HIS HONOUR: On 18 February 2015, at the suit of the defendant (Ms Nissi), I made orders to the effect that the plaintiff (Mr Sharkey) should be restrained from leaving the country until further order, and that he should deliver up his passports until further order. The application was made before me ex parte, in circumstances where the suit between Mr Sharkey and Ms Nissi was being heard by Robb J.
The reasons that I gave ([2015] NSWSC 104) show that the application was made either on the basis of the Court's general power to make such orders or on the basis of UCPR r 25.14. In the case of the rule, the particular power relied upon was one to make a freezing order or ancillary order or both. In this case, what was sought was described as an "ancillary order".
Mr Sharkey moves today for the discharge of the orders that were made. There are a number of points taken. The first was that the general power to make orders restraining people from leaving the jurisdiction (by analogy with the old writ of ne exeat colonia) has been abolished. The next point taken was that there is no power to make a purely ancillary order under r 25.14 except one that is, as r 25.12 says, ancillary to a freezing order or prospective freezing order; in this case, no freezing order was sought or made.
Next, it was submitted, there was no evidence of any intention to "abscond" in the sense of "depart in a sudden and secret manner, especially to avoid legal process" (the definition was taken from the Macquarie Dictionary online). The only evidence that Mr Sharkey intended to lead was, it was submitted, that he was travelling back to America in the ordinary course of his affairs, in circumstances where he has travelled between that country and this on many occasions in the past.
Next, it was said, there was no need to make the order in terms where, if Ms Nissi were entitled to the relief she claimed in the hypothetical circumstances under consideration, the amount of her claim in respect of the mortgage over the property in dispute was less than half the agreed minimum value of that property. In those circumstances, it was submitted, any order in favour of Mr Sharkey which had the effect of entitling Ms Nissi to relief in respect of the mortgage could be accommodated by moulding the form of the order in favour of Mr Sharkey.
Next, it was said, there was significant evidence of prejudice to Mr Sharkey's business interests in America. That was particularly significant, it was submitted, where Ms Nissi's undertaking as to damages was effectively worthless.
In my view, the orders made should be set aside. The reasons for that may be stated without going further into the complicated jurisdictional issues. In circumstances where this application was made in the course of a busy Duty List, and is being dealt with ex tempore to permit Mr Sharkey to leave on a flight booked for this evening (which will be a consequence of the orders I will make), I do not think it is wise to undertake any further examination of the bases of the power that I exercised last week.
One of the significant matters that was put to me on the ex parte application was the proposition that (and I quote paragraph 9 of the written submissions for Ms Nissi):
"Mr Sharkey will return to California immediately his evidence in the proceedings is completed. This is likely to be as early as this afternoon [i.e., the afternoon of 18 February 2015".
In fact, as Robb J subsequently made clear when the matter went back to his Honour, there was no suggestion ever that Mr Sharkey would leave the jurisdiction immediately after his cross-examination. Robb J stated that on 19 February 2015 at T 192.20-33. It has not been suggested that what his Honour said was in any way mistaken.
There has been put before the Court today a body of evidence to show that those who were intending to leave once their cross-examination and any re-examination was completed, were other witnesses called by Mr Sharkey in his case. There was documentary evidence which would have shown that it was intended that those people leave straight away. That material was not put before me on 18 February, no doubt because their departure was not a reason for seeking the order.
However, it is clear both from what is said in para 9 of the submissions and from what I said at [26] of my earlier reasons that I regarded as important by the consideration, "[t]hat Mr Sharkey intends to leave the country once his evidence is completed. He is said to be booked on a flight at 2.15pm today".
Unfortunately, the transcript of the ex parte application is not available. Thus, both counsel and I are forced to rely on our memories of what was said. I am prepared to accept that it may not have been stated as a matter of absolute certainty that Mr Sharkey was going to leave that very day. However, as I have said, it was stated that he would return immediately his evidence was completed and that it was likely that his evidence would be completed that afternoon. That time was derived by reference to the transcript of the hearing before Robb J on 16 February 2015, T 1.39-.46.
