Braam v BBC Hardware Ltd
[2020] VSCA 164
•19 June 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2019 0096
| MALCOLM ANTHONY BRAAM | Applicant |
| v | |
| BBC HARDWARE LTD | Respondent |
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| JUDGES: | TATE and OSBORN JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 4 May 2020 |
| DATE OF JUDGMENT: | 19 June 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 164 |
| JUDGMENT APPEALED FROM: | Braam v BBC Hardware Ltd (Supreme Court of Victoria, Moore J, 9 August 2019) |
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PRACTICE AND PROCEDURE – Application to set aside notice of discontinuance and minutes of consent orders, and reinstate proceeding – Whether settlement resulted from duress – Whether judge erred in finding no evidence of mental breakdown – Whether judge erred in finding no cogent evidence of vitiating conduct – Evidence of a rational, alternative reason for settlement – Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, Dunwoodie v Teachers Mutual Bank Ltd [2014] NSWCA 24, discussed – Leave to appeal refused.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr MA Braam in person | |
| For the Respondent | Mr JP Gorton QC with Ms M Norton | Minter Ellison |
TATE JA
OSBORN JA:
TABLE OF CONTENTS
Introduction and summary......................................................................................
1
Bullying by co-worker .............................................................................................
3
Braam’s relationship with Borowski....................................................................
4
Common law proceeding for negligence................................................................
4
The directions hearing..............................................................................................
6
The settlement with BBC Hardware......................................................................
12
Orders made ..............................................................................................................
14
The judge’s reasons...................................................................................................
17
The grounds of appeal..............................................................................................
21
Did the judge err in finding there was no evidence that Braam suffered a mental breakdown as a result of the directions hearing? — Ground 1............
21
Did the judge err in finding that Braam had not established that Zammit AsJ engaged in any vitiating conduct? — Ground 2...................................................
26
Did the judge err in finding no cogent evidence of duress?— Grounds 3 & 4..
28
Conclusion.................................................................................................................
32
Introduction and summary
In 2006, the applicant, Malcolm Anthony Braam (‘Braam’) suffered a psychiatric injury as a result of bullying in his place of employment, an outlet of a hardware chain owned by the respondent, BBC Hardware Ltd (‘BBC Hardware’). He brought a common law proceeding against BBC Hardware and also against a former friend, Daniel Borowski (‘Borowski’), for exacerbation of his psychiatric injury, and against his former solicitors, Nowicki Carbone Lawyers, for professional negligence. A directions hearing before Zammit AsJ[1] was held on 4 December 2013 (‘the directions hearing’) some days after which Braam settled the proceeding against BBC Hardware for $100,000.
[1]Her Honour (now Incerti J) was an Associate Judge of the Supreme Court from March 2010 until her appointment as a Judge of the Trial Division in February 2015.
About five years later, on 27 September 2018, Braam filed a summons seeking to set aside the minutes of consent orders that gave effect to the settlement of the proceeding against BBC Hardware and the notice of discontinuance he had filed. Braam alleged that he had settled with BBC Hardware under duress caused by the alleged conduct of Zammit AsJ during the directions hearing, which he said caused him to have a mental breakdown and led him to discontinue the proceeding involuntarily. On 9 August 2019, Braam’s summons came on for hearing before Moore J. The judge dismissed the summons.[2] Braam now seeks leave to appeal from the decision of Moore J, and if leave is granted, to appeal from his Honour’s decision.
[2]Moore J delivered his reasons orally on 9 August 2019 and these were transcribed: Braam v BBC Hardware Ltd (Supreme Court of Victoria, Moore J, 9 August 2019) (‘Reasons’).
In our opinion, for the reasons set out below, leave to appeal should be refused. There is no evidence to suggest that Zammit AsJ engaged in any form of oppressive or vitiating conduct. Rather, the objective evidence indicates that Zammit AsJ discharged her duties to all those who appeared before her at the directions hearing appropriately and respectfully, and faithfully took into account the interests of Braam and each of the three defendants. There is no cogent evidence that Braam suffered a mental breakdown as a result of the directions hearing and because of that was pressured into settling with BBC Hardware. In any event, there is nothing to suggest that BBC Hardware had actual or constructive notice that Braam, in initiating the settlement of the proceeding, did so because of illegitimate pressure applied to him. The evidence is to the contrary. Moore J did not err in dismissing the application to set aside Braam’s settlement agreement with BBC Hardware.
Bullying by co-worker
On 11 October 2002, Braam commenced working for BBC Hardware at the Bunnings Warehouse in Moorabbin. He was employed by BBC Hardware until March 2006, during which period he said he ‘received multiple customer service awards’ and ‘took a lot of pride in [his] level of service’.[3]
[3]Braam v BBC Hardware Ltd [2013] VCC 515, [31].
During the course of 2003, he alleged that a co-worker started to bully him by ignoring, ridiculing and belittling him, refusing to provide assistance, addressing him in a hostile and aggressive manner, and telling him how he should complete his work tasks. He complained to management but felt that no satisfactory remedial action was taken. He took sick leave and, when he returned, he reduced his hours to avoid the co-worker. When the co-worker went on maternity leave, he returned to nearly full-time hours. He later detailed his concerns to various managers but felt again that he received an unsatisfactory response.
On 23 March 2006, a meeting was held to discuss Braam’s work performance and he was issued with two warnings about his workplace behaviour regarding poor customer service. He took leave from work and later resigned, having become distressed and anxious. He suffered panic attacks. He filed a WorkCover claim for permanent impairment.
In March 2007, he presented to the Emergency Department of Monash Medical Centre. He commenced a cognitive behavioural treatment program in July 2007. On 12 September 2008, Braam was diagnosed as suffering an autism spectrum disorder, namely, Asperger’s Syndrome. He considered this to be a ‘life-defining event’ that ‘provided an explanation as to his “sleep problems, and lack of social and emotional comprehension”’.[4]
[4]Ibid [53].
BBC Hardware admitted liability for impairment benefits for psychological injury, and on 3 December 2009 consent orders were filed with the County Court stating that BBC Hardware would pay to Braam weekly payments for no current work capacity from 28 June 2006 to 28 September 2007, in addition to his medical expenses and costs.
On 9 March 2010, Braam’s claim was referred to a medical panel. The panel provided an opinion on 12 April 2010, noting that Braam ‘continues to isolate himself and avoids being with people’. The panel accepted that Braam sustained a psychiatric injury during the course of his employment on 23 March 2006, saying:
The Panel concluded that the worker is suffering from a Chronic Adjustment Disorder with Depressed and Anxious Mood relevant in part to the accepted psychiatric condition injury with a designated injury date of 23 March 2006. The Panel also considered that the worker would attract a diagnosis of Asperger’s Syndrome which is a pre-existing lifelong condition.
Braam’s relationship with Borowski
During 2009 Braam met Borowski. They met on the internet and then offline. Their friendship developed and in October 2009 Borowski and his then-partner invited Braam to move into a house they were going to rent. Braam was uncomfortable with such a move and the share house did not eventuate. In April 2011, the relationship between Borowski and his then-partner ended, and the friendship between Braam and Borowski further developed.
