Assadourian v Assadourian

[2001] NSWSC 1054

CITATION:	Assadourian v Assadourian [2001] NSWSC 1054
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 3521 of 2000
HEARING DATE(S):	13 November 2001
JUDGMENT DATE:	21 November 2001
PARTIES :	Nauvart Assadour Assadourian (Plaintiff) Malaka Assadourian (First Defendant) Artin Assadourian (Second Defendant)
JUDGMENT OF:	Windeyer J at 1

COUNSEL :	D.G. Charles (Plaintiff) R Killalea (Defendants)
SOLICITORS:	PricewaterhouseCoopers Legal (Plaintiff) K Le Lievre (Defendants)
CATCHWORDS:	CONTRACTS - plaintiff and defendants settled a previous action by signing a deed of release - terms of deed incuded plaintiff pay some money to defendants' solicitors to be paid to defendants upon their giving vacant possession of a property by a certain date - defendant did not give vacant possession - claim by both sides for balance of funds - CONTRACTS - construction - whether date of possession is essential term - whether entitled to money conditional upon possession on fixed date - whether claim of plaintiff only in damages rather than return of moneys
CASES CITED:	Henderson v Henderson (1843) 3 Hare 100 [67 ER 313] Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589
DECISION:	See paragraph 15

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

WEDNESDAY 21 NOVEMBER 2001

3521/00 NAUVART ASSADOUR ASSADOURIAN V MALAKA ASSADOURIAN & ORS

Judgment

1 This action is, I hope, the last substantive one arising out of a difficult dispute and difficult litigation over property, No. 85 Kleins Road, Northmead.

2 In proceedings 3284/94 Artin Assadourian and Malaka Assadourian sought a declaration that Nauvart Assadourian held that property as trustee for them. In this judgment I will refer to the parties by their first names in an attempt at clarity. In those proceedings Nauvart cross-claimed for possession of the property and removal of a caveat. The proceedings were listed on 27 February 1997 and adjourned until the next day, when the matter was compromised pursuant to the terms of a deed of release and consent orders. The deed of release cited the proceedings in the court and the agreement to settle in accordance with the orders annexed to the deed and the terms of the deed. Clause 1, 2, 4, and 7 of the deed were as follows:

1. In consideration for:

(a) the making of orders by consent by the Supreme Court today in the form annexed hereto and marked "A"; and

(b) the vacation of the property by Artin Assadour Assadourian and Malaka Assadourian by 1 February 1998; and

(c) the payment of the amount of $30,000 by Nauvart Assadour Assadourian as follows:


(i) $7,500 to be paid to the trust account of M. Kanaan & Co, solicitors, on or before 14 March 1997.

(ii) $22,500 to be paid to the trust account of M. Kanaan & Co, solicitors, or if there is no law firm practicing as M. Kanaan & Co. at the date of the payment then to Dunhill Madden Butler, on or before 1 February 1998 to be held on trust for payment by M. Kanaan & Co or Dunhill Madden Butler, as the case may be, to Artin Assadour Assadourian and Malaka Assadourian upon their vacation of the property by 1 February 1998,
each party to this Deed hereby releases each other party from all causes of action, claims, suits, debts, costs, expenses, liabilities of any nature which that party has or may have now or at any other time either alone or jointly against any other party to this Deed, other than enforcement of the Orders made in the proceedings and other than as set out in this Deed.

2. Artin Assadour Assadourian and Malaka Assadourian jointly and severally agree to pay all outgoings in respect of the property, and Nauvart Assadour Assadourian agrees not to claim rent or licence fee or mense profits or any other amount in respect of their occupation of the property for the period up to and including 1 February 1998 and any shorter period of occupation.
…
4. Artin Assadour Assadourian and Malaka Assadourian jointly and severally agree to vacate the property together with their children and all their goods and chattels by 1 February 1998.
…
7. This Deed contains the entire agreement between the parties with respect to its subject matter.

