Kuzenko-Taskovic v Djukanovic - [2005] SADC 126

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
KUZENKO-TASKOVIC v DJUKANOVIC
Judgment of Her Honour Judge Simpson
14 September 2005
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSIDERATION - WHAT AMOUNTS TO CONSIDERATION - FORBEARANCE TO SUE
Claim for legal fees brought by plaintiff – defence and counterclaim alleged negligence and/or breach of contract against the plaintiff – defence to counterclaim raised Deed of Compromise and Release in bar – whether Deed operated to bar counterclaim determined as a preliminary issue – Held: - Deed of Compromise and Release operates to bar counterclaim against the plaintiff- counterclaim dismissed.
Legal Practitioners Act 1981 Sections 57(5), 60, 64(1) and 65, referred to.
McDermott v Black (1938) 63 CLR 161; Karafotias v Karafotias (2003) 84 SASR 578, applied.

KUZENKO-TASKOVIC v DJUKANOVIC
[2005] SADC 126

This is a claim which was instituted by Ms Jasmina Kuzenko-Taskovic, a solicitor, on 9 May 2000 in the Magistrates Court against the defendant Mr Zvonko Djukanovic, on account of legal fees.
The particulars of the claim are as follows:
1.On or about the month of March 1998 the plaintiff was engaged by the defendant to represent him in his two actions in the District Court of South Australia.
2.Legal representation and advice were provided to the defendant and on 28 October 1998 the plaintiff rendered accounts for all services provided in both matters, the total of her fees being in the amount of $3,100.
3.The defendant failed to pay the said two accounts.
4.The plaintiff now claims that the defendant pays to the plaintiff her said fees, all costs and interest.
A defence and counterclaim were filed on 28 August 2001. A reply and defence to the counterclaim were filed on 14 September 2001. An order was made on 10 May 2002, removing the action into the District Court. The defendant filed an amended defence and further amended counterclaim on 12 March 2004.
The defendant denies that the plaintiff is entitled to the relief claimed or any relief and refers to his further amended counterclaim. By his counterclaim, the defendant claims damages for negligence and/or breach of contract against the plaintiff in the sum of $165,000, plus past and future medical and associated travel expenses.
The particulars of negligence and/or breach of contract alleged against the plaintiff relate to the conduct of the two actions in the District Court in which the defendant was a plaintiff and Ms Kuzenko-Taskovic acted, for a time, as his solicitor.
The first action, Action No 5 of 1996, was a claim against the Motor Accident Commission for personal injuries sustained by the plaintiff in a motor vehicle accident on 11 August 1990 (‘the motor vehicle accident claim’). The second action, Action 419 of 1995, was a claim by the defendant against his former solicitor, Neville John Jordan, (‘the Jordan claim’) for damages arising as a result of negligence when Mr Jordan was acting for the defendant in respect of the motor vehicle accident claim.
It is convenient to continue to refer Ms Kuzenko-Taskovic as the plaintiff, although she is defendant by counterclaim, and Mr Djukanovic as the defendant, although he is the plaintiff by counterclaim.
The plaintiff filed an amended defence to the counterclaim on 20 October 2004. She denies the allegations contained in the defendant’s counterclaim and denies that the defendant is entitled to the relief sought.
In particular, in the following paragraphs of the defence to the counterclaim, the plaintiff says:
24.     …that in any event the defendant is barred from bringing the within action against the plaintiff on the ground that an agreement was made by the defendant on 10 August 1999 to release and discharge, inter alia, the plaintiff from any liability and in particular the liability claimed within the Counterclaim (‘the Agreement’) and accordingly says that the defendant’s Counterclaim should be dismissed.
25.     The Agreement is partly recorded in writing. The written record is a Deed executed by the defendant on 10 August 1999, in respect of resolution of District Court Action 419 of 1995 between Zvonko Djukanovic as plaintiff and Neville Jordan as defendant.
26.     The oral terms of the Agreement were agreed on 10 August 1999 between the defendant on the one hand and counsel and solicitor for Jordan on the other hand, namely,
26.1   The insurer for Jordan would pay $72,000 towards the settlement sum of $75,000;
26.2   The remaining $3,000 was the excess on the policy payable by Jordan and was the responsibility of Jordan;
26.3   Since Jordan was bankrupt, the defendant would need to make an application to the Legal Practitioners’ Guarantee Fund for payment of Jordan’s share of the settlement sum namely $3,000;
26.4   The insurer of Jordan, through its solicitors, would provide to the defendant the contact details of the relevant person for him to contact in order to make his application to the Legal Practitioners’ Guarantee Fund.
27.     The plaintiff says that on or about 28 August 1999 and pursuant to the Agreement:
27.1   The defendant was paid $72,000 by the insurer for Jordan;
27.2   The defendant was given the contact details of the relevant person in order to make the application to the Legal Practitioners’ Guarantee Fund.
28.     The plaintiff says that shortly thereafter the defendant made application to the Legal Practitioners’ Guarantee Fund for the remaining $3,000 but has refused to sign the necessary documentation to enable his application to be processed.
An order was made by a Master on 5 August 2004 that this action proceed to trial to determine, as a preliminary issue, whether the defendant is barred from bringing the counterclaim against the plaintiff on account of the agreement referred to in paragraphs 24 – 28 inclusive of the defence to the counterclaim.
In the course of this hearing, the defendant raised a number of objections to the enforceability of any agreement:
1.At the time of negotiations, the defendant was suffering from ill health, including panic attacks, a reaction to the air-conditioned environment in the court and general weakness, so that he was not able to understand the effect of any agreement;
2.At the time of negotiations, the defendant was coerced and bullied by the solicitor and counsel for the professional indemnity insurer for Mr Jordan into agreeing to the compromise – his will was overborne;
3.It was a term of the agreement that judgment would be entered in the Jordan claim and judgment was never entered;
4.The defendant expected to receive the full amount of $75,000 from the professional indemnity insurer in one lump sum;
5.The defendant did not know that he would receive only $72,000 from the professional indemnity insurer and that he would have to apply to the Legal Practitioners’ Guarantee Fund for the balance of $3,000;
6.It was never explained to the defendant that to obtain the balance of $3,000 he would be required to sign a further release, which he was not prepared to do;
7.The defendant has received only $72,000 of the full sum of $75,000 promised to him.
The Hearing
It was agreed that the plaintiff should be dux litis at the hearing. The plaintiff was represented by counsel.
Mr Djukanovic appeared in person. On the first day of the hearing, a solicitor appeared on an informal basis to assist Mr Djukanovic in presenting his case. Mr Djukanovic’s wife was in court with him throughout the hearing. At times during the course of the hearing, Mr Djukanovic faced some difficulties in representing himself on account of his lack of legal training, his health or, on occasion, because of the heightened emotion associated with his claim, and other claims, which caused him anxiety or distress. Overall, Mr Djukanovic appeared to have a commendable ability to marshal relevant facts and a good command of the documents to which reference was made. Every effort was made to allow Mr Djukanovic the fullest opportunity to test evidence called by the plaintiff and to present evidence on his own account. Counsel for the plaintiff extended to Mr Djukanovic every courtesy. Mr Djukanovic in turn made an effort to show the court and counsel respect.
The Witnesses
The plaintiff called as witnesses Mr Beazley of counsel, Mr Richard Smith, solicitor for the professional indemnity insurer for Mr Jordan, Ms Jan Grundy, at the relevant time a senior solicitor at Law Claims, Ms Carolyn Richards, Director, Law Claims in August 1999, Ms Susan Bishop, solicitor responsible at the time for handling claims on the Legal Practitioners’ Guarantee Fund, Mr Lyndon Parker, Sheriff’s Officer and Ms Denise Webb, Judicial Support Officer, District Court.
All of the plaintiff’s witnesses were cross-examined by Mr Djukanovic. They gave their evidence in a straightforward and direct way. I accept their evidence without qualification.
The defendant gave evidence and called his son, Mr Zoran Djukanovic, Dr Czechowicz, a psychiatrist, and Mr Quinton, a psychologist. For a number of reasons, to which I will refer, I have found the evidence of each of the witnesses called by the defendant, including the defendant himself, to be unreliable. Where their evidence differs or departs from the evidence of the plaintiff’s witnesses, I reject it.
Mr Djukanovic did not call his daughter, Ms Suzanne Djukanovic, to give evidence. He was unable to secure her attendance at court. His general practitioner, Dr Nowosilskyj, wrote to the Court to explain the circumstances on Mr Djukanovic’s behalf. Ms Suzanne Djukanovic is not a patient of Dr Nowosilskyj. He wrote to the court after Mr Djukanovic had informed him that his daughter was not well and was suffering from a “nervous breakdown”. I make no criticism of the failure to call Ms Djukanovic. I doubt that her evidence could have made any difference to findings of fact, or to the conclusion reached on the evidence overall.
