Hiralal v Hiralal

[2016] NSWSC 137

Supreme Court

New South Wales

Medium Neutral Citation:	Hiralal v Hiralal & Ors [2016] NSWSC 137
Hearing dates:	22 February 2016
Decision date:	22 February 2016
Jurisdiction:	Equity - Duty List
Before:	White J
Decision:	1 Order that the defendants' notice of motion filed on 19 February 2016 be dismissed with costs. 2 Give the parties liberty to restore the matter to Lindsay J on reasonable notice by arrangement with his Honour's associate.
Catchwords:	PRACTICE AND PROCEDURE – application for declaration pursuant to s 73 Civil Procedure Act 2005 (NSW) that a binding settlement agreement entered into – no intention to be bound – agreed terms incomplete and unable to give rise to a binding agreement
Category:	Procedural and other rulings
Parties:	Vidyagauri Hiralal (Plaintiff) Nitin Hiralal (1st Defendant) Vinod Gokal (2nd Defendant) Vibha Hiralal (3rd Defendant)
Representation:	Counsel: N Allan (Plaintiff) P Afshar (Defendants)   Solicitors: Macquarie Partnership Lawyers (Defendants)
File Number(s):	2012/82834

Judgment

1. HIS HONOUR: These proceedings are listed before Lindsay J on 29 February 2016 with an estimated time for hearing of five days.

2. The plaintiff is the mother of the first defendant. The proceedings concern the administration of a trust established under the will of the plaintiff's late husband. The plaintiff, the first defendant and the second defendant are trustees of the will.

3. The plaintiff brings various claims against the first and second defendants (and the third defendant who is the first defendant's wife) including claims that the first and second defendants be removed as trustees. She also seeks an account, in particular against the first defendant, and ancillary relief.

4. It appears that there will be particular issues concerning, amongst other things, what moneys the first defendant received which it will be said ought to have been treated as moneys of the deceased, or which may have been received by him as a loan. There are also questions as to what chattels, if any, of the estate are held by the first defendant.

5. The parties have prepared statements as to what they say are the issues in dispute. The plaintiff says that the issues include how much of the testator's money were held by the first defendant at the time of the testator's death and to what extent the deceased directed the first defendant to spend moneys on particular issues.

6. The claims include claims in respect of proceeds of a life insurance policy and a term deposit. There are claims that the first defendant has failed to recover loans made by the deceased and has misapplied moneys received by way of repayment of loans that should have been accounted for to the estate.

7. By notice of motion filed on 19 February 2016 the defendants seek:

“1   A declaration that on 4 January 2016, the plaintiff and the defendants agreed to settle these proceedings on the following terms:

(a)   subject to the performance of the following conditions, namely:

(i)   the first defendant obtaining the consent of the other beneficiaries of the estate of the late Hiralal Bhagwandas (Estate) to the Estate purchasing a home for the plaintiff in India in her name on the basis that she agrees in writing to the return of that home to the Estate upon her death; and

(ii)   the plaintiff and the first defendant meeting and reconciling the figures concerning the Estate, set out in the documents in the bag currently held at the offices of the first defendant’s solicitor,

(b)   the proceedings be dismissed; and

(c)   the plaintiff and defendants be paid their costs in the same amount as agreed between them from the Estate.”

8. The defendants seek orders that the proceedings be dismissed. They also seek an order that "the plaintiff and defendants be paid their costs in the same amount as agreed between them from the Estate".

9. The notice of motion was filed before Lindsay J on 19 February 2016. Lindsay J noted that the whole of the defendants' evidence in support of their notice of motion was contained in an affidavit sworn by the first defendant on 19 February 2016 and that the parties proposed that a judge other than his Honour deal with the application this week. The evidence adduced in support of the application includes without prejudice communications that it was thought better that the judge listed to hear the matter not read. His Honour noted that the contents of the first defendant's affidavit of 19 February 2016 had not been read by him at the parties' request.

10. Today counsel for the plaintiff indicated that the plaintiff was not yet in a position to serve evidence in response to the first defendant's affidavit of 19 February 2016.

11. The plaintiff is aged 80 and is in a retirement home. The first defendant's affidavit deposes to conversations both with her and with another of her sons, Mr Hariwadan Hiralal. It appeared to me from reading his affidavit that a question arises as to whether, on the assumption that the first defendant's evidence in his affidavit of 19 February is wholly accepted, nonetheless, it does not disclose a seriously arguable claim that the proceedings have been settled. I have proceeded to deal with that question as if I were dealing with an application for summary dismissal of the notice of motion.

12. The first defendant deposes to a conversation with his brother, Mr Hariwadan Hiralal (Hari), in which Hari said that he had been funding his mother's proceedings. According to the first defendant, Hari spoke to him on or about 18 December 2015 and said in substance that he, the first defendant, should talk to his mother to try to resolve the case.    