In the circumstances, it seems to me that there was, and I accept by oversight or inadvertence, a material misstatement on a relevant fact. I accept that this occurred in the heat of the moment or the confusion caused by the need to have separate counsel making the application before me. Nonetheless, the fact is that it did occur.
Had I been told that Mr Sharkey was not intending to leave (as is now clear he was not) for some days, I would not have made the orders ex parte, but would have given him an opportunity to answer the application.
Allied to that ground is Mr Sharkey's evidence that he travels regularly between America and Australia, and that he has no intention of staying out of this country permanently. In those circumstances, it seems to me, it could not be said that his departure following the conclusion of the hearing before Robb J could possibly be regarded as one undertaken with any intention of avoiding legal process or in a secret or underhand way.
On the contrary, Mr Sharkey has said, and since he was not challenged on it I accept, that he has plans to return to this country on several occasions later this year. Further, Mr Sharkey has shown, by producing his flight records, the frequency of his trips between this country and America.
I do accept, as I recorded in my reasons at [22] and [23], that there were passages in the cross-examination of Mr Sharkey which could suggest that he had behaved, in relation to Ms Nissi, in an underhand and deceptive way; and likewise with his creditors more generally. That was a matter of some significance, because it gave colour to the proposition that Mr Sharkey's abrupt (as it seemed) departure might well be for the purpose of avoiding the enforcement of any order against him.
Whilst I remain of the view that that impression is available from the passages of transcript referred to, when it is put in the context of Mr Sharkey's frequent travel between America and this country, its significance is diminished. Further, it is a matter that Mr Sharkey could have addressed had he been given an opportunity to be heard.
The next matter concerns the value of the property and the amount of Ms Nissi's entitlement to relief. It is important to bear in mind that the claimed entitlement only arises if Mr Sharkey makes good his claim to beneficial ownership of the property, in which case (I assume) he would come under some liability to recoup Ms Nissi for amounts spent by her on the mortgage and to indemnify her for the balance secured.
It is clear that this could be dealt with by moulding any relief in Mr Sharkey's favour so that Ms Nissi would have (for example) the benefit of an equitable charge or lien over the property.
The parties agree that the property in question is worth at least $1.1 million. In round figures, Ms Nissi's claim - on the hypothesis that is relevant - is valued at about $550,000. It is therefore clear that appropriately moulded relief (if Mr Sharkey makes out a case for relief) could accommodate Ms Nissi's hypothetical entitlement to be recouped and indemnified.
The next matter is that Mr Sharkey has put on evidence, which I repeat was not challenged in cross-examination, as to the detriment to his business interests in America if he were prevented from leaving the country in the very near future. That prejudice would be significant.
True it is that Ms Nissi gave an undertaking as to damages. But (and this is the last matter on which I rely in support of the conclusion that I have expressed), her affidavit (which she filed and read not before me, but pursuant to an order subsequently made by Robb J) is that apart from whatever interest she may have in the property in question, she is, to put it bluntly, not good for any likely amount of damages that Mr Sharkey and his business interests may sustain if he is prevented from attending to those business interests by a continuation of the orders.
Those matters individually, and certainly collectively, justify setting aside the orders that were made.
Accordingly, I discharge orders 1 and 2 made on 18 February 2015. I direct that the plaintiff's solicitor Mr Sperber is at liberty to return to the plaintiff the passport of the plaintiff that has been delivered into Mr Sperber's custody.
Counsel for Ms Nissi accepts that she must pay the costs, and puts nothing against the assessment of those costs on the indemnity basis. Accordingly, I order the defendant to pay the plaintiff's costs of the application, and direct that those costs be assessed on the indemnity basis.
The notice of motion filed in Court on 18 February 2015 is dismissed.
[3]
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Decision last updated: 03 March 2015