Background matters
The motor vehicle claim
The motor vehicle claim brought by Mr Djukanovic was commenced on 9 August 1993 in the Magistrates Court of South Australia. It appears that Mr Jordan acted for a short time in the matter, before being granted leave to withdraw on 15 July 1994. The matter was removed to the District Court in January 1996. In August 1996, Andersons, solicitors, were acting for Mr Djukanovic in the action. On 2 December 1997, Mr Djukanovic filed a Notice that he was acting in person. On 15 December 1997 Mr Anderson, of Andersons Solicitors, wrote to Mr Djukanovic advising that the firm could no longer act for Mr Djukanovic following a breakdown in the relationship between them, and in particular following Mr Djukanovic’s tape recording of a conference without permission. The file was released to Mr Djukanovic. Mr Anderson advised Mr Djukanovic:
In relation to the motor vehicle accident claim we are preparing our account in taxable form so that when the matter is completed we can claim costs against the insurance company’s solicitor.
On 19 March 1998, the plaintiff in this matter, Ms Jasmina Kuzenko-Taskovic filed a Notice of Acting for Mr Djukanovic in the motor vehicle claim. Ms Kuzenko-Taskovic continued acting in the matter until October 1998. On 29 October 1998, Mr Djukanovic filed a Notice of Acting in person.
A trial in the action proceeded before a District Court judge, commencing on 2 November 1998. On 25 March 1999, judgment was entered for the plaintiff in the sum of $146,000, in addition to amounts already paid on account by the defendant in the action. The plaintiff obtained an order for his proper legal costs, to be taxed if they were not agreed within 21 days. The issue of costs was not finally resolved until 4 July 2001, when an order for costs was made in the motor vehicle claim. It was noted that the order, which was by consent, was in full and final settlement of any claim the plaintiff, Mr Djukanovic, may have had against the defendant, Motor Accident Commission, or the defendant’s insurer, SGIC, arising out of the accident of 11 August 1990, which was the subject of those proceedings, but it did not include any action Mr Djukanovic may bring or have brought against any other person.
The Jordan claim
The action brought by Mr Djukanovic against Mr Jordan was commenced in the District Court on 11 April 1995. Andersons, Solicitors, acted for Mr Djukanovic in that action until around 26 June 1998, when Ms Kuzenko-Taskovic took over the conduct of the matter.
Ms Kuzenko-Taskovic ceased acting in October 1998 and Mr Djukanovic filed a notice that he was acting in person on 29 October 1998.
The Proceedings in August 1999
9 August 1999
The trial of the action against Mr Jordan was listed to commence in this court on Monday 9 August 1999. Mr Djukanovic appeared in person. He said that he had had difficulties obtaining legal representation. He was in a wheelchair and he was accompanied by his son, Mr Zoran Djukanovic and his daughter, Ms Suzanne Djukanovic. Mr Zoran Djukanovic said that he knew he would have to take his father to court on the morning of 9 August 1999, but he did not know what the case was about. He had not discussed it with his father.
Mr Beazley appeared as counsel on instructions of Mr Smith, the solicitor acting for the professional indemnity insurers for the defendant in the action, Mr Jordan.
Mr Smith said in his evidence that he was appointed as a panel solicitor by Law Guard, professional indemnity insurers for legal practitioners. He was instructed by Law Claims to act in the matter of the defendant’s action against his former solicitor, Mr Jordan. Mr Smith said that relations between him and Mr Djukanovic during the interlocutory stage of proceedings had been strained or unfriendly, sometimes to the extreme. Mr Smith instructed Mr Beazley as counsel at trial.
Mr Smith explained that he understood the defendant had instructed Mr Jordan in relation to a motor vehicle accident which occurred in 1990. Mr Jordan had allowed the claim to run out of time. The defendant subsequently instructed Andersons, Solicitors, to act in the motor vehicle accident claim and the claim against Mr Jordan. Mr Smith was aware, at the time of the hearing, that Mr Djukanovic also had a complaint against his other former solicitors, Andersons, and Ms Kuzenko-Taskovic.
Ms Denise Webb, Judicial Support Officer to the judge who heard the trial in August 1999, was called to give evidence. She kept a record in her Bench Book of the proceedings on 9 and 10 August 1999 in Mr Djukanovic’s claim against Mr Jordan. A copy of the relevant pages of the Bench Book was tendered in evidence.
It appears from the record kept by Ms Webb that the matter was first called on at 10.10 am on 9 August 1999. Counsel advised the court that the issue was one of causation and there was no admission of liability.
Mr Djukanovic referred in open court to an offer that had been made without prejudice. Mr Djukanovic said that he told the judge that he had received two offers and that they were very miserable and unreasonable and he had rejected them. He said he did not mention the amount involved. He was advised that the offer was not before the Court. Mr Djukanovic told the Court he understood the proceedings were to be an assessment of damages only.
The judge raised procedural matters with the parties, including the effect of advice that Mr Jordan had been declared bankrupt on 24 August 1998. The requirement or otherwise of obtaining leave from the Federal Court to proceed in the claim against Mr Jordan was discussed. Mr Djukanovic said he understood that the judge’s opinion was that Mr Djukanovic could obtain leave from the Federal Court and continue the hearing in due course.
A question was raised of an application in relation to Mr Djukanovic’s capacity to give instructions or to represent himself. The Court was advised that counsel for the defendant was not in a position to make an application in relation to the capacity of Mr Djukanovic to conduct his own proceedings. The judge questioned whether the court should take up the application of its own motion. The judge asked Mr Djukanovic if he had any medical witnesses. In the event, after a short adjournment, counsel for the defendant made an application for a stay of proceedings on the grounds that the plaintiff was, or might be, a “person under a disability”.
Evidence was heard on the voir dire in the afternoon of 9 August from Mr Quinton, a psychologist who had been seeing the plaintiff for many years, and Dr Czechowicz, his treating psychiatrist over some considerable time.
The only available copy of the transcript of evidence taken on 9 August 1999 was that exhibited to an affidavit sworn by the defendant on 13 December 2002. Pages 52, 53 and 55-57 relate to evidence given by Dr Czechowicz. Page 54 was missing.
Dr Czechowicz was asked whether he had gained an impression from speaking to Mr Djukanovic that he distrusted people, and in particular, lawyers. Dr Czechowicz’s opinion was that Mr Djukanovic did have a distrust of lawyers, possibly reasonably based on his past experience. Dr Czechowicz saw nothing irrational in that. He was asked whether the distrust of lawyers, or panic attacks or any other condition, would prevent the defendant from entering into discussion or considering the appropriateness or otherwise of offers. Dr Czechowicz said that in his opinion the defendant was able to make those kinds of decisions. He did not believe the defendant was suffering from any impairment to his memory.
Dr Czechowicz was asked by Mr Djukanovic what he would say about his character. Dr Czechowicz said that from what he knew of the defendant, the defendant had made significant achievements and been successful in various areas of his life.
No transcript of the evidence given by Mr Quinton on 9 August 1999 was available and he had no independent recollection of it.
Mr Djukanovic said that he cross-examined both Mr Quinton and Dr Czechowicz and his understanding was that the judge considered he was not only able to give instructions, but also to cross-examine witnesses, while not professionally, but ‘in accordance with his own ability.’
The court was satisfied that there was no basis to find that the plaintiff was unable to give sufficient instructions to take, defend or compromise proceedings by reason of any intellectual impairment. The application for a stay of proceedings was dismissed.
Submissions were made in relation to the effect of bankruptcy on the proceedings and a further question was raised by the judge as to whether he should continue to hear the trial, having heard of the settlement offer earlier that day.
Mr Djukanovic and his son both said the judge suggested that the parties try to settle the matter out of court. Mr Beazley asked Mr Djukanovic if he were prepared to enter into negotiations. Mr Djukanovic told Mr Beazley that he was always happy to engage in communication to understand each party’s point of view. Mr Beazley suggested that Mr Quinton might be able to facilitate their discussions. Mr Djukanovic said he told Mr Beazley that he had a very good communication with Mr Quinton and he hoped they had a very good understanding between each other.
Mr Smith said that he gave certain advice to his client, Law Claims, in relation to the prospect of resolving the matter without its going to trial. Ms Grundy was the senior solicitor employed by Law Claims at the time of the Jordan trial before the District Court. She was instructing Mr Smith in the matter.