Braam asked Borowski if he wanted to start a relationship with him but that did not occur. In December 2011, Borowski ended the friendship between himself and Braam and their last social meeting together occurred on 14 April 2012.
On 17 April 2012, Braam was again admitted for emotional distress to the Emergency Department of the Monash Medical Centre. He attributes this admission to the dissolution of his friendship with Borowski.
Common law proceeding for negligence
Braam made an application for a serious injury certificate for pain and suffering and loss of earnings in order to commence a common law proceeding against BBC Hardware for negligence. On 27 May 2013, Judge McInerney of the County Court granted him leave to bring proceedings for damages in respect of his injury arising out of the course of his employment by BBC Hardware.[5]
[5]Leave was granted pursuant to s 134AB(16)(b) of the Accident Compensation Act 1985.
Braam rejected a statutory offer made on 29 July 2013 by BBC Hardware for $100,000 plus retention of benefits. On 21 August 2013, he commenced a proceeding in the Supreme Court in the Personal Injuries List against BBC Hardware[6] by writ and statement of claim. In that proceeding he also brought claims against Borowski alleging negligence and aggravation of his pre-existing serious injury, and against Nowicki Carbone Lawyers alleging professional negligence and breach of contract.
[6]The writ and statement of claim initially named ‘Bunnings Warehouse’ as first defendant but the pleading was subsequently amended to name the correct legal entity, ‘BBC Hardware Ltd’. See [35] and [40] below.
On 19 September 2013, the lawyers for BBC Hardware, Minter Ellison, wrote to Braam expressing concerns about the form and content of the statement of claim,[7] and suggesting that a directions hearing be listed to enable the relevant matters to be raised with the court.
[7]This included the need for an amendment in order to name the proper first defendant.
In a letter dated 20 September 2013, Braam agreed that a directions hearing should be held, and sought clarification of the issues about the form and content of the statement of claim.
On 2 October 2013, Minter Ellison again wrote to Braam setting out in detail a summary of objections to matters pleaded in the statement of claim, including a failure to plead material facts, and identifying parts which were said to be vague or ambiguous, embarrassing, scandalous, frivolous or vexatious. A number of allegations were said to be irrelevant, while others included material relating to an earlier proceeding, including its conciliation and terms of settlement, which was said to be improper and prejudicial. It was contended that the pleading would require substantial amendment in order for any defence to respond to it in an orderly fashion. In these circumstances, Minter Ellison sought that Braam file an amended statement of claim and asked that it not be required to file a defence on behalf of BBC Hardware while those matters were considered.[8]
[8]Minter Ellison emphasised that they were not questioning Braam’s entitlement to pursue his claim but were asking for the claim to be put into a proper form.
In a letter dated 3 October 2013, Braam agreed to BBC Hardware deferring filing a formal defence and said he would not amend his statement of claim ‘unless judicially directed’.
Minter Ellison responded by letter dated 9 October 2013, pointing out that it is useful to have simple and clear statements of the contentions made by the parties in their pleadings, and that the rules of the Supreme Court require pleadings. Given that ‘the court will likely make orders for the amendment of parts of your statement of claim’, the letter attached a copy of the draft statement of claim that accompanied the serious injury application with a suggestion that a document in that form, with any relevant modifications, would ordinarily be sufficient for a claim against an employer. At that stage a directions hearing had been scheduled for 27 November 2013, which was then rescheduled for 4 December 2013.
In the period leading up to the directions hearing, Braam negotiated to settle his claim against Nowicki Carbone Lawyers. He agreed to discontinue proceedings against that party formally at the directions hearing.
On 29 November 2013, Braam emailed the associate to Zammit AsJ copies of various documents, including the serious injury application civil jurisdiction result sheet containing the orders made on 27 May 2013.
The directions hearing
The directions hearing took place before Zammit AsJ on 4 December 2013. Braam appeared as a self-represented litigant, as did Borowski (the second defendant), while BBC Hardware (the first defendant) was represented by its solicitor, David Poulton (‘Poulton’), a partner in the firm of Minter Ellison, and Nowicki Carbone Lawyers (the third defendant) was represented by its solicitor, Katarina Bilandzic from DLA Piper.
There is no transcript of the directions hearing. However, Poulton took contemporaneous notes of what occurred and exhibited these to an affidavit he swore.[9] Although the notes are not equivalent to a transcript, Braam accepted before the primary judge that the notes were accurate.[10] He confirmed that he accepted their accuracy at the hearing of his application for leave to appeal. The notes are handwritten but, for the purpose of consideration by this Court, can be transcribed as follows:
[9]Affidavit of David Stanley Poulton sworn 28 June 2019.
[10]Reasons 39.
Date: 4/12/13
Time (start): 10.30
Time (end): 11.40
Matter: Braam
Directions hearing – R Zammit
P in person
D1 – DP
D2 – in person
D3 – K Bilandzic
RZ – a number of matters.
- corro sent to court – not appropriate.
D3 – discontinue – no order as to costs – MB confirming this.
DP – we say NC S of C a better basis.
RZ - Ct wd strike out of own motion
- S of C cannot stand in current form.
MB – think it capable of being pleaded to.
- ME have sent a letter responding paragraph by paragraph.
- Their draft defence just admitted or denied.
- Happy to use additional S of C as a starting point.
- I conscious not a barrister. On a disability pension.
Tried to get pro-bono during SI – was knocked back.
RZ – OK but need basic structure. D3 may have pleaded, that a matter for them.
- serious concerns about whether any basis for Borowski claim at law.
Ct can strike out a claim if no prospect of success, at own motion.
- will not hear that today.
MB – D2 I am claiming negligence
RZ – How does he owe you a duty of care?
- A no. of elements you need to plead as to how he has been neg or breached a duty of care.
- I’m not giving you legal advice.
- what do you propose to do re this pleading?
RZ
DB – I don’t understand why I am here.
Don’t understand what the claim is.
RZ – I am going to s/o pleading.
- we are in a costs jurisdiction
- other parties put to expense to come here.
- I am gravely troubled re claim against DB.
- Should on next occasion if not be properly pleaded I will likely take peremptory action …
- Having regard to time of year.
RZ – propose adj matter to last week in Feb. Am SoC to be filed before then
Orders
1. Pl S o C dated 21/8/13 s/o
2. Pl leave to serve proposed am SoC 25/2/14
3. Proc adj to 12/3/14 at 10.30 at which time ct will hear application as to S of C
4. B/c claim against D3 dismissed
5. Reserve costs of today
MB – no idea of level of stress on D2
– not done lightly.
DB – I have incurred costs to legal advice.
RZ – This was a hearing you had to attend. However if the case goes ahead and you are successful you will be entitled to costs. Let’s consider further next time.
The handwritten notes also record contemporaneously a conversation Poulton had with Braam after the directions hearing was completed and the matter adjourned.[11] They read as follows:
[11]At the hearing before this Court, Braam said that ‘I specifically wanted to say that he [Poulton] did come up to me after the hearing. He did not have to. He made time for me when very few other people did, and he was empathetic and highly professional.’
