• Lawyers in Sydney
• Lawyers in Melbourne
• Lawyers in Brisbane
• Lawyers in Perth
• Family lawyers
• Employment lawyers
• Criminal lawyers
• Wills and estates lawyers
• Find a lawyer

Judgment

1. Mr Mahdi Sultan commenced these proceedings in the Equity Division of this Court in 2021 against the first defendant, Mr Ahmad Dabboussi, the second defendant Zam Zam Operations Pty Ltd, and the third defendant Halal 2 U Pty Ltd.
2. Mr Sultan's claim against Mr Dabboussi is a claim for damages in the sum of $5,229,350 for alleged false representations, alleged misleading or deceptive conduct and/or alleged breaches of contract. The amount of damages claimed reflects the total amount of moneys that Mr Sultan claims to have paid to Mr Dabboussi for him to invest in particular investments that he says Mr Dabboussi was promoting to him with representations that they would pay a 100 per cent return on capital invested by a specified date, plus the amount of the allegedly promised return. Those representations were allegedly made orally during conversations between Mr Sultan and Mr Dabboussi in July and August 2021.
3. Mr Sultan's claims against Zam Zam Operations Pty Ltd and Halal 2 U Pty Ltd are claims for restitution of some of those investment moneys that Mr Sultan says he paid into the accounts of those companies at Mr Dabboussi's direction. Thus, there is an overlap between the amount of Mr Sultan's damages claim against Mr Dabboussi and the amounts claimed from the two companies by way of restitution.
4. Importantly for present purposes, Mr Sultan also claims a declaration that he has an equitable interest in real property at Condell Park owned by Mr Dabboussi, and a declaration that he has a proprietary interest in 50 per cent of the net proceeds of sale of a property at Horningsea Park that was owned by Mr Dabboussi and his former wife, Ms Fadile Bernad, as joint tenants, on the basis of an alleged oral agreement between Mr Dabboussi and Mr Sultan that the moneys invested, and the allegedly promised return on those moneys, would be secured against the Condell Park property and against Mr Dabboussi's interest in the Horningsea Park property. That oral agreement is alleged to have been made during the same conversations in July and August 2021 in which Mr Sultan claims that the allegedly false or misleading representations were made by Mr Dabboussi.
5. Mr Dabboussi is representing himself in the proceedings. He has filed a defence which does not traverse each allegation in Mr Sultan's statement of claim in the usual way. The defence states, amongst other things, that Mr Sultan has not suffered any loss because the moneys that he paid to or at Mr Dabboussi's direction after their conversations in July and August 2021 were moneys that Mr Sultan had procured third parties to invest. Mr Sultan was acting as some sort of broker, which explains why Mr Sultan says that Mr Dabboussi promised to pay him a commission calculated as a percentage of the funds invested.
6. There is no solicitor on the record for Zam Zam Operations Pty Ltd or Halal 2 U Pty Ltd. Mr Dabboussi has not been granted leave to represent those companies in the proceedings. Mr Dabboussi has stated at several interlocutory hearings in the proceedings that Zam Zam Operations Pty Ltd is in liquidation, or has been wound up. If so, then these proceedings are stayed insofar as they concern Mr Sultan's claims for relief against Zam Zam Operations Pty Ltd by operation of s 471B or s 500 of the Corporations Act 2001 (Cth).
7. It is convenient to refer to these proceedings as the Sultan proceedings.
8. The Horningsea Park property formed part of the assets of the marriage of Mr Dabboussi and Ms Bernard. In 2021, Ms Bernard commenced proceedings (P)SYC5897/2021 in the Federal Circuit and Family Court of Australia (Division 2) (the FCFCA) seeking relief that includes orders under s 79 of the Family Law Act 1975 (Cth) altering the interests of Mr Dabboussi and Ms Bernard in property of the marriage (the family law proceedings).
