Wakim v Tadros (No. 2) [2012] NSWSC 749

Supreme Court New South Wales

Medium Neutral Citation: Wakim v Tadros (No. 2) [2012] NSWSC 749 Hearing dates: 29/06/2012 Decision date: 29 June 2012 Jurisdiction: Equity Division - Commercial List Before: McDougall J Decision: Application for leave to amend dismissed with costs. Catchwords: [PROCEDURE] - civil - leave sought to amend statement of claim - embarrassing pleadings - whether plaintiff's proposed amendments to pleadings clarify defects in previous iteration. Category: Procedural and other rulings Parties: Elias George Wakim (Plaintiff) Anthony Tadros (First Defendant) J & R Investment Services Pty Ltd (Second Defendant) Joseph Wakim (Third Defendant) Rita Wakim (Fourth Defendant) Ben Anthony Kannan (Fifth Defendant) Marie Kannan (Sixth Defendant) Sayed El Hawache (Seventh Defendant) James Jospeh Lahood (Eighth Defendant) Moussa Wakim (Ninth Defendant) CBD Tax Pty Ltd (Tenth Defendant) Representation: Counsel: P Mee Ling (Solicitor) (Plaintiff) C Robinson (Ninth Defendant) Solicitors:Mee Ling (Plaintiff) Cambridge Law (Ninth Defendant) File Number(s): 2007/257897