3 The court orders included the following:

1. The Summons be dismissed.

2. Judgment for possession of the property comprised in Certificate of Title folio identifier 23/9330 and known as 85 Kleins Road, Northmead ("the property") in favour of the Defendant/Cross claimant to be enforced in accordance with these orders.

3. An order that the Defendant/Cross claimant have leave to issue a writ of possession in respect of the property on or after 2 February 1998 provided that the amount of $30,000 is paid by the Defendant/Cross claimant as follows:

(a) $7,500 to be paid to the trust account of M. Kanaan & Co, solicitors, on or before 14 March 1997.
(b) $22,500 to be paid to the trust account of M. Kanaan & Co, solicitors, or if there is no law firm practicing as M. Kanaan & Co then to Dunhill Madden Butler, on or before 1 February 1998 to be held on trust for payment by M. Kanaan & Co or Dunhill Madden Butler, as the case may be, to the Plaintiffs/Cross defendants upon the property being vacated by the Plaintiffs/Cross defendants by 1 February 1998.


4. A declaration that the Plaintiff/Cross defendants have no legal or equitable interest in the property

5. An order that the Registrar-General remove the caveat registered number Y850166 from the register forthwith.

…

7. The Court notes

(a) The Plaintiffs/cross defendants agree to pay all outgoings in respect of the property, but are not liable to pay rent or licence fee or mesne profits or any other amount in respect of the occupation of the property, for the period up to and including 1 February 1998 or the period of occupation by Plaintiffs/cross defendants whichever is the shorter.

4 The sums of $7,500 and $22,500 were paid in accordance with the deed. The sum of $7,500 was either paid to Artin and Malaka or applied towards their costs. Artin and Malaka did not vacate on 1 February 1998. Malaka entered a new caveat on 6 February 1998. On 23 February a writ of possession issued on which execution was stayed for a time, but execution finally took place on 15 May 1998 when Artin and Malaka were evicted from the property and possession given to Nauvart. Nauvart exchanged contracts for sale of the property in August 1998, and on 1 September 1998 the caveat was removed pursuant to a lapsing notice. On 3 September 1998 Malaka lodged a further caveat. Hodgson CJ in Eq ordered on 8 September 1998 that this be removed, but granted an injunction restraining Nauvart from dealing with the proceeds of sale of the property until further order. The reason for this restraining order was that Malaka had sought to have the deed set aside by notice of motion in the original proceedings. Hodgson CJ in Eq considered that she should have the opportunity to commence separate proceedings for this relief, which she did in proceedings filed on 27 September 1998, as a result of which the interim injunction was extended until further order. The new proceedings, No. 4827 of 1998, were heard before Young J on 27, 28 and 29 June 2000 and on the last day His Honour dismissed the proceedings with costs. Leave to appeal against that decision has been refused by the Court of Appeal.

5 In this action Nauvart seeks that the balance remaining of the sum of $22,500 paid to Messrs. M Kanaan & Co be paid to him. The amount of $22,500 was reduced to $13,015 after Nauvart, through his solicitors, consented to an agreed amount for the costs of Messrs. M Kanaan & Co being paid from the amount held. This consent was given by letter dated 15 September 1998, which at the same time sought an undertaking that no amount of the balance would be paid to Artin or Malaka or to any person representing them.

6 Two other matters have some relevance to the proceedings. On 9 February 1998, Messrs. Dunhill Madden & Co, acting for Nauvart, sent a letter to Messrs. M Kanaan & Co which included the following paragraph:

Please also confirm that as agreed you will continue to retain the sum of $22,500 on your client’s trust account until your clients have fulfilled the duties imposed on them in terms of the court orders of 28 February 1997.

7 On 12 August 1998 Messrs Dunhill Madden & Co. wrote again to Messrs M Kanaan & Co stating that Artin and Malaka were not entitled to any amount of the sum of $22,500 as they had failed to vacate on 1 February 1998. They also stated that Nauvart’s costs and other losses exceeded the sum of $22,500, but they would accept the figure of $17,777 for these and that the balance remaining of the $22,500 could be paid to Artin and Malaka, provided Malaka withdrew her caveat and she and Artin undertook not to impede the sale of the property. On any basis that offer lapsed.