Ms Grundy said that she attended at court on the morning of 9 August 1999, when the trial was to commence. She was not there all that day. She said that she did hear Mr Djukanovic tell the judge during the course of discussion that there had been an offer made on behalf of the defendant, which Mr Djukanovic understood amounted to an admission of liability. Mr Djukanovic had told the court that he understood that the matter was proceeding as an assessment of damages.
Ms Grundy discussed the matter with Mr Smith and the Director of Law Claims, Ms Carolyn Richards. Ms Grundy said that the possibility that the judge may not be able to continue to hear the trial, the possible liability and the legal costs associated with hearing, the special damages in relation to continuing medical treatment and the potential liability faced by Law Claims in respect of future claims by Mr Djukanovic against his former solicitors, Andersons and Ms Kuzenko-Taskovic, were all factors which were considered in relation to a decision to endeavour to settle the matter.
Ms Richards was aware of the action brought by Mr Djukanovic against Mr Jordan. As a result of her position as Director of Law Claims, Ms Richards was also aware that Mr Djukanovic had expressed dissatisfaction with Andersons, Solicitors previously acting for him in the Jordan claim and another matter. Andersons had notified Law Claims of a potential claim by him against them. Ms Richards knew also that Ms Kuzenko-Taskovic had acted for Mr Djukanovic.
Ms Richards and Ms Grundy agreed to attend at the District Court on Tuesday, 10 August 1999, in order to facilitate negotiations to settle the Jordan claim with Mr Djukanovic.
The course of negotiations on 10 August 1999
On 10 August 1999 negotiations began at court at about 9 o’clock in the morning. Mr Smith and Mr Beazley entered into discussions with Mr Djukanovic and his daughter, who was with him, about the possibility of settlement. Mr Zoran Djukanovic, Mr Djukanovic’s son, attended court with his father. The psychologist, Mr Quinton, was also present. Mr Quinton had first seen Mr Djukanovic on 1 January 1992, on referral from his general practitioner at the time.
Mr Beazley said in his evidence that he was reluctant to be involved in discussions with Mr Djukanovic without Mr Quinton being there. It is not exactly clear who asked Mr Quinton to attend at court. In any event Mr Quinton did attend and it was with the full agreement of both parties. It appeared to Mr Beazley that Mr Djukanovic had a great deal of faith in Mr Quinton.
Ms Richards said that she had been informed late on the first day of trial, 9 August 1999, of a possibility that the trial might be adjourned. She knew of medical expenses continuing to be incurred by Mr Djukanovic, and Ms Richards was concerned that an adjournment was not in the best interests of the insurance scheme. She attended at court on the second day of trial, 10 August 1999, with Ms Grundy because she had the authority to settle the matter on behalf of Law Claims.
Ms Richards and Ms Grundy had no personal contact with Mr Djukanovic on 10 August 1999. Mr Smith advised that an offer had been made by Mr Djukanovic that he would settle the matter for $73,500 plus costs. An offer of $60,000 inclusive of costs and interest had been rejected. During the course of negotiations, Ms Richards made a decision to increase the amount Law Claims was prepared to pay Mr Djukanovic to settle the matter, having regard to the maximum damages likely to be awarded in the event Mr Djukanovic was successful in the action, in order to obtain a release in respect of Andersons and Ms Kuzenko-Taskovic, who Ms Richards believed were facing potential claims by Mr Djukanovic in the future.
Instructions were given to Mr Smith to offer $75,000 on behalf of Law Claims to settle the action against Mr Jordan, with a release against potential claims against Andersons and Ms Kuzenko-Taskovic also being obtained.
It was proposed that judgment be entered against the defendant practitioner, Mr Jordan, in the sum of $75,000. As to payment of a judgment sum, in the normal course, a practitioner would be expected to contribute the sum of $3,000 as excess, and Law Claims would be responsible for the balance of $72,000, pursuant to the professional indemnity insurance scheme. In the case of a practitioner who was bankrupt, and therefore unable to pay the excess, application may be made to the Legal Practitioners’ Guarantee Fund for payment of the balance of $3,000.
Mr Smith said his role was primarily to convey instructions from Ms Richards and Ms Grundy to Mr Beazley, who did most of the negotiation with Mr Djukanovic. Mr Beazley had established a good relationship with Mr Djukanovic. Mr Smith was present for most of the time when Mr Beazley was talking to Mr Djukanovic and the people with him. Mr Djukanovic, his daughter, his son and Mr Quinton remained in the courtroom for the negotiations. Ms Richards and Ms Grundy remained in one of the anterooms outside the court.
Mr Zoran Djukanovic said that at first there was mostly disagreement. He said that Mr Smith told his father that he was not going to let him have it his way, as had happened with another solicitor, when medical reports had been simply submitted to the judge, and that the case was going to be fought “report by report.” He recalled that at some time during the morning, Mr Quinton asked him to put money in his parking meter. When he came back, he found that the figure of $75,000 had been agreed. He remembered that there was a discussion about his father not suing Ms Kuzenko-Taskovic or Mr Anderson. Mr Quinton left and after that his sister Suzanne was trying to negotiate with Mr Beazley and Mr Smith. He said they were more intent on negotiating with his father and they were always trying to push her away. He said Mr Smith was more aggressive towards his father and his sister and the argument seemed to get louder, and so a security guard was brought in.
Mr Zoran Djukanovic said most of the time he remained quiet and was simply observing. He left it to his sister to handle documents that were produced. He said every time writing was produced, Mr Beazley and Mr Smith would try to edge his sister out and put the papers in front of his father. His sister was saying that she was trying to protect her father. She wanted to make sure that their father was able to claim money from SGIC, and to preserve his right to dispute any bills from Andersons and Ms Kuzenko-Taskovic.
Mr Smith said that during the course of the negotiations Mr Djukanovic’s daughter appeared to become anxious about the possibility of an agreement affecting legal fees attached to the motor vehicle claim. Mr Djukanovic’s daughter wanted her father to make sure that he retained the right to challenge the entitlement of Andersons and Ms Kuzenko-Taskovic to costs in those proceedings.
Mr Zoran Djukanovic said there were discussions between his sister and Mr Smith about the wording of the document. His father was between the two arguments and stressing out, because he thought he was getting “choked up.” They were in a tiny room when they were trying to negotiate. He said that somehow in amongst all the fighting, the document was signed. He said that his sister wanted deeply to fight this out in court. His sister was still fighting after the document was signed and the judge had returned to court.
Mr Smith said that Mr Djukanovic’s son appeared to play very little part in advising his father in the negotiation process. On the other hand, Mr Djukanovic’s daughter appeared to be definitely involved in discussions about settlement of her father’s claim. He said that her involvement was predominantly speaking to her father, although occasionally Mr Djukanovic’s daughter spoke directly to him or to Mr Beazley.
It was the defendant’s own recollection that the discussions with him occurred in one of the small conference rooms. He said that Mr Beazley, Mr Smith, Mr Quinton, himself and his daughter were in the room together. There was very little room. His daughter was concerned he said because she felt Mr Djukanovic was not in a position to understand what the legal representatives for the insurers of Mr Jordan were trying to achieve, and she was very worried. She expressed that worry to Mr Quinton, who was trying to be impartial.
Mr Djukanovic said that he kept complaining to everybody in the conference room “I’m feeling sick”. He said that Mr Beazley and Mr Smith were going in and out of the conference room several times, presenting various drafts of the agreement.
Mr Djukanovic eventually said he would accept the $75,000 in one shot after 21 days. Mr Djukanovic told Mr Beazley and Mr Smith that there was almost $20,000 in expenses to Mr Quinton. He could therefore not settle for less than $75,000. He said he told Mr Beazley it had to be sent in a cheque of $75,000 without any further delay. Mr Beazley told Mr Djukanovic that it was not up to him – it was up to Law Claims as to when he received the cheque. There was a big fight about that. Mr Djukanovic said he was expecting to be given a cheque for $75,000 without any further delay after 21 days. There was a further discussion about time for payment. Mr Djukanovic demanded that it be made within 21 days. The legal representatives of the insurers for Mr Jordan wanted 21 days to pay the sum agreed. Mr Djukanovic did not agree with it but was told that the money was to come from overseas. He said there was a heated exchange in relation to that and he already felt at boiling point. He felt his pulse increased twofold and it prevented him breathing. It prevented the blood going into his head and it caused him to lose his eye vision. He kept complaining that he was getting sicker, but nobody would listen except his son. Even his psychologist, Mr Quinton, was as if hypnotised. Mr Quinton, he thought, felt uncomfortable and was watching, speechless. Mr Quinton asked Zoran to put money in the parking meter of his car. Mr Quinton told him that he would have to leave soon after 11 am because he had a patient waiting for him.