Judgment - ex tempore (revised 29 june 2012) 1HIS HONOUR: On 8 June 2012 I heard an application by the plaintiff, Mr George Wakim, to amend his statement of claim so as, among other things, to bring a claim against his brother, Mr Moussa Wakim. I came to the view, for reasons I gave on that day ([2012] NSWSC 700), that leave should not be granted "at least as the claim is framed in the further amended statement of claim". Perhaps unwisely, I gave Mr George Wakim another opportunity to propound a revised pleading which might deal with what I saw to be the deficiencies in the document with which I was dealing on that occasion. 2A revised draft pleading has now been put forward. The notice of motion seeking leave to amend has not been amended, but nothing turns on that. 3It seems, from the statement of claim and the submissions that I have heard (both on this occasion and on the previous occasion), that part of the case for Mr George Wakim is that he lent, or agreed to lend, some $500,000 to the first defendant, Mr Tadros, to enable Mr Tadros to buy out his partner or co-venturer in a used car dealership. That partner or co-venturer was the second defendant, J & R. Mr George Wakim says that the loan was to be made through J & R, as some sort of conduit. 4One of the difficulties in understanding what is sought to be alleged against Mr Moussa Wakim is that the claim propounded is not one accruing to Mr George Wakim in his own right (that is to say, for wrongs done to him directly by Mr Moussa Wakim). It is, instead, an action on a claim that it is said Mr Tadros had against Mr Moussa Wakim, in respect of which the cause of action was assigned by Mr Tadros' trustee in bankruptcy to Mr George Wakim. For the reasons I gave at [9] and [10] on 8 June 2012, I do not propose to resolve this application on the basis of whether or not an assignment of a bare cause of action is good at law or in equity. 5So far as I can understand it, the claim that Mr Tadros sought to assert (and which Mr George Wakim, as assignee, now seeks to assert) is that Mr Moussa Wakim received money from J & R which was either money paid by Mr Tadros to J & R for particular purposes, or money that Mr George Wakim paid to J & R to be lent to Mr Tadros. However, it is very difficult to discern that articulation of the case from the statement of claim. 6I set out the proposed paragraphs 205 to 207, which may be compared with the previous version referred to at [4] of my reasons of 8 June 2012: Claim against MW 205.MW has been paid monies by J & R that are funds which either: (A)J & R received from Tadros as pleaded in paragraphs 32 to 33C and 155 to 160 herein; or (B)that were intended for Tadros by GW as pleaded in paragraphs 43 to 45 and 169 to 173 herein and to which neither he nor J & R was entitled as against Tadros. Particulars The sum of $100,000 was paid by J & R and or JW to MW on or about April 2004. 206.When receiving these funds, MW knew they were paid by Tadros or were intended for Tadros as pleaded in paragraph 205 and that neither he nor J & R were entitled to the funds and MW therefore holds those funds as a constructive trustee. Particulars At or before the sum of $100,000 was paid JW orally informed MW that the sum was from the money J & R received from GW to be lent to Tadros and which J & R wrongfully kept in that the sale value of the assets was lower than $393,879 and the $106,121 was not paid to Tadros 207.As a consequence, Tadros is entitled to an order that MW pay him all monies received by J & R from Tadros or intended for Tadros and paid to MW. 7It is convenient to start with para 205. That alleges a payment of money by J & R to Mr Moussa Wakim. That money is said to be either money received by J & R from Mr Tadros or money that Mr George Wakim intended to be paid to Mr Tadros. It is said that neither Mr Moussa Wakim nor J & R was entitled, as against Mr Tadros, to the benefit of that money. 8The particulars do not clarify the matter. They refer to a sum of money paid by J & R "and/or JW" to Mr Moussa Wakim in about April 2004. 9"JW" is Mr Joseph Wakim: the principal of J & R and another member of the family which is embroiled in this dispute. 10Reference to paras 32 to 33C and 155 to 160 do not clarify para 205. Paragraph 32 alleges a loan agreement made between Mr George Wakim as lender and Mr Tadros as borrower on 7 May 2004. Paragraphs 33 to 33C allege express written, oral and implied terms of that loan agreement. None of those paragraphs alleges any payment by J & R from Mr Tadros, and thus they do not in any way assist in elucidating subpara (A) of the proposed para 205. Further, it may be noted, if the loan agreement was made on 7 May 2004, then it is difficult to see how a payment made by J & R or Mr Joseph Wakim to Mr Moussa Wakim in April 2004 could have anything to do with that loan agreement. 11I should have said that it is alleged that Mr Joseph Wakim was at the time the director and controlling mind of J & R. If that is so, then any payment made by him in that capacity would be the act of J & R and reference to him in the particulars is irrelevant. If, however, it is intended to suggest that he was acting in some other capacity, then the reference to him in the particulars is embarrassing. 12The confusion exposed to date is not clarified by paras 155 to 160. They purport to allege a cause of action apparently claimed by Mr Tadros, against J & R, arising out of termination of the joint venture. As I understand it (and if one goes beyond those particular paragraphs to para 161), what is said in effect is that J & R gulled Mr Tadros into agreeing to pay far more for J & R's interest in the joint venture business than it was worth. That is said to involve some breach of fiduciary obligation. It appears from the particulars of that breach (the obligations themselves being unparticularised) that there may be some latent proposition that the duties owed were prescriptive rather than proscriptive. If that is so then, as I observed in the course of argument, it will be necessary for the question of the nature of those duties to be settled at a level higher than the trial level. But I leave that to one side. 13It is then said that Mr Tadros is entitled to compensation by reason of those alleged breaches of fiduciary duties. The compensation claimed appears to include the extent to which the amount paid to J & R for its interest in the joint venture business exceeded the value of that interest. If that is so, Mr Tadros might have some claim against J & R. However, that does nothing to elucidate why it is that payment of any money by J & R to Mr Moussa Wakim would involve Mr Moussa Wakim in some way in accessory liability. 14Turning to subpara (B), it is necessary to go to paras 43 to 45 and 169 to 173. The first three paragraphs allege that Mr George Wakim gave a sum of about $900,000 to Mr Joseph Wakim, part of which was for repayment of a loan and part of which ($872,500) was to be invested. It is said that Mr Joseph Wakim held that sum to be paid in part to Mr Tadros and in part for other purposes. However, it is said, Mr Joseph Wakim did not apply the money in that way, but rather for an unauthorised purpose. It is not alleged in those paragraphs that Mr Joseph Wakim was acting as agent or director of J & R, or otherwise than in his personal capacity. Thus, it is not immediately clear how paras 43 to 45 could amplify or explain para 205(B). 15Paragraphs 169 to 173 allege, as I understand them, that J & R, through Mr Joseph Wakim, effectively agreed with Mr Tadros to broker a loan to him from Mr George Wakim. That agreement is said to give rise to fiduciary duties and common law duties of care. The fiduciary duties alleged are, once again (and in this case it is clear), prescriptive rather than proscriptive. It is then alleged that J & R failed to pay the sum of $106,000 to Mr Tadros, but instead applied it for other purposes. 16The difficulty with all this is that, assuming for the moment the truth of the facts alleged, they show at most that either Mr Joseph Wakim or J & R held money from Mr George Wakim which was intended, as they jointly purposed, to be applied as a loan to Mr Tadros. The failure to pay the money in accordance with the common purpose may well give rise to some "Quistclose" trust, and the failure of that purpose may give rise to some resulting trust. But the beneficiary of those trusts would be Mr George Wakim. It is not clear, and the paragraphs in question do not explain, how the benefit of those trusts could extend to Mr Tadros so as (between him and J & R) to make the moneys trust moneys held on trust for him. 17Thus, it seems to me, the proposed amendments to para 205 do not clarify the defects that I perceived to exist in its previous iteration. On the contrary, when one looks at the paragraph, and considers it in conjunction with the paragraphs that it calls up, the difficulties are compounded and the confusion is increased. 18In my view, the proposed para 205 is embarrassing, and ought not to be allowed to proceed. 19It is not necessary to apply the same level of analysis to paras 206 and 207. They depend entirely on para 205. If, as I think, there should not be leave to amend to include the present proposed para 205, then there is no point in permitting leave to amended in terms of paras 206 and 207. 20Having regard to the orders that I made on 8 June 2012, I think I should assume that the versions of paras 205 to 207 now propounded represent Mr George Wakim's last and best attempt to put forward a pleading that should be allowed to proceed. On that basis, I see no point in allowing any further amendment. Accordingly, I order that the notice of motion filed on 18 May 2012 be dismissed with costs.

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