Gauci v Grech
[2005] VSC 246
•8 July 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 6486 of 2004
| EMANUEL GAUCI | Plaintiff |
| v | |
| GORDON GRECH | Defendant |
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JUDGE: | Cummins J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1 July 2005 | |
DATE OF JUDGMENT: | 8 July 2005 | |
CASE MAY BE CITED AS: | Gauci v Grech | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 246 | |
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Practice Court – Contempt of count – Rule 75.06.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D. Baker | Xerri Rubinstein & Co |
| For the Defendant | Mr G. McCormick | John Micallef & Co. |
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HIS HONOUR:
Before the Court is a summons filed on 16 June 2005 by the plaintiff seeking an Order that the defendant be punished for contempt of Court. The summons was taken pursuant to Rule 75.06 and seeks as follows in paragraph 2, which is the epicentre of this Practice Court proceeding:
“That the defendant be punished for contempt for failure by the defendant to comply with the order of Hollingworth J, as referred to in paragraph 1 of the Her Honour’s orders made 28 June 2004 by failing to pay the moneys there ordered to be paid to the defendant’s solicitors to be held in trust by the defendant’s solicitors pending final resolution of these proceedings or until further order.”
Also sought, in paragraph 1 of the summons, is an accounting of the proceeds of the sale of the property being Lot 283 Feijoa Court, Werribee, being an accounting by the defendant to the plaintiff for the defendant’s dealing with the funds received by the defendant as consideration for that sale.
Also before the Court is a summons by the defendant to the plaintiff filed 30 June 2005 in which in paragraph 1 is sought that paragraph 1 of the Order of Hollingworth J, be varied by deletion of all the words appearing after the words “be paid to the solicitors for the defendant”.
Also, in paragraph 2 of the defendant’s summons, is sought an Order that the plaintiff be ordered to execute within 14 days all documents (including without limitation any sale authorities) necessary to allow the sale by auction of 11-13 Maida Avenue, North Sunshine and Lot 17 Lomandra Bowl, Melton. That last matter – paragraph 2 of the defendant’s summons filed 30 June 2005 - was not heard by me in the Practice Court when the other matters were before me but was adjourned over for further consideration and to which I shall return.
The Order made by Hollingworth J on 28 June 2004 in relevant part states as follows:
“OTHER MATTERS: 1. The plaintiff by his counsel having given the following undertaking:
(a)to abide by any order the Court may make as to damages in the case that the Court shall hereafter be of the opinion that the defendant shall have sustained any by reason of this order, that the plaintiff ought to pay.
THE COURT ORDERS THAT:
(1)Lots 283 Feijoa Court, Werribee … be sold by the defendant for not less than $280,000 and the net proceeds of that sale after deduction of:
(a)real estate agent’s advertising expenses and real estate agent’s commission in respect of the said sale; and
(b)the sum of $62,910 being the balance owed by the defendant for the purchase of the said lot
be paid to the solicitors for the defendant to be held in trust by them pending final resolution of these proceedings or until further order.”
Other consequential orders were made by Her Honour.
Before me principally is the plaintiff’s summons for a finding of punishment of contempt pursuant to Rule 75.06. The summons is supported by an affidavit of the plaintiff, Mr Emanuel Gauci, sworn 15 June 2005, with 11 exhibits. A critical exhibit is Exhibit 2, terms of settlement of the 12 October 2004, signed by the parties and to which I shall come.
Supporting the defendant’s summons in relevant part to these proceedings, having noted as I have done that paragraph 2 of that summons is adjourned over, is an affidavit of Mr Gordon Grech, defendant, made through an interpreter and sworn 29 June 2005, with 19 exhibits thereto.
The initial proceedings were filed by the plaintiff on 11 June 2004 by statement of claim, which sought a declaration that the partnership between the plaintiff and the defendant be dissolved with effect from 30 April 2004; that an account of all partnership dealings be taken; that on the taking of accounts the defendant play the plaintiff such money as is found due and the plaintiff pay the defendant such money as is found due; an order restraining the defendant from selling, disposing of or in any way alienating and dealing with the land and improvements being Lot 283 Feijoa Court, Werribee; and other relief not relevant to this proceeding. By summons filed the same day, 11 June 2004, like injunctive relief was sought, and consequential Orders. Filed in those initiating proceedings was an affidavit of the plaintiff sworn 9 June 2004 and an affidavit of the defendant sworn 26 June 2004. A defence and counterclaim was filed on 7 July and a defence to counterclaim on 27 July 2004. It is not necessary to proceed further to those matters other than to state them as the foundation for the proceeding before the Practice Court.