Mr Djukanovic said that his daughter took no notice of his complaints. She was engaged in a bitter argument about the proposition. He said he relied on his daughter because her English was good. He could not read the document because he was losing vision. He felt like a dying person begging for their money. He was almost at the point of giving it away.
Mr Djukanovic described his perception of the style of negotiation of both Mr Smith and Mr Beazley. Mr Djukanovic said that Mr Smith behaved in a bullying and pushy manner with him. He felt under pressure because of it. In particular, he said that Mr Smith told him, “Mr Djukanovic, if you know what is good for you, you will sign our offer, because I will stop at nothing. Do you understand? I will stop at nothing. I am going to make your life hell.”
Mr Djukanovic said he told Mr Smith, “Don’t bully me. Don’t provoke me. Don’t make me angry, otherwise I am going to sue these two lawyers who done it to me too.” He said then Mr Smith backed off. Mr Djukanovic said that the pressure from Mr Beazley was different – it was subtle pressure to convince Mr Djukanovic to sign. There was therefore a subtle inducement from Mr Beazley and a bullying approach from Mr Smith. Mr Djukanovic agreed that he had never mentioned Mr Smith’s behaviour at all to anyone until he was giving evidence in this matter in court.
Although it was not put to Mr Smith when he gave his evidence initially, Mr Djukanovic’s evidence was that he signed the Deed of Compromise and Release under duress. He said from 10 past 9 to quarter to 12 in the morning there was intense argument and intense pressure. “It was almost like I was put in a straitjacket”. He was getting sicker as a result of the argument. He experienced spasms hitting his whole body, he felt breathless and felt he was going to die, fighting for the “miserable” $75,000, of which most was going to go to pay bills, with very little left for him.
Mr Djukanovic said his daughter tried to protect him and there was fighting as a result of it. It was not a conducive time for anybody to sign any legal document, especially a document which had an unexplained implication for the future, unforeseen for him at that particular time because he did not have time to think, being worried that he might die. He kept telling everyone that he was almost at the very end of his life.
Mr Smith was recalled because of the allegations raised for the first time in Mr Djukanovic’s evidence. Mr Smith said that he had had no part in drawing the Deed of Compromise and Release. That was done by Ms Richards or Mr Beazley. His recollection was that discussions with Mr Djukanovic and his daughter were held in the courtroom, not in the small conference room.
Mr Smith denied behaving in a bullying manner towards Mr Djukanovic and his family. He denied physically pushing Mr Djukanovic’s daughter to prevent her being with her father. His recollection was that most of the arguing was between Mr Djukanovic and his daughter. He did not say to Mr Djukanovic words to the effect “if you know what is good for you, you will sign our offer because I will stop at nothing. Do you understand? I will stop at nothing. I am going to make your life hell.” Mr Smith said he did not say those words or anything like it.
Mr Smith said that at all times when he spoke to Mr Djukanovic in the courtroom, the Sheriff’s Officer was present, as well as Mr Beazley. He did not try to dictate to Mr Djukanovic in words such as, “You must sign or else it will cost you everything you could possibly dream of. Your life will be unbearable.” He did not try to edge Ms Djukanovic out of negotiations by blocking, bullying or pushing her away, or using his bodyweight to force her to one side. Mr Smith denied making any suggestion that he was going to fight Mr Djukanovic every step of the way.
Mr Quinton gave evidence that Mr Djukanovic, or possibly Mr Beazley, asked him to attend on Tuesday 10 August 1999 to assist with discussions about settlement. He would not have attended unless Mr Djukanovic consented to his doing so. Mr Quinton recalled that there was a lot of attention, a lot of concern, and he was mainly busy trying to ensure there was an agreement reached. He felt that was his role. In Mr Quinton’s assessment, there was pressure on both sides to reach agreement.
Mr Quinton had no particular recollection of the circumstances in which the discussions were held. Mr Quinton said that by the time he had to leave the court to return to his consulting commitments, he believed agreement had been reached to settle the matter and … “I was just feeling so pleased that we had actually reached an agreement on the $75,000.” He said that he had to leave to return to his consulting rooms before the written document was signed.
Mr Quinton was asked, on behalf of Mr Djukanovic, whether, knowing Mr Djukanovic as he did, he felt that on 10 August 1999, he could cope with the exercise of the negotiations and settlement of the Neville Jordan case.
Mr Quinton’s answer was that, from his own point of view, he was very keen an agreement should be reached because he could see in what a distressing state the legal proceedings left Mr Djukanovic. He believed that Mr Djukanovic would be in a much better mental state if it were settled, so long as it was a reasonable agreement. He hoped that with the support from family members around him trying to ensure it was a reasonable agreement, Mr Quinton believed that Mr Djukanovic was going to be able to cope with it.
Mr Quinton could not recall Mr Djukanovic being particularly badly affected by air conditioning in the building, although he had been told on many occasions previously by Mr Djukanovic that he did not cope well in air-conditioned environments. Mr Quinton knew from past experience, that Mr Djukanovic could become very angry and very distressed, but he did not recall anything of that nature on 10 August 1999. In a report he prepared dated 16 December 2002, Mr Quinton said:
I was present when the Deed of Compromise and Release exhibit DJ3 was being drawn up in the conference rooms. I was not able to be present when the matter was taken back into court before Judge Lunn see exhibit DJ2. However I did support Zvonko signing this agreement in order to settle the matter of Djukanovic v Jordan and I did understand this was designed to prevent any legal actions against Andersons solicitors and Jasmina Kuzenko-Taskovic.
Mr Quinton believed, when agreement was reached for the $75,000, that would be the end of any legal actions between Andersons and Jasmina Kuzenko-Taskovic and Mr Djukanovic. There was an arrangement that out of the $75,000, his fees of $20,000 were to be paid. Mr Quinton wrote to Mr Djukanovic in November 1999 and March 2000 in relation to his fees, amongst other things. However, after leaving the Court on 10 August 1999 after 11am, Mr Quinton did not see Mr Djukanovic again until 1 March 2002, when Mr Djukanovic asked Mr Quinton to prepare an affidavit in the proceedings against Ms Jasmina Kuzenko-Taskovic.
Mr Quinton prepared several reports and affidavits in these proceedings. He has relied on the history given to him by Mr Djukanovic and has adopted Mr Djukanovic’s opinions as his own. Mr Quinton’s report of 11 May 2004 and an affidavit, affirmed on 18 October 2004, set out material obtained from Mr Djukanovic, pleaded his case, and reached legal conclusions on his behalf.
Notwithstanding that he has adopted a position as an advocate for Mr Djukanovic, Mr Quinton’s evidence about his involvement in the negotiations on 10 August 1999 does not support a conclusion that on that day Mr Djukanovic was incapable of comprehending the nature of and affect of the compromise reached, nor that he was over-borne and pressured into accepting the compromise.
Dr Czechowicz has treated Mr Djukanovic since 12 August 1987. He has involved himself deeply in Mr Djukanovic’s various claims. Dr Czechowicz described Mr Djukanovic in 1999 as a “physical invalid with a chronic psychiatric condition of dysthymia with (Post Traumatic Stress Disorder) and panic disorder.”
Dr Czechowicz was also called by the defendant to give evidence about the capacity of the defendant to understand negotiations and come to any agreement on 10 August 1999. Dr Czechowicz was not present at court on that day. He saw Mr Djukanovic professionally on 22 July 1999 and on 28 August 1999. Dr Czechowicz agreed that he was a sympathetic listener for Mr Djukanovic. He said that he was interested in the emotional content of what Mr Djukanovic had to say and in diffusing his anger, which he otherwise tended to turn against himself to the detriment of his mental health. His impression of Mr Djukanovic’s health at the time of the hearing generally was of a man in a wheel chair, subsequently suffering from anxiety. He had been told by Mr Djukanovic of pressure exerted on him in the course of negotiations. He had not heard of it until around late in November 2004, just before the hearing commenced. Based on the description of events given to him by Mr Djukanovic, Dr Czechowicz’s opinion was that Mr Djuknovic had been in great distress and suffering from a panic attack on 10 August 1999.
His opinion must be rejected. Dr Czechowicz acknowledged that he had become deeply involved in Mr Djukanovic’s affairs. His opinion was based on facts which Dr Czechowicz accepted, but which have not been proved.
The hearing resumed at 11.48am. It appears from the other fragment of transcript, pages 68-70, in relation to proceedings that day, that Mr Beazley reported the progress made in the course of negotiations that morning. Mr Beazley informed the judge that it was hoped that agreement had been reached to settle the matter on the basis of judgment being entered in the sum of $75,000, inclusive of costs and interest. As part of the overall settlement and part of the agreement, Mr Djukanovic was to compromise any potential proceedings he had against Andersons, Solicitors and Ms Kuzenko-Taskovic, who were to maintain a denial of liability. The judge referred to the fact that the solicitors, Andersons and Ms Kuzenko-Taskovic were not parties to the action, and it was not possible to enter judgment in respect of any claims against them.

