Ayoubi & Anor v Faleh & Anor [2013] NSWSC 204

Supreme Court New South Wales

Medium Neutral Citation: Ayoubi & Anor v Faleh & Anor [2013] NSWSC 204 Hearing dates: Thursday, 28 February 2013 Decision date: 28 February 2013 Jurisdiction: Equity Division - Duty List Before: White J Decision: Refer to para [39] of judgment. Catchwords: PROCEDURE - Supreme Court Procedure - New South Wales - application to set aside orders made in defendant's absence - sufficiency of explanation for defendant's absence - exercise of discretion pursuant to r 36.16 of the UCPR - defendant's prospects of success Legislation Cited: Civil Procedure Act 2005 Cases Cited: Adams v Kennick Trading (Intl) Limited (1986) 4 NSWLR 503 Category: Interlocutory applications Parties: Jihad Ayoubi (1st Plaintiff) Sanna Ayoubi (2nd Plaintiff) Faleh Fatat (1st Defendant) Michael Ibrahim (2nd Defendant) Representation: Counsel: Ex parte 2nd Defendant in person Solicitors: File Number(s): 2012/357843

Judgment 1HIS HONOUR: These proceedings were commenced on 16 November 2012. The plaintiffs are Mr Jihad Ayoubi and his mother Mrs Sanna Ayoubi. The proceedings concern the ownership of a Honda NSX motor vehicle. 2On 16 November 2012 the plaintiffs applied successfully ex parte for an injunction to restrain the defendants from dealing with the vehicle in question. The evidence, as relied upon on that application, was to the effect that the owner of the vehicle was Mr Jihad Ayoubi and that he had made an agreement with the first defendant, Mr Michael Ibrahim, to sell the car to him for $25,000 and had received a $500 deposit. 3It was the plaintiffs' case that Mr Ibrahim had paid money to Jihad's brother Mohamed, and Mohamed Ayoubi had allowed Mr Ibrahim to remove the vehicle from Mrs Sanna Ayoubi's house. 4The plaintiffs' complaint was that Mr Ibrahim had not paid the balance of the agreed price of $24,500. 5On 20 November 2012 the matter was adjourned before the duty judge and was stood over to 26 November 2012. The position, so far as I can glean at this point, was that Mr Ibrahim contended that he had purchased the vehicle from Mr Mohamed Ayoubi and before he had notice of the Court's orders (I assume) sold it to an Indonesian buyer for some $12,000 in cash. 6There was argument either before Ball J on 26 November or Bergin CJ in Equity on 3 December 2012 in relation to payment of funds into court following the sale of the vehicle by Mr Ibrahim. On 3 December 2012 Bergin CJ ordered Mr Ibrahim to pay $6,200 into court, this being, as I understand it, the balance of the purchase price which he accepted he still had in his hands. 7Her Honour made orders for the service of evidence and fixed the matter for hearing on 15 February 2013. The matter was listed for hearing before Gzell J on 15 February 2013. The first principal issue would have been whether Mr Jihad Ayoubi was the owner of the vehicle as he contended, or whether the true owner of the vehicle was his brother Mohamed. If Mr Jihad Ayoubi was the owner of the vehicle it would not matter that Mohamed Ayoubi had agreed to sell the vehicle to Mr Ibrahim as Mr Ibrahim and Mr Mohamed Ayoubi contended. If Mr Jihad Ayoubi was the true owner, then unless the vehicle was taken with his consent, it would have been an act of conversion. 8The second issue before Gzell J would have been the measure of damages claimed. 9When the matter came on for hearing before Gzell J on 15 February 2013 there was no appearance for the defendants. The associate's record of proceedings of that day records that his Honour granted leave to the plaintiffs to file in court a further amended summons and further affidavits of Jihad and Sanna Ayoubi. 10The associate's record also records: "4. The Court finds that the First Defendant agreed to purchase the Honda NSX motor vehicle of the First Plaintiff for $25,000 and paid a deposit of $500. The balance of purchase price was not paid. 5. Verdict and judgment for the First Plaintiff against the First Defendant for $24,500 damages for breach of contract. 6. Money in court to be paid out to First Plaintiff." 11Thus, the damages ordered were not damages in tort for the loss of the value of the vehicle, but damages in contract, a breach of the agreement asserted by Mr Jihad Ayoubi for the sale of the vehicle for the price of $25,000. 