13. The first defendant deposed that Hari said that if the case were settled he would want "our costs paid" as he had spent a lot of money on the case. According to the first defendant, Hari said that their mother wanted go to India and "you need to buy her a home."

14. The first defendant deposed that he told Hari that the estate did not have the sort of money that Hari mentioned and the rest of the money was in Fiji and tied up in the current litigation. After some further discussions the conversation terminated. On 23 December 2016 there was an exchange of email correspondence which contemplated that the first defendant would travel to Sydney in early January to discuss the proceedings with his mother with a view to a possible settlement.

15. In one of the emails, the first defendant told Hari that:

"Mum is aware of the amount due to the estate as the written figures were given to her, which she claimed was in her bag. The bag is now in Sydney and an offer to open it was made through her lawyers to no avail. I can arrange for same to be available to her in the presence of witnesses from both sides. This issue alone will more or less kill all contentious issues. The subsequent payments can be allowed for leaving NO doubt on amount owed.”

16. The first defendant deposes that he flew to Sydney from Fiji and visited his mother, the plaintiff, on 4 January 2016. He deposes that he said to the plaintiff that:

"Hari says he wants to sort out this case and he wanted me to talk to you. We have the court case soon and we need to sort it out".

He deposes that the plaintiff said:

"Oh, I have already told the lawyer on the 15th and again on 18th that I don't want to do this case. I'm not climbing all those steps in my condition".

17. They were then interrupted by a telephone call from Hari to his mother after which the conversation, according the first defendant, continued as follows:

"Mum   He's been giving me a very hard time. ... I've got a doctor's appointment on the 4th of February and a review with the doctors on the 18th of February. If they give me the ok to travel, I am going to go to India. Until then, I am going to stay here. I like this place. I am not going to leave it. I don't have to worry about anything but before I go, I want to have a home in India under my name. But I am happy to write that it will go back to the estate when I die.

I    Look, buying a home from the estate under your name won't be a problem if you are going to give it back to the estate. But I need to get approval from the remainder men. You are putting the condition that you want the home before you go but the trust does not exist and there is a lot of paperwork to be done before we can activate the funds in the estate. You have got yourself into 'chakravyuh' [best translated as 'conundrum'] and getting out of it takes a big procedure. Even if we agree anything, the Court needs to sanction it and agree before we can do anything. You have to realise that when it comes to that black money, you got those figures and the paperwork was with you and you agreed it was in your bag.

Mum   I have forgotten the figures.

I   It is very simple. Take your key and go to Chandra's office and open the bag and look at the papers. And we have 100% records after that.”

18. The first defendant deposed that the plaintiff made certain admissions in respect of matters that are in issue in the proceedings.

19. The conversation continued:

"I    ... This is the last chance … because I am not going to chase after you again. I cannot keep running after you and help you out.

Mum    I am willing to remove the case. I want to go directly from this place to India. I am too old. I am not going to take money with me when I die. I want this sorted out and I want to move to India.

I    Basically, you want a house in India and you are agreeable for it to be returned to the estate. I can't see any of the beneficiaries objecting to that. That’s not a problem. The only problem I see is that there is a lot of paperwork to do. The decision has to be approved by the Court. You know the figures. The only figures that need to be sorted out is the Australian dollars owed to the estate. The details are in your bag. Take your key, go to my lawyer’s office, open the bag and get the papers where all of the expenses are recorded. Simple as that ...

Mum    I'm going to go from here directly to India.

I    Ok. If you’ve told the lawyers on the 15th and 18th to stop the case, he's still sending us nasty letters."

20. The first defendant deposed that he then telephoned the plaintiff's solicitor Mr Harish Prasad, who told him that his fees were still outstanding and that would need to be sorted out. The first defendant deposed that he told Mr Prasad:

"Mum has agreed that she has the figures in her bag at Chandra's office and we can reconcile them, which is easy. She has agreed to stop the case".

21. He deposed Prasad asked for his mother's number and said that he would talk with his client and call back. The first defendant deposes that he then said to his mother that:

“Harish wants his costs. Hari has told me he wants his costs. Whatever they claim, I will also claim from the estate”,

and his mother agreed to that. He deposes he then said:

"Ok, after your lawyer has spoken with you, then we can do what needs to be done to sort it out. I’ll see you tomorrow".

22. It is that conversation that is said to have given rise to a binding settlement agreement. It may be noted that the conversation concluded with the first defendant's stating that the plaintiff would need to speak to her solicitor. There were no words said that indicated that the parties understood they had reached an immediately binding agreement.

23. There were many matters that would obviously need to be the subject of further agreement, including what property would be purchased for the plaintiff in India, what would be the costs of that property, where it would be located and matters of that kind.

24. The suggested reconciliation of the substantive claims in the proceedings is said to have been agreed by the plaintiff’s agreeing to look at paperwork said to be contained in a bag held at the first defendant's solicitor's office to which the plaintiff was said to have the key. No such reconciliation had been carried out at the time of the alleged agreement. Nor has it been carried out since it seems. It would not have been known whether consideration of whatever papers are in the bag would lead to a resolution of the claims in the proceedings.

25. Questions of costs still needed to be resolved. The first defendant contemplated that the settlement would require the preparation of a "lot of paperwork".

26. I can see no indication objectively that the parties intended then to be bound by the terms to which it is said they had agreed. Indeed, the terms said to have been discussed are so incomplete that they could not, in any event, give rise to a binding agreement.

27. On 6 January 2016, Mr Prasad wrote to the defendants' solicitors, Macquarie Partnership Lawyers. He stated that the first defendant had contacted him from the home of the plaintiff on 4 January 2016 and had indicated that he had reached an agreement and the plaintiff's application was to be withdrawn.

28. Mr Prasad then wrote:

"The writer informed your client that he would attend on our client to confirm her instructions. We note that our client instructs that it is her understanding that your client has committed a number of conditions [sic] based on which our client would withdraw the proceedings.

Needless to say this included your client’s commitment to payment of legal costs etc. Please advise as a matter of urgency whether you have any instructions in this regard".

29. The defendants emphasise the statement by the plaintiff's solicitor that the plaintiff had instructed him that it was her understanding that the first defendant had given his commitment to a number of conditions on the basis of which she would withdraw the proceedings. But that is not a statement that the plaintiff considered herself immediately bound by an agreement for the settlement of the proceedings. It is clear that the plaintiff through her solicitor was seeking confirmation of at least one of the commitments that the plaintiff sought on the basis of which the proceedings would be withdrawn. That confirmation was not forthcoming.

30. On 22 January 2016 Macquarie Partnership (solicitors for the defendants) wrote to Harish Prasad & Associates and said that during the discussions held on 4 January 2016 the plaintiff told the first defendant that she would not attend the hearing and simply wished to move to India and receive moneys regularly, as previously agreed, from the estate. They said that the plaintiff told the first defendant that she had instructed her solicitor on 15 and 18 December to discontinue the proceedings. They said that the discussion concerning costs was that the first defendant would not pay or claim any costs, but if the plaintiff wanted to claim costs from the estate then the defendants would claim the same amount.

31. Macquarie Partnership said that it was their view that the Court would not approve the parties' costs to be paid out of the estate. They said the first defendant denied that he agreed to pay any portion of the client's costs.

32. Macquarie Partnership attached a draft deed of settlement and release. The deed did not include the terms which are now said to be conditions of the agreement of settlement of the proceedings. The deed did not include any term that a property in India would be purchased for the plaintiff or that she would agree to return such a property to the estate upon her death. It contained no term that the parties would need to reconcile figures concerning the estate. It made no reference to the documents said to be contained in a bag which would permit such a reconciliation. It did not contain a term that the parties would be paid their costs in the same amount as might be agreed between them.

33. Macquarie Partnership went on to say that they considered that the plaintiff's claim would fail for reasons to which they briefly adverted and then added:

“Notwithstanding these matters, our clients - given their familial and historical ties with the plaintiff - consider that this proceeding should be resolved in a commercial manner.”

34. Again, this is inconsistent with the position now taken by the defendants. The defendants' solicitors did not say that in their clients’ view the proceedings had already been resolved by the matters discussed on 4 January 2016.

35. On 2 February 2016 Harish Prasad & Associates again wrote to Macquarie Partnership Lawyers raising a number of points in dispute in the case. They made a settlement offer. It is unnecessary to set out its terms. The offer was rejected by Macquarie Partnership on 9 February 2016. Again, it is unnecessary to set out the terms of the response, except that at the conclusion of Macquarie Partnership's letter that firm said:

"Our clients do not wish to prolong these discussions to the point that the parties would be forced to expend additional funds only to reach settlement ‘on the steps of the Court'. Accordingly, we propose that the parties' legal representatives (solicitors and counsel) participate in a short settlement conference on Friday, 12 February 2016 so as to give our respective clients one last opportunity to resolve this matter ...”

36. Again, there was no assertion that the dispute had already been resolved by the discussion held on 4 January 2016.

37. In my view, assuming that all of the evidence of the first defendant in his affidavit of 19 February 2016 were accepted, it is nonetheless clear beyond reasonable argument that no binding agreement for the settlement of the proceedings was reached.

38. I order that the defendants' notice of motion filed on 19 February 2016 be dismissed with costs.

39. I give the parties liberty to restore the matter to Lindsay J on reasonable notice by arrangement with his Honour's associate.

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Decision last updated: 29 February 2016