Mr Beazley told the court that although a resolution had been reached, Mr Djukanovic’s daughter had some concerns in relation to the terms of the written agreement, which was then being settled and, in particular, concerns that the compromise did not affect an order for costs, or the payment of legal fees, or a challenge to the quantum of legal fees by Mr Djukanovic in the motor vehicle claim.
There was further discussion regarding the bankruptcy of Mr Jordan and its effect on the proceedings. The court had been advised that Mr Jordan was bankrupt. The fact of his bankruptcy had not been pleaded, nor formally proved. It was Mr Beazley’s recollection that the parties, including Mr Djukanovic, were concerned that there should be no difficulty in relation to the bankruptcy of Mr Jordan. The Court was adjourned at 11.58am for the details of settlement to be completed.
The agreement is a handwritten document of four pages. The first two pages were written by Mr Beazley. The remaining two pages were written out by Ms Richards.
Ms Richards was concerned to ensure that the terms of the agreement with Mr Djukanovic achieved the release of Andersons and Ms Kuzenko-Taskovic, who were not parties to the action which was being resolved. Ms Richards had no doubt that it was her intention that a judgment should be entered in the action against Mr Jordan. The principal reason in her mind for obtaining the judgment was to merge the liability in respect of Mr Jordan and the potential liability in respect of Andersons and Ms Kuzenko-Taskovic, to avoid any dispute in the future.
Ms Richards said she knew, as a result of her position as Director of Law Claims, that Mr Jordan was bankrupt. There had been other claims against him in respect of which payments had been made on behalf of Law Claims and, in particular, in relation to any excess for which the practitioner was liable, payments had been claimed from the Guarantee Fund.
She asked Mr Smith to explain to Mr Djukanovic that while the insurers would not pay the excess, there was a mechanism under the Legal Practitioners Act 1981 for anyone who could not satisfy judgment because the party was bankrupt, to make a claim on the Guarantee Fund. That was why the reference to the Guarantee Fund was included in the Deed of Compromise and Release. Ms Richards said that she did not know that before being paid the sum of $3,000 excess, in the event the application to the Guarantee Fund was successful, that Mr Djukanovic would have to sign a form of release which might include conditions.
Clause 2 of the agreement was included to preserve the right of the Guarantee Fund to seek recovery from a practitioner, on whose behalf the Guarantee Fund paid money to another party. It mirrored a provision in the Legal Practitioners Act 1981 to the same effect. She asked the legal representatives for the insurers to make certain that Mr Djukanovic understood that the insurers would not pay the first $3,000 and that there was a mechanism through the Guarantee Fund for Mr Djukanovic to obtain the $3,000 from the Guarantee Fund.
When Ms Richards signed the Deed of Compromise and Release, she was not in the courtroom with Mr Djukanovic, but in the interview room outside the court. Ms Richards signed the agreement pursuant to her authority under the Legal Practitioners Professional Indemnity Insurance Scheme.
Mr Smith said that he remembered Mr Beazley sitting at the bar table next to Mr Djukanovic and reading the written document through together. Mr Smith said that Mr Beazley read the agreement out loud. Mr Smith said that Mr Djukanovic was concerned to know where the judgment sum was to come from, given that Mr Jordan was bankrupt. Mr Smith explained to Mr Djukanovic that of the agreed figure of $75,000, Law Claims as the insurer for the legal practitioner, Mr Jordan, would be responsible for the sum of $72,000. The practitioner would normally be required to pay an excess of $3,000.
Mr Smith told him that he would have to make an application to the Legal Practitioners’ Guarantee Fund to obtain the balance of $3,000. Mr Smith advised Mr Djukanovic after he made some enquiries that an application to the Legal Practitioners’ Guarantee Fund would have to be made and submitted to the Attorney-General. He told Mr Djukanovic that he understood on the information he had, that it would probably be granted. Mr Smith did not give advice to Mr Djukanovic about the possibility of a Release being required. He did not know about it. Mr Smith told him that he would try to facilitate a claim to the Guarantee Fund as far as he could.
Mr Smith and Mr Beazley left the courtroom to allow Mr Djukanovic and his daughter to discuss the agreement.
Mr Djukanovic said Mr Beazley asked him, “Mr Djukanovic, are you going to sign?” He said that he told Mr Beazley, “Oh my God, you all engage, arguing about this lousy Deed and nobody worry about myself dropping dead as a result of this nasty fighting which started 10 past 9 up to now.” He said that his body could not take it anymore – he was at quitting point.
He grabbed the Deed from Mr Beazley. His daughter grabbed it from him. Mr Smith came in and pushed his daughter away from him. His daughter reacted very poorly and spat on some woman, although he did not know who it was because his vision was fading. He just knew there was spitting. He could hear his daughter saying to Mr Beazley and Mr Smith, “You pushing my father to sign Deed. He don’t even know what he sign. He can’t even read it. What kind of people you are?” Then she started to swear. That made him even more sick. Mr Djukanovic said his daughter kept screaming, yelling and complaining, at which point the Sheriff’s Officer came in and told Mr Djukanovic that his daughter was only trying to protect him because he was very sick. He grabbed the pen from Mr Beazley and signed the Deed.
Mr Zoran Djukanovic said that each time the lawyers returned with a written proposal, they rammed a paper in front of his father with a pen and said, “Let’s get this over and done with and get this signed”, and his sister was trying to get in between them to say, “Dad, don’t sign anything, don’t sign anything until we read what is put on the paper.”
He said he saw Mr Smith go in between his sister and his father and using his body weight, tried to push her away. Mr Zoran Djukanovic did not make any complaint to anybody about it. He described Mr Beazley as being agitated and Mr Smith as a bully. He did not see his sister spit on anybody. He said he played no part in advising his father about the settlement on 10 August 1999.
Mr Djukanovic said that Mr Beazley had to leave before the final hearing before the judge to go to another case. He said Mr Beazley shook his hand “I’m sorry what has been done to you. I have to go. Goodbye Mr Djukanovic.” And he went.
The Sheriff’s Officer who witnessed the signature of Mr Djukanovic was called to give evidence. Mr Parker remembered being asked by his superior officer to maintain a security presence in the courtroom at least on 10 August 1999, following a general request from a lawyer.
Mr Parker remembered sitting in the Court and being a little concerned about family members in the court. It seemed there was some friction between the family members, with the court or with another lawyer. Mr Parker did not have an exact memory of the events of the day. He did however remember the judge leaving the bench and negotiations continuing in the courtroom.
While he did not have a specific memory of witnessing Mr Djukanovic’s signature, he did have a vague memory of being asked if he could witness the document. He said it was unusual for a Sheriff’s Officer in the role of security to be asked to do that. He could not imagine witnessing a signature if there were any sign of any party being under pressure.
Mr Parker did not recall that there was any anger or dispute in relation to the signing of the Deed. He said that during the hearing itself there was friction. What he recalled was a verbal, angry altercation between the parties involved, but he had no recollection of any physical altercation. Mr Parker had a vague recollection that the friction which occurred in the courtroom was directed from Mr Djukanovic’s daughter towards the lawyer for the other party.
He did not recall saying to Mr Djukanovic that Mr Djukanovic’s daughter, Suzanne, was only trying to protect him. He said he did remember that Mr Djukanovic was a bit upset. Mr Parker’s only role was to keep the peace and to make sure that the court ran smoothly. If he had made any remark of that nature, he said it would have been directed towards Mr Djukanovic helping himself as far as how he and his daughter presented in court so that the matter would proceed effectively. It would not be part of his role to give advice as to the rights or wrongs of any dealings.
I cannot accept the evidence of Mr Djukanovic, or his son, that Mr Djukanovic or his daughter were subjected to bullying or other pressure of any sort, during negotiations to settle the Jordan claim. Their evidence, in that respect, is inconsistent with the evidence of Mr Quinton and Mr Parker. It is inconsistent with subsequent conduct. It is inconsistent with the proceedings in open court before the judge. Their evidence was highly emotional and, in my opinion, it was coloured by the wish to have the evidence support the desired outcome of the hearing. The evidence they gave on that topic is unlikely in the extreme.
There can be no dispute that the defendant, Mr Djukanovic, signed the written agreement, headed Deed of Compromise and Release. His signature was witnessed by Mr Parker. There is also no dispute that the Deed was signed by Ms Carolyn Richards, Director of Law Claims, pursuant to the authority of the Legal Practitioners Professional Indemnity Insurance Scheme, on behalf of the professional indemnity insurer for Mr Jordan. The document was executed as a deed. No reliance is placed by the plaintiff in this action on the fact that the agreement with the defendant was in the form of a deed. Mr Smith said that the deed was subsequently stamped.
The Deed of Compromise and Release provides as follows:
THIS DEED is made this 10^th day of August 1999 BETWEEN ZVONKO DJUKANOVIC of 26 Packer Crescent, Paradise his heirs, successors and assigns (“the plaintiff”) AND NEVILLE JORDAN formerly of 41 Goodwood Road, Wayville (“the solicitor”) his servants, agents, successors and assigns.
WHEREAS:
1.The plaintiff has commenced proceedings in the District Court of South Australia Action 419 of 1995 (the proceedings) against the solicitor to which action the solicitor has filed a Defence.
2.The parties have agreed to compromise the proceedings and all disputes arising from or incidental to the subject matter of the proceedings and any potential claims actions or demands against Andersons Solicitors of Victoria Square, Adelaide and Jasmina Kuzenko-Taskovic, Solicitor which relate to or are associated with the said Andersons or Jasmina Kuzenko-Taskovic acting for the plaintiff in respect of this claim or the motor vehicle claim No. 5 of 1996, save and except for any dispute between the plaintiff and either or both of Andersons and Ms Kuzenko-Taskovic in respect of their costs and disbursements claimed by them from the plaintiff and not recovered in action No. 5 of 1996.
3.The settlement contained in this deed does not bar the plaintiff from seeking to recover any costs and disbursements rendered by Mr Jordan, Andersons and Ms Kuzenko-Taskovic in action No. 5 of 1996 from SGIC.
4.This Agreement in so far as it relates to Andersons or Ms Kuzenko-Taskovic is made with a denial of liability.
THE PARTIES HERETO AGREE AS FOLLOWS:
1.In consideration of judgment being entered for the plaintiff in the proceedings for the sum of $75,000.00 (which includes any costs or interest) and in further consideration of the solicitor consenting to that judgment the plaintiff hereby discharges and releases Andersons and Ms Kuzenko-Taskovic from all claims demands actions for costs damages or otherwise which he may now have or at any time hereafter have against them or either of them.
2.This Deed may be pleaded in bar to any action in respect of the matters the subject of the proceedings and recited herein other than as a bar to any rights of the Guarantee Fund or its trustee the Law Society with respect to any amount to satisfy the judgment that may be paid from the Guarantee Funds.
3.The plaintiff agrees to a stay of execution of the judgment for a period of 21 days.
4.The plaintiff directs that payment of the settlement sum be made by post addressed to him at the above address.
In witness whereof the parties hereto have signed this agreement as a Deed.
Signed sealed and delivered this 10^th day of August
1999 by the plaintiff  …………………………
in the presence of……………………………..
L J PARKER (SECURITY)
Signed sealed and delivered on behalf of Neville
Jordan by his insurers under the authority of the             …………………………
Legal Practitioners Professional Indemnity                  Director of Law Claims
Insurance Scheme.
In the presence of ……………………….
R M SMITH
The parties returned to court at 12.57pm. A note was made in the Bench Book that the parties had reached agreement. The formal order was as follows:
There will be judgment for the plaintiff against the defendant for $75,000 which includes both costs and interest. I note that a Deed has been entered into today and executed by both parties and as part of the overall settlement, Mr Djukanovic will also compromise any potential proceedings he has against two other solicitors that have been named, Messrs Andersons and Jasmina Kuzenko-Taskovic. There is to be a stay of execution for 21 days. The Court adjourned at 1pm.
Ms Webb completed the Certificate of Proceedings, recording the formal order made. The fact of the judgment was subsequently entered in the court’s computer record of the proceedings, although in that record there were some minor discrepancies as to the dates of the hearing and judgment. There is however no reason to doubt the record made in the Bench Book by Ms Webb, nor a certificate provided by the Registrar of the District Court dated 19 October 2004, which is a typed copy of the extract from the Bench Book for 10 August 1999.
Mr Djukanovic tendered at the hearing a letter from Mr Beazley to Mr Smith dated 16 August 1999, reporting on the trial. In the letter, Mr Beazley set out the issues which had been identified in the course of the proceedings. Apart from those associated with the trial itself, Mr Beazley mentioned it was “clearly apparent early in the discussions that the plaintiff and his advisers (in particular his daughter) had intended not only to proceed against Mr Jordan but also against two other solicitors, namely Mr Anderson and Ms Kuzenko-Taskovic.” He referred to the voir dire hearing in relation to Mr Djukanovic’s “ability to understand how an action would be compromised and be able to assess the same logically.” Mr Beazley said it was apparent that “the plaintiff was directly under the influence of his daughter who seemed to have an unrealistic understanding of the issues and the quantum of the claim.” He said further “I can say that I have never been involved in such a difficult exercise in negotiating, particularly given the presence of the daughter at those negotiations. In the end, the agreement was executed by the plaintiff and subsequently perused by the judge to the satisfaction of the plaintiff.”
Mr Beazley confirmed that a compromise was reached on 10 August 1999, Heads of Agreement signed and a judgment was entered by the court.
Mr Zoran Djukanovic said he was happy when the case was over. It meant no more running around providing transport for his father in the course of litigation. When they returned home from court on 10 August 1999, he had a sense of relief. His sister was still arguing with his father about the Deed. Mr Djukanovic himself said that his daughter maintained her opposition to what he had done after they left the court.
10 August 1999 – 28 August 1999
Mr Smith wrote to Mr Djukanovic on 24 August 1999. The letter was sent by registered mail and read as follows:
Re: District Court Action No 419 of 1995 – Yourself v Jordan
We refer to resolution of the above claim.
In accordance with the settlement reached we enclose our client’s cheque in the sum of $72,000.00 made payable to you.
As previously advised you will be required to make application for the balance in the sum of $3,000.00 against the Legal Practitioners’ Guarantee Fund care of the Law Society of South Australia at 124 Waymouth Street, Adelaide, 5000, telephone 8229 0222. You will be required to obtain the relevant forms in order to process your application against the Guarantee Fund from that address.
From our client’s perspective the matter is now resolved. We wish you well for the future.
The letter enclosing the cheque in the sum of $72,000 was collected at the post office by Mr Djukanovic’s son, Zoran, who signed the Delivery Confirmation – Advice Receipt on 26 August 1999. Mr Zoran Djukanovic said that he had gone down to the post office to collect a registered letter, but he did not know what was in it. On 28 August 1999, Mr Djukanovic arranged for the deposit of the cheque in the sum of $72,000 into his bank account.
Ms Susan Bishop, Senior Legal Officer in Professional Standards at the Law Society, gave evidence. Ms Bishop produced an application to the Guarantee Fund received on 30 August 1999 from Mr Djukanovic from The Legal Practitioners’ Guarantee Fund file.
Mr Djukanovic’s son, Zoran, had written “For Sue Bishop” at the top of the document. It is likely that a claim form had been obtained by Mr Djukanovic from the Law Society and that he had been given her name as the person to whom it should be returned. The claim form itself is made up of three typewritten pages which required completion.
The claim form submitted to The Legal Practitioners’ Guarantee Fund was completed by Mr Djukanovic’s daughter, on his instructions. It is in her handwriting. She helped him prepare it. The claim form is a statutory declaration, declared by Mr Djukanovic on 30 August 1999, before a Justice of the Peace. There are other documents attached to it. The circumstances of the loss sustained as a result of professional default by a legal practitioner is described by reference to the Further Amended Statement of Claim dated 24 June 1999 in the Jordan matter. There is also attached to the claim form a statutory declaration dated 4 August 1999 in which Mr Djukanovic sets out his complaints against the defendant Mr Jordan and also about the conduct of his defence by his insurers.
In a separate page 2 of the claim form, Mr Djukanovic refers to the resolution of the Jordan matter as follows:
I wish to make you aware that both parties concerned had reached an agreement to settle this matter.
Please find enclosed the contract of settlement in relation to the negligence claim, Action No. 419 of 1995, dated the 10^th August 1999.
This took place in the District Court of Adelaide, and Judge Lunn had recorded that there has been a settlement in relation to this matter. I have marked this contract of settlement as exhibit “3C”, which consists of 4 pages.
However, part of the agreement of the settlement was that the Legal Practitioners’ Guarantee Fund are liable to pay me a sum of $3,000.00 in respect to this settlement of this matter in question in order to be concluded.
Please find enclosed a letter from Mr Richard Smith of Lawson Downs Barristers & Solicitors, dated the 24^th August 1999, which clearly confirms this agreement. I have marked this letter as exhibit “4D”.
In addition, a photocopy of the Deed of Compromise and Release dated 10 August 1999 and a copy of Mr Smith’s letter to Mr Djukanovic dated 24 August 1999 were attached to the claim form.

It is likely that Mr Zoran Djukanovic delivered the application for the payment from the Guarantee Fund to the Law Society on about 30 August 1999.
On 1 September 1999, Ms Bishop wrote to Mr Djukanovic acknowledging the receipt of his claim against the Legal Practitioners’ Guarantee Fund and advising him that she was to arrange for its consideration at the next meeting of the Professional Standards Committee on 21 September 1999.
Pursuant to section 57(5) of the Legal Practitioners Act 1981, no payment may be made from the Guarantee Fund except with the authorisation of the Attorney-General.
A claim for compensation may be made pursuant to section 60 of the Act, which provides:
(1)     Subject to this Part, where –
(a)     a person suffers loss as a result of a fiduciary or professional default; and
(b)     there is no reasonable prospect of recovering the full amount of that loss (otherwise than under this Part)
the person may, by instrument in writing served on the Society, claim compensation under this Part.
(2)     The amount of a claim cannot exceed –
(a)     the actual pecuniary loss suffered by the claimant in consequence of the fiduciary or professional default (including the reasonable costs of making the claim); less
(b)     any amount that the claimant has received, or may reasonably be expected to recover (otherwise than under this Part) in reduction of that loss.
Pursuant to section 64(1) of the Act, the Law Society must satisfy any valid claim under Part 5 of the Act, to the extent determined by the Society or the Supreme Court, out of the Guarantee Fund.
Section 65 provides as follows:
(1)Subject to this section, where the Society has made any payment to a claimant under this part, the Society is to the extent of the payment, subrogated to the rights of the claim against any person liable at law or in equity for the fiduciary or professional default in respect of which the payment was made.
(2)This section does not confer on the Society any right to recover money from a person whose liability in respect of a fiduciary or professional default does not arise from a wrongful or negligent act or omission on that person’s part.
On 1 October 1999, Ms Bishop wrote to Mr Djukanovic. She advised him that the Committee had resolved that the claim he had made should be admitted against the Guarantee Fund for payment. She also advised Mr Djukanovic that before payment could be made, the authorisation of the Attorney-General was required. In order to facilitate that process, he was asked to sign a Release which was enclosed with her letter. Ms Bishop advised Mr Djukanovic that once she had the enclosed Release returned to her, she would seek authorisation from the Attorney-General.
The Release enclosed with the letter from Ms Bishop set out in the preamble to it the circumstances of a professional default by Mr Jordan, a claim against the Legal Practitioners’ Guarantee Fund arising out of the default, the claim by Mr Djukanovic in the sum of $3,000 in respect of the default and the desire by the Law Society to be subrogated to the claimant’s rights. In consideration of the Law Society agreeing to admit the claim against the Legal Practitioners’ Guarantee Fund, Mr Djukanovic, as the claimant, was asked to:
1.Release the Society and the Fund from all claims, actions or liability of whatsoever nature arising by reason of the default committed by Mr Jordan;
2.Agree that the Society shall be subrogated to the extent of the sum of $3,000 to his rights and remedies in relation to the loss suffered by him from the default;
3.Authorise and empower the Society to take or institute in his name such actions or proceedings (including the proving of any debt against the Official Receiver or any Trustee in Bankruptcy or Liquidator) in relation to the loss suffered by him from the legal practitioner’s default whether against the practitioner or against any other person or persons or corporation as the Society may be advised; and Agree that at the request and expense of the Society give all information and do all things as may be reasonably required as the named party in the said action or proceedings;
4.Assign to the Society all his entitlement to dividends payable on account of any debt, being all proved in any bankrupt estate or company liquidation, and further Undertake to execute a notice so informing and directing the Official Receiver, any Trustee in Bankruptcy or Liquidator as the case may be; and
5.Further Agree to indemnify and keep indemnified the Society against all claims demands proceedings and actions arising from the said default and brought or made by any person claiming as beneficiary under any trust or donee of any gift made or created by him alleging an entitlement to all or part of any moneys or property being the subject of this claim.
The document had been marked in pencil by Ms Bishop, to indicate where Mr Djukanovic and a witness were to sign.
It appears that Mr Djukanovic signed the Release, but made some alterations to it. Some words were crossed out in paragraphs 1, 4 and 5. The words crossed out are highlighted above. It is not clear what Mr Djukanovic intended by crossing those words out, because their removal appears to make little difference to the effect of the Release on Mr Djukanovic, but compromises the grammatical sense of the paragraphs.
Mr Djukanovic added a further paragraph 6 as follows:
6. THE CLAIMANT HEREBY ACKNOWLEDGES that this said claim should not interfere in any way with his third party claim because it is a completely separate matter.
It seems that the Release was returned to Ms Bishop, who provided a copy of either the first page of the Release, or of the whole Release, signed and dated by her as received on 7 October 1999 as the receipt for it.
Mr Quinton said that he understood from speaking to Mr Djukanovic after August 1999, that Mr Djukanovic knew he had to sign documents to obtain the last $3,000, but he did not like the document he had to sign.
Ms Bishop arranged for the claim against the Guarantee Fund to be reconsidered by the Professional Standards Committee, on account of the amendments made to the standard Release document. Ms Bishop was advised by the Committee that Mr Djukanovic should sign the standard Release form or alternatively a Release approved by the Director.
On 28 October 1999, Ms Bishop wrote to Mr Djukanovic as follows:
Re: Claim against the Guarantee Fund – Neville John Jordan
I confirm my advice to you that I proposed submitting the Release document to the Professional Standards Committee for consideration.
The Committee resolved that you should sign a standard form Release or alternatively a Release approved by the Director accommodating your concerns but not detracting from the rights of the Society.
I am therefore enclosing another copy of the Release for your signature. In the alternative the Director has approved the draft Release which you may prefer to sign. If this does not accord with your wishes you may submit a further proposal for the Director’s consideration.
When I have your duly signed Release, I will be able to seek approval from the Attorney-General to enable payment to be made to you.
The draft Release which was enclosed with the letter was amended to take into account the concerns reflected by the amendments made to the standard Release by Mr Djukanovic. The words “arising out of a settlement of a negligence claim in District Court Action No. 491/1995” were added to the end of paragraph 3 of the preamble to the Release. The words “which represents the amount of the excess payable by the said Neville John Jordan pursuant to the policy of professional indemnity insurance” were added to the end of paragraph 4 of the preamble. In paragraph 1 of the Release itself, the reference to “default” was qualified by the words “within described”. In paragraph 4 of the Release itself, the words “the said” were substituted for the word “any” in line 2 and the word “all” was deleted from line 2.
Ms Bishop understood that under the Legal Practitioners Act 1981, the Society was entitled to be subrogated to the rights of the claimant and it was appropriate to limit the Release and Discharge. When Ms Bishop prepared an amended draft Release document for Mr Djukanovic to consider, she believed she was accommodating his concerns, reflected in his amendments to the standard Release form. She advised him in her letter of 28 October 1999 that, if her suggested draft did not accord with his wishes, he could submit a further proposal for consideration.
It is likely that after receiving the letter of 28 October 1999 from Ms Bishop, enclosing another copy of the standard Release and also an alternative draft Release, Mr Djukanovic became very angry and upset. It is probable that Mr Djukanovic’s son took him in to the Law Society with the amended Release document and they spoke to Ms Bishop. There was an argument in the office. Mr Zoran Djukanovic described his father as being very angry and abusive. Mr Djukanovic became extremely agitated, so much so that he had to be asked to leave the office.
Mr Djukanovic said in his evidence that he could see very little difference in the amended draft Release. He said that he did not want to “defraud SGIC”. He was concerned that signing the Release might in some way affect the issue of costs in the motor vehicle claim.
The concern about the issue of costs in the motor vehicle claim was a major theme throughout Mr Djukanovic’s evidence. Mr Djukanovic complained that he had not been told he would have to sign a document of release in respect of the Guarantee Fund when he agreed to settle the Jordan action. He saw the request as another sign that there was a conspiracy involved, “impairing” his claim against SGIC. It was a concern that appears to have occupied a good deal of time in the negotiations in respect of the terms of the compromise in the Jordan action. It is a concern which Ms Bishop attempted to address in the amended Release. It was a concern, it appears, for which no amount of explanation could provide the reassurance Mr Djukanovic wanted.
There has been no further response to the letter of 28 October 1999 from Mr Djukanovic. Mr Djukanovic made it clear that he believed he has been a victim of a “cover-up, collusion, conspiracy, perversion and obstruction of justice by a number of lawyers and officers of the courts”.