12On 18 February 2013, Mr Ibrahim filed a notice of motion seeking to set aside the orders made by Gzell J on 15 February 2013 in his absence. The matter came before Nicholas J on 19 February 2013 and his Honour stayed the order made by Gzell J on 15 February that the money in court be paid out to the first plaintiffs. On 22 February 2013, Nicholas J extended the stay until further order. 13In his affidavit of 19 February 2013 Mr Ibrahim deposed that he was running late for court and that he attempted to leave a message through the Court Registry to that effect. He said that the message was apparently received in the judge's chambers at about 9.56 am, that is, presumably, at about the same time as the judge was going onto the bench. In any event, he says, as I understand it, that it was through an accident that he did not appear at the hearing on 15 February. 14When the matter was before Nicholas J on 22 February 2013, there was before his Honour an email from Mr Whitelaw, the legal representative for the plaintiffs, advising that the plaintiffs would not be appearing on that day on the motion before his Honour and that the plaintiff neither consented to nor objected to the orders sought. 15On 25 February 2013 the Registrar listed Mr Ibrahim's notice of motion for hearing today before the duty judge. When the notice of motion was called before me today in the duty judge list, there was again no appearance for Mr Ibrahim. He did not appear either in person or by any legal or other representative. 16Mr Whitelaw appeared for the plaintiff. In the absence of any appearance for Mr Ibrahim, I ordered that his notice of motion be dismissed with costs. 17This afternoon Mr Ibrahim has sought to file a further notice of motion, again seeking an order that the judgment made in his absence on 15 February be set aside. 18He told me this afternoon that the reason for his non-appearance this morning was because he did not get to sleep until 6 o'clock this morning. He did not wake up in time to be in court at 10 am. He said that this was due to his suffering from bipolar disorder. He tendered a medical certificate dated 12 February 2013 which certifies that he suffers from bipolar disorder and that this is a disorder that can mentally affect a person's ability to control impulses and significantly distort thoughts, volition, memory, perception and judgment. The certificate does not, on its face, support bipolar disorder as being an adequate reason for not waking up in time for court proceedings. 19In substance, Mr Ibrahim seeks to set aside the orders that I made this morning, dismissing his notice of motion of 18 February 2013 or to rely on a new notice of motion to set aside the orders of 15 February 2013. Because the orders of 15 February 2013 were made in his absence, the Court has power pursuant to r 36.16 to set aside the orders. 20Factors relevant to the exercise of that discretionary power include the reasons for the default in appearance, whether the delay would operate to the prejudice of the plaintiff, and the defendant's apparent prospects of success in the proceedings. See Adams v Kennick Trading (Intl) Limited (1986) 4 NSWLR 503 at 507 and the notes to Ritchie's Uniform Civil Procedure New South Wales. 21In exercising the power given by r 36.16, the Court is to seek to give effect to the overriding purpose of the Rules, of facilitating the just, cheap and quick resolution of the real issues in the dispute under the Civil Procedure Act 2005, s 56. 22The apparent strength of the defence to the plaintiff's claim is a material issue to the exercise of discretion under the Rules. Mr Ibrahim's contention is that Mr Mohamed Ayoubi was the true owner of the vehicle. It was not registered in his name but the register is not a register of ownership. 23When invited to identify the evidence that he would rely upon as evidence of Mr Mohamed Ayoubi's ownership of the vehicle, Mr Ibrahim referred to an affidavit sworn by Mohamed Ayoubi. Although he did not have the affidavit I take it he is referring to an affidavit of Mr Mohamed Ayoubi dated 11 December 2012 which is in the Court book. 24Mr Mohamed Ayoubi there deposed that he purchased a severely damaged Honda vehicle in "approximately around 2004" and that he paid for it in cash of approximately $38,000 to $48,000. 