9. The Horningsea Park property was subsequently sold by the registered first mortgagee, who then commenced proceedings 2023/98977 in this Court and paid the net sale proceeds of approximately $1.227 million into court (the mortgagee proceedings). At the time of the mortgagee sale, numerous caveats had been lodged against the title to the property by claimants other than Mr Sultan. The affidavit sworn by the mortgagee's solicitor on 23 March 2023 in support of the application to pay the net sale proceeds into court identified those caveators, Mr Sultan, and Mr Dabboussi's parents (Ms Zeinab Dabboussi and Mr Mohammad Marwan Dabboussi) as persons who may have an interest in the net sale proceeds of the property, in addition to Mr Dabboussi and Ms Bernard. With the exception of Mr Sultan and Mr Dabboussi's parents, each of those interested persons is now a party to the family law proceedings. Whilst Mr Sultan is not a party to the family law proceedings, counsel for Mr Sultan has appeared before the Federal Circuit and Family Court of Australia in at least one hearing in those proceedings.
10. I became aware of the family law proceedings, including the third party claims to the Horningsea Park property net sale proceeds that form part of the family law proceedings, in the course of hearing two applications that came before me as Duty Judge on 20 May 2024 by Mr Dabboussi's parents and certain other persons for this Court to pay to the applicants the Horningsea Park property net sale proceeds which are held in court. Counsel for Mr Sultan appeared at the hearing of those applications as an interested person who also claims an interest in the Horningsea Park property net sale proceeds. I made orders staying those applications on the basis that any payment out of the moneys held in court should await and abide the determination of all of the competing claims to the Horningsea Park property net sale proceeds in the family law proceedings. At that point during the hearing, counsel for Mr Sultan informed me that he had commenced these proceedings claiming an interest in those net sale proceeds, and that the proceedings were listed for hearing before me on 25 and 26 June 2024. I informed counsel for Mr Sultan and Mr Dabboussi that I intended to review the file and consider whether those proceedings should be transferred to the FCFCA to be heard and determined together with the family law proceedings.
11. On 30 May 2024, I caused my Associate to list these proceedings for directions on 4 June 2024 and to notify Mr Sultan's solicitor and Mr Dabboussi that I was considering making an order under s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) (the NSW Cross-Vesting Act) transferring these proceedings to the FCFCA and that, if they opposed such a transfer, I would hear submissions from them on that occasion. Counsel for Mr Sultan made submissions in opposition to any transfer. Mr Dabboussi informed the Court that he was in favour of a transfer. At the conclusion of the hearing, I made an order transferring the Sultan proceedings to the FCFCA on the basis that I would publish my reasons for doing so as soon as practicable. These are those reasons.
12. Section 5 of the NSW Cross-Vesting Act relevantly provides: "5 Transfer of proceedings (1) Where - (a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court, and (b) it appears to the Supreme Court that - (i) (Repealed) (ii) having regard to - (A) whether, in the opinion of the Supreme Court, apart from any law of the Commonwealth or another State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Federal Circuit and Family Court of Australia, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the Supreme Court and capable of being instituted in the Federal Court or the Federal Circuit and Family Court of Australia, (B) the extent to which, in the opinion of the Supreme Court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the Supreme Court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, and (C) the interests of justice, it is more appropriate that the relevant proceeding be determined by the Federal Court or the Federal Circuit and Family Court of Australia, as the case may be, (iii) (Repealed) the Supreme Court shall transfer the relevant proceeding to the Federal Court or the Federal Circuit and Family Court of Australia, as the case may be. … (7) A court may transfer a proceeding under this section on the application of a party to the proceeding, of its own motion or on the application of the Attorney-General of the Commonwealth or of a State or Territory. … (9) Nothing in this section confers on a court jurisdiction that the court would not otherwise have."
13. The Court is required to have regard to each of the matters in s 5(1)(b)(ii)(A), (B) and (C) in determining whether it is more appropriate that these proceedings be determined by the Federal Circuit and Family Court of Australia. However, (A), (B) and (C) are not cumulative requirements. If neither (A) nor (B) is satisfied, the Court may nevertheless conclude having regard to the interests of justice that it is more appropriate that these proceedings be determined by the Federal Circuit and Family Court of Australia: Zhang v Levingson [2023] NSWSC 1559 at [26]-[30] (Slattery J), and the authorities there referred to.
