Abdalla v Jarvis J Pty Ltd (No 3)

I delivered judgment in these proceedings on 22 September 2025: see Abdalla v Jarvis J Pty Ltd [2025] NSWSC 1084 (PJ or Primary Judgment). I subsequently delivered a further judgment in relation to orders: see Abdalla v Jarvis J Pty Ltd (No 2) [2025] NSWSC 1206.

These reasons assume familiarity with, and adopt the same definitions, as in the Primary Judgment.

In the Primary Judgment, I held that the second defendant, Anthony Hanna, holds a 50% interest in the Land on trust for the plaintiff, Mr Abdalla.

I ultimately made orders for the judicial sale of the Land and that the net proceeds of the sale to be paid into Court.

The Land has now been sold and the amount of $360,638.53 has been paid into Court.

By notice of motion filed 31 March 2026, Mr Abdalla seeks orders that the entire proceeds of sale of the Land held in Court be paid to him, together with judgment against Mr Hanna in the amount of $450,000. This last aspect was subsequently revised in short minutes of order provided by Mr Abdalla prior to the hearing of the motion, so as to seek judgment for the shortfall between the amount of $450,000 and the amount presently held in Court.

These reasons determine that motion. A brief oral hearing was held on 24 April 2026. Mr Abdalla was represented by Damian Allen of counsel and Mr Hanna was represented by Minbo Wang, solicitor. Mr Abdalla relied on two affidavits of his solicitor and I also had the benefit of written submissions from both parties.

Most, if not all, of the additional facts relevant to the motion beyond those set out in the PJ were not in dispute.

The Land was sold for $900,000. The first mortgagee, Commonwealth Bank of Australia (CBA) was paid out in full. Two amounts were relevantly paid to the CBA: an amount of $220,979.07 in relation to home loan account number 881873206, and an amount of $278,523.86 in relation to home loan account number 465102197.

In July 2021, Mr Hanna drew down $240,000 against home loan account number 881873206, at a time when he was aware of Mr Abdalla’s interest in the Land.

The parties agreed that the starting point is that Mr Abdalla is entitled to one half of the net sale proceeds of $862,221.40, namely $431,110.70.

Mr Abdalla submitted that regard should be had to the $240,000 drawn down from the CBA at a time after Mr Hanna was aware of Mr Abdalla’s interest in the Land. By borrowing the $240,000 against the Land, Mr Hanna diminished Mr Abdalla's interest in the Land. That loan had to be paid out on settlement. Had the loan not been drawn down, and thus not required to be repaid on settlement, Mr Abdalla would have received the entire $431,110.70. On that basis, he submitted that the shortfall of $70,472.17 should be ordered to be paid by Mr Hanna to him.

Mr Hanna did not directly respond to any of these submissions. Rather, he contended in his written submissions relied on at the hearing, that in considering what equitable compensation should be awarded to Mr Abdalla, the Court should have regard to the $212,000 previously paid by Mr Hanna to Mr Abdalla – see PJ [19]-[21] and [64]. Mr Abdalla has had the benefit of this amount and it has not been refunded. Mr Hanna contended that the $212,000 should be deducted from the $431,110.70 starting point resulting in $219,110.70 payable to Mr Abdalla.

As an innocent volunteer, Mr Hanna is liable to account to Mr Abdalla for the property held on trust or its traceable proceeds insofar as they remain in his possession: see Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732; [2016] NSWCA 81 at [43]-[47] per Leeming JA (with whom Bathurst CJ and Sackville AJA agreed) and Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [143]-[144] per Gleeson JA (with whom Meagher and Barrett JJA agreed).

The additional borrowing by Mr Hanna against the Land after Mr Hanna became aware of Mr Abdalla’s interest should not count operate to Mr Abdalla’s detriment. I accept the submissions on behalf of Mr Abdalla that in determining what should now been paid to him, that additional borrowing should be borne against Mr Hanna’s interest.

I do not accept that the $212,000 sourced from Mr Hanna and paid to Mr Abdalla should be deducted from the amount otherwise payable to Mr Abdalla. As I observed at PJ [64], although sourced from Mr Hanna, the $212,000 was not consideration paid by him for the transfer to him of the Land in 2019. Mr Abdalla had no knowledge that the $212,000 was sourced from Mr Hanna. In truth, that sum was part payment by Ms Shonoda to Mr Abdalla for the two Hinchinbrook Properties: see PJ [61]. Mr Abdalla could not have been compelled to transfer those two properties until the entire consideration was paid, and it was not.

Any claim for the refund of the $212,000 from Mr Abdalla – for example a claim in restitution based on a total failure of consideration – would lie, if at all, at the suit of Ms Shonoda and not at the suit of Mr Hanna. There is no basis, in my view, for the $212,000 to be deducted from the interest of Mr Abdalla in the present circumstances.

For these reasons, I am of the view that orders should be made as contended for by Mr Abdalla.

The Court orders that: