Pham v Enterprise ICT Pty Ltd

This is another round in the long-running dispute between the Phams, Sebies and ENA Development Pty Ltd (ENA), which has been productive of numerous judgments, both in this Division and in the Court of Appeal.

The relevant procedural history is set out in four judgments of the Court of Appeal, being Sebie v Pham [2021] NSWCA 115 (31 May 2021), Sebie v Pham (No 2) [2021] NSWCA 274 (21 October 2021) (No 2), Sebie v Pham (No 3) [2021] NSWCA 277 (19 November 2021) (No 3) and Sebie v Pham (No 4) [2021] NSWCA 326 (16 December 2021) (No 4).

As this judgment concerns a costs issue only, I respectfully incorporate the procedural and other history set out in those Court of Appeal judgments by reference, and will otherwise keep the exposition of the factual background to the present application as brief as possible.

Sackar J is currently part heard in a cross-claim in these proceedings brought by ENA against the Phams. On 26 November 2021 his Honour made orders, including:

It will be noted that Order 8 (the Stay) stays Order 6, which latter order gives effect to the Payment Out Orders (as defined in his Honour’s orders).

The fate of the Payment Out Orders was ultimately determined by the Court of Appeal, first in No 3 which refused Mr Robert Sebie's application for leave to appeal from the Payment Out Orders (Bell P and Basten JA; Brereton JA contra), and then in No 4 in which Meagher JA declined an application brought by Mr Robert Sebie and ENA for a stay of the Payment Out Orders pending an application for special leave to appeal to the High Court.

All parties before me today accepted that at least by reason of No 4, the Stay had been lifted from 16 December 2021 with the result that Order 6 made by Sackar J on 26 November 2021 (see [4]) could be carried into effect.

From 16 December 2021 email correspondence ensued between Mr Pham in his capacity as the solicitor for himself and his wife with the Court asking the Court to give effect to the Payment Out Orders.

On 17 December 2021, the Court informed Mr Pham that the relevant official in the Court would begin the process of arranging the payment.

On 20 December 2021, the Court informed Mr Pham that Mr Ronald Jemmott, a director of ENA, was challenging the payment being made. Mr Pham responded on 20 December 2021 by drawing attention to the judgments of the Court of Appeal and concluding:

On 22 December 2021, a notice of motion (the 22 December Motion) was e-filed in the Court of Appeal by Mr Robert Sebie and ENA seeking relief including:

The 22 December Motion was purportedly signed by Mr Jemmott on behalf of ENA, and by Mr Robert Sebie.

On 22 December 2021 at 1.10pm Mr Mazen Zraika, who was purporting to represent ENA as an alternate director, emailed the chambers of Ball J as Vacation Judge. The email was copied to Mr Robert Sebie but not to the Phams. It attached the 22 December Motion and asked for the Payment Out Orders to be stayed pending the hearing of that motion by the Court of Appeal or the return of Sackar J from leave. Justice Ball’s associate responded later that day that all parties should be copied on correspondence and that a notice of motion supported by an affidavit would be required.

On 23 December 2021 at 1.54pm, the Registrar of the Court of Appeal emailed Mr Zraika, copied to Mr Pham, Mr Jemmott and Mr Robert Sebie:

Later in the afternoon of 23 December 2021 the relevant Court official emailed Mr Pham:

There was no reason for that correspondence to be copied to ENA or Mr Robert Sebie, and it was not. As I discuss further below, the Payment Out Orders were then perfected by performance, with the funds being received into Mr Pham’s wife’s bank account either that day or on 24 December 2021.

On 24 December 2021 at 4.03pm, Mr Zraika again emailed Ball J’s chambers asking for an urgent listing of a motion to stay the Payment Out Orders. Later that afternoon, his Honour's associate replied to the effect, among other things, that in the absence of an affidavit which demonstrated that the matter was urgent and that there was a reasonable basis for making the orders sought in the notice of motion, his Honour would not take any steps in relation to the proposed motion.

Nothing more was done until 29 December 2021, when Mr Zraika emailed the chambers of Davies J, who was then the Vacation Judge, seeking the hearing of the motion that is presently before the Court. Only an unsworn affidavit by Mr Jemmott in support of the motion was provided with the email. That motion is brought by ENA alone, is purportedly signed by Mr Jemmott and is dated and was apparently filed on or about 23 December 2021 seeking this order:

For several reasons which it is not necessary for me to set out in detail, Davies J's associate informed Mr Zraika that his Honour would not deal with the application. Those reasons included, entirely understandably on the material that was apparently provided to his chambers, that his Honour considered that he did not have jurisdiction to deal with the matter as it was a matter for the Court of Appeal.

On the material which I have been able to find in the Court file, in the limited time available to me, it does not appear that Davies J's chambers were made aware of the earlier approach to Ball J's chambers. Nor, when an email was sent by Mr Zraika to my chambers on 10 January 2022, was there any reference to the earlier applications to either Vacation Judge. That omission should not have occurred.

