Gurappaji v Penhalluriack
[2009] VSC 609
•14 December 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 6343 of 2004
| KAVITHA GURAPPAJI | Plaintiff |
| v | |
| FRANK WILLIAM PENHALLURIACK & ANOR | Defendant |
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JUDGE: | OSBORN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 December 2009 | |
DATE OF JUDGMENT: | 14 December 2009 | |
CASE MAY BE CITED AS: | Gurappaji v Penhalluriack & Anor | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 609 | |
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COMMON LAW – Terms of settlement conditional upon finalisation of a related matter which is not yet achieved – Plaintiff not estopped from asserting that finalisation of a related matter is not yet achieved – Appeal dismissed – Orders for costs against the defendants personally.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D C Harrison | McNab McNab & Starke |
| For the 1st Defendant | Ms K Rees | T J Mulvaney & Co |
| For the 2nd Defendant | Ms K McMillan SC | Bruce M Cook & Assoc |
HIS HONOUR:
In this matter the defendants seek orders authorising the sale of a property situated in East Boundary Road, Bentleigh East, and consequential orders for access to the property in order to facilitate such sale.
They bring the matter before the Court on appeal from orders of Evans AsJ made on 27 November 2009 whereby he dismissed the defendants' application and awarded cost against them personally.
Although the matter has a complex background, the asserted right which the defendants seek to enforce is founded in terms of settlement. Those terms of settlement are dated 24 June 2008. They compromised three proceedings which arose out of or were connected with the estate of Malcolm Hilary Chipperton who died on 2 May 2003. They also included provisions relating to a further proceeding, number 7534 of 2004 issued by Patricia Farnell against the first defendant seeking a declaration that Malcolm Hilary Chipperton was the father of Farnell's daughter.
By the terms of settlement it was acknowledged that the estate of the deceased was insolvent unless a property situated in East Boundary Road, Bentleigh East was declared to belong to the estate or some sum was declared to be owing to the estate in respect of the property. The terms of settlement further resolved a series of issues between the parties and provided for the distribution of moneys to the various parties to the terms of settlement.
Clause 1 of the terms of settlement provided that the terms were subject to and conditional upon a requirement there be no further claims made against the first defendant or notified to the first defendant prior to the distribution of the funds as set out in the terms of settlement, and the approval of the compromise by the Court on behalf of Debra Chipperton, a represented person within the meaning of the Guardianship and Administration Act 1986.
Further, cl 2 of the terms of the settlement provided that subject to cl 1, the terms should relevantly be implemented on finalisation of the Farnell proceeding.
Clause 2 of the terms of settlement defined the ‘finalisation’ of the Farnell proceeding. That definition is primarily in contention before me today.
Clause 2 provided:
Subject to para.1 hereof, these terms, save for paras.6 and 7 hereof, shall be implemented on finalisation of the Farnell proceeding.
Para.6 hereof comes into effect on the court giving its approval.
Para.7 hereof comes into effect immediately on the execution of the of these terms. For the avoidance of doubt for the purposes of these terms, 'finalisation of the Farnell proceeding', occurs on the expiration of 14 days after the Honourable Justice Bell has delivered his judgment, including a costs decision, save in the case of an appeal where finalisation will occur when the Court of Appeal delivers its judgment.
In the event, the Farnell proceeding was appealed to the Court of Appeal, and on 5 December 2008, Kellam and Dodds‑Streeton JJA made orders, in part, that the appellant, Patricia Farnell, should on or before 31 January 2009 give security in the sum of $16,000 for the costs that may be awarded against her on appeal in a form acceptable to the Prothonotary, failing which the appeal should be stayed.
Thereafter, Patricia Farnell failed to give security but sought to appeal this order to the High Court. Special leave to appeal was refused on 27 May 2009.
Subsequently, the plaintiff in this proceeding deposed by affidavit sworn 9 October 2009 that:
The proceeding commenced against the Deceased's estate by Patricia Farnell (‘Farnell’) was not finalised until the High Court refused special leave to appeal on 27 May 2009. It is my understanding, supported by the First Defendant, that Farnell has not provided the security for costs ordered by the Court of Appeal on 5 December 2008.
The defendants also assert that on 12 October 2009, counsel for the plaintiff orally agreed that the Farnell proceeding had been finalised so far as the terms of settlement were concerned.
When the matter came on for hearing before Evans AsJ on 27 November 2009, his Honour took a strict view of the terms of settlement and dismissed the application. As I understand it, the point comes down to this; the term ‘finalisation of the Farnell proceeding’ is defined by the terms of settlement in a way which ultimately contemplates that finalisation of the proceeding will occur when the Court of Appeal delivers judgment. What the Court of Appeal has done is stay Ms Farnell's appeal. The terms of that stay are not expressed to be permanent and it is contended on behalf of the plaintiff that this leaves open the possibility that the appeal will be revived. If that occurs, the whole purpose of the relevant provision in the terms of settlement will be potentially defeated because Ms Farnell's claim may be revived on appeal to the Court of Appeal. It seems to me that this view is, strictly speaking, correct. It is open to the defendants to seek judgment for want of prosecution in Ms Farnell's appeal but presently speaking, judgment has not been obtained in the Court of Appeal which disposes of the appeal. It further seems to me that the intent of the relevant provision in the terms of settlement is that judgment will be given in the Court of Appeal which is determinative of the appeal, and that has not yet occurred.
I am not satisfied that the terms of para 4 as quoted in [11] of this judgment, of the plaintiff's affidavit sworn 9 October 2009 estops the plaintiff from adopting the position which she has adopted today and which, as I understand it, reflects the position adopted by Evans AsJ. I am also not satisfied that anything said by counsel on 12 October 2009 estops the plaintiff from adopting the position to which she is strictly entitled under the terms as the Associate Justice held and accordingly, I propose to dismiss the appeal.
In the course of discussion with counsel I have expressed the view that this matter appears to have a sorry history of dispute and it further appears to be one which would be best resolved by further agreement between the parties rather than a requirement that the defendants go back to the Court of Appeal for further order in the final proceeding.
If the plaintiff insists on that course, all that will happen is that further costs will be incurred in the estate and there will be a further wasting of the assets of the estate. Therefore despite the order to which the plaintiff is entitled today, I would urge the parties to try and reach some further agreement as to the finalisation of the matter and I would reserve liberty to apply to me for further orders in the matter, although I contemplate that such application would only be made in the event that there were orders to be sought by consent either for further mediation in the matter or for further substantive orders by consent.
Accordingly, what I propose to do today is to dismiss the appeal and to reserve liberty to the parties to apply.
I accept Mr Harrison's submission that I have upheld the view that was adopted by Evans AsJ and it seems to me that the costs of the appeal should be paid by the defendants personally. I have agreed that the Associate Justice did get it right, as is submitted to me, and in the circumstances the costs of the appeal should come from the defendants and not from the estate. Accordingly, I propose to order that the costs of the appeal be paid by the defendants personally.
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