14. It will not be more appropriate that these proceedings be determined by the FCFCA if that court does not have jurisdiction to do so, or even if it is seriously arguable that it does not have jurisdiction to do so: Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 (Valceski) at [20]-[21] (Brereton J, as his Honour then was).
15. I am satisfied that the FCAFC does have jurisdiction to determine the Sultan proceedings. Counsel for Mr Sultan made no submission to the contrary.
16. The Sultan proceedings are a dispute between one party to the marriage (Mr Dabboussi) and a third party (Mr Sultan).
17. The FCAFC has original jurisdiction with respect to "matters" in respect of which proceedings may be instituted under the Family Law Act, including property settlement proceedings under Parts VIII and VIIIA of that Act: see Federal Circuit and Family Court of Australia Act 2021 (Cth), s 132(1)(a).
18. The ultimate issue in property settlement proceedings is what, if any, alteration should be made to the interests of the parties to the marriage in their property (s 79, Family Law Act). The first step in such proceedings is the identification and valuation of the property of the matrimonial parties, which necessarily includes determining the extent of any debts owed by each matrimonial party and the extent to which such debts may be secured against their interests in property: Valceski at [27]-[29]. The range of orders that may be made in altering the matrimonial parties' interests in property extend to orders that are binding on, and directed to, creditors and other third parties in respect of debts owed by a party to the marriage and in respect of property of the parties to the marriage (s 90AE, Family Law Act).
19. The jurisdiction conferred on the FCFCA to hear and determine "matters" in respect of which proceedings may be instituted under the Family Law Act extends to the determination of the whole of the justiciable controversy, including any aspects of that controversy that depend on State law rather than federal law. There is a single "matter" which encompasses all claims arising out of a common substratum of facts, notwithstanding that the facts on which the claims depend may not wholly coincide. The jurisdiction to determine the whole of the matter carries with it the power to grant appropriate remedies in the matter, including remedies given by State law. It is not necessary for the FCFCA to find a remedy within the Family Law Act: Fencott v Muller (1983) 152 CLR 570 at 603-608; [1983] HCA 12 (Mason, Murphy, Brennan and Deane JJ); Valceski at [38]-[59]; Rizeq v State of Western Australia (2017) 262 CLR 1; [2017] HCA 23 at [49]-[57] (Bell, Gageler, Keane, Nettle and Gordon JJ).
20. The Sultan proceedings and the family law proceedings share a common substratum of facts, notwithstanding that the family law proceedings involve wider and additional issues. The issues of whether Mr Dabboussi is indebted or liable to Mr Sultan, whether Mr Sultan has an equitable interest in the Condell Park property of which Mr Dabboussi is the registered proprietor, and whether Mr Sultan has a proprietary interest in 50 per cent of the net proceeds of sale of the Horningsea Park property that was owned by the matrimonial parties as joint tenants, are common to both proceedings. Those issues will arise in the course of the FCFCA determining the application for orders under s 79 of the Family Law Act, as an essential step in identifying the pool of matrimonial property. The factual issues underpinning Mr Sultan's claims to an equitable interest in the Condell Park property and a proprietary interest in 50 per cent of the net sale proceeds of the Horningsea Park property are the same alleged conversations and transactions that give rise to his claims in the Sultan proceedings for damages for alleged false representations, alleged misleading or deceptive conduct and/or alleged breaches of contract.
21. It appears from the joinder to the family law proceedings of numerous third parties who claim an interest in the net sale proceeds of the Horningsea Park property that the FCFCA will determine factual and legal issues relating to their claims, including the question of the priorities of such interests as those third parties may be found to have in those net sale proceeds. The claims of those third parties are likely to intersect with Mr Sultan's claim to an interest in those net sale proceeds, at least in relation to questions of the priorities as between all of those parties, which may depend on whether Mr Sultan and each third party had notice of the others' claims at the time that each of them claims to have acquired their interest in the Horningsea Park property.
