Alstergren v Galic

[2012] VCC 1465

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-12-01505

WILLIAM EDWARD ALSTERGREN and	Plaintiffs
CHRISTOPHER JAMES TWIDALE
v.
THIMOR GALIC	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	1 October 2012
DATE OF JUDGMENT:	1 October 2012 (revised 2 October 2012)
CASE MAY BE CITED AS:	Alstergren & Anor v Galic
MEDIUM NEUTRAL CITATION:	[2012] VCC 1465

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Summary judgment – Defence of duress – Whether illegitimate pressure applied to defendant – Issue appropriate for determination at trial – s. 63 Civil Procedure Act 2010 – Karam v Palmone Shoes Pty Ltd [2012] VSCA 97 applied.    

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A. Schlicht	Vadarlis & Associates
For the Defendant	Mr A. Herskope	JBT Lawyers

HIS HONOUR:

1The plaintiffs, two barristers, seek summary judgment against the defendant, a solicitor. The claim is for the sum of $150,000 said to be owing pursuant to a deed entered into between the parties on 13 December 2011.

2There is no dispute that the deed was executed by the parties. The defendant says he entered into the deed after having been subject to duress by the plainitffs, or alternatively that the conduct of the plaintiffs amounted to unconscionable conduct.

3The plaintiffs had acted as counsel in a trial in the Supreme Court of Western Australia, in which they had been briefed by the defendant. The trial lasted 41 sitting days. The last day of the trial was 9 September 2011. Final submissions were made at a further hearing in early October 2011.

4During the course of the trial, there was considerable correpsondence between the plaintiffs and the defendant, and with their client Mr Kim Soia, relating to the payment of counsels fees.

5The defendant, although he had briefed the plaintiffs in the Western Australian action and, in correspondence with his client, admitted such liability, has denied that he ever had a personal liability to pay the plaintiffs’ fees.

6Following the completion of the trial and final submissions in the Western Australian action, an application was made to further amend the client’s claim in the proceeding. This application was set down for hearing on 15 December 2011.

7Sometime before that hearing, the plaintiffs’ solicitor in correpsondence with the defendant made it clear that his clients would not appear at a hearing unless arrangements were made for the payment of the outstanding fees. Eventually, the parties entered into the deed dated 13 December 2011.

8In paragraph 81 of the defendant’s affidavit sworn 14 September 2012, he said, “I was concerned that any prospect I had of recovering significant fees owed to me by Soia, which the plaintiffs were well aware of would be jeopardised if I didn’t sign. I was thinking that Soia would never pay my fees if counsel I had recommended withdrew at this late critical stage”.

9Plaintiffs’ counsel, Mr Schlicht, submitted that the pressure alleged by the defendant which had led to him executing the deed was simply a pressure that he might otherwise not recover his own fees from the client. The defendant’s allegation however includes the element that recovery of the defendant’s fees from the client was thought to be dependant on counsels’ continued involvement in the case, which they threatened would not happen if the deed was not executed.

10The defendant says that because of the late stage at which he was required to make a decision in relation to the execution of the deed his options were very limited and he felt the only realistic option open to him was to secure the attendance of the plaintiffs as counsel on 15 December. Mr Herskope, defendant’s counsel, submitted that in the circumstances the defendant had raised a defence which could not be described as “fanciful” and that there was a real question to be tried.

11Although the defendant may have established it was arguable that the “pressure” applied by the plaintiffs amounted to pressure that “went beyond what the law is prepared to countenance as legitimate” (Crescendo Management v Westpac Banking Corporation 19 [1988] NSWLR 40 at 46 per McHugh JA), Mr Schlicht submitted that a further fact should be decisive in the plaintiffs’ favour, namely that on 6 February 2012, the defendant had lodged a caveat pursuant to a second mortgage granted by the client pursuant to the terms of the deed. Effectively, therefore, the defendant had affirmed the deed by his subsequent conduct, whether or not there may have existed circumstances which entitled the defendant to avoid the agreement.

