Supreme Court New South Wales Medium Neutral Citation: Mohareb v Jankulovski [2014] NSWSC 745 Hearing dates: 3 June 2014 Decision date: 10 June 2014 Before: Harrison J Decision: 1. Order that the proceedings be listed for mention before me at 9.30 am on Tuesday 17 June 2014. 2. Reserve costs. Category: Procedural and other rulings Parties: Nader Mohareb (Plaintiff) Emil Jankulovski (First Defendant) Emil & Sons Pty Ltd t/as Inducta Engineering (Second Defendant) Representation: Counsel: C J Dibb (Plaintiff) M Dulhunty (Defendants) Solicitors: C Jankulovska (Defendants) File Number(s): 2012/68684 Publication restriction: Nil Judgment 1HARRISON J: On 17 April 2014 I published my judgment in this matter dealing with an application by the defendants for an order that the proceedings be dismissed for want of due despatch: see Mohareb v Jankulovski [2014] NSWSC 451. I did not at that time deal with a claim made by the defendants framed in their notice of motion filed on 4 March 2014 as follows: "(d) That the plaintiff return forthwith the dongles handed to him by the first defendant on 4 February 2013." 2The evidence upon which the defendants relied when the matter came before me for consideration on 14 April 2014 was contained in the affidavit of Cvetanka Jankulovska sworn 4 March 2014. The only reference in that affidavit to the dongles that are at the heart of the present application was contained in a letter dated 12 July 2013 sent by Ms Jankulovska to the plaintiff in the following terms: "I refer to the judgment of Harrison AsJ of 27 June 2013. You are required to return 2 dongles with Inducta Engineering Software which were given to you on 4 February 2013. If you do not return the dongles within 7 days Court order will be sought to enforce the above judgment." 3The judgment to which that letter refers is her Honour's judgment in Mohareb v Jankulovski [2013] NSWSC 850. The only references to dongles in that decision appear in [22] and [37] as follows: "[22] It is common ground that the following conversation then took place. Mr Mohareb says that Mr Jankulovski replied 'I know, I know... but this time I really would like to resolve it once and for all. Look, to prove it to you I will give you right now without reservation on my part two licences to all of Inducta Engineering software.' While saying this Mr Jankulovski turned to his computer, connected the first of the two licence dongles to his computer, brought up the list of all the Inducta Engineering software on his computer screen and ticked all the boxes next to each of the Inducta Engineering software and authorised all the licences to the connected dongle. He then repeated this whole process for the second licence dongle ... Next, he connected a USB storage device to his computer and transferred to it copies of each of the Inducta Engineering programs. He then handed Mr Mohareb the two dongles and the USB saying: 'Here it is, this is all yours now. And this is just for starters and to prove to you my goodwill. So what do you think?' Mr Mohareb says this did not come as any surprise to him because it had already been part of previous written offers of settlement which Mr Jankulovski had proposed. Mr Jankulovski does not recall asking Mr Mohareb what he thought... [37] The next part of what occurred is clear. There was an exchange of emails. Mr Mohareb then wrote and sent Mr Jankulovski a confirmation email, at around 4.30 pm with the draft written details of what they had agreed upon earlier in the day. This email reads: 'Outline of our agreement Hi Emil, This is further to our meeting and discussion in your office earlier today, and to confirm in broad outline the terms of the agreement we have both reached today in order to settle the Supreme Court matter on an amicable basis. As I understand them, the broad outlines of the terms we both agreed upon are: 1) You have agreed to send a letter of retraction and apology to my Clients Sonenco Apartments and Saab Corp, with the following proposed wording: 'Dear Sirs, this is further to my two letters to you early last year and dated 23rd February 2012 & 4th April 2012. I would like to inform you that I now believe that those letters were sent to you as result of an error of judgement on my part. Accordingly, I would now like to retract what I had stated in those two letters and apologise for any inconvenience this may have caused you. Regards...' 2) You have agreed to pay me or my company NM Structural Engineers P/L - by way of compensation - the amount of $20,000. I acknowledge that I have - as a good will gesture on your part - already received a cheque for that amount from you. 3) As a good will gesture on your part, you have also offered and already provided me with 2 USB dongles with user licences for all the programs that comprise the total suit [sic] of Inducts Engineering software. 4) By mutual consent we have both agreed to put the current dispute behind us and to resume the professional and commercial relationship we had, as it was prior to the onset of the dispute. Based on the above I have agreed to discontinue the action I had initiated in the Supreme Court, with each party paying their own costs including any costs orders like the cost order awarded in your favour on 4th May 2012. The above is my understanding and confirmation of the agreement we reached earlier today during our discussion in your office. As just discussed, I will not have a chance to draft the formal settlement agreement until Wednesday. In the mean time I'm happy to discuss any clarifications which you may have." 4In the proceedings before her Honour the plaintiff sought an order for specific performance of the terms of an agreement by way of settlement of the proceedings alleged to have been made on 4 February 2013. In the events that occurred, her Honour refused the relief sought. It appears to be the defendants' contention now that the plaintiff's entitlement to retain the disputed dongles was tied to the outcome of his claim to have the settlement agreement specifically performed. Because he was unsuccessful in that claim, the defendants maintain that the dongles that he received from the defendants, apparently in anticipation of the agreement being enforceable, must be returned to them. 5The evidence upon which the defendants now rely in support of their claim is contained in the affidavit of Emil Jankulovski sworn 28 May 2014. He annexed a series of letters to which some reference needs to be made. 6First, Mr Jankulovski wrote to the plaintiff on 12 February 2013 in the following relevant terms: "I refer to the previous correspondence in particular our settlement negotiations on 4 February 2013 and wish to advise as following: 1. Please return as soon as possible two USB dongles keys with software licences, property of Inducta Engineering, given to you on 4 February 2013. 