John Albert Overall v John Sotirious Terpu
[2003] NSWSC 986
•28 October 2003
CITATION: John Albert Overall & Ors v John Sotirious Terpu & Anor [2003] NSWSC 986 HEARING DATE(S): 28/10/03 JUDGMENT DATE:
28 October 2003JURISDICTION:
Equity Division
Commercial ListJUDGMENT OF: Einstein J DECISION: Sanction of Settlement CATCHWORDS: Damages (Infants and Persons of Unsound Mind) Act 1929 (NSW) - Sanction of Settlement LEGISLATION CITED: Damages (Infants and Persons of Unsound Mind) Act 1929 (NSW) CASES CITED: Yu Ge by her tutor Tao Ge v River Island Clothing Pty Ltd [2002] NSWSC 28 PARTIES :
John Albert Overall (First Plaintiff)
Enterprise Concepts International Pty Ltd (ACN 073 919 669) as Trustee for Elimatta Superannuation Fund (Second Plaintiff)
John Albert Overall as tutor for Andrew James Piper Overall (Third Plaintiff)
John Sotirious Terpu (First Defendant)
Conquest Mining Limited (ACN 009 232 277) (Second Defendant)
FILE NUMBER(S): SC 50168/02 COUNSEL: Mr CC Hodgekiss SC (Plaintiffs)
Ms V McMurchie (solicitor) (Defendants)SOLICITORS: Dibbs Barker Gosling (Plaintiffs)
Phillips Fox (First Defendant)
Dexter Healey (Second Defendant)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST
Einstein J
Tuesday 28 October 2003 ex tempore
Revised 30 October 2003
50168/02 John Albert Overall & Ors v John Sotirious Terpu & Anor
JUDGMENT
1 In proceedings No. 50168/02 I grant leave to the plaintiffs to file in Court a notice of motion seeking an order pursuant to section 4 of the Damages (Infants and Persons of Unsound Mind) Act 1929 (NSW) (“the Act”). That motion seeks the Court’s approval and sanction to a settlement of the proceedings which, subject to the Court’s approval, has been effected by Deed of Settlement.
2 I grant leave to the plaintiffs to file in Court an affidavit by Chrisanthe Makris of 27 October 2003 which is read in support of the application. Additionally Ms Makris has given some short oral evidence in support of the application.
3 The proceedings were fixed for hearing on Monday of this week at an estimate of a 3 day hearing. The central issues raised in the pleadings are readily identified by an examination of the further amended summons and the defences.
4 The proceedings concern a number of disparate allegations concerning alleged representations and statements said to have been made by the first and second defendants by their agent, Mr Leo Khouri, which are said to have been false and misleading and/or to have been conduct in or in connection with dealings in securities that was misleading and deceptive. Other causes of action disclosed in the pleading include causes of action simply based in contract.
5 The third plaintiff is the son of the first plaintiff and is currently aged 17 years of age and in year 12 at Trinity Grammar.
6 The third plaintiff’s claims in the proceedings concerned options purchased on his behalf by the first plaintiff.
7 The affidavit of Ms Makris was in the following terms:
“1. I am a solicitor in the employ of Dibbs Barker Gosling Lawyers and assisting Gerard Breen, the solicitor on the record for the Plaintiffs. I have the day to day carriage of the matter.
2. On 7 March 2003, the Third Plaintiff, was one of three plaintiffs who filed a Further Amended Summons as against the Defendants in these proceedings.
3. The Third Plaintiff is the son of the First Plaintiff. He is currently aged 17, attending Trinity Grammar and in year 12.
4. A Deed of Settlement has been entered into between the parties to the proceedings, subject to the approval of this Honourable Court. A copy of the Deed of Settlement is annexed and marked “A”.
Nature of the Proceedings
5. The Plaintiffs alleged that the Defendants and/or agents acting on their behalf made certain representations with respect to the purchase of options and contributing shares in Conquest Mining Limited.
6. The First and Second Defendants denied such representations were made.
Third Plaintiff’s claim in the proceedings
7. The Third Plaintiff’s options were purchased on his behalf by the First Plaintiff.
8. The Third Plaintiff purchased 30,000 options at approximately 15c each. The First Plaintiff on behalf of the Third Plaintiff contributed $4,581.75 in total to the purchase of his options in the Second Defendant (“CQTOA”). These options expired on 30 June 2000.
9. The options were purchased on the basis of alleged representations by the Defendants, that the Plaintiffs would be entitled to 1 contributing share for every two options held, in addition to a number of complimentary contributing shares.
10. To maintain their entitlement to the contributing shares the Plaintiffs continued holding the options, however such options were due to expire on 30 June 2000, after which time they would be valueless. In an attempt to mitigate their losses, the Plaintiffs paid a further 3c per option to receive the same number of new options (“CQTOC”) and maintain their alleged entitlement to the contributing shares. The First Plaintiff on behalf of the Third Plaintiff paid a further $900 to renew the options held by the Third Plaintiff.
11. The total amount claimed in the proceedings by the Third Plaintiff was $5,481.75.
Third Plaintiff’s entitlement under the Deed of Settlement
12. The Deed of Settlement provides for the Third Plaintiff to receive $5,481.75, subject to court approval.
13. The Third Plaintiff will retain the options purchased on his behalf although currently such options have only a nominal value.
14. The Third Plaintiff will receive the total amount he invested in the purchase of the options, being $5,481.75.
15. The Third Plaintiff has not been personally liable for any costs of the matter to date.
16. I am instructed that the Third Plaintiff will not be incurring any costs in the proceedings, but rather these will be borne by the First and Second Plaintiffs.
18. The Deed of Settlement has been duly executed by the John Albert Overall, as tutor for the Third Plaintiff.”17. The settlement sum provided to the Third Plaintiff is a reasonable one having regard to the quantum of the Third Plaintiff’s claim.
8 The terms of the Deed of Settlement reached are appended to the affidavit.
9 The third plaintiff is not personally liable for any costs in the proceedings to date so that there is no question but that the amount which is to be paid to the third plaintiff of $5,481.75 is to be paid without deductions of any type.
10 The amounts expended by the first and second plaintiffs in relation to their purchases of options were considerably in excess of the amounts expended on behalf of the third plaintiff in the purchase, on his behalf, of the options.
11 The first plaintiff who is to receive approximately $65,000 under the terms of settlement is in effect to receive a sum which is considerably less than that which was expended by the first and second plaintiffs upon their acquisition of options the subject of the proceedings.
12 Mr Hodgkiss SC has from the bar table explained to the Court that as he saw it, an extremely significant issue which was to have been litigated was whether or not the subject representations could have been sheeted home to the first or second defendants.
13 The principles are set out by O’Keefe J in Yu Ge by her tutor Tao Ge v River Island Clothing Pty Ltd [2002] NSWSC 28.
14 I am satisfied from that explanation, from the pleadings and from the affidavit of Mr Overall of 1 August 2003 that this question of agency may well have been pervasive in terms of an ultimate determination of the most significant parameter in the proceedings. That being the case it seems that there were reasonable grounds for the plaintiffs to settle and the evidence given by Ms Makris from the witness box satisfies me that counsel’s advice was taken in that regard and expressly taken in relation to the reasonableness of the settlement achieved on behalf of the third plaintiff.
15 For those reasons but subject to the orders approving and sanctioning the subject settlement expressly including provision for the amount to be paid to the third plaintiff to be paid into a bank account of the third plaintiff when received, it is, it seems to me, appropriate for the Court, pursuant to section 4 of the Act, to sanction the settlement. Short minutes of order should be brought in.
___________________
I certify that paragraphs 1 -15
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 28 October 2003 ex tempore
and revised on 30 October 2003
Susan Piggott
Associate
Last Modified: 11/06/2003
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