There are four properties relevant to the proceeding. The central one for the purpose of the Practice Court proceeding is Lot 283 Feijoa Court, Werribee. Contiguous to it is Lot 282 Macadamia Grove, Werribee. Third, there is a factory premises and land at 11-13 Maida Avenue, North Sunshine. Fourth, there is Lot 17 Lomandra Bowl, Melton.
In the plaintiff’s affidavit of 15 June 2005 he rehearsed the history of the matter. He deposed in paragraphs 4 and 5:
“4.The proceeding remains before the Court in order to allow for the Terms of Settlement to be implemented and effected. Since the Terms of Settlement were agreed, various disputes have arisen between the parties that have delayed the finalisation of the proceedings and of the parties’ disputes.
5.Two of the four properties referred to in Clauses 2(a), 2(c) and 6 of the Terms of Settlement are the land and improvements that are on 11-13 Maida Avenue, North Sunshine and Lot 17 Lomandra Bowl, Melton. Neither of those properties has as yet been sold. Valuations of the properties had been sought and only recently obtained and the parties had intended that the properties would be sold by auction after evaluations had been obtained’.”
The affidavit then goes on to deal with financial difficulties, particularly in relation to 11-13 Maida Drive, North Sunshine, and rehearses a substantial amount of correspondence between the parties. In paragraph 11, the affidavit continues,
“My solicitors conducted a title search in respect of the property Lot 283 Feijoa Court, Werribee. The register search statement obtained from the Department of Sustainability and Environment Victoria, indicates that the property was registered in the name of Gavin John Tippett on or about 2 March 2005. The memorandum of transfer of land indicates that the property was transferred to Gavin John Tippett for consideration of $285,000 on 25 February 2005.”
Paragraph 12 states:
“In all the circumstances I say that the defendant is in default of the orders of this Honourable Court made by Her Honour Justice Hollingworth on 20 June 2004 in that the defendant has failed to pay the balance of the sum of $285,000 remaining after payment of real estate agents’ advertising expenses and real estate agents’ commission in respect of the sale of property of Lot 283 Feijoa Court, Werribee and after deduction of the amount of $62,910 to the defendant’s solicitors to be held in trust by the solicitors pending resolution of these proceedings or until further order, alternatively the defendant has wrongfully failed to notify me and/or my solicitors of the said balance that is held in trust by the defendant’s solicitors.”
In the affidavit of the defendant, sworn 29 June 2005, in paragraph 6 the defendant deposes:
“I agree with Paragraph 4 [of the plaintiff’s affidavit] save and except that the Terms of Settlement resolved all matters between the parties. The parties attended the Supreme Court in between November 2004 and February 2005 and the directions in the proceedings were adjourned. The reason why the proceedings were not struck out is because at the first hearing before Master Kings, she declined to strike them out because she was of the view that because keeping the proceeding on foot was useful for the purposes of the Terms of Settlement.”
Again that affidavit substantially deals with the correspondence, which I do not need to go to, because in my view this matter properly is to be resolved not by the correspondence but by the interface of the terms of settlement and the Order of Hollingworth J.
It is evident from the terms of the Order of Justice Hollingworth that if that was where the story ended there was, and would have remained, an obligation upon the defendant to have the moneys from the sale of Lot 283 Feijoa Court held in trust by his solicitors pending final resolution of these proceedings or until further order.
However, that was not the end of the matter. A mediation occurred on 12 October 2004. On that day Terms of Settlement were reached between the parties. It is evident from looking at the papers that the mediation was a substantial and difficult matter as indeed counsel have informed me from the Bar table in the Practice Court.
The Terms of Settlement were signed by each party on 12 October 2004. They are three pages in length and of 12 paragraphs. Further, both parties have been carrying out the Terms of Settlement since that time, albeit imperfectly. It is doubtless because of the imperfection that the parties have come back before me. Not all the terms have been fulfilled. Nonetheless both parties have been carrying out the terms of the settlement since the date of their execution, being 12 October 2004. Significantly, the terms are not expressed to be mutually interdependent; nor are the individual terms expressed to be suspended until the holistic fulfilment of the Terms of Settlement.
The Terms are set forth as Exhibit EG2 to the affidavit of Mr Gauci. Relevantly for the purposes of this proceeding are paragraphs 2(b), (c), 6 and 12. Paragraph 2(b) of the Terms states as follows:
“The parties agree that Gordon Grech will retain as his personal property Lot 283 Feijoa Court, Werribee and that Emanuel Gauci will retain as his personal property Lot 282 Macadamia Grove, Werribee, and that neither of them has any interest of whatever nature in the property of the other.”