DP–MB conversation after court:
1. I recommended (like the judge) that he should seek legal advice.
2.I confirmed I agreed with the judge that the claim against Borowski was very weak and he should seriously consider whether to go ahead with it.
3.I explained what he could do regarding the SoC and where we might want particulars (eg conduct of [co-worker])
4.I indicated we could potentially give him the names of some lawyers who practice in the jurisdiction if he wanted. I said it would be up to him then to assess if he could work with them.
Braam did not take contemporaneous notes of the directions hearing but, in support of his summons, he relied on affidavits he had affirmed, some of which gave his account of the directions hearing and its aftermath. Those affidavits were affirmed by him on 27 September 2018, 20 December 2018, 21 January 2019, 12 March 2019, 19 March 2019, 3 May 2019, 13 June 2019 and 16 July 2019. In his affidavit affirmed 27 September 2018, he said that he suffered a mental breakdown as a result of Zammit AsJ’s ‘aggressive’ conduct towards him:
On 4 December 2013, I attended a Directions Hearing in relation to my negligence matter presided over by then-Associate Justice Rita Zammit. As a result of her aggressive conduct towards me, I had a mental breakdown in the days after this Directions Hearing and could not continue my matter. I signed a settlement on 12 December 2013 after 7 years and 9 months. I did not want to settle this matter.
Braam referred to a complaint he made to the Judicial Commission of Victoria, dated 23 March 2018 (‘the JCV complaint’).[12] In that complaint he included a generalised description of alleged conduct by Zammit AsJ but said he had decided to avoid allegations that specific statements had been made:
[12]The JCV complaint was exhibited to Braam’s affidavit of 27 September 2018.
At a Supreme Court Directions Hearing on 4 December 2013, then-Associate Justice Rita Zammit conducted herself in a way that caused me to have a mental breakdown, thus forcing me to have to discontinue my proceeding. As of the date of writing, that remains the case.
…
SPECIFICS OF THE CONDUCT
I have made a deliberate decision to not list specific statements or actions made by Rita Zammit on that day. This is for a number of reasons:
1) There is no transcript or recording available, as I did not think to ask. It is plausible that the mere request for a transcript may have moderated the judicial conduct I say I experienced.
2) I had no witnesses in open court that can corroborate my statements. For the record, in addition to myself and Rita Zammit, also present was Rita Zammit’s associate, the tipstaff, and three people representing defendants.
3) I perceived the impact of Rita Zammit’s conduct not so much in terms of what was said and done, but rather the general manner of it.
4) The overall impact on me after the event was holistic, and not related to specific statements.
In the JCV complaint, Braam expressed the belief that the conduct of Zammit AsJ fell outside that which could be expected of a judicial officer managing a busy case-load:
I wish to explicitly state that I am conscious of the fact that Associate Justices often have to dispose of many matters in an efficient manner and a certain brusqueness or terseness may be required at times.
I am also conscious that the pressure of growing judicial case-loads without necessarily commensurate increases in support and resources does cause significant stress for judicial officers.
I believe my experience with Associate Justice Rita Zammit’s courtroom cannot be in any way accounted for by the above two considerations.
Although Braam had indicated he would not identify specific statements or actions of Zammit AsJ, he included the following five points in an addendum to the JCV complaint. They relevantly provided:[13]
[13]The JCV complaint contained a number of exhibits which were not attached to Braam’s affidavit in support of his summons, but the nature of the exhibits was clear from the points made.
Perhaps, after all this, I should be specific in some ways:
1) Serious Injury documents emailed by me to Associate Justice Zammit’s associate in advance of the Directions Hearing on 4 December 2013 ..., then Her Honour saying to her associate in open court ‘I don’t even know if he has a Serious Injury’. Perhaps if she’d read the clearly labelled County Court judgment emailed to her …
2) Suggesting my Serious Injury was actually not really serious, while having two friends in court (together with her Associate) all laughing at one point, which was directed at me. Laughing should not really happen if someone has a 35% impairment. Serious injuries are automatically serious, as the name suggests, I would have thought.
3)not having drafted correct Orders more than a month later and having other parties feel the need to write to her Associate[[14]] …
4) making other intemperate remarks in open court [unrelated to Braam’s proceeding] ( ... which led the Supreme Court to subsequently issue a statement clarifying Justice Zammit’s remarks).
5) General aggression and hectoring, making me feel too scared to come back to another hearing, and therefore have to abandon my litigation ... .
[14]The orders made at the directions hearing on 4 December 2013 were authenticated on 18 December 2013; there was a small correction needed. Zammit AsJ made an order making that correction under r 36.07 of the Supreme Court (General Civil Procedure) Rules 2005 (the ‘slip rule’) on 30 January 2014. In any event, this issue clearly post-dated Braam’s entry into the settlement with BBC Hardware and so could not form part of any alleged duress by Zammit AsJ. Furthermore, the need for a small correction in the making of orders is no evidence of duress. See [37]–[38] and n 20 below.
The JCV complaint was dismissed by the Judicial Commission of Victoria on 17 July 2018 as it was satisfied that the matter had occurred at too remote a time to justify further consideration.
In support of his summons, Braam also exhibited a diary he maintained, which included in the entry for 4 December 2013 the following:
1041–1200: Directions Hearing
-talked afterwards with David Poulton then Daniel
-David Poulton spoke to Daniel at one stage.
And the record for 5 December 2013 included the entry, ’05 Dec 13 Directions Hearing yesterday - Tired/reaction/unpacked’.
In his affidavit, Poulton addressed points 1, 2, 4 and 5 raised in the addendum to the JCV complaint.[15] He said he did not observe the conduct alleged and believes he would have made a note of those events if they had occurred. More generally, he said he did not observe Zammit AsJ conducting herself inappropriately during the directions hearing nor did he observe Braam appearing to be distressed, scared or agitated either during the hearing or afterwards:
The file note of the directions hearing dated 4 December 2013 records that the directions hearing dealt with the difficulty raised by the First Defendant in responding to the pleadings filed by the Plaintiff, concerns about the viability of the Plaintiff’s claim against the Second Defendant, Daniel Borowski, and the Plaintiff’s consent to dismiss the claim against the Third Defendant, Nowicki Carbone.
In his affidavit sworn on 13 June 2019, the Plaintiff refers to page 7 of his letter to the Judicial Commission dated 23 March 2018 in relation to what he alleges was the conduct of Zammit AsJ towards him at the directions hearing on 4 December 2013. I do not recall any of points 1, 2, 4 or 5 (as outlined on page 7 of the plaintiff’s letter) occurring. Had any of those matters occurred they would have been significant or unusual events, and I believe I would, in accordance with my usual practice, have recorded them in the file note I made at the time.
My general experience with Justice Zammit as at December 2013, and now, is that she conducts herself appropriately as a Judicial Officer and is respectful towards practitioners and litigants. My recollection of her conduct at the directions hearing on 4 December 2013 is consistent with that experience.
I have no memory of the plaintiff appearing to me to be distressed, scared or agitated during the directions hearing on 4 December 2013 or in my discussion with him immediately afterwards. Again, I believe I would have recorded such matters in my file note if I had gained any such impression at that time.[16]
[15]See [28] above.
