Supreme Court New South Wales Medium Neutral Citation: Moustach Pty Limited v Eddie Takchi [2015] NSWSC 2077 Hearing dates: 1 June 2015 Date of orders: 01 June 2015 Decision date: 01 June 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Paragraph 24 of Statement of Claim struck out; plaintiffs have leave to file Amended Statement of Claim; defendants have leave to file Notice of Motion seeking that amendments be disallowed. Catchwords: PROCEDURE – joinder of parties – joinder to enable orders requiring attendance of persons – where no cause of action alleged against those persons – no requirement of joinder for purpose of (NSW) Civil Procedure Act 2005, s 68. PROCEDURE – order allowing plaintiffs to serve evidence outside time limited for service – where evidence not yet served – inability to assess prejudice caused by late service. PROCEDURE – subpoenae – failure to comply – application for orders requiring compliance – inappropriateness of order. PROCEDURE – statement of claim – whether sufficiently pleads case – failure to allege crucial facts. Legislation Cited: (NSW) Civil Procedure Act 2005, s 68 (NSW) Conveyancing Act 1919, s 37A Texts Cited: Practice Note No SC Eq 11 Category: Procedural and other rulings Parties: Moustach Pty Limited ACN 051 870 789 (first plaintiff) Moussa Hanna Moussa (second plaintiff) Salima Moussa (third plaintiff) Arlette Takchi as executrix of the estate of the late Eddie Takchi (first defendant) Arlette Takchi (second defendant) DMRJ Pty Limited ACN 139 377 450 (third defendant) TBT Investments Pty Limited ACN 087 336 221 (fourth defendant) Representation: Counsel: D C Eardley (plaintiffs) M B Holmes (first and second defendant) J M Ireland (third and fourth defendant) Solicitors: Russo & Partners (plaintiffs) Barraket Stanton Lawyers (first and second defendants) McGirr Lawyers (third and fourth defendants) File Number(s): 2013/205000 Judgment (ex tempore) Plaintiff's Notice of Motion 1. HIS HONOUR: By Notice of Motion filed on 1 May 2015, the plaintiffs Moustach Pty Limited, Moussa Moussa and Salima Moussa claim a raft of procedural orders, which I will deal with seriatim. 2. The first five claims for relief, which were procedural in nature, relating to the filing and service and abridgement of time in respect of the motion are unnecessary and were not pressed. 3. Paragraphs 6 and 7 of the motion seek orders joining to the proceedings, as fifth and sixth defendants respectively, George Takchi and Tony Takchi who, as I understand it, are directors of the third and fourth defendants. It was explained that the only purpose of joining them was in order to enable orders to be made requiring that they attend and be examined in respect of an alleged failure to comply with a subpoena. No cause of action has been identified against them. There is no necessity to join them as a defendant in order to enable an order under (NSW) Civil Procedure Act 2005, s 68, to be sought against them. The claims for relief in paragraphs 6 and 7 will therefore be dismissed. 4. Orders are then sought, in paragraphs 8 and 9, that procedural directions made by me on 30 March 2015 setting the matter down for hearing, and providing for the exchange of written submissions and service of evidence, be discharged. Again, as it transpired, all that was sought in substance was that the plaintiffs be permitted to serve evidence belatedly, outside the time limited for service by those orders. 5. Each of the orders in respect of service of evidence were expressed in terms "without the leave of the Court", so that the plaintiffs, if they wish to rely on evidence served outside the time so limited, may seek the leave of the Court to do so. That is consistent with, and in no way involves discharging, the orders previously made. But I am not inclined to grant any such leave, until the Court knows what the evidence is upon which the plaintiffs seek belatedly to rely, and what impact that will have on the defendants' ability to meet it in time for the hearing. If the plaintiffs wish to seek leave to rely on evidence served belatedly, then they should make an application in those terms supported, inter alia, by having served the subject evidence, so that the other parties and the Court may form a view as to the hardships and burdens and prejudice, if any, that would be occasioned if such evidence were now permitted. As that was the only basis upon which the orders in paragraphs 8 and 9 were sought, they too will be refused. 6. Paragraphs 10 and 11 sought orders that the third and fourth defendants comply with subpoenas issued on 9 September 2014. Those subpoenas were issued at a time when the evidence was not complete, and were in the nature of attempts to obtain disclosure in the proceedings. In those circumstances, they were essentially inconsistent with the spirit of Practice Note No SC Eq 11. The defendants took that point in December 2014, and invited the plaintiffs to make an application for discovery at the appropriate time, and to withdraw the subpoenas in the meantime. There was no express response to that, but the plaintiffs did not reply and did not press the subpoenas until a letter of 29 April 2015 was sent demanding compliance. 7. A subpoena having been served, it is pointless, inutile and inappropriate for the Court to make an order that a party, already bound by an order of the Court (as a subpoena is), comply with that order. If the subpoena has in truth been disobeyed – which in the light of the correspondence I am inclined to doubt is a finding to which the Court would readily come – there are proper ways of enforcing it. They do not involve or include simply seeking yet another order from the Court that it be complied with. Paragraphs 10 and 11 of the motion will therefore be dismissed. 