A "tissue of lies", fraud and the Real Property Act

“ The central figure in this litigation is Mr Robert Sebie…Mr Sebie has learned his way around the legal system…I have concluded that Mr Sebie was incapable of telling the truth… I would not ordinarily use the expression ‘tissue of lies’, but this is one case where it is appropriate…”

This was Pembroke J’s (justifiably) dramatic opening in one of a series of judgments concerning Mr Sebie (Pham v Enterprise ICT Pty Ltd [2017] NSWSC 446).

Most recently, the Court of Appeal (Enterprise ICT Pty Ltd v Pham (No 2) [2018] NSWCA 185) has rejected an appeal commenced by Mr Sebie (via one of his corporate entities) challenging the decision of His Honour Justice Pembroke.

A home in Chiswick

The litigation revolves around a home in Chiswick, once owned by Mr Sebie, and multiple purported dealings in relation to the property (loan security, caveats, lapses, family law property restraints, self-serving possession law proceedings, bogus transfers, sale, specific performance).

Fraud and Property Transfers

Property law issues aplenty

The litigation is a minefield of property law issues for property law enthusiasts, and, laced with a fascinating spin of factual circumstances.

The facts are extraordinary:

Mid 2014 – Mr Sebie’s former wife (Ms Musabwasoni) commences a family law proceeding against Mr Sebie, including seeking orders forexclusive occupation of the Chiswick property.
29 October 2014 – Mr Sebie contracts to sell the Chiswick property to Mr and Mrs Pham (just months after the family law case commenced).
3 December 2014 – Mr Sebie fails to complete on the contract to sell the Chiswick property. His explanation includes the assertion that he could not discharge a loan from ENA Development Pty Ltd (ENA) connected with the purchase of the Chiswick property in 2005 (of which Mr Sebie was the sole director, and subsequently, his sister and mother).
February 2015 – Mr Sebie provides a copy of “proof” of the loan agreement which is purportedly from 2005. It contains a reference to 2010 legislation and various other unusual anomalies.
23 February 2015 – Mr Pham commences a proceeding for specific performance for the Chiswick property.
May 2015 – ENA (via Mr Sebie) commences a separate proceeding against Mr Sebie (himself) for possession of the Chiswick property, alleging that Mr Sebie had defaulted under the 2005 loan. That proceeding was determined by consent orders, pursuant to which ENA would take possession of the property from Mr Sebie for consideration including the satisfaction of the alleged debt.
June 2015 – Mr Sebie (without notice to the plaintiffs) took steps to remove a caveat lodged by Mr Pham.
July 2015 – ENA (assuming that “possession” conferred “title”) transferred the Chiswisk property to Enterprise ICT Pty Ltd (Enterprise ITC) , a recently incorporated company of which Mr Sebie was the sole director and his sister the sole shareholder. This was despite an earlier order of the Federal Circuit Court restraining Mr Sebie from dealing with the Chiswick property.
5 November 2015 – Mr and Mrs Pham commences proceedings against Enterprise ICT and are successful in obtaining an order for specific performance.
2018 – Mr Sebie (via Enterprise ITC) lodges an appeal (which is unsuccessful).

Court of Appeal

In the Court of Appeal, the Court clarified that insofar as the fraud was “brought home” to Enterprise ICT, or its agents, including Mr Sebie, the Torrens legislation did not free that company’s title as registered proprietor from Mr and Mrs Pham’s prior interest under their contract of sale with Mr Sebie (Assets Co v Mere Roihi [1905] AC 176 at 210). The same fraud on Mr and Mrs Pham provided an equitable basis for setting the transfer aside (Chesterfield v Janssen (1751) 28 ER 82 at 100).

Links to various of the judgments in the related proceedings:

Barristers, Working with Barristers

Talitha Fishburn

A “tissue of lies”, fraud and the Real Property Act

A home in Chiswick

Fraud and Property Transfers

Property law issues aplenty

Court of Appeal