[16]Affidavit of David Stanley Poulton sworn 28 June 2019, [5]–[8].
The settlement with BBC Hardware
Some six days after the directions hearing, on 10 December 2013, Braam wrote a letter to Minter Ellison, addressed to Poulton, advising that he had resolved his claim against Nowicki Carbone Lawyers and would have a mediated discussion with Borowski. He offered to settle his claim against BBC Hardware for $100,000 for pain and suffering and pecuniary loss, as well as retention of the compensation previously received pursuant to the Accident Compensation Act. This reflected the terms of the previous statutory offer.[17] Braam’s letter referred to the constructive conversation he had had with Poulton after the directions hearing and how he had achieved all he could hope for from the other two defendants (with the exception of no ongoing friendship with Borowski). He was seeking a mutually beneficial outcome with BBC Hardware. The letter was relevantly in the following terms:
[17]See [14] above.
I wanted to write to thank you for our discussion after the Directions Hearing in my matter last Wednesday 04 December. I thought it was both constructive and useful, and hope you did too. As a result of our conversation, and other events since then, I have felt able to make substantial progress in potentially resolving my claim against your client, BBC Hardware Ltd.
You’re aware my situation with Daniel Borowski has been most important to me, not only in and of itself, but then of course the subsequent withdrawal of my legal representation by my ex-solicitors, Nowicki Carbone, shortly after they were made aware of the 09 July 2012 medico-legal report of Dr Entwisle, which revealed to them and to your client the existence of my difficulties with Daniel.
After I spoke with you last Wednesday, I had a conversation with Daniel, which, although fraught, was extremely useful from the point of view of resolving the matter. We will have a mediated discussion one day in January at the Dispute Settlement Centre of Victoria, during which Daniel has undertaken to, in good faith, answer all questions, on any topic, ‘sincerely and honestly’, for a period of up to 8 hours. It is obvious that this is a good solution, and quite possibly the only good solution available.
After speaking with Daniel, I then attended the offices of DLA Piper for just over 4 hours first to sign the Release to end the action against Nowicki Carbone, then to identify documents from my legal file at Nowicki Carbone that I did not have and would like to have copied. …
These matters affect your client by virtue of the fact that, as I told you last Wednesday, I turned down your client’s statutory offer of $100,000 plus retention in order to sue Daniel in company with your client and my ex-solicitors, Nowicki Carbone. I wished to make him aware of what he has done, and that his effect on me has been an exacerbation of the injury sustained at my workplace in 2005–2006 while employed with your client.
Now that a thorough discussion is desired by Daniel to happen, and so will happen, it seems the closest approximation to a positive outcome for both of us as can be achieved.
The obtaining of documents from my ex-solicitors also seems the most positive outcome possible for both them and myself.
Therefore, having achieved all I could have hoped from the other two defendants (with the obvious exception of no longer retaining the friendship with Daniel), I can now say the following as regards your client:
1)As per my letter of intentions of 24 July 2012: ‘I will not alter [my statutory counter-offer] unless strong reasons exist to do so.’ Patently, such reasons now exist. A resolution with Daniel is overwhelming, and not much less so is the resolution of the Nowicki Carbone matter which was precipitated by the Daniel events.
2)As per my letter of statutory counter-offer of 29 July 2012: ‘For me, as a plaintiff in a psychological case, with an assessed severe mental injury, and after the subsequent aggravating circumstances, I can say definitively that the legal risks are much less important than the psychological. Specifically, any and all prospective judicial decisions are much less important to me than the emotional outcome that is achieved. I cannot emphasise enough that this is completely irrespective of whether a given legal decision is in my favour, because I do not need to go to court to know what happened to me. If forced to choose, I will seek a good psychological outcome over and above a good legal one.’
3)Therefore, as I have now obtained a situation where I am psychologically in a position I could not previously be, I can now offer to settle my claim against your client on the terms outlined in your letter of Statutory Offer dated 29 July 2013, namely ‘payment … in the sum of $100,000 (plus retention) in full and final settlement of both pecuniary loss damages and pain and suffering damages as defined in Section 134AB(37) of the Accident Compensation Act 1985’.
4)I am now also in a position to offer the alternative proposed by you that I was not able to accept before, and that is, in default of financial settlement, to file and serve my original Statement of Claim of 26 June 2012 that was prepared for my Serious Injury Application. …
…
Yours sincerely,
Malcolm Braam[18]
[18]Emphasis added.
On 12 December 2013, BBC Hardware accepted this offer of settlement. In the letter sent to Braam with a release for signing, Minter Ellison noted that:
Please note that this Release is a binding legal document, and by signing this document you are confirming the full and final settlement of your common law claim, including finalisation of any entitlement to weekly payments of compensation which you may have had by virtue of your claimed injury.
Orders made
On 13 December 2013, Braam and BBC Hardware executed minutes of consent orders dismissing the proceeding against the first defendant, in the following terms:
1. The name of the first defendant be amended to BBC Hardware Ltd.
2. The proceeding against the first defendant is dismissed.
3. There is no order as to costs.
Those minutes were filed with the court on 17 December 2013.
On 18 December 2013, the orders made by Zammit AsJ on 4 December 2013 were authenticated by the Prothonotary. Those authenticated orders are in the following terms:
1. The Plaintiff’s statement of claim dated 21 August 2013 is struck out.
2. The Plaintiff file and serve an amended writ by 25 February 2014.
3. The Plaintiff has leave to file and serve a proposed amended statement of claim by 25 February 2014.
4. The proceeding is adjourned to 12 March 2014 at 10.30 am at which time the Court will hear any applications in [relation] to any proposed amended statement of claim.
5. The costs of today are reserved.
6. By consent the Plaintiff’s claims against the three Defendants is dismissed.
The authenticated orders largely reflect the terms of the orders recorded by Poulton in his contemporaneous notes, save for the wording of the final paragraph.[19] It was common ground that the reference to ‘the three Defendants’ in the final paragraph of the orders should have referred to ‘the third Defendant’ reflecting the discontinuance of the proceeding against Nowicki Carbone Lawyers. The order was corrected under the ‘slip rule’ on 30 January 2014 in accordance with the following terms:
Pursuant to rule 36.07 of the Supreme Court (General Civil Procedure) Rules 2005, the order of the Honourable Associate Justice Zammit dated 4 December 2013 be amended as follows:
(a) Paragraph 6 be amended to read ‘the Third Defendant is dismissed with no order as to costs’. [20]
[19]See [23] above.
[20]The effect of the amendment is that paragraph 6 of the orders of 4 December 2013 are to be read as: ‘By consent the Plaintiff’s claims against the Third Defendant is dismissed with no order as to costs’. As mentioned, this issue is not material as it post-dated the settlement agreement.
On 16 January 2014, a cheque in the sum of $90,193.44 payable to Braam was drawn (‘the settlement moneys’).[21] That cheque was presented and banked by Braam on 23 January 2014. Braam subsequently deposited the settlement moneys into an account with Colonial First State on 31 January 2014. He withdrew $2,000 to pay to Borowski on 20 February 2014 following their mediation ‘to compensate Daniel as a goodwill gesture for his costs incurred as a result of involvement in my litigation’.
[21]An amount of $9,807.56 was deducted from the settlement sum of $100,000 and repaid to Centrelink by the insurer.
On 31 January 2014, Zammit AsJ made further orders by consent which were authenticated by the Prothonotary on 7 March 2014. These consent orders were in the following terms, which reproduce the terms of the consent minutes filed on 17 December 2013:
1. The name of the First Defendant be amended to BBC Hardware Ltd.
2. The proceeding against the First Defendant is dismissed.
3. There is no order as to costs.
On 14 February 2014, Braam filed a notice of discontinuance against BBC Hardware[22] and Borowski.
[22]Referred to as Bunnings Warehouse.
In relation to the settlement moneys from BBC Hardware, Braam said that on 19 September 2014 he closed the account with Colonial First State and transferred the balance of the moneys to Interactive Brokers with the intention of using the funds to trade stocks and similar financial instruments on US exchanges. After sustaining some losses, Braam withdrew the remaining funds from the account with Interactive Brokers and opened a new account with Colonial First State on 7 November 2014. He closed this on 30 July 2015 and again deposited the remaining funds into his account with Interactive Brokers in order to trade stocks. During 2016, he lost nearly all the funds, leaving him with $4,607.83, which he withdrew on 14 September 2017 and deposited into a savings account with ANZ. He says the losses were a result of neglecting the account due to his continuing emotional state.
On 27 September 2018, Braam filed the summons seeking to set aside the minutes of consent orders dismissing the proceeding against BBC Hardware[23] and the notice of discontinuance ‘in so far as that Notice relates to Bunnings Warehouse’.[24] He sought leave to reinstate his proceeding against BBC Hardware for economic loss, pain and suffering. In his supporting affidavit of the same date he also sought a declaration that he sustained psychological serious injury as a result of his association with Borowski:
I also seek a declaration by the Court that I sustained an exacerbation of my psychological Serious Injury as a result of my association at the relevant time with the second defendant Daniel Borowski … and that this exacerbation created the pre-conditions for the conduct of Associate Justice Rita Zammit to be much more likely to be able to have the effect of forcing the involuntary termination after 7 years and 9 months of my negligence proceeding against my employer.
[23]See [35] above.
[24]Filed 14 February 2014.
The judge’s reasons
The summons came on for hearing before Moore J on 9 August 2019. Braam, who remained self-represented, explained to the judge that the basis for his claim for reinstatement was that he settled his proceeding against BBC Hardware under duress caused by the alleged conduct of Zammit AsJ at the directions hearing. He asserted that her Honour’s conduct led him to have a mental breakdown, which, in turn, forced him to discontinue the proceeding against BBC Hardware. BBC Hardware submitted that, on the evidence before the court, no basis had been shown to set aside the orders dismissing the proceeding or the settlement upon which they were based.
Moore J identified the key issue as ‘whether the evidence before the court establishes, on the balance of probabilities, that, at the December 2013 directions hearing, Zammit AsJ engaged in improper vitiating conduct towards the plaintiff, the conduct being in the nature of duress’.[25] The judge noted that in the supporting affidavit of 27 September 2018 there was ‘very little information and detail about the actual wrongful or inappropriate conduct he attributes to Zammit AsJ’.[26]
[25]Reasons 35.
[26]Ibid.
He observed that Braam referred to what he described as her Honour’s aggressive conduct and asserted that she exploited his anxiety. Braam did not identify any actual words or conduct on the part of her Honour. He noted that in the JCV complaint,[27] Braam ‘made a deliberate decision to not list specific statements or actions made by Zammit AsJ on that day’ in part because the impact on him was ‘holistic and not related to specific statements’.[28] Moore J considered that this revealed that the complaint really concerned Braam’s subjective feelings about the general conduct of the directions hearing and not any particular behaviour or statement made by her Honour.
[27]See [26]–[28] above.
[28]Reasons 35. See [26] above.
Moore J considered whether there was any evidence to support the specific allegations Braam made in the addendum to the JCV complaint, namely, the allegations that: (1) Zammit AsJ said to her associate, in open court, ‘I don’t even know if he has a serious injury’; (2) her Honour suggesting that Braam’s injuries were not serious; (3) her Honour failing to draft orders until more than a month after the hearing; (4) her Honour making intemperate remarks in open court; and (5) her Honour being generally aggressive and hectoring Braam, ‘making him feel too scared to come back to another hearing and, therefore, [to] have to abandon his litigation’.[29] Moore J did not find any supporting evidence to establish the allegations and, in respect of the orders, he held that, without more, delay by a judicial officer in the drafting of orders is not improper conduct in the nature of duress.[30]
[29]Reasons 36–7.
[30]As noted at [37]–[38] above, the orders made at the directions hearing on 4 December 2013 were authenticated on 18 December 2013. They were corrected on 30 January 2014. See n 14 above.
The judge observed that in Braam’s affidavit affirmed 12 March 2019, Braam relied on what was said to be indirect evidence supporting his allegations: (1) Braam’s contemporaneous diary, which he said became much less detailed after 4 December 2013 and less organised; (2) his 35 per cent impairment at the time of the directions hearing; (3) the fact that he had pursued his case for seven years and nine months before ending it after the directions hearing; and (4) that he was pursuing his case once again, having sought legal representation in June and July 2015, prior to the dissipation of his settlement moneys, which commenced in August 2015.
The judge did not accept that Braam’s diary showed him becoming less detailed in his entries and less organised. The judge, while accepting Braam’s explanation that it was not his practice to record emotional matters in his diary, considered that if the allegations were true there would have been some record of the conduct which Braam viewed as inappropriate or improper. There was no such record. With respect to the other factors, the judge concluded that none of the matters provided any basis for inferring that Zammit AsJ engaged in any vitiating conduct at the directions hearing. He also considered that the credibility of Braam’s claims was undermined by the delay of over four years between the directions hearing (4 December 2013) and the first steps taken by Braam about Zammit AsJ’s alleged conduct, namely, the making of the JCV complaint (23 March 2018).
The judge noted the affidavit of Poulton, described above,[31] and the contemporaneous notes he took that, significantly, Braam accepted as accurate.[32] He noted that Poulton disagreed with the proposition that Zammit AsJ had been aggressive towards Braam or applied any pressure to him.[33] He also relied on Poulton’s observations that at the directions hearing Braam did not appear distressed, scared or agitated.[34] He rejected Braam’s submission that, relevantly to the allegation of duress, Poulton would not have seen what occurred at the directions hearing through Braam’s eyes, that is, as a person who had suffered a psychiatric injury. The judge found such a subjective characterisation did not assist Braam in establishing that Zammit AsJ actually engaged in improper conduct.
[31]See [23]–[24] and [32] above.
[32]Reasons 39.
[33]Ibid. See [32] above.
[34]Ibid. See [32] above.
The judge accepted the submission of BBC Hardware that there was an absence of any medical or expert evidence to suggest that anything occurred at the directions hearing to cause Braam to suffer a mental breakdown. There was a report of Dr Weissman from many years after the directions hearing (17 April 2019), but the conclusion was based upon Braam’s perception of Zammit AsJ’s conduct. This did not assist Braam in establishing that such conduct occurred.
The judge agreed that the chain of correspondence between Braam and Minter Ellison after the directions hearing contradicted the claim that Braam suffered a mental breakdown and was subject to duress from the Bench.
The judge concluded that, on the evidence before him, he was unable to be satisfied that Braam suffered a mental breakdown on or around the directions hearing. However, he acknowledged that the directions hearing may have been stressful for Braam because of
the appearance of opposing lawyers and the attendance on that day at court of Daniel Borowski. All of which were apparently stressors to the plaintiff. As he put it in his materials, he found the day overwhelming.[35]
[35]Reasons 45.
He concluded that any distress Braam suffered on or around the directions hearing had not been established, on the balance of probabilities, as having been caused by Zammit AsJ. He went further and concluded that Braam’s allegations were without substance, there being no cogent evidence of things said or done by her Honour which, individually or collectively, amounted to the application of duress or other vitiating conduct.[36]
[36]Ibid.
The grounds of appeal
Braam seeks to rely on the following inter-related grounds of appeal:
Ground 1:His Honour Justice Moore erred by finding that the evidence did not establish that Braam suffered a mental breakdown as a result of the 4 December 2013 directions hearing conducted by then-Associate Justice Zammit.
Ground 2:His Honour erred by finding that Braam did not establish that Associate Justice Zammit engaged in any vitiating conduct in the nature of duress.
Ground 3:His Honour erred by finding that cogent evidence of things said or done by Associate Justice Zammit which amounted to the application of duress had not been presented.
Ground 4:His Honour was wrong to find that Braam’s claims of duress were without substance.[37]
Did the judge err in finding there was no evidence that Braam suffered a mental breakdown as a result of the directions hearing? — Ground 1
[37]He also relied on a question of law, namely: ‘Did His Honour Justice Moore correctly apply the law as it relates to vitiating conduct in the nature of duress?’. However, there was no need in these proceedings to identify a separate question of law.
Braam submits that Moore J erred by finding that the evidence did not establish that he had suffered a mental breakdown as a result of the directions hearing. Braam submits that he was labouring under the burden of a number of ‘obvious stressors’ which, combined with his condition as someone with Asperger’s Syndrome, meant that he was very fragile and it did not require much duress or oppression by Zammit AsJ to precipitate a mental breakdown; her conduct was the ‘final straw’.
The details of the ‘obvious stressors’ were recorded in his personal diary throughout 2012 and 2013: (1) that he had been forced to leave his employment with BBC Hardware in 2006 because he was not able to deal with bullying as a result of which he suffered a psychiatric serious injury; (2) the conduct of Nowicki Carbone Lawyers, which he says also included bullying, failing to file affidavits on time, or at all, or in one instance filing a false affidavit, and then their abandonment of him in August 2012, six weeks before his serious injury application hearing in the County Court, necessitating an application for a litigation guardian to be appointed; and, significantly, (3) he was dealing with the collapse of his relationship with Borowski, ‘an ex-friend, but really so much more than that … a figure of great significance in my life and therefore in this litigation … [and] the first (and so far only) man I have asked whether he would like to be in a relationship with me’.[38] At the time of the directions hearing he was experiencing all these stressors, especially ‘an extensive confusion and bewilderment to make sense of the Daniel involvement’.[39]
[38]Written case for the Applicant [5].
[39]Ibid [7].
Braam submits that his diary showed that he was engaged in activities at all hours of the day and night, with obviously interrupted sleep patterns, and was using a wakefulness-promoting drug to assist with concentration to engage in tasks, including managing his litigation. This ‘vortex of such a wretched maelstrom of multiple supervening and interposing events over a prolonged period’[40] would be severe pressure for any person, but more so for him because of his psychiatric injury and his underlying condition.
[40]Ibid [9].
He reiterates that after assiduously pursuing his serious injury proceeding for seven years and nine months, he suddenly ended it after the directions hearing. In essence, he submits that there was no other reasonable explanation for his sudden settlement of the proceeding against BBC Hardware, except for his having suffered a mental breakdown as a result of the directions hearing conducted by Zammit AsJ.
BBC Hardware submits Braam’s assertion, made years later, that he suffered a mental breakdown as a result of the directions hearing, is not supported by the contemporaneous evidence. His diary fails to corroborate a mental breakdown. The entries for the relevant dates contain no record of anything negative and, as mentioned,[41] on 5 December 2013, contained the entry, ‘Directions hearing yesterday – Tired/reaction/unpacked.’ Further, BBC Hardware points to a poem about the history of the litigation included in the diary on 23 December 2013, after the settlement had been reached, which supports the view that Braam willingly and rationally settled the proceeding and which does not reflect a state of mind of someone reluctantly compromising a proceeding because of a mental breakdown. With respect to the compromise of the proceeding, in the poem Braam refers to the cash settlement and the potential closure with Borowski and says: ‘But the real prize, I can tell you — Is none of these things — It’s the time, and the freedom — That ending it brings’.
[41]See [31] above.
BBC Hardware also relies on the contemporaneous correspondence comprising Braam’s letter dated 10 December 2013 to Minter Ellison,[42] which it submits not only fails to corroborate the claim that he suffered a mental breakdown as a result of the directions hearing but, as the judge found, positively contradicts Braam’s case.
[42]See [33] above.
BBC Hardware submits that the ‘sudden’ settlement is no evidence of a mental breakdown. Braam did not ‘abandon’ his claim; rather, he compromised it and received almost $100,000 for doing so,[43] which he has retained, together with retaining the previous benefits.
[43]See [39] above.
In our view, the judge was correct to find that he could not be satisfied that Braam suffered from a mental breakdown as a result of any vitiating conduct by Zammit AsJ at the directions hearing.
The judge did not deny that Braam was subject to a number of stressors at the time of the directions hearing. Indeed, the judge recognised that there were a number of stressful factors operating on Braam at that time, including being in court against opposing lawyers and the presence of Borowski. However, crucially, there was no evidence of a deterioration or decline in Braam’s mental state at or after the directions hearing. In his diary, Braam records intense and detailed behaviours consistent with his underlying psychiatric condition. However, the issue before Moore J was confined to whether, as a result of the conduct of Zammit AsJ at the directions hearing, there was any deterioration in that state, which led Braam to enter into a settlement with BBC Hardware. The records in the diary do not show such deterioration. It may be accepted that it was not Braam’s practice to record emotional experiences in his diary. However, the mental state revealed in the poem of 23 December is that of a resilient and buoyant state of mind of someone relieved at the end of litigation. The report of Dr Weissman was prepared many years after the directions hearing and, while it attested to an aggravation of his psychiatric condition, it pointed to multiple stressors and, in respect of Zammit AsJ, was based upon a hypothetical.