22. For those reasons, I am satisfied that the FCFCA does have jurisdiction to determine the Sultan proceedings in the circumstances of this case if those proceedings are transferred to it. There will be a single justiciable controversy encompassing Mr Sultan's claims and the existing issues in the family law proceedings that arises from a common substratum of facts, and that controversy is the "matter" in respect of which the FCFCA has jurisdiction. It is true that Mr Sultan's claims are only part of the controversy, but they are within the scope of the controversy.
23. I therefore turn to the relevant considerations under s 5(1)(b)(ii)(A)-(C) of the NSW Cross-Vesting Act.
24. The first consideration - (A) - is not applicable. The Sultan proceedings were capable of being instituted in this Court. The jurisdiction of this Court to entertain the Sultan proceedings does not depend on any law relating to cross-vesting.
25. The second consideration - (B) - is also inapplicable. Mr Sultan's claims for damages for alleged false representations and alleged misleading or deceptive conduct do arise under Commonwealth legislation, but this Court's jurisdiction to entertain those claims is not dependent on any Commonwealth or State cross-vesting legislation.
26. That leaves the third consideration - (C) - the interests of justice. I respectfully adopt the following summary of the applicable principles by Chen J in Comino v Kremetis (2023) 110 NSWLR 224; [2023] NSWSC 32 at [70]: "70. The authorities dealing with the residual provision (viz., the 'interests of justice') are well-established. Relevantly, they may be summarised as follows: 1. The determination of whether it is in the 'interests of justice' under s 5(2)(b)(iii) for proceedings to be transferred depends on what is the 'more appropriate' forum for those proceedings without any particular emphasis in favour of the forum selected by the plaintiff: James Hardie & Company Pty Limited v Barry (2000) 50 NSWLR 357; [2000] NSWCA 353 at [87] ('Barry'); BHP Billiton Limited v Schultz (2004) 221 CLR 400; [2004] HCA 61 at [14] and [25]. ('Schultz'). This last matter is sometimes expressed to the effect that there is no principle in the application of the Act that the jurisdiction chosen by the plaintiff and regularly invoked is not lightly to be overridden: Schultz at [25]. 2. Although it has been suggested that there is strictly no onus upon either party to persuade the Court to transfer the proceedings or not, the better view is that the applicant for transfer has to persuade the Court to make the order it seeks: Barry at 380 [100]. That is, unless 'it appears' that the proceedings should be determined in another court, 'the court does not have power under the act to transfer the proceedings. To that extent it may be said that an applicant assumes some onus of persuasion': Irwin v State of Queensland [2011] VSC 291 at 14. 3. The Court must make a 'management decision as to which Court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute': Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 714 ('Bankinvest'); Barry at [87]; Schultz at [14] and [63]. Put slightly differently, the interests of justice are 'concerned with the question of which jurisdiction is better placed to determine a dispute between the parties from a practical point of view': Opes Prime Stockbroking Ltd (In Liq) (Scheme Administrators Appointed) v Stevens [2014] NSWSC 659 at [25]. 4. Rather than the selection of the most advantageous, or least disadvantageous, forum for one of the parties, the 'interests of justice' are to be judged by objective factors to facilitate identification of the 'natural forum', in which it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party: Valceski at [69]. 5. The interests of justice include a range of matters such as the governing law, forensic advantages and disadvantages, balance of convenience to the parties and the witnesses and convenience to the Court system: Barry at [95]. 6. If 'it appears' that one court is more appropriate than the other, however so slightly, then a transfer to the more appropriate court is mandatory; no question of discretion arises: Valceski at [70]."
