Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Enterprise ICT Pty Ltd v Pham [2017] NSWCA 236 Hearing dates: 13 September 2017 Date of orders: 15 September 2017 Decision date: 15 September 2017 Before: Macfarlan JA Decision: (1) The applicant's notice of motion is dismissed. (2) The applicant is to pay the respondents' costs of the motion. (3) Make no order as to the costs of Enterprise ICT Pty Ltd. Catchwords: APPEAL – Court of Appeal – Stay of Proceedings – appeal not reasonably arguable – balance of convenience favours the respondents – notice of motion dismissed Legislation Cited: Uniform Civil Procedure Rules 2005, r 51.44 Cases Cited: Lawrence v Gunner [2015] NSWCA 322 Category: Procedural and other rulings Parties: Enterprise ICT Pty Ltd (First Appellant) Robert Sebie (Second Appellant) Andy Vuong Duc Pham (First Respondent) Thi Huong Giang Pham (Second Respondent) Representation: Counsel: R Killalea (Solicitor) (First Appellant) Second Appellant (Self-represented) B Zipser (Respondents) Solicitors: Kazi & Associates (First Appellant) Second Appellant (Self-represented) Andy Pham Lawyers (Respondents) File Number(s): CA 2017/172378 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Citation: [2017] NSWSC 446 Date of Decision: Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446; Pham v Enterprise ICT Pty Ltd (No 2) [2017] NSWSC 583 Before: Pembroke J File Number(s): SC 2015/325044 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. HIS HONOUR: This is an application by Mr Robert Sebie ("the applicant") for a stay of orders made by Pembroke J pursuant to his judgments in Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446 and Pham v Enterprise ICT Pty Ltd (No 2) [2017] NSWSC 583. The applicant was unrepresented both before this Court and at the hearing before Pembroke J. He had legal representation until shortly before the commencement of the principal hearing before his Honour. 2. The application in this Court was supported by Enterprise ICT Pty Ltd ("EICT") for whom Mr R Killalea, solicitor, appeared. EICT was a plaintiff in the court below and, with the applicant, is an appellant in this Court. Argument in support of the applicant's motion for a stay was largely presented by Mr Killalea. 3. The proceedings at first instance related to a property at Chiswick purchased by the applicant in 2005. On 29 October 2014 he exchanged contracts for the sale of the property to the respondents, Mr and Mrs Pham. The applicant did not complete the contract. As a result, the respondents commenced proceedings in the Equity Division and lodged a caveat on the title to the property. 4. After a four day hearing, the primary judge found that the applicant and his brother Richard Sebie dishonestly took steps to have the respondents' caveat removed and to transfer the property to ENA Developments Pty Ltd ("ENAD"), and thence to EICT. These steps were taken without the respondents' knowledge. 5. The applicant and EICT sought to establish EICT's entitlement to the property by alleging that in 2005 the applicant had obtained a loan from ENAD that was secured on the property, and that ENAD had subsequently sold the property to EICT, presumably pursuant to a purported exercise of its (supposed) mortgagee's power of sale. The directors and shareholders of ENAD and EICT were members of the applicant's family. 6. The primary judge made the following findings: the purported secured loan agreement of 2005, on which the applicant based his case, was a "fiction"; that ENAD's purported transfer to EICT was fraudulent; and that the "designed object of the transfer was to cheat [the respondents] of their existing rights" (Judgment of 26 April 2017 at [52] and [56]). His Honour found that the conduct of the applicant and Richard Sebie involved actual fraud or dishonesty (ibid at [56]). 7. The filing of a notice of appeal does not operate as an automatic stay of proceedings under the decision below (r 51.44(2) of the Uniform Civil Procedure Rules "UCPR"). The Court however has power to grant a stay if it considers it appropriate to do so (r 51.44). Whilst an applicant for a stay need not necessarily demonstrate that he or she has an arguable case, the existence or absence of an arguable case on appeal is a highly material circumstance relevant to the exercise of the Court's discretion. The principles applicable to stay applications were recently summarised by Gleeson JA in Lawrence v Gunner [2015] NSWCA 322 at [11]-[13]: "A successful party is prima facie entitled to the fruits of his or her judgment, but a stay may be granted where an applicant demonstrates an appropriate case to warrant the exercise of discretion in its favour. The mere filing of the appeal is insufficient, of itself, to demonstrate such a case. Usually it is demonstrated by showing that there are arguable grounds of appeal and that there is a risk that if money is paid it will be unable to be recovered if the appeal succeeds, or by demonstrating that unless a stay is granted the appeal will be rendered nugatory: TCN Channel 9 Pty Ltd v Antoniadis [No 2] [1999] NSWCA 104; 48 NSWLR 381 at [15]. The Court will weigh considerations such as the balance of convenience and the competing rights of the parties. It is for the applicant to demonstrate a proper basis for a stay that will be fair as between the respective interests of the parties: see Alexander v Cambridge Credit Corporation Ltd at 694; Adeels Palace Pty Ltd v Moubarak [2009] NSWCA 130 at [5]. It is appropriate to consider first whether the appeal raises a serious question to be tried, in the sense of arguable grounds, and if so, where the balance of convenience lies: Kalifair at [18]; Vaughan v Dawson [2008] NSWCA 169 at [17] (Campbell JA)." 