We do not accept the proposition that the settlement of the proceeding is itself evidence that Braam had suffered a mental breakdown after the directions hearing. Braam’s letter to Minter Ellison of 10 December 2013 offering to settle[44] is confident, cogent, rational, full of initiative and constructive. The tone and cogency of the letter does not manifest a disturbed mental state. Nor, importantly, could it have put Minter Ellison on notice that Braam was in the midst of a mental breakdown. Ultimately, for Braam to rely on his alleged mental breakdown to set aside the consent orders dismissing the proceeding, it is necessary for him to show that BBC Hardware was aware, or should have been aware, that he was in no fit state to compromise the proceeding. This he is unable to do. We will return to this issue.[45]
[44]See [33] above.
[45]See [84] and [86] below.
The sum for which Braam offered to settle was equivalent to that of the statutory offer. In the letter of 10 December 2013, Braam gave a rational explanation of why he had previously rejected the statutory offer, namely, in particular, ‘in order to sue Daniel’ because he ‘wished to make him aware of what he has done, and that his effect on me has been an exacerbation of the injury sustained at my workplace in 2005–2006’ when employed by BBC Hardware. The letter went on to explain that he had now moved towards a ‘positive outcome’ for himself and Borowski, having had a conversation with him, and, after speaking to Poulton at the conclusion of the directions hearing, having secured Borowski’s agreement to answer all questions, on any topic, sincerely and honestly, for up to eight hours, thus resulting in what Braam described as ‘quite possibly the only good solution available’. He also explained that his resolution with Nowicki Carbone Lawyers ‘seems the most positive outcome possible for both them and myself’. It was against that background that Braam offered to settle with BBC Hardware, ‘having achieved all I could have hoped from the other two defendants (with the obvious exception of no longer retaining the friendship with Daniel)’. He went on to state that, as a result of the resolutions with Borowski and Nowicki Carbone Lawyers, ‘[p]atently, such reasons now exist’ for altering his statutory counter-offer.
The explanation given thus provided a comprehensible background against which the offer to settle was made. This was particularly so with respect to the resolution of the significant personal relationship Braam had had with Borowski. The offer to settle, far from being evidence of a person who had suffered a recent mental breakdown, was objective evidence of an intelligent and considered position by a person who provided a well-written and convincing explanation as to why their strategic position had changed. Moreover, in our view, BBC Hardware was well justified in treating the offer with the seriousness with which it did. Braam’s observation in the letter that he thought his discussion with Poulton was ‘both constructive and useful’ gave Minter Ellison, justifiably, confidence in its communications with Braam.
Furthermore, the conduct of Braam following the offer to settle, of executing the release and signing the consent orders, was further evidence of rational goal-directed behaviour and BBC Hardware was again justified in treating it as such.
We do not consider that the only reasonable explanation for Braam settling the Supreme Court proceeding is that he had suffered a mental breakdown.[46] We do not consider that Moore J erred in finding there was no evidence that Braam suffered a mental breakdown as a result of the directions hearing.
[46]See also [76] below.
We reject Ground 1.
Did the judge err in finding that Braam had not established that Zammit AsJ engaged in any vitiating conduct? — Ground 2
In support of Ground 2, Braam relies again on the various stressful factors that impinged on him on the day of the directions hearing, including being seated beside Borowski in court, and his perception of what occurred ‘through the sensitised lens of Asperger’. In that state, he submits there was little Zammit AsJ needed to do for him to experience oppression or duress. He relies on the allegations he made in the JCV complaint that he heard Zammit AsJ say, ‘I don’t even know if he has a serious injury’ and later the statement, ‘it’s not a serious matter’. He also relies on the allegation that three of Zammit AsJ’s ‘friends’ in the courtroom were laughing at him. He submits that Moore J was wrong to say that his diary would have recorded an emotionally upsetting event if it had occurred because, as noted, he generally refrained from writing about emotional matters and was careful to depersonalise the text. Furthermore, he submits that, while he does not contest what Poulton recorded in his contemporaneous notes, as a partner of Minter Ellison, he would nearly always deal with other practitioners and not directly with people with psychological injuries or autism, and so could not see what happened from his (Braam’s) eyes.
In response, BBC Hardware relies on Poulton’s evidence that he has no memory of the events as described by Braam at the directions hearing, or of Braam appearing distressed, scared or agitated during the directions hearing or afterwards during their conversation. It also relies on Poulton’s contemporaneous notes of the directions hearing, which, as emphasised, do not corroborate any of the matters later raised by Braam in the JCV complaint. Furthermore, there is no corroboration of the allegations in the contemporary diary entries Braam made.
In our view, we consider that Moore J was correct in his conclusion that Braam had failed to establish the necessary factual foundation for any finding that Zammit AsJ had engaged in vitiating conduct that amounted to duress.[47] Although Braam relied on the specific matters raised in the addendum to the JCV complaint, his acceptance that Poulton’s contemporaneous notes were accurate significantly undermines those allegations. Poulton has quite specifically denied the occurrence of the particular conduct alleged by Braam to have been engaged in by Zammit AsJ, item by item.[48] The onus lay on Braam to establish the matters he alleged before Moore J. That onus was not discharged by him when there was cogent, contemporaneous evidence to the contrary.
[47]We discuss what is required at law to establish duress below at [81]–[84].
[48]See [28]–[32] above.
The contemporaneous notes made by Poulton of the directions hearing, and the details of what was said and done, are instructive.[49] Zammit AsJ had two self-represented parties before her, the plaintiff, Braam, and the second defendant, Borowski. Borowski told her Honour that he did not know why he was there and he did not understand the claim made against him. Her Honour quite properly took the view that it was her obligation to explain that the proceeding brought by Braam did not appear to have a valid legal foundation for a claim against Borowski. There was nothing in the pleading that indicated that Borowski owed Braam a duty of care, which is the essential legal basis for a claim in negligence. She was ‘gravely troubled’ by the claim against Borowski and indicated that it might have to be struck out. This was in accordance with the professional standards of a judicial officer.
[49]See [23] above.
It is not sufficient for conduct to amount to duress that a person subjectively perceives a situation as intimidating. It is understandable, however, that when Braam was told that his claims against Borowski, a figure of great significance in his life,[50] might not be tenable and that Borowski may not remain as a defendant in the proceeding, Braam might doubt whether it was worth continuing with the proceeding. His later explanation to Minter Ellison was that he had earlier rejected their statutory offer because he wished to sue Borowski as well as BCC Hardware and his former lawyers. With respect to Borowski he elaborated further:
I wished to make him aware of what he has done, and that his effect on me has been an exacerbation of the injury sustained at my workplace in 2005–2006 while employed with your client.[51]
[50]See [57] above.
[51]Emphasis added. See [33] above.In this context it is noteworthy that Braam, in seeking to reinstate his proceeding against BBC Hardware for economic loss, pain and suffering also seeks ‘a declaration by the Court that I sustained an exacerbation of my psychological Serious Injury as a result of my association at the relevant time with the second defendant Daniel Borowski’: see [43] above.
For Braam to be informed by Zammit AsJ, quite properly, that the suit against Borowski might not proceed because it lacked a legal basis had the effect of removing what appears to have been a primary rationale for Braam to continue with the proceeding. Those circumstances further support the existence of a reasonable alternative explanation as to why, after the directions hearing, he took stock and wrote the letter of offer to Minter Ellison, namely, that a primary rationale for continuing with the proceeding had evaporated and he had achieved all he could hope from his claims against Borowski and Nowicki Carbone Lawyers, and was ready to settle with BBC Hardware.