25Mr Jihad Ayoubi's affidavit evidence was to the effect that he purchased the vehicle for $68,000. Included in the funds for the purchase were funds provided by his mother. 26The affidavit on the court file of Jihad Ayoubi dated 10 December 2012 includes a document which he described as an "RTA contract of sale and transfer of ownership". That is said to record his purchase of the vehicle on 12 February 2013. 27There is a document of that date issued by what appears to be the Roads and Traffic Authority dated 18 February 2013 and a form that records the purchase of the vehicle by Mr Jihad Ayoubi dated February 2013, for $68,000. 28Mr Ibrahim also referred to a receipt signed by Mr Jihad Ayoubi of 9 August 2012. That document states, "I, Jihad Ayoubi, sold Honda NSX to Michael Abraham [sic] for the sum of $500." Mr Jihad Ayoubi had said in his affidavit that the sum of $500 was the deposit paid to him on 9 August, when he agreed with Mr Ibrahim to sell the car to Mr Ibrahim for $25,000. 29The objective support for Mr Ibrahim's contention that Mr Mohamed Ayoubi was the owner of the vehicle is extremely slender. On the material to which I have been referred, it consists of no more than Mr Mohamed Ayoubi's assertion that he paid for the vehicle in cash in 2004, a contention that is not only contradicted by the evidence of Mr Jihad Ayoubi and his mother, but by the only documentary materials to which I have been taken. 30The other issue which would have been before Gzell J had Mr Ibrahim appeared on 15 February would have been whether Mr Jihad Ayoubi was entitled to the contractual measure of damages or whether he was entitled to damages for conversion for the true value of the vehicle which might have been less than $25,000 and, if so, what that measure of damages would be. 31Mr Jihad Ayoubi had said in affidavits that Mr Ibrahim had advertised the vehicle for sale for $25,000, but I infer that the measure of damages was based upon the evidence of the contract between Mr Jihad Ayoubi and Mr Ibrahim, an agreement which Mr Ibrahim denies. 32I take it that Mr Ibrahim would say that the value of the vehicle was in the order of $12,000, being a sum which I understand he says was the sum for which he sold the vehicle. 33Given that I think the prospects of Mr Ibrahim succeeding on the question of liability are slight, the question then is, should the orders be set aside in order that there can be, in effect, a hearing of a question of quantum,. 34The explanation for the non-appearance of Mr Ibrahim when the matter was before Gzell J on 15 February is not really satisfactory. 35Having regard to the amount which is at stake and to the fact that the issue of quantum would appear to turn on the conflict of oral evidence between the four persons involved and the dictates of s 56 that the Court is to have regard to the requirements of seeking to facilitate the just, quick and cheap resolution of the real issues, I am not satisfied that it would be appropriate to exercise the discretion under r 36.16 to set aside the orders made on 15 February. The Court provided the facility for the resolution of the real issues in dispute on that day. 36The fact that Mr Ibrahim is not legally represented is not a reason for setting aside the orders. It would not be consistent with s 56 of the Civil Procedure Act for the orders to be set aside and for there to be a further hearing, even limited to questions of quantum. 37Accordingly, had Mr Ibrahim presented in court this morning when the matter was called, the argument that he presented this afternoon, I would not have acceded to the application listed before me this morning. 38For these reasons I decline to set aside the orders which I made this morning. The orders that Nicholas J made on 22 February provided for a stay of the order for payment out of the moneys paid into court. There is no reason for that stay to continue. 39I order that the stay ordered by Nicholas J on 22 February 2013 be discharged. I refuse the application to set aside the orders that I made earlier this morning. 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: 25 March 2013