1. Although my consideration of the merits of the appeals has necessarily been attenuated, I am able to make the following observations about the grounds relied on in the appellants' Amended Notice of Appeal. Ground 1 1. This ground alleges that the applicant was denied procedural fairness because he was denied the opportunity to call "a further witness or witnesses". The particulars of the ground refer to passages of the transcript of the hearing before the primary judge. The first part of the transcript referred to records the applicant's statement to the Court on the fourth and last day of the hearing that "I believe it's absolutely critical into this case is a cross-examine of Mr [Ramzy] Sebie which is the husband of Mrs Rose Sebie" (sic). His Honour responded as follows: "The evidence has now concluded. We have now reached the stage of addresses. I would hope to hear the addresses and give judgment this afternoon. You've had every opportunity to call whoever you wanted to call and to read whatever affidavits you thought you should read. Your time is over, it's now time for addresses" (T 227). 1. Bearing in the mind the lateness of the application to call that witness and that the applicant did not identify to his Honour the evidence that the witness could give, I consider that the applicant would have little, if any, prospect of succeeding in challenging his Honour's exercise of discretion to decline to permit the applicant to call evidence from Mr Ramzy Sebie. 2. The second reference is to an application, which was made by EICT shortly after the above exchange occurred, to adduce evidence of financial records of ENAD which were annexed to an affidavit. His Honour's response referred to the fact that earlier that morning he had asked Mr Richard Sebie, the sole director of EICT, whether he wanted to rely on a second affidavit, and received a negative response. His Honour's response also included the following: "The fact that these documents were created last week by three persons associated with the family or the companies which they control [as Mr Sebie said was the case], all of whom have not given evidence or been cross-examined together with the general lack of credibility of the case put forward on behalf of the first and third defendants, satisfy me that it would not be in the interests of justice to receive any further material from the first defendant or to delay the finalisation of addresses and the giving of a judgment in this case so I reject the application" (T 231-2). 1. The comments made in [10] above apply equally to a challenge to this exercise of the primary judge's discretion. Ground 2 1. This ground alleges that the applicant was denied procedural fairness as a result of the primary judge refusing to allow an affidavit of Ms Rose Sebie, the applicant's mother, to be read. 2. The transcript reference particularised in relation to this ground records that the applicant sought to read the affidavit of his mother, apparently without her being available for cross-examination, on the basis that her illness (worsening dementia) had arisen after she swore the affidavit. The primary judge declined to allow the affidavit to be read without Ms Sebie's attendance for cross-examination. Bearing in mind the highly contentious nature of the issues in the proceedings at first instance, it is difficult to see the applicant succeeding in challenging this exercise of discretion, particularly as the applicant does not give any specific reasons for concluding that the discretion miscarried. Ground 3 and 4 1. These grounds challenge the primary judge's principal findings. Their particulars indicate that they go no further than the challenges made in grounds 5, 6 and 7. Ground 5 1. This ground alleges that the primary judge erred in finding that Mr Richard Sebie, who I have noted was the sole director of EICT, "did his brother's [the applicant's] bidding knowing that there was no secured loan agreement" (Judgment of 26 April 2017 at [57]). 2. The particulars in support of this ground refer only to Mr Richard Sebie's evidence. However the primary judge found that Mr Richard Sebie was not a credible witness and that he acted dishonestly in relation to the events with which the proceedings were concerned. The appellants have not proffered any arguable ground for overturning the primary judge's rejection of his evidence. In these circumstances, the appellants' reliance on this evidence does not assist them in seeking to establish this ground of appeal. Ground 6 1. This ground alleges that the primary judge erred in finding that EICT did not provide any consideration for the transfer of the Chiswick property to it. In this context, the appellants rely upon EICT's payment of a substantial sum of money for stamp duty (being $97,700, although the primary judge referred to it as $87,690). That