8. Paragraphs 12 and 13 seek that each of the proposed fifth and sixth defendants, being officers respectively of the third and fourth defendants, attend pursuant to Civil Procedure Act, s 68, to be examined as a witness as to the failure of the third and fourth defendants respectively to comply with the alleged subpoenas; the observations I have already made concerning the subpoenas are germane to those orders as well. In addition, before being minded to make an order that a subpoenaed party attend to be examined, it would be necessary for there to be at least some prima facie evidence that there had been a misunderstanding of or failure to comply with the subpoena, and given the course of the correspondence to which I have adverted, and what I would take to be the implicit withdrawal of the subpoenas following the December correspondence, that would be an inappropriate course. Accordingly, the claims in paragraphs 12 and 13 will be dismissed. 9. Paragraphs 14 and 15 seek orders that the fifth and sixth defendants produce to the Registry the documents the subject of the subpoenas addressed to the third and fourth defendants respectively. It follows from what I have already said that that is also misconceived. 10. Paragraphs 16 and 17 seek leave to file expert evidence belatedly on the part of the plaintiffs, and a correlative extension of time for the defendants to do so. As I have foreshadowed, that will appropriately be considered once it is known what the expert evidence on which the plaintiffs wish to rely amounts to. 11. It may well be that it is not too late for the plaintiffs to obtain appropriate, limited disclosure for the purposes of these proceedings by an appropriately framed motion identifying the limited classes of documents that it says it genuinely needs in order to complete its expert evidence, supported by evidence in appropriate form that demonstrates that, by appropriate requests it has not been able to do so. The defendants will be mindful of the Court's expectation that reasonable requests for production of documents for the purpose of enabling proceedings to be conducted be complied with. That said, the present motion is, in every respect, unsupported and insupportable, and must be dismissed. 12. The Court orders that the Notice of Motion filed on 29 April 2015 be dismissed with costs. Third and Fourth Defendants' Notice of Motion 1. It is patent that the Statement of Claim as currently pleaded fails, first, sufficiently to plead a case under (NSW) Conveyancing Act 1919, s 37A, even against the deceased, on the footing that it does not contain any express allegation of the crucial fact that the deceased had the relevant intent in making the transaction. Although a generous reading of the pleading might imply such an allegation into it, allegations of and akin to fraud should not be left to generous constructions. 2. Secondly, it is deficient because it contains no allegation whatsoever of knowledge or notice on the part of the third and fourth defendants in respect of any vitiating intention – which, prima facie, would be critical to obtaining the relief sought by way of setting aside the transfer or declaring a trust of the property. 3. It is regrettable that the application comes so late, after the proceedings have been set down for hearing, and after the relevant defendants have been in possession of the pleading for nigh on two years. In those circumstances, the third and fourth defendants can hardly complain if the plaintiffs are afforded an opportunity to put their pleading into order, as it seems to me that while the pleading is seriously defective, the defendants having taken the case as far as they have and having consented to its being set down for hearing cannot have been under too serious a difficulty in comprehending what the plaintiffs truly alleged. 4. For that reason, the plaintiffs will be afforded an opportunity to seek to remedy the pleading. 5. It is worth observing, in that respect, that in the third defendant's defence of 21 January 2014, it pleads that it purchased the subject property at market value in a bona fide arms length transaction and without notice of the matters pleaded at paragraphs 16 – 24 of the Statement of Claim; and (in paragraph 7) denies that its purchase is voidable pursuant to s 37A, saying "that the transaction is a bona fide transaction for value without notice of the matters pleaded at paragraphs 16 to 24 of the Statement of Claim". The fourth defendant's pleading is identical. This rather confirms the view that the third and fourth defendants well understand the purport of the plaintiffs' case, and are not likely to be prejudiced by a grant of leave to the plaintiffs to amend. 6. The Court therefore orders that: 1. Paragraph 24 of the Statement of Claim be struck out. 2. The plaintiffs have leave to file an Amended Statement of Claim, the amendments to be limited to pleading properly the claim for relief under Conveyancing Act, s 37A, any such Amended Statement of Claim to be filed by 15 June 2015. 3. The defendants have leave to file a motion to have any such amendment disallowed and for dismissal of the proceedings as against them by 22 June 2015, any such motion to be returnable on 29 June 2015 at 9.45 am in the Corporations Judge Motions List. 4. The plaintiffs are to pay the third and fourth defendants' costs of the motion. ********** 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: 13 April 2016