of s 60(2), s 60(3) operated according to its terms such that the action was abandoned by the trustees on 30 December 2011; (iii)that Mr Sarkis therefore had no locus standi to prosecute his summons seeking leave to appeal, by reference to Want v Moss and Cummings v Claremont Petroleum (her Honour noting that her previous decision in Baulkham Hills Shire Council v Stankovic [2009] NSWCA 281 was on an entirely different point and irrelevant to the issues raised on Mr Moussa's Notice of Motion). (iv)that s 58(3) of the Bankruptcy Act had no application to Mr Moussa's Notice of Motion (and hence that there was no requirement for Mr Moussa to have obtained leave to bring the Notice of Motion). Application for review of her Honour's decision 17I turn then to the present application. An application for review pursuant to s 46(4) of the Supreme Court Act is not an appeal (s 19(2) of the Act and Uniform Civil Procedure Rules 51.2 and 51.58). What the applicant for review must show is that there has been an error of principle in the exercise of the power or that the decision was plainly wrong (Transglobal Capital Pty Ltd v Yolarno Pty Ltd [2004] NSWCA 136; Patrick v Howorth [2002] NSWCA 285). It is noted in Ritchies' Uniform Civil Procedure NSW that this construction of the power derives either from the legislative context of that statutory provision (citing Wentworth v Wentworth (1994) 35 NSWLR 726) or from the proposition that an application to discharge or vary is essentially a matter of practice and procedure. 18More recently, in Rinehart v Welker [2011] NSWCA 403, the Court of Appeal noted the heavy burden that a person seeking a s 46(4) review has to discharge in order to have a Judge of Appeal's order set aside (at [48]) (referring there also to Kiri Te Kanawa v Leading Edge Events Australia Pty Ltd [2007] NSWCA 274 at [14] and Lo v Iverarch [2009] NSWCA 92 at [29]). 19As Beazley JA observed, there is power under Rule 13.4(c) of the Uniform Civil Procedure Rules to dismiss proceedings where it appears to the Court that the proceedings are an abuse of the process of the Court. Proceedings sought to be maintained by a party that does not have locus standi to bring those proceedings must in my view be an abuse of the process of the Court. 20No error in the construction of ss 58 and 60 of the Bankruptcy Act has in my respectful view been demonstrated to have been made by her Honour. For the reasons set out by her Honour, Mr Sarkis does not have standing to prosecute the appeal he seeks to maintain from the judgment and orders of Latham J. His trustees in bankruptcy have elected not to prosecute the appeal and have either elected to discontinue the action (as her Honour found) or have abandoned it. 21No error of principle has been identified in the exercise by her Honour of the power to dismiss the Summons seeking leave to appeal pursuant to Uniform Civil Procedure Rules 13.4(c) and 51.1. (Insofar as Mr Sarkis maintained as a ground of appeal that her Honour had erred, or that her Honour's discretion had miscarried, in that it was premature to dismiss the proceedings while the application under s 178 was unresolved, that application has since been dismissed but in any event it does not seem to me that her Honour's discretion in that regard was shown to have been plainly wrong or an error of principle.) 22Insofar as Mr Sarkis maintained that the dismissal of the application was unjust and has emphasised the moral background or strength to the claim he seeks to prosecute in the appeal, it cannot be said that it is plainly wrong to dismiss an application that there is no standing in the applicant to bring. 23Mr Sarkis has therefore not established that there is a basis for the relief he seeks. The Amended Notice of Motion should be dismissed. I see no reason why costs should not follow the event. Accordingly, I am of the view that the appropriate order is that the Amended Notice of Motion filed 18 June 2012 should be dismissed with costs. 24BARRETT JA: Tobias AJA will deliver the next judgment. 25TOBIAS AJA: I agree with the orders proposed by Ward J for the reasons she has given. I wish to add only the following. As her Honour has noted, Mr Sarkis' real complaint as set out in his affidavit of 1 June 2012 and his submissions filed on 21 August 2012, and which he was at some pains to explain to the Court today, is that the factual findings of Magistrate O'Shane were wrong when she rejected his evidence and accepted the evidence of Mr Moussa on the issue of whether or not there was a relevant agreement between them for the payment of the money the subject of the learned Magistrate's order. He thus asserts that he has been the subject of a grievous wrong and that this Court, in effect, is morally bound to correct it. 26The difficulty faced by Mr Sarkis is that Latham J was bound by the provisions of s 40(1) of the Local Court Act 2007 (NSW) pursuant to which Mr Sarkis sought leave to appeal to her Honour against the judgment and orders made by Magistrate O'Shane. As her Honour noted in [6] of her judgment of 30 September 2011, there is no appeal from a Magistrate's decision to the Supreme Court on questions of fact. Furthermore, a wrong finding of fact, and even a perverse finding of fact that is against the weight of the evidence, does not elevate that wrong into an error of law. Accordingly, the law by which Latham J was bound and by which this Court is also bound, does not permit of an examination of the evidence before Magistrate O'Shane in order to determine whether she should have believed Mr Sarkis rather than Mr Moussa. Contrary to Mr Sarkis' understandable plea to this Court, neither Latham J nor this Court has power to determine what Mr Sarkis has characterised as a moral issue which involves a finding of fact rather than an error of law. 27Errors of law and findings of fact are not the same. However, it is understandable that a lay person in the position of Mr Sarkis may be under some misapprehension as to the jurisdiction of a court to deal with issues such as those presented to Latham J. In any event, as Ward J has pointed out, the real issue in the present matter is whether the decision of Beazley JA was plainly wrong. For the reasons given by her Honour, Beazley JA was clearly correct in determining the issues which were presented to her for decision. For these further reasons, I agree with the orders proposed by Ward J. 28BARRETT JA: I agree that the orders proposed by Ward J should be made. I also agree with the reasons stated by her Honour and with the additional reasons stated by Tobias AJA. 29The order of the Court of Appeal is therefore that Mr Sarkis' application for review by way of Amended Notice of Motion filed on 18 June 2012 is dismissed with costs.