New South Wales Supreme Court CITATION : Syndicate Mortgage Solutions Pty Ltd v Khaled El-Sayed & ors [2009] NSWSC 1491 HEARING DATE(S) : 15 December 2009 JURISDICTION : Equity Division JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 15 December 2009 DECISION : Assessment of damages in respect of first cross-claim be heard and determined separately and after other issues in the proceedings CATCHWORDS : PROCEDURE – Separate determination of questions – where appropriate CATEGORY : Procedural and other rulings Syndicate Mortgage Solutions Pty Ltd (plaintiff/first cross-defendant) Khaled El-Sayed (first defendant/first cross-claimant) Khayrieh El-Sayed (second defendant/second cross-claimant) K & K El-Sayed Pty Ltd (third cross-claimant) PARTIES : National Australia Bank Limited (third defendant) Perpetual Trustees Victoria Limited (fourth defendant) Haysam Mouhajar (second cross-defendant) Raymond Mawad (third cross-defendant) Registrar General of NSW (fourth cross-defendant) Ozem Azzam Kassem (fifth cross-defendant) FILE NUMBER(S) : SC 2585/08 Mr Tayyar (sol) (plaintiff/first & fifth cross-defendants) COUNSEL : Mr McKeand SC (cross-claimants) Mr McCartney (second cross-defendant) Ms Hastings (third cross-defendant) Fower & Gorcha (plaintiff/first & fifth cross-defendants) Simon Diab & Associates (first & second defendants/cross-claimants) SOLICITORS : Simmons & McCartney (second cross-defendant) Colin Biggers & Paisley (third cross-defendant) Legal Services, Dept of Lands (fourth cross-defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRERETON J Tuesday 15 December 2009 2585/08 Syndicate Mortgage Solutions Pty Limited v Khaled El-Sayed & 3 Ors JUDGMENT (ex tempore) 1 HIS HONOUR: By notice of motion filed on 4 September 2009, Khaled El-Sayed (who is the first defendant and first cross-claimant on the first cross-claim), Khayrieh El-Sayed (who is the second defendant and second cross-claimant on the first cross-claim), and K & K El-Sayed Pty Ltd (which is the third cross-claimant on the first cross-claim) seek inter alia an order that the Court determine all issues arising on the statement of claim, and the question of liability only on the first cross-claim, separately and before the other issues in the proceedings, essentially leaving any question of damages on the first cross-claim to be heard subsequently, if necessary. 2 By the statement of claim, the plaintiff Syndicate Mortgage Solutions Pty Ltd, seeks possession of real property of the defendants, pursuant to securities given variously by the defendants over their several parcels of real estate. The defence to the statement of claim impugns the securities on grounds of non est factum, or that they are voidable in equity for unconscionable dealing, or ought to be set aside as having been procured by misleading and deceptive conduct, and so on. The issues on the statement of claim will primarily concern the circumstances in which the mortgages were executed. 3 By the first cross-claim, the cross-claimants affirmatively propound against the cross defendants the defences to which I have referred, and in addition claim that the fifth and sixth cross-defendants, who are receivers appointed by Syndicate Mortgage Solutions under the securities, trespassed by entering into possession of and selling properties, in particular those of K & K El-Sayed. Although in an affidavit Mr El-Sayed suggested that he complained that the receivers had, in breach of duty, sold those properties at an under value, his counsel has eschewed any such claim as a cause of action relied on in the proceedings. Accordingly, the additional issue raised by the cross-claim, other than the affirmative defences to the claim for possession, essentially pertains to the validity of the appointment of the receivers, and whether their entry into possession of the relevant properties was authorised or was a trespass. 4 If the cross-claimants succeed on that issue on their cross-claim, then there will be a question of damages, which will require valuation evidence in respect of the various properties, and an inquiry as to whether the prices achieved by the receivers and the associated costs of the receivership have resulted in detriment to the financial position of the cross-claimants when compared to what it otherwise would have been but for their appointment. A dozen or so properties of K & K El-Sayed are involved. The cross-claimants have been advised that preparation of evidence and for a hearing on the question of damages might cost $120,000 or so, which they are not presently in a position to raise. If they fail on liability, then the issue will never arise. 5 The issues which will arise on the question of damages appear to be quite discrete from those which arise on the question of liability, so that little if any duplication would be involved in deferring the question of damages. 6 The third cross-defendant, Raymond Mawad, opposed the deferral of the determination of damages, arguing that it was "cleaner, more convenient and less costly" for all matters to be dealt with at the one hearing, and that he should not be required to undertake the additional costs of preparing for two hearings. The first answer to that is that the need for a second hearing might never arise. The second answer is that, in any event, the duplication involved, if there is a need for a subsequent hearing as to damages, will be minimal. 7 The second cross-defendant Haysam Mouhajar did not express any particular preference, one way or the other. The solicitor for the plaintiff and the fifth cross-defendant has belatedly appeared, and submitted that separation of the question of damages would escalate costs. I have read his submissions, but they do not traverse the proposition that the question of damages in this case does not overlap the issue of liability, nor that if the cross-defendants succeed on liability then the question of damages will never arise, so that deferring it could involve substantial savings to all parties in costs and in time. 8 In my opinion, this is an appropriate case in which to defer the question of damages: the issues are severable; there will be little overlap if a subsequent hearing is required; there will be significant savings of time and costs if it is not; and the plaintiffs' access to justice will be facilitated. 9 I order that the question of the assessment of damages in respect of the first cross-claim be heard and determined separately and after the other issues in the proceedings. I order that costs of the motion be the cross-claimants' costs in the proceedings. 10 I direct that the second cross-defendant not be entitled to rely at the hearing on any affidavit evidence that has not been served by 31 December 2009. I will fix the proceedings for hearing before me on Monday 23 August 2010 for five days. I will list the matter for pre-trial directions on 25 February 2010 at 9:45 am. ********** 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.