8 The defendant, Malaka, by notice of motion seeks orders which are inappropriate for a motion. The only part of the motion pressed is an order that the moneys in contention be paid out to Malaka. Artin has said that he makes no claim to them. To endeavour to save further waste of time and to endeavour to bring the proceedings to an end, I directed that part of the notice of motion pressed be treated as a cross-claim.

Claims

9 The proceedings are on summons. That is unfortunate because, as the hearing progressed, it became clear that the basis of claim, defence and cross-claim really needed pleadings to elucidate them.

10 The simple claim of the plaintiff was that the $22,500 was payable to Malaka and Artin upon their vacating the property on 1 February 1998; that they did not do so; and that therefore the plaintiff was entitled to whatever balance of the money remained. This was argued on the basis that this was the true construction of the contract. No argument was put forward as to there being any implied term to that effect and no argument was put that there was a total failure of consideration. To the plaintiff’s claim Malaka mounted two defences. The first was based on the extended estoppel doctrine founded on Henderson v Henderson (1843) 3 Hare 100 [67 ER 313] as expounded by the High Court of Australia in Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589. The second argument went to the construction of the deed and orders and the question of whether time was an essential term as to giving possession and perhaps more importantly as to entitlement to receive the moneys. The counter claim was that Malaka was entitled to the money as possession was ultimately obtained.

Construction

11 I consider the requirement to vacate by 1 February 1998 was an essential term. Failure to comply with that term would have entitled Nauvart to terminate the agreement for breach, but that was not done. The question is whether on its proper construction, failure to so vacate gave rise to a requirement to refund the $22,500. I do not consider that it did. Leaving aside Clause 7 for a minute, it would have been an obvious provision to insert even accepting, as happens in these cases, that settlement documents are sometimes produced under considerable pressure. The court orders are annexed to the deed and must be read with it. Paragraph 3 of those orders does not support a construction of entitlement to return of the moneys. Evidence of subsequent conduct is admissible to identify the terms of an agreement but not as to the construction of those terms. The subsequent conduct and agreement as to payment from the sum of $22,500 are contrary to any implied term.

Plaintiff’s claim

12 If I am correct about this construction then Nauvart would have a claim for damages for breach of contract. No such claim has been brought. There is no evidence of damage so the court can do nothing about this in the absence of claim and evidence, although it seems obvious enough that the damages brought about by breach would be real.

13 As I have come to this conclusion it is really unnecessary to discuss the Anshun defence. Nevertheless in my view it fails. I do not consider that the claim by Nauvart ought clearly to have been made in the earlier proceedings to set aside the release and orders on the ground of fraud and other similar grounds. This would probably have required the joining of an additional party as a cross-defendant; and there was no possibility of inconsistent judgments. A similar challenge could be made to the claim which Malaka now seeks to bring pursuant to the notice of motion. I do not consider it unreasonable not to have brought the claim in the proceedings before Young J.

Defendant’s claim

14 The difficulty about the defendant’s claim is that it is based on the assumption that the moneys ought to have been paid to her and her husband upon their giving vacant possession at any time. The true position according to the agreed facts is that they never gave vacant possession but were evicted pursuant to the writ of possession. On that basis one of the purposes of payment failed but it could not be said it was the only purpose had total failure of consideration been argued. The true answer if properly claimed with appropriate evidence would have been that damages for breach of contract would have exceeded the amount in court and been recoverable from it.

15 Nauvart has the benefit of orders for costs in various motions and actions dealing with the question of rights to the property at Northmead. It is accepted that it is quite unlikely that these costs would be recovered if the moneys in court are paid to Malaka. I consider it proper for those costs to be charged on and paid out of the moneys in court. If necessary I will give leave to the plaintiff to amend to make that claim. If sense prevails that will bring these proceedings to an end as the costs will exceed the moneys in court and should obviate any requirement for formal assessment.

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Last Modified: 12/17/2001