27. In my opinion, there is sufficient commonality of issues between the Sultan proceedings and the family law proceedings that the interests of justice require that they should all be determined by one court, and the FCFCA is the natural forum for that proceeding. As I have explained, Mr Sultan's claims form part of a larger question to be determined in the family law proceedings. The issues raised by Mr Sultan's claims are inextricably connected to the issues raised by Ms Bernard's claim under s 79 of the Family Law Act, and by the third party claims to the Horningsea Park property net sale proceeds which form part of the family law proceedings. If the Sultan proceedings were to be determined in this Court, any determination that Mr Sultan has an interest in the Condell Park property or the Horningsea Park property net sale proceeds would not bind Ms Bernard or the third party creditors, none of whom are parties to the Sultan proceedings. Nor would Ms Bernard or the third party creditors be bound by any findings made by this Court that touch upon the question of the priority of such interests as Mr Sultan may be found to have. It would be necessary for the FCFCA to revisit those issues in the course of identifying the pool of matrimonial property. That duplication of issues to be determined in the two proceedings is inefficient for the courts and costly for the parties, and gives rise to a risk of inconsistent findings between the two proceedings. Those considerations point strongly to the conclusion that the interests of justice favour the determination of all issues in one forum, and to the FCFCA as the more appropriate forum. No party to the Sultan proceedings has suggested that this Court should exercise cross-vested jurisdiction to determine the whole of the justiciable controversy, and no application has been made in the FCFCA for the family law proceedings to be transferred to this Court for that purpose: Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 4(1); Young v Lalic (2006) 197 FLR 27; [2006] NSWSC 18 at [37]-[48] (Brereton J, as his Honour then was); Singh v Singh [2018] NSWCA 30 at [250] (Gleeson JA, Leeming and White JJA agreeing). Thus, only the FCFCA can resolve the whole of the justiciable controversy without duplication of evidence and issues.
28. It was submitted on behalf of Mr Sultan that a transfer of the Sultan proceedings to the FCFCA would be contrary to the interests of justice "insofar as it concerns Mr Sultan" because Mr Sultan contends that he has a strong case against Mr Dabboussi, and he will be prejudiced if that case cannot be heard and determined in the near future in a two day trial in this Court. Counsel for Mr Sultan submitted that, if this Court were to uphold Mr Sultan's claims, he would enforce the judgment in his favour by bankrupting Mr Dabboussi with a view to the trustee in bankruptcy investigating and following the money that Mr Sultan claims to have paid to Mr Dabboussi. It was submitted that, if this Court were to declare that Mr Sultan had an interest in the Condell Park property and/or in 50 per cent of the Horningsea Park property net sale proceeds, then the priority of Mr Sultan's interest vis-à-vis other parties would need to be determined in separate proceedings. It was submitted that the determination of Mr Sultan's claims would be delayed if the Sultan proceedings were now transferred to the FCFCA, and that it would be more costly for Mr Sultan to participate in proceedings in the FCFCA encompassing the family law proceedings and the Sultan proceedings, compared to participating in a two day final hearing of the Sultan proceedings in this Court followed by some separate future proceedings to determine questions of priority between all parties with an interest in the Condell Park property and/or the Horningsea Park property net sale proceeds.
29. I reject those submissions.
30. The interests of justice transcend the interests of any one party.
31. As Mason, Murphy, Brennan and Deane JJ said in Fencott v Muller at 608: "A judicial power which is not exercised to determine the whole of a controversy is, generally speaking, not appropriately and conveniently exercised. Not appropriately, because the controversy is not quelled; not conveniently, because the parties - the principal beneficiaries of the exercise of judicial power - must litigate anew to have the outstanding questions and issues determined."