At the directions hearing, Zammit AsJ also had a duty to ensure that BBC Hardware would be facing a properly articulated claim to which it could respond by way of defence, and she made appropriate orders to ensure that they would have a proper opportunity to know the case against them. This, again, is no more than what is expected of a judicial officer.
We reject Ground 2.
Did the judge err in finding no cogent evidence of duress?— Grounds 3 & 4
Grounds 3 and 4 are closely related and it is convenient to deal with them together.
It is necessary to consider what amounts to duress at common law.
An agreement will only be set aside on grounds of duress if the agreement was entered into by a person by reason of illegitimate, or not legally justifiable, pressure having been applied to that person by someone who intends to compel the person to enter into the agreement.[52] The consequence is that consent to the agreement is revocable. As McHugh JA commented in Crescendo v Westpac,[53] referring to Universe Tankships Inc of Monrovia v International Transport Workers Federation:[54]
Lord Scarman declared that the authorities show that there are two elements in the realm of duress: (a) pressure amounting to compulsion of the will of the victim and (b) the illegitimacy of the pressure exerted. ‘There must be pressure’, said Lord Scarman ‘the practical effect of which is compulsion or the absence of choice’.[55]
[52]Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 46 (McHugh JA) (‘Crescendo v Westpac’). The High Court has declined to determine whether it is only threats of unlawful conduct that can constitute duress: Thorne v Kennedy (2017) 263 CLR 85, 97–9 [27]–[29] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ), 113–4 [70]–[71] (Nettle J), the NSW Court of Appeal having decided, in Australia & New Zealand Banking Group v Karam (2005) 64 NSWLR 149, that illegitimate pressure should be restricted to the exertion of pressure by threatened or actual unlawful conduct.
[53](1988) 19 NSWLR 40.
[54][1983] 1 AC 366.
[55]Crescendo v Westpac (1988) 19 NSWLR 40, 45 (citation omitted).
It is not necessary for the will of the victim to be overborne; it is a matter of ‘the will being deflected, not destroyed’.[56] McHugh JA went on to say:
A person who is the subject of duress usually knows only too well what he is doing. But he chooses to submit to the demand or pressure rather than take an alternative course of action. The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed.[57]
[56]Ibid 45, McHugh JA quoting from Lord Simon in DPP (Northern Ireland) v Lynch [1975] AC 653, 695. See also Thorne v Kennedy (2017) 263 CLR 85, 97 [26] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ).
[57]Crescendo v Westpac (1988) 19 NSWLR 40, 45–6.
The burden lies on the person alleging duress to establish that the illegitimate pressure was directed at procuring the affected person’s contractual assent.[58] The test is an objective one; was it reasonable for the person alleging duress to believe that the person engaging in the wrongful conduct would take the action foreshadowed?[59] The test is not subjective depending only on a person’s impression or perception.
[58]Barton v Armstrong [1973] 2 NSWLR 598, 617 (Mason JA), 621 (Taylor AJA).
[59]Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298, 302–3.
Furthermore, where an allegation of duress is relied upon to set aside an agreement not with the person who engaged in the threatening behaviour but with a third party (as here), it is necessary to show that the third party knew of, or had procured, the making of the threat. McColl JA made this plain in Dunwoodie v Teachers Mutual Bank Ltd[60] when she said:
[60][2014] NSWCA 24.
Chitty on Contracts (31st ed, 2012, Sweet & Maxwell, vol 1 at [7-053]) states:
Where it is sought to avoid a contract on the ground of duress exercised, not by the party seeking to enforce the agreement, but by some third person, the party seeking to avoid the contract must prove that the other party knew of the duress, or had constructive notice of it or had procured the making of the contract through the agency of the party who exercised the duress.
...
Speaking of the nature of the duress which would enable a contract said to have been entered into under its influence to be avoided, Jacobs JA said that that duress ‘must consist in threats of violence calculated to cause fear of loss of life or of bodily harm or actual violence or unlawful imprisonment or threat thereof to one party ... by the other party to the contract, or by someone acting with his knowledge and with his advantage’.
...
I … refer to Smith v William Charlick Ltd where Isaacs J ... added, ‘[i]t is clear that duress created by persons or circumstances unconnected with a party to a contract is no cause for impeaching the bargain with him’. Perry J applied Isaacs J’s statement in Magnacrete Ltd v Douglas-Hill, holding that ‘[p]ressure by a third party acting independently of the contracting parties cannot constitute duress so as to provide a ground for avoidance’.[61]
[61]Ibid [53], [58], [60] (emphasis added) (citations omitted).
The discussion above of the directions hearing demonstrates that there is no cogent evidence to suggest that Zammit AsJ imposed illegitimate pressure on Braam to enter into the settlement agreement. First, there is no objective support for the proposition that Zammit AsJ applied any pressure to Braam to enter into the settlement agreement; secondly, there is no cogent evidence to support the proposition that Zammit AsJ did anything beyond performing her professional duty as a judicial officer and nothing that could be described as conduct that was ‘illegitimate’ or without legal justification; and thirdly, there is no evidence that Zammit AsJ intended that Braam enter into the settlement agreement, or even knew of its existence until her chambers were informed after BBC Hardware accepted the offer initiated by Braam some days after the directions hearing. In these circumstances, Moore J was correct to conclude that there was no cogent evidence of duress. Braam had not discharged the onus upon him. His subjective perception of being overwhelmed by the occasion of the directions hearing did not provide a proper foundation for, or substantiate, his allegation of duress.
Most importantly, for Braam to rely upon the allegation of duress to set aside the settlement agreement, it is necessary for Braam to show, as Zammit AsJ is not a party to the settlement agreement, that BBC Hardware had actual or constructive notice that Braam had been subjected to duress by reason of Zammit AsJ’s conduct. However, all of the evidence of the interactions between Minter Ellison and Braam points in the opposite direction: it is clear that, whatever might have been Braam’s subjective experience in the privacy of his own home after the directions hearing, in all his dealings with Minter Ellison — at the directions hearing, in the chain of correspondence with them, most especially Braam’s letter of 10 December 2013 — there was no sign that he was feeling threatened or agitated, or that his freedom of choice was compromised by reason of the conduct of Zammit AsJ. As Moore J found, the tenor of the chain of correspondence leading to the settlement entirely contradicted Braam’s claim that he was subjected to duress from Zammit AsJ. In our view, Minter Ellison was completely justified in taking the letter of 10 December 2013 at face value, especially in the context of a ‘helpful and constructive’ discussion between Braam and Poulton directly after the directions hearing. There is no suggestion that Minter Ellison sought to take advantage of someone they knowingly recognised had been subjected to illegitimate pressure.
We consider that Moore J did not err in finding that there was no cogent evidence of duress and no substance to Braam’s claim of duress.
We reject Grounds 3 and 4.
Conclusion
In our view, leave to appeal should be refused.
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