Australia, May 9 -- New South Wales Land and Environment Court issued text of the following judgement on April 9:

1. By Notice of Motion filed on 24 January 2025, the Plaintiff (CE Sales) seeks:

1) an order that [16]-[18] of the First Defendant's (Mr Elyas's) Defence filed on 16 December 2024 be struck out, pursuant to Uniform Civil Procedure Rules 2005 (NSW) rule 14.28(1);

2) judgment on admissions against Mr Elyas in the amount of $3,324,463.71 (together with interest to the date of judgment), pursuant to UCPR rule 17.7;

3) in the alternative, summary judgment against Mr Elyas pursuant to UCPR rule 13.1 in the amount of $3,324,463.71 (together with interest to the date of judgment); and

4) Mr Elyas to pay the Plaintiff's costs of the motion.

The Pleadings

2. Paragraphs [25]-[33] of the Statement of Claim filed on 14 October 2024 allege as follows (omitting particulars):

[25] Between 3 August 2021 and 14 May 2024, Elyas made payments totalling $3,624,463.71 from CES funds to a bank account in his name or LJI FS (Payments).

[26] Elyas had authority to pay out of CES bank accounts genuine expenses incurred by CES as part of its business, to the legitimate suppliers of those expenses, but not otherwise.

[27] The Payments were not payments of any bills or other expenses in fact incurred by CES.

[28] The Payments were made by Elyas for his personal benefit and without any authority from CES.

[29] Accordingly, the funds the subject of the Payments were misappropriated by Elyas.

[30] On about 28 May 2024, the sum of $300,000 was paid by Elyas to CE Sales.

[31] Elyas was authorised by CES only to make such payments from CES bank accounts as were required to pay CES' genuine expenses.

[32] The Payments were made by Elyas to himself without authority from CES.

[33] Accordingly, Elyas is liable in restitution to repay to CES the amount of the Payments.

3. Those paragraphs are admitted by Mr Elyas - see Defence at [6]-[7]. That is, Mr Elyas admits that the Payments were made by him for his personal benefit and without authority from CE Sales, and that the funds the subject of the Payments were misappropriated by him. He admits that he is liable in restitution to repay the amount of the Payments.

4. Paragraph [10] of the Defence provides as follows:

The first defendant admits that he is liable for the repayment of some of the misappropriated fund but further pleads the matters contained in paragraphs [X to X] in respect of liability and proportion of any damages.

5. The reference to "[X to X]" is plainly a mistake. The intention was to refer to [16]-[18] of the Defence. Those paragraphs provide as follows:

[16] Further, and in the alternative, and in answer to the whole or part of the plaintiff's claim, the first defendant say that if the plaintiff has suffered loss and damage as alleged, or at all, then such loss or damage was caused by the plaintiff's own conduct and negligence and/or failure to mitigate its' alleged loss.

Particulars

(a) at all material times, the plaintiff was aware of the risks of entering into the agreement with the third defendant, including the risks associated with outsourcing it's financial interests and financial control in the company;

(b) the plaintiff failed to take proper precautions against the risk;

(c) the plaintiff failed to exercise reasonable care for its' own interests;

(d) the plaintiff failed to take proper precautions in having appropriate mechanisms and approval processes in place;

(e) the plaintiff failed to provide proper supervision; and

(f) further particulars to be provided following evidence and discovery.

[17] By reason of the matters pleaded in paragraphs 16 above, the plaintiff was contributorily negligent within the meaning of section 5R of the Civil Liability Act 2002 (NSW) and any liability of Elyas for any loss and damage suffered by the plaintiff should be reduced.

[18] Further, and in the alternative, and in answer to part or the whole of the claim, the first defendant relies upon section 5D of the Civil Liability Act 2002 (NSW) and says that any loss or damage sustained by the plaintiff was not caused or contributed to by any act or omission on the part of the second defendant but may have been contributed to by an act or omission on the part of the third defendant.

The "agreement with the third defendant" referred to in the particulars appears to be a reference to a services agreement between CE Sales and the Third Defendant by which the Third Defendant provided accounting services. Mr Elyas was an employee of the Third Defendant.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1961824bc7b6f6b558e7dcbb)

Disclaimer: Curated by HT Syndication.