It appears that Mr Djukanovic told Dr Czechowicz that he believed that the solicitors for the plaintiff in this action and the solicitors representing the Legal Practitioners’ Guarantee Fund were working together to delay the resolution of his claims for justice. Mr Djukanovic told Dr Czechowicz he believed that in being asked to sign the Release document in respect of the payment from the Guarantee Fund, he was asked to agree to allow the Fund to claim against other insurance. Accordingly, he was not prepared to sign it.
Ms Bishop said the current position in relation to a claim on the Fund by Mr Djukanovic is that on receipt of an appropriate Release, she would write on behalf of the Fund to the Attorney-General and ask for the approval of the Attorney-General to enable her to arrange for payment of the sum of $3,000 from the Guarantee Fund. Once approval had been received, Ms Bishop said she would make arrangements with the Finance Officer to draw a cheque on the Guarantee Fund in favour of Mr Djukanovic, as standard procedure. No difficulty with obtaining approval was anticipated.
Conclusion
It is likely that the circumstances of the negotiations between the parties on 10 August 1998 were very difficult for everyone concerned. It is likely that Mr Djukanovic found the discussions trying, not only because he was acting for himself, but also because of his daughter’s behaviour towards him and others. She may have had the best interests of her father at heart. However, on the evidence of all of those who were at court on 10 August 1999, Ms Suzanne Djukanovic appears to have been the cause of a great deal of stress for her father and for those attempting to hold discussions about a possible compromise. The defendant may have come to believe that he was too ill to cope with negotiating a compromise, or that he was subjected to pressure from the lawyers acting for the professional indemnity insurer for Mr Jordan, or that he did not understand the effect of the Deed he signed. The evidence does not support any such conclusion.
The agreement between the parties is set out in the Deed of Compromise and Release. The principles which apply to its construction are:
·       The court should ascribe to it the meaning it would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time they signed the document containing the release;
·       The court may give effect to what in an objective sense the parties intended, including an agreement to release claims or rights of which a party was not or could not be aware, provided clear language is used to make the intention plain;
·       General words in a release are limited to what was specifically in the contemplation of the parties at the time the release was given;
·       Although each release should be considered against its own matrix of facts, and there are no special rules of construction applicable to a release, such as a contra proferentem rule, a release does have some special features;
·       A court will be slow to infer a release of rights of which the party was unaware and could not have been aware;
·       It may be appropriate to imply an obligation on the beneficiary of a release to disclose matters of which the beneficiary of the release knows, and which may not be known to the other party;
·       The circumstances of the release and the purpose for which the agreement was made may be taken into account.[1]
[1] Karafotias v Karafotias (2003) 84 SASR 578 at 587-588
In this case, negotiations to settle the Jordan claim were conducted by Mr Beazley and Mr Smith in the courtroom with Mr Djukanovic, his daughter and Mr Quinton on 10 August 1998. An agreement was reached between the parties.
The agreement was reduced to writing – the Deed of Compromise and Release. The Deed was executed by Ms Richards on behalf of the Legal Practitioners Professional Indemnity Scheme.
The Deed was freely executed by Mr Djukanovic, whose capacity to participate in negotiations and to understand the agreement was not subject to any compromise on account of his physical or mental health. Mr Djukanovic’s signature was witnessed by Mr Parker, a Sheriff’s Officer.
There is no substance to any suggestion of pressure, or bullying, or overbearing conduct on the part of anyone associated with the negotiations on behalf of the defendant, Mr Jordan, or his professional indemnity insurers, and in particular, on the part of Mr Smith, or Mr Beazley.
Mr Djukanovic had a clear understanding that:
·he was settling the Jordan claim;
·a judgment would be entered in the action against Mr Jordan in the sum of $75,000 inclusive of costs and interest;
·execution on the judgment was stayed for 21 days;
·he was agreeing to discharge and release his former solicitors, Andersons, and Ms Kuzenko-Taskovic, from all claims he may have against them;
·Mr Jordan was bankrupt;
·the professional indemnity insurers for Mr Jordan would pay $72,000 of the judgment sum;
·Mr Jordan was responsible for the excess under the scheme of insurance in the sum of $3,000;
·Mr Djukanovic could make a claim on the Legal Practitioners’ Guarantee Fund for payment of the balance in the sum of $3,000;
The details, and any implications, of the application to the Legal Practitioners’ Guarantee Fund were not known or explored in any detail by either party.
Judgment was entered against the defendant, Mr Jordan, in the sum of $75,000 inclusive of costs and interest. Payment in the sum of $72,000 was made by cheque mailed to Mr Djukanovic on 24 August 1999. Mr Djukanovic banked the cheque on 28 August 1999, without question or complaint.
Mr Djukanovic made an application to the Legal Practitioners’ Guarantee Fund on 30 August 1999 for the payment to him of the sum of $3,000.
By letter dated 1 October 1999, Mr Djukanovic was advised that his claim against the Guarantee Fund had been admitted and Mr Djukanovic was asked to sign a Release in respect of the Law Society. Mr Djukanovic made some amendments, signed the Release and returned it to the Law Society. By letter dated 28 October 1999, Mr Djukanovic was advised the amended Release was not acceptable to the Law Society, that he would be required to sign a standard form Release or alternatively an enclosed amended Release drafted in an attempt to accommodate Mr Djukanovic’s concerns. He has not signed a Release.
The parties are bound by the agreement. It was agreed that judgment was to be entered against Mr Jordan in the action brought against him by Mr Djukanovic in the sum of $75,000 inclusive of costs and interest. In consideration of judgment being entered, and in the further consideration of the solicitor consenting to judgment, Mr Djukanovic discharged and released Andersons and Ms Kuzenko-Taskovic from all claims demands actions for costs damages or otherwise which he may have or at any time hereafter have against them, or either of them.
Mr Djukanovic understood that he would not be able to enforce the judgment against Mr Jordan. He knew Mr Jordan was bankrupt. Mr Djukanovic reasonably wanted to know how payment was to be made before agreeing to the proposal put forward in settlement of his claim. He was told, and he expected, that the professional indemnity insurers for Mr Jordan would be responsible for paying $72,000 of the judgment sum and that he could claim against the Legal Practitioners’ Guarantee Fund for the balance of $3,000. Having regard to the legislative provisions in relation to the Guarantee Fund, he could have received no assurance that his claim against the Guarantee Fund would be accepted, although the circumstances suggested that it was likely to be.
Mr Djukanovic had no legal advice on 10 August 1999. The lawyers representing Mr Jordan and his professional indemnity insurers were under no obligation to give Mr Djukanovic advice about the consequences to him of the agreement he reached. He may have since made some enquiries of a legal practitioner about the effect of the Release he was asked to sign to obtain payment of the $3,000.
It is possible that Mr Djukanovic misunderstood the effect of the proposed Release on the motor vehicle claim. In any event, circumstances with respect to the motor vehicle claim, which was the subject of concern in 1999, have now changed. The motor vehicle claim has been finalised.
It remains a matter for Mr Djukanovic as to whether or not he is prepared to execute a standard form of Release, or an amended form of Release such as that already offered to him. Such a Release apparently requires no surrender of any rights of which he was not aware at the time of the agreement.[2] There is no evidence that Mr Djukanovic is prevented from obtaining payment of the balance of the judgment sum. Mr Djukanovic can be confident that there is no conspiracy or other obstruction in his way.
[2] Karafotias v Karafotias (2003) 84 SASR 578 at 583
In any event, Mr Djukanovic was under no misapprehension about the entering of judgment against Mr Jordan or about how the judgment was to be satisfied. There is no suggestion, and nor could there be on the evidence, that Mr Djukanovic was not in possession of relevant facts when he agreed to compromise his claim against Mr Jordan. Mr Djukanovic obtained a judgment in his favour. That was what he agreed to in return for discharging and releasing Andersons and Ms Kuzenko-Taskovic.

In this case, the promise made on behalf of Mr Jordan to compromise the Jordan claim was performed with entry of judgment in Mr Djukanovic’s favour.[3] As it happens, payment of most of the judgment sum has also been made. No promise was made to guarantee the payment of the balance.
[3] McDermott v Black (1938) 63 CLR 161 at 183-186
It remains open to Mr Djukanovic to pursue a claim against the Legal Practitioners’ Guarantee Fund if he chooses to do so. He may not avoid his obligations under the Deed by choosing not to pursue a claim for the payment of the balance of the judgment sum from the Guarantee Fund, a claim which was within the contemplation of both parties at the time of the agreement.
The effect of the Deed of Compromise and Release executed by the defendant on 10 August 1999 is to bar the action brought against the plaintiff by the counterclaim of the defendant. The counterclaim is dismissed.