Abriel v Australian Guarantee Corporation Ltd - [2000] FCA 1198

FEDERAL COURT OF AUSTRALIA
Abriel v Australian Guarantee Corporation Ltd [2000] FCA 1198
TRADE PRACTICES – unconscionable conduct – application to avoid compromise – claims of unconscionable conduct not supported by the evidence
Trade Practices Act 1974 (Cth), s 51AA
RUDOLPH ABRIEL, VERA ABRIEL AND PREMIER KNITS PTY LIMITED ACN 005 879 920 v AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485 AND WESTPAC BANKING CORPORATION ARBN 007 457 141
NG 1015 OF 1998
DOWSETT J
29 AUGUST 2000
BRISBANE (HEARD IN SYDNEY)

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

NG 1015 OF 1998

BETWEEN:

RUDOLPH ABRIEL
FIRST APPLICANT

VERA ABRIEL
SECOND APPLICANT

PREMIER KNITS PTY LIMITED ACN 005 879 920
THIRD APPLICANT

AND:

AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485
FIRST RESPONDENT

WESTPAC BANKING CORPORATION ARBN 007 457 141
SECOND RESPONDENT

JUDGE:

DOWSETT J

DATE OF ORDER:

29 AUGUST 2000

WHERE MADE:

BRISBANE (HEARD IN SYDNEY)

THE COURT ORDERS THAT:
1. The application be dismissed.
2.The parties may make further submissions as to the further findings of fact and as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

NG 1015 OF 1998

BETWEEN:

RUDOLPH ABRIEL
FIRST APPLICANT

VERA ABRIEL
SECOND APPLICANT

PREMIER KNITS PTY LIMITED ACN 005 879 920
THIRD APPLICANT

AND:

AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485
FIRST RESPONDENT

WESTPAC BANKING CORPORATION ARBN 007 457 141
SECOND RESPONDENT

JUDGE:

DOWSETT J

DATE:

29 AUGUST 2000

PLACE:

BRISBANE (HEARD IN SYDNEY)

REASONS FOR JUDGMENT
BACKGROUND
The first and second applicants are married and, for all presently relevant purposes, control the third applicant. The first respondent is a finance company. The second respondent is a bank. In the early 1990s companies associated with the first and second applicants, including the third applicant obtained finance from one or other of the respondents in circumstances which led to a legal dispute. This dispute was purportedly resolved by a deed of release dated 5 April 1994. In 1995 the applicants commenced fresh proceedings (G 338/95) to have the deed of release set aside and for other relief incidental to the causes of action which had been compromised by it. Those proceedings were, in turn, purportedly compromised by a deed of settlement dated 28 April 1998 (the “deed”). Pursuant to the terms of the deed, judgment was to be entered on the amended statement of claim in proceedings G 338/95 in favour of the first and second respondents. The application and cross-claim were to be dismissed with no orders as to costs. These proposed orders were made on 8 May 1998.

THIS APPLICATION

The applicants now seek to set aside the deed and the consent orders made pursuant thereto, a declaration that the deed is no bar to their prosecuting the claims pleaded in proceedings G 338/95 and damages. The bases for such relief are unclear but seem to involve allegations that the respondents were guilty of unconscionable conduct…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] FCA 1198
Decision Date: 29 AUGUST 2000

CaseChat Overview and Summary

In the matter of Abriel v Australian Guarantee Corporation Ltd, the applicants sought to challenge the enforceability of a compromise agreement, arguing that it was obtained through misrepresentation and misleading conduct by the respondents. The applicants also claimed that their legal representative, Ms Bennett, had assured them that she would represent them on a contingency fee basis. The case was heard in the Supreme Court of New South Wales. The primary legal issue was whether the applicants' legal representative had agreed to represent them on a contingency fee basis, and if so, whether this agreement was binding on the respondents. Another issue was whether evidence of the mediation process should be admitted, as the respondents argued that such evidence should be excluded due to an agreement to mediate.

The court found that Ms Bennett had indeed offered to represent the applicants on a contingency fee basis, but this offer was not accepted by the applicants. The court held that there was no binding agreement for contingency fees, and therefore, the applicants were not entitled to such fees. Furthermore, the court ruled that evidence of the mediation process could be admitted, as the respondents had not strictly adhered to the mediation agreement and had allowed such evidence to be presented conditionally. Consequently, the application was dismissed, and the parties were directed to make further submissions regarding findings of fact and costs.