12Extensive material has been filed by the parties on the application. When the matter first came before Her Honour Judge Kennedy on 21 August 2012, an order was made to provide an alternative option for the resolution of the dispute, Judge Kennedy set the matter down for trial commencing 29 October 2012 with priority before herself so that, if subsequently the plaintiffs were not successful on their summary judgment application, an early trial date would be available. Her Honour anticipated at that time the trial would proceed by way of affidavit material.

13A new test for summary judgment was provided in section 63 of the Civil Procedure Act 2010. That provision has been considered in many judgments by single judges of the Supreme Court. It had generally been understood that the provision was intended to broaden the scope of cases which might be disposed of summarily, whilst maintaining the position that unless a claim or defence were to be regarded as “fanciful”, contested civil disputes should be determined at trial rather than summarily.

14In Karam v Palmone Shoes Pty Ltd [2012] VSCA 97, the Court of Appeal at paragraph 28 said that the “change in terms” of the test for summary judgment in section 63 of the Civil Procedure Act 2010 “was not intended to establish a new or different test; rather to express more accurately a way in which the rule [rule 22.02] had been interpreted by the courts”.

15I consider in this case that there is sufficient dispute about factual and legal matters to make it appropriate for this proceeding to be determined at trial rather than on a summary basis. In those circumstances, it is not appropriate for me to say anything further about the relative merits of the arguments presented to me on the application.

16Subsequent to delivering these reasons in court, Mr Herskope has requested that I record my ruling on the admissibility of correspondence between the plaintiffs’ solicitors and the defendants, which the defendant contended should not be admitted because it was marked “without prejudice” and recorded settlement negotiations. Mr Herskope, however, had sought to rely upon this correspondence as the “reasons” the defendant had later lodged the caveat on 6 February 2012. In the circumstances, I consider that the admissibility of the chain of communications is a matter best left for determination by the trial judge.

17During the course of the hearing, both plaintiffs and defendant’s counsel confirmed that they could see a reason why the proceeding could not be determined at a trial commencing 29 October 2012. The order of Judge Kennedy provided that any further affidavits a party seeks to rely on must be filed and served by 15 October 2012. It was not suggested that, if any further affidavits were required to be filed, that they would be extensive.

18Mr Herskope indicated that the defendant wished to file an amended defence. The only matter raised by him which would be the subject of the amendment would be the further or better articulation of the matters relied upon in relation to the defence of duress. He specifically stated that it was not the defendant’s intention to rely upon the matters referred to in an email dated 11 December 2011, being exhibit TG 37 to the defendant’s affidavit sworn 17 September 2012, as a concluded and enforceable agreement between the parties but simply to assert that those matters were part of the background circumstances in which the deed executed on 13 December 2011 must be considered.

19The defendant also seeks leave to file a rejoinder in response to the plaintiffs’ reply. As for discovery, the parties agreed that any order for discovery should be limited to any document which may harm a party’s case and any other document or class of documents which a party reasonably requests the other to discover. Judge Kennedy’s orders provide for mediation by 10 October 2012.

20In the circumstances, I consider the following orders are appropriate:

1.The trial fixed for hearing on 29 October 2012 with priority before Her Honour Judge Kennedy is confirmed (revised estimate 3-5 days).

2.By 4:00pm on 5 October 2012 the defendant must file and serve any amended defence, limited to the better articulation or particularisation of the defence of duress and may also file and serve a rejoinder.

3.By 4:00pm on 17 October 2012 the parties must make discovery (including inspection) limited to:

a.         any documents which may harm that party’s case;

b.any document or class of documents which another party reasonably requests that party to discover.

4.The costs of the plaintiffs’ summons filed 24 July 2012 and of the defendant’s summons filed 9 August 2012 shall be costs in the Cause.

5.Otherwise the plaintiffs’ summons dated 24 July 2012 is dismissed.

6.Reserve liberty to apply.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 1 October 2012 and revised on 2 October 2012.

Dated: 2 October 2012

Catherine Kusiak

Associate to His Honour Judge Anderson