Mr Zraika's email to my chambers of 10 January 2022 (copied to Mr Pham and Mr Robert Sebie), seeking an urgent hearing of the present notice of motion, included:

In an email later that afternoon to my chambers, copied to the various parties, Mr Pham responded, including (emphasis added):

The costs issue presently before the Court really arises out of Mr Pham's statement “and payment out was in effect immediately”. I accept Mr Pham’s statement from the virtual bar table that his reply had been made by him remotely on holidays away from his office and doing the best he could to respond to the correspondence.

I must say that I read those words as a statement of the legal effect of the Stay no longer being operative, but as became apparent during the course of this morning's hearing, what Mr Pham was intending to convey, and I accept this to be the case unreservedly, was that the payment out had in fact been effected immediately by the Court. It appears that all the parties read Mr Pham's email, to the extent they did, in the way which I had done originally, so that it was not apparent that the payment out had been made.

In the absence of consent to the application, I fixed ENA’s notice of motion for urgent hearing before me this morning.

This morning, Mr Pham appeared for himself and his wife, and Mr Robert Sebie also appeared for himself.

Mr A Jones, solicitor, appeared on behalf of ENA. Mr Jones informed me that he had only received instructions this morning, however he proceeded to prosecute the notice of motion supported by Mr Robert Sebie.

The sole reason that Mr Jones was able to advance in support of a stay of the Payment Out Orders until the Court of Appeal had dealt with the 22 December Motion, which is listed at 9am on 31 January 2022, was the existence of that motion. When I asked Mr Jones whether he was able to put any submissions as to why that motion had any prospects of success, he was unable to do so but referred me to Mr Robert Sebie’s written submissions.

On the other hand, when I asked Mr Robert Sebie why the 22 December Motion had any prospects of success, he referred me to his written submissions in support of that proposition that he had provided to the Court this morning which ran to five and a half closely-typed pages.

When I called upon Mr Pham to address, it then became apparent from his submissions that the Court and the other parties had failed to appreciate from his email set out in [22] that the Payment Out Orders had been put into effect by the Court Registry on 23 December 2021. Mr Pham subsequently provided to the Court the copies of emails, including that which I have set out in [15], and a screen-shot which all parties accepted demonstrated the receipt on either 23 or 24 December 2021 into his wife's bank account of the $203,673.06.

With that becoming clear, Mr Jones and Mr Robert Sebie accepted, with respect quite correctly, that the Court should dismiss the present motion as having no utility. However, Mr Jones sought his client's costs of today on the basis that Mr Pham could have informed the parties much earlier that the Payment Out Orders had in fact been perfected by performance, so that today could have been avoided and ENA spared the expense of having retained him to appear.

Mr Pham submitted that he had in fact done so and that, in any event, there was no merit in the application being advanced by ENA and supported by Mr Sebie.

For the following four reasons, the Court will make no order as to costs.

The primary reason is that there does appear to me to have been a genuine misunderstanding of what Mr Pham had put in his email of 10 January 2022 (see [22]). I accept that he was intending to convey to the addressees of the email that the payment out had occurred.

In my view that unintentional ambiguity and consequent misunderstanding is sufficient to warrant making no order as to costs, but if I be wrong in that there are three additional reasons why I propose to make no order as to costs.

First, Mr Jones candidly informed the Court that he had been instructed this morning. I can only assume that at least some of the reasons why he was instructed by ENA was Meagher JA’s refusal to allow Mr Zraika to appear for ENA in No 4 and the criticism directed to ENA by the Court of Appeal in No 2. In No 2 the Court was, putting the matter without exaggeration, seriously critical that ENA had instructed a Mr Alis from Mr Jones' firm to appear in the Court of Appeal on that day in circumstances where Mr Allis was, as the judgment records, unable to give any assistance to the Court as to the matters then before it. The Court concluded that Mr Alis had been retained by ENA only to circumvent the requirement that ENA should appear by a solicitor.

Mr Jones’ very limited ability to assist the Court today strongly suggests that he was instructed today for precisely the same reason. This appears to be a repeat of the conduct which, entirely correctly in my respectful view, was strongly disapproved by the Court in No 2. However, given today’s hearing was brought on urgently in the vacation and these matters have not been put directly to Mr Jones, I refrain from further observations on this point and am not to be taken as intending any disrespect to Mr Jones.

Second, I am fortified in the view that ENA should not have its costs by the fact that all of the substantive arguments in favour of the motion, such as they were, were provided by Mr Robert Sebie in his written outline.

Third, while I am conscious that the 22 December Motion has yet to be heard by the Court of Appeal, it is sufficient for me to record that, having heard from Mr Robert Sebie and read his submissions, there is much to be said for Mr Pham's submission that the 22 December Motion is entirely without merit. Of course, upon full argument, the Court of Appeal may take a different view. Nevertheless, Mr Robert Sebie was unable to persuade me today of any obvious merit in the 22 December Motion such as to warrant a stay of the Payment Out Orders if there had been any utility in that course.

For these reasons the orders of the Court are: