Konstandellos v Harplex Pty Ltd - [2017] VSC 183

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CIVIL LIST

S CI 2014 06596

NIKOLAOS KONSTANDELLOS AND OTHERS (according to the attached schedule)	Plaintiffs
v
HARPLEX PTY LTD (ACN 188 350 074)	First Defendant
KELLY & CHAPMAN (a firm)	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	2, 3 and 4 November 2016. Written submissions filed on behalf of the first defendant on 7 November 2016, and in reply by the plaintiff on 10 November 2016.
DATE OF JUDGMENT:	26 April 2017
CASE MAY BE CITED AS:	Konstandellos and ors v Harplex Pty Ltd and anor
MEDIUM NEUTRAL CITATION:	[2017] VSC 183

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CONTRACT – Question of enforceability of judgment debt by the first defendant against the plaintiffs – Nature of agreement – Whether agreement between the plaintiffs and the first defendant enforceable – Extent to which extrinsic evidence is admissible as to the terms of agreement – Whether or not payment discharged the plaintiffs’ debt in full – No release of the balance of the judgment debt was intended – Part payment not good consideration for release of full amount of judgment debt.

CONTRACT – Effect of settlement agreement reached between the first defendant and fourth plaintiff – Plaintiffs jointly and severally liable for judgment debt – No evidence about the terms of the settlement agreement – Release of a single debtor releases all other joint debtors – Settlement agreement found to constitute a release of all plaintiffs – Associated Retailers Ltd v Toys Unlimited Pty Ltd and ors [2011] VSC 297; Walker v Bowry (1924) 35 CLR 48; Pollack v National Australia Bank [2002] FCAFC 55 referred to and followed.

TRADE PRACTICES – Whether first defendant engaged in misleading and deceptive conduct – Terms and scope of retainer – Whether solicitor acted in trade or commerce – Section 18 Australian Consumer Law – Dual Homes Pty Ltd v Moores Legal Pty Ltd and anor (2016) 306 FLR 227 and LT King Pty Ltd and anor v Besser and anor (2002) 172 FLR 140 referred to and followed.

NEGLIGENCE – Terms of retainer between plaintiffs and their solicitors – Whether there was a breach of retainer and/or duty of care on the part of solicitors.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L Warren, acting counsel	Russell Kennedy
For the First Defendant	Mr M T Lapirow	Trumble Szanto Lawyers
For the Second Defendant	Ms L Hannon	Obst Legal

TABLE OF CONTENTS

Background and Parties.................................................................................................................... 1

The recovery proceeding and the settlement agreement............................................................ 2

Further recovery action by Harplex.............................................................................................. 10

Chronology of the Proceeding....................................................................................................... 14

The issues in the proceeding......................................................................................................... 17

The pleadings................................................................................................................................... 18

The evidence..................................................................................................................................... 30

Commentary on the evidence........................................................................................................ 62

What were the terms of the agreement between the plaintiffs and Harplex?....................... 68

Is an agreement in the terms contended for by the plaintiffs enforceable?.......................... 76

Did Harplex engage in misleading and deceptive conduct?................................................... 80

Did the 2016 settlement agreement release the plaintiffs from their liability under…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Konstandellos v Harplex Pty Ltd

Details

AGLC: Konstandellos v Harplex Pty Ltd [2017] VSC 183
Case: [2017] VSC 183
Decision Date: 26 April 2017

CaseChat Overview and Summary

The case of Konstandellos v Harplex Pty Ltd involved multiple plaintiffs suing the defendants over various issues, including the enforceability of a judgment debt and allegations of misleading and deceptive conduct under the Australian Consumer Law. The plaintiffs sought to have the judgment debt declared unenforceable, alleging that the agreement between them and the first defendant was not binding due to a lack of consideration for the release of the full debt. The defendants, in turn, argued that a settlement had been reached, discharging all plaintiffs from their joint and several liability. Additionally, the plaintiffs claimed that their solicitors had breached their retainer and duty of care.

The primary legal issues the court had to address were whether the agreement between the plaintiffs and the first defendant was enforceable, the admissibility of extrinsic evidence concerning the terms of the agreement, and the extent to which part payment of the debt constituted good consideration for the release of the full amount. The court also had to determine if the settlement agreement released all plaintiffs from liability and if the first defendant had engaged in misleading and deceptive conduct under Section 18 of the Australian Consumer Law.

In its reasoning, the court found that the agreement was not enforceable as the plaintiffs' part payment of the debt did not constitute good consideration for the release of the full amount. The court held that no release of the balance of the judgment debt was intended and thus, the plaintiffs remained liable. The settlement agreement reached between the first defendant and one of the plaintiffs was deemed to constitute a release for all plaintiffs, as per the cited authorities. The court concluded that there was no evidence of misleading and deceptive conduct by the first defendant, as the terms and scope of the retainer were clear and the solicitor's conduct did not fall under the definition of trade or commerce. Finally, the court found that the plaintiffs' solicitors had not breached their retainer or duty of care.

The final orders of the court were that the judgment debt remained enforceable against all plaintiffs, and no misleading and deceptive conduct was found on the part of the first defendant. The plaintiffs' claims against their solicitors were also dismissed.

Orders