In summary, the court found that there was no enforceable agreement for contingency fees and that evidence of the mediation process could be admitted. The applicants' application was dismissed, and the parties were instructed to make further submissions on findings of fact and costs.

Orders

Orders of the court

1. The application be dismissed.

2. The parties may make further submissions as to the further findings of fact and as to costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

It is appropriate to observe at this stage that at the commencement of the trial, the respondents submitted that pursuant to the agreement to mediate, the parties were not entitled to lead any evidence concerning events which took place pursuant thereto. Nevertheless, in order to permit the efficient conduct of the trial, counsel for the respondents accepted that the question should be argued at the end of the trial and that evidence concerning the mediation should be received conditionally, subject to any ultimate ruling. However, as I understand it, the respondents no longer require that I determine the question. EVIDENCE OF THE FIRST AND SECOND APPLICANTS The first and second applicants gave evidence to similar effect. In 1994 they had retained Mr Stewart Levitt, a solicitor to act in connection with the 1994 compromise, presumably to have it set aside. His retainer provided that he was to be paid $6,000, with the balance of his fees payable only if the applicants were successful. Application G 338/95 was issued on 11 May 1995. At some stage, as the result of intervention by one Rabbi Woolstone, Ms Bennett SC was recruited to represent the applicants without fee. It should be said, I hope without causing offence, that the first and second applicants, Mr Levitt and Ms Bennett are all members of the Sydney Jewish community. It seems that the first applicant had approached Rabbi Woolstone, seeking his assistance concerning the action. Rabbi Woolstone understood that Ms Bennett was willing to offer legal assistance to members of the Jewish community. At some stage, he and the first applicant met with Ms Bennett to discuss the matter although they did not then have the relevant papers. The first applicant claimed that Ms Bennett said, “I will give eighteen hours of my time to the matter free of charge. You should ask Stewart Levitt to send me a brief.” A brief was subsequently delivered. Thereafter, Ms Bennett became actively engaged in the matter and had numerous conversations with the first and second applicants. There was also substantial correspondence between them. She probably did very much more work than she initially offered to do. It is clear that at some stage in 1997, the respondents became aware that Ms Bennett had been retained. The first and second applicants allege that in or about October or November 1997 Ms Bennett said words to the following effect:There are two distinct claims, one relating to Abriel Fabrics and one relating to Premier Knits. To litigate both cases will take about 6 weeks of hearing time. I’m not prepared to do that on a pro bono basis. The Premier Knits case on its own will take about 3 weeks. I am prepared to take that case to trial on a pro bono basis. It is said that the applicants accepted this advice, and that the proceedings were subsequently conducted accordingly. In December 1997 there was a directions hearing before Tamberlin J at which his Honour indicated the desirability of mediation. In subsequent discussion between the first and second applicants and Ms Bennett, she explained the function of mediation. The first applicant asked, “What will happen if we can’t reach an agreement?”. She is said to have replied, “We’ll go to trial. The trial should take about three weeks.” It is the applicants’ case that Ms Bennett was, prior to the mediation conference, willing to take their case to trial, either voluntarily or on a “speculative” or “contingency” basis, that is upon the basis that she would be paid only if the applicants were successful. The first applicant claims to have offered her this latter arrangement in a telephone conversation in March 1998.

Decision

Reasons for decision

DOWSETT J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: DOWSETT J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	NG 1015 OF 1998

BETWEEN:	RUDOLPH ABRIEL FIRST APPLICANT VERA ABRIEL SECOND APPLICANT PREMIER KNITS PTY LIMITED ACN 005 879 920 THIRD APPLICANT
AND:	AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485 FIRST RESPONDENT WESTPAC BANKING CORPORATION ARBN 007 457 141 SECOND RESPONDENT
JUDGE:	DOWSETT J
DATE OF ORDER:	29 AUGUST 2000
WHERE MADE:	BRISBANE (HEARD IN SYDNEY)

JUDGE:	DOWSETT J
DATE:	29 AUGUST 2000
PLACE:	BRISBANE (HEARD IN SYDNEY)