EICT paid the stamp duty does not however indicate that any consideration was provided by EICT either to ENAD or the applicant for its purported acquisition of the property. This ground of appeal does not therefore have any prospects of success. Ground 7 1. This ground alleges that the primary judge erred in holding that the evidence of Ms Shelyn Nassif was of "no utility". Ms Nassif was called to give evidence that she witnessed signatures on the purported secured loan agreement of 5 September 2005. The primary judge made the following findings concerning her evidence: "Ms Shelyn Nassif was a credible witness but her evidence was of no utility. In her affidavit she identified her signature on the signature page of a document dated 5 September 2005. It appears to be an alternative version of the signature page of the 'secured loan agreement' whose discrepancies I canvassed in paragraph [27] above. However, she gave no evidence of the nature or content of the document to which that signature page was attached. If that signature page is genuine, it could have been the signature page from a document that had nothing to do with a loan from ENA Development Pty Ltd to Robert Sebie in September 2005. Her evidence was of no assistance" (at [50]). 1. The applicant did not provide any arguable basis upon which this Court could interfere with these findings. The grounds of appeal generally 1. I have referred above to each of the grounds contained in the Amended Notice of Appeal. For the reasons I have given, none of them is reasonably arguable. None therefore has any significant prospects of success. The balance of convenience 1. In assessing the balance of convenience I take into account on the one hand, that the respondents have been prevented from obtaining ownership and possession of the property which the applicant had agreed to sell to them in October 2014. The passage of almost three years since the time at which their purchase should have been settled provides a strong reason for letting them have the fruits of their victory in the proceedings below. 2. The only significant balance of convenience matter raised on the applicant's part is that his elderly mother has lived in the property for some years and would be forced to leave if the respondents were given ownership and possession of the property. The applicant gave evidence that his mother is very ill and needs constant care, that neither he nor his brother has accommodation which could be provided to her, that his sister has no room in her house for their mother, and that their mother and her husband (Mr Ramzy Sebie) cannot live together. He said that his mother and her husband "do not get on" and constantly fight, and that they have led separate lives for some time. He asserted that his mother therefore has nowhere to go if she is required to leave the Chiswick property. 3. It is regrettable indeed that Ms Rose Sebie is so ill, and that there are difficulties with her accommodation. However she has three adult children and a husband who will, despite their own difficulties, need to assist her. Even if a stay pending appeal were granted, the need to make alternative accommodation arrangements for Ms Sebie would only be postponed for a short period unless the appeals succeeded, an outcome which in my view is unlikely to eventuate. 4. The possibility of prejudice to the applicant by the respondents obtaining title to the property and disposing of it prior to determination of the appeal is foreclosed by the following undertaking proffered by the respondents to the Court, which the Court accepts: "The respondents undertake to the Court that apart from giving security to Westpac Banking Corporation to complete their purchase, they will not further encumber the property the subject of these proceedings or transfer it to a third party for a period of six months from today's date [being 13 September 2017]." 1. If the appeal is not disposed of within this period and the respondents do not extend their undertaking, it will be open to the applicant to make an application to the Court for interim relief. Conclusion 1. Weighing these various considerations, I have concluded that no stay should be granted. The appeal has no significant prospects of success and the balance of convenience favours the respondents. 2. As well as seeking a stay, the applicant's notice of motion sought an order under r 7.36 of the UCPR referring the applicant to the Registrar for referral to a barrister or a solicitor on the Pro Bono Panel for legal assistance. No argument was addressed to me concerning this prayer for relief. In those circumstances, and because of the views I have expressed concerning the appeal's lack of prospects of succeeding, I am not prepared to make such an order. This conclusion will not prevent the applicant making a properly supported application in the future if he considers it appropriate to do so. 3. For the reasons I have given, I dismiss the applicant's notice of motion. The applicant should pay the respondents' costs of the motion. EICT, which is an appellant but which was not formally joined as a party to the motion, should pay its own costs. I therefore make no order as to its costs. ********** 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: 15 September 2017