2. Please return as soon as possible one USB dongle key, property of Inducta Engineering given to you on 14 October 2011." 7Next, Ms Jankulovska wrote to the plaintiff on 24 April 2014 in terms that included the following: "From Mr Dibb's conversation with Ms Dulhunty on 17 April 2014, I understand that you were going to return two USB software licence dongles to Inducta, given to you in February 2013 as part of a failed settlement, immediately. I note that so far the defendants have not received the above items. You were ordered to return them in June 2013 by Associate Justice Harrison. I have written you numerous letters asking you to return Inducta Engineering property, as ordered by the Supreme Court of NSW, but you have not as yet complied with the order. In light of the above my instructions are as follows: 1. Return the two dongles. 2. Return the third USB dongle that you obtained in late 2011, after you claimed that the one you already had was faulty and you promised to return it. It appears that you are in possession of 2 dongles, whereas you should have returned the allegedly faulty one. If my clients do not receive their property within 3 days from this message proceedings will be commenced to retrieve it." 8The plaintiff replied promptly the same day, pointing out correctly that no order of the sort to which Ms Jankulovska's letter referred had ever been made. 9Ms Jankulovska then wrote to the plaintiff's barrister, Mr Dibb, on 30 April 2014 in these terms: "We refer to our email of yesterday and the above matter. We note that the dongles returned to the defendants are not the dongles that were handed to the plaintiff on 4 February 2013. We note further that the defendants first demanded the return of the dongles from your client by letter dated 12 February 2013... We point out that the dongles were handed to your client on 4 February 2013 as a result only of your client's unexpected and unwanted attendance at the defendant's offices on that date. Her Honour Justice Harrison found that there was no settlement of the matter on that date and, as the dongles were handed over to your client as part of the events that occurred on that day then clearly as part of her judgment the dongles are required to be returned. We put you on notice that unless the dongles handed to your client on 4 February 2013 are returned to the defendants by 5.00 pm on Monday 5 May 2014 we are instructed to re-list the motion and obtain orders for the return of those dongles. We are also instructed to seek an order for indemnity costs against your client." 10The plaintiff swore an affidavit on 2 June 2014 upon which he relied before me. Part of that affidavit was as follows: "7. When, on 4 February 2013, these proceedings were, as I believed, settled by agreement with the first defendant, I was given as part of the settlement consideration two further 'dongles'. Accordingly, at that point I had four, one of which did not work...At that time I was also given a cheque for $20,000. This was also part of the consideration for what I believed to be the settlement of the proceedings. 8. Shortly thereafter, the defendants stopped payment on the cheque and purported to withdraw from the settlement. They also requested the return of the two 'settlement dongles'. In response, I sought to enforce the settlement agreement. 9. In June 2013, her Honour Harrison AsJ ruled that my understanding was in error and that no final settlement agreement had been reached because we had not signed a formal document. 10. On 17 April 2014, my counsel agreed with counsel for the defendants that I would return the two 'settlement dongles'. Due to the very high degree of ill-will between the parties, I opted to do this by sending them to my counsel for him to forward to the defendants. 11. The first defendant complained that the two 'dongles' I so returned were the older ones and asked for the newer two instead... 12. My counsel proposed that the defendants should return to me the working one of the older two 'dongles' and I would send them the newer ones in return. I asked to do it this way because I am a professional engineer and I need to be able to use the software for design work. I was concerned that if I sent the only remaining 'dongle' in my possession to the defendants, they might delay sending me the one I was entitled to in order to cause me inconvenience. I returned one of the newer 'dongles' through my counsel and retained one for use until I got the other one back. 13. I was concerned also because my counsel had received an email from counsel for the defendants that queried my right to use the software at all... It appeared to me from that that perhaps the defendants for some reason no longer regarded me as being entitled to have any 'dongle' at all. If I was to return the last one of them, it might be a long and difficult process to compel them to return my property and I would be unable to use my software to do design work during that period." 11Although I had some initial reservations about the precise nature of the claim made by the defendants, and whether it was necessary for it to be formally pleaded, it now seems eminently clear to me from the plaintiff's own affidavit that he accepts that what he refers to as the two "settlement dongles" are in fact items to the return of which the defendants are entitled. So much is clear from the plaintiff's admission in [10] above that, "my counsel agreed with counsel for the defendants that I would return the two 'settlement dongles'." The plaintiff's latter day attempt to qualify the force or practical effect of that admission, by insisting that his commercial or professional position may be in peril because the defendants could take the view that he was "no longer regarded... as being entitled to have any dongle at all" has no foundation to support it. It appears to me to be no more or less than a transparently disingenuous ploy to frustrate the defendants' conceded right to have the items concerned returned to them forthwith. 12It is clear that the defendants are entitled to the return of the dongles that are referred to by the plaintiff in paragraph [10] of his 2 June 2014 affidavit. I take these items to be the two dongles that were handed to the plaintiff on 4 February 2013. The plaintiff should return them to the defendants within 7 days. I will at this stage do no more than list this matter before me for mention on Tuesday 17 June 2014. I expect to be informed by the plaintiff or his counsel or solicitor at that time that the items have been returned to the defendants. I will reserve consideration of the costs of the proceedings relating to the disputed dongles until then in order that I may be able to dispose of that issue with a full knowledge and understanding of what has occurred. ********** 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: 11 June 2014