32. The submissions made on behalf of Mr Sultan erroneously assumed that this Court could determine the issues in dispute in the Sultan proceedings, leaving only the question of the relative priorities of such interests as Mr Sultan may be found to have in the Sultan proceedings and such interests as third parties may be found to have in the family law proceedings to be determined in some separate proceeding, the precise nature of which was not articulated. As I have explained, Mr Sultan would have to relitigate his claims to an interest in the Condell Park property and in the net sale proceeds of the Horningsea Park property in the family law proceedings in order to obtain a determination of those claims that is binding on Ms Bernard - the co-owner of the Horningsea Park property and the claimant for orders altering interests in property owned by Mr Dabboussi and herself - and that is also binding on other third party creditors claiming an interest in the Horningsea Park property net sale proceeds. Moreover, there is no reason why the question of the priorities between all such interests as are ultimately found to exist should not be determined in the family law proceedings to which all relevant parties have been joined, with the exception of Mr Dabboussi's parents and Mr Sultan. It would be open to any party to the family law proceedings to apply to join those additional parties to afford them an opportunity to be heard and to ensure that they are bound by the orders ultimately made by the FCFCA. It is also open to those additional parties to apply to be joined to the family law proceedings. Mr Sultan appears to have elected not to take that course. Shortly after counsel appeared for him at an interlocutory hearing in the family law proceedings in July 2023, Mr Sultan amended his claims in the Sultan proceedings in this Court on 3 August 2023 introducing for the first time his claims to an interest in the Condell Park property and an interest in the net sale proceeds of the Horningsea Park property. That election is not determinative of where the interests of justice lie. The course that Mr Sultan has chosen gives rise to a risk of inconsistent findings for the reasons that I have explained above. As I have already mentioned, Mr Sultan relies on the same conversations and transactions as the foundation for his damages claims, and for his claims for declaratory relief concerning interests in the Condell Park property and the Horningsea Park property net sale proceeds. There is therefore no part of the Sultan proceedings that is completely separate and distinct from the justiciable controversy in respect of which the FCFCA has jurisdiction that could potentially be the subject of an order under r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) for separate determination by this Court in advance of the Sultan proceedings being transferred to the FCFCA.
33. As counsel for Mr Sultan submitted, the transfer of the Sultan proceedings to the FCFCA is likely to result in some delay in the determination of the issues in dispute in the Sultan proceedings. The Sultan proceedings are presently listed for final hearing in this Court on 25 and 26 June 2024. To the best of my knowledge, the family law proceedings have not yet been allocated final hearing dates, and there is no evidence before this Court about when the family law proceedings might reasonably be expected to be heard.
34. However, I do not consider that any such delay overwhelms the other considerations that I have identified above which overwhelmingly support the conclusion that the FCFCA is the more appropriate forum to determine the issues in dispute in the Sultan proceedings. I reach that conclusion more readily in circumstances where Mr Sultan himself delayed for approximately two years after commencing the Sultan proceedings before pleading his claims for declarations that he has an interest in the Condell Park property and in the Horningsea Park property net sale proceeds. The Sultan proceedings were commenced on 7 December 2021, and those claims were first pleaded on 3 August 2023.
35. It is regrettable that the existence of the family law proceedings, and the commonality of the issues to be determined in those proceedings and in the Sultan proceedings, were brought to the attention of this Court after the Sultan proceedings had been listed for final hearing and just weeks prior to the commencement of that final hearing, and only then incidentally as a result of Mr Sultan's opposition to an application by a third party for payment out of the funds held in court in which he claims a proprietary interest. Irrespective of the reasons why Mr Sultan has chosen to prosecute his claims in separate proceedings in this Court, his choice is contrary to the ordinary course in circumstances involving disputes in relation to interests in matrimonial property. As Brereton J said in Valceski at [77]: "Where third parties who assert rights against matrimonial property do so concurrently with pending matrimonial property proceedings, it will ordinarily be appropriate for those issues to be resolved in the matrimonial proceedings, and for the third party to join in those proceedings for that purpose, rather than to commence separate litigation, in another court, which almost inevitably results in duplication of evidence, issues, time, and costs."
36. For those reasons, having regard to the matters in s 5(1)(b)(ii) of the NSW Cross-Vesting Act, I am satisfied that the FCFCA is the more appropriate forum to determine the issues in dispute in the Sultan proceedings. The proceedings must therefore be transferred to the FCFCA.
37. I made the following orders at the conclusion of the hearing on 4 June 2024 for all of the foregoing reasons: 1. Order pursuant to s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) that these proceedings be transferred to the Federal Circuit and Family Court of Australia (Division 2), with a view to being heard and determined together with proceedings (P)SYC5897/2021 in that Court. 2. Order that the costs of these proceedings to date are reserved for determination by the Federal Circuit and Family Court of Australia. 1. For the avoidance of doubt, the listing of these proceedings for hearing on 25 and 26 June 2024 in this Court is vacated.
38. I note that the transfer of the proceedings will not undo or otherwise affect any stay of these proceedings against Zam Zam Operations Pty Ltd that is presently in force by operation of s 471B or s 500 of the Corporations Act.