Paragraph 2(c) states:
“The two remaining properties will be sold by auction and the parties agree to appoint an auctioneer for that purpose within 21 days of the date hereof, and failing agreement as to an auctioneer the appointment will be determined by the Real Estate and Stock Institute of Victoria. A reserve price on each property will be agreed by the parties and failing agreement then by a valuer appointed by the Real Estate and Stock Institute of Victoria.”
Paragraph 6 states:
“Within seven days of settlement of the purchase moneys which may be received in respect of the factory partnership premises at 11-13 Maida Grove, North Sunshine, Emanuel Gauci will pay to Gordon Grech $20,000 in full and final settlement of all and any debts which Emanuel Gauci may have to Gordon Grech in respect of the partnership.”
Paragraph 12 states:
“Gordon Grech’s legal representatives will attend to inform the Court that agreement to settle has been arrived at and will request orders that the proceeding be struck out without any order as to costs and that any existing orders be set aside and a right of reinstatement in the event of non-compliance with these terms.”
In fact the defendant’s solicitors did not attend Court as contemplated by paragraph 12 of the Terms above cited. That was because some of the terms (notably in respect of the Maida Grove property) had not yet been fulfilled. By operation of the ordinary Court process, not at the instigation of one or other of the parties, the matter came on before Master Kings on 9 November 2004 for a pre-trial directions hearing, and again on 8 March 2005 for a further pre-trial directions hearing. It is plain that the proceedings remained before the Court because not all of the Terms of Settlement had reached finality. It would appear that the Master took the view that it was desirable until all of the Terms had reached finality that the proceeding not be yet struck out. However, that does not mean, and in my view could not have been taken by the Master to mean, that paragraph 1 of the Order of Justice Hollingworth remained operational in any substantial manner. That is because paragraph 1 of the Order is entirely contrary to paragraph 2(b) of the Terms of Settlement. In my view, it is plain that by reaching the Terms of Settlement, in particular paragraph 2(b), the parties themselves have treated Order 1 of Justice Hollingworth as discharged and no longer efficacious. It is true that the Order remains extant in a formal sense, but it is demonstrable that the parties by their concluded agreement and as to which they have since been acting, treated that aspect of the Order as concluded and no longer operational in any substantial sense. It is clear from the Terms of Settlement that although there were four properties, the properties including Lot 283 and Lot 282 were treated as stand-alone properties. The difficulty with finalisation in relation to the North Sunshine property at Maida Avenue remained. However it is demonstrable from the Terms of Settlement, as I have stated above, that the terms were not mutually interdependent nor were the individual terms in a state of suspension until the holistic fulfilment of the Terms of Settlement. It is plain that the parties treated, as at 12 October 2004 and since, Lot 282 and Lot 283 as stand-alone properties in the terms set forth in paragraph 2(b) of the Terms.
Even if there were a technical contempt I would refuse to make a finding of contempt in the circumstances I have stated.
However, in my view there is not any contempt at all. The agreement of the parties is clearly set forth in paragraph 2(b) of the Terms of Settlement. Thereafter, each party was and is entitled to treat the respective properties, the plaintiff as to Lot 282 and the defendant as to Lot 283, as his own property and as a consequence was entitled to do what he wished with the proceeds.
Had the plaintiffs wished to retain the benefit of Order 1 of Hollingworth J, that could have been made a term of settlement. It was not. There is nothing in the Terms of Settlement to support the plaintiff’s contention of continuation of Order 1, either in the contemplation of the parties or in practical reality. The conspicuous difference between the Terms of Settlement on the one hand and Order 1 of Hollingworth J on the other, is in my view quite conclusive.
Accordingly I dismiss the summons of the plaintiff for a finding of contempt of Court by the defendant. I refuse the relief sought in paragraph 2 of that summons.
The Order sought in paragraph 1 of the summons of the plaintiff is also refused because it falls with paragraph 2, for the reasons I have stated namely that Terms of Settlement paragraph 2(b) is operational.
I grant the relief sought in paragraph 1 of the defendant’s summons of 30 June, not because it is necessary, because it is not, but because that is a formal application before me and although it is otiose it is consistent with my judgment.
Order 2 sought in the summons of 30 June of the defendant is stood over and can be heard in the Practice Court by another Judge, as I am now no longer sitting in the Practice Court.
[Discussion as to costs].
I order that the plaintiff pay the defendant’s costs of the contempt proceedings before the Practice Court.
I direct that the relief sought in paragraph 2 of the defendant’s summons of 30 June 2005 come before the Practice Court for hearing on 13 July 2005.
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