Kuzenko-Taskovic v Djukanovic No. DCCIV-02-742

JASMINA KUZENKO-TASKOVIC v ZVONKO DJUKANOVIC
[2003] SADC 177
Chief Judge Worthington
Civil Jurisdiction

The defendant, Zvonko Djukanovic, appeals against the decision of a Master. The plaintiff, Jasmina Kuzenko-Taskovic, a solicitor, has sued the defendant to recover legal fees. The defendant has denied liability and brought a counterclaim. On the application of the plaintiff, the Master gave summary judgment dismissing the counterclaim on the ground that a Deed of Release executed by the defendant in another action is a bar to bringing the counter-claim in the present action.
The action has a long history but for present purposes it can be summarised as follows.
Ms Kuzenko-Taskovic issued proceedings in the Magistrates Court in May 2000 to recover legal fees amounting to $3,100 for services provided by her in two actions, Djukanovic v Neville Jordan: No 419/1995 (“the Jordan matter”) and Djukanovic v Motor Accident Commission: No 5/1996 (“the MAC matter”). In August 2001 Mr Djukanovic filed a counterclaim seeking damages, originally $25,000 but later increased to $165,000 and the action was transferred to this court. He raises a number of issues including allegations that Ms Kuzenko-Taskovic failed to act professionally and to follow his instructions, resulting in an aggravation of his medical condition. His claim is brought in negligence and in contract. Ms Kuzenko-Taskovic ceased to act for Mr Djukanovic in October 1998 shortly before the trial in the MAC matter commenced in this court before Judge Bright. He was unrepresented in that trial.
Mr Djukanovic’s action against Mr Jordan came on before Judge Lunn on 9 August 1999. That also arose out of Mr Jordan acting as his solicitor, and Mr Jordan was represented by solicitors instructed by the Law Society because of the involvement of the Legal Practitioners Professional Indemnity Insurance Scheme. It is common ground that Mr Jordan played no active part in the litigation and that for all practical purposes the defendant was the Law Society. Again, Mr Djukanovic was unrepresented.   The first day of hearing was taken up with things that are not directly relevant to the present issue. On the second day, 10 August 1999, the matter was resolved. A Deed of Compromise and Release was executed by Mr Djukanovic and by the Director of Law Claims. The compromise was to resolve not only the Jordan matter but any claims that he might otherwise bring against other solicitors who had acted for him namely, Andersons and Ms Kuzenko-Taskovic. The terms of the Deed are as follows (the spelling of names is as it appears):
“DEED OF COMPROMISE AND RELEASE
THIS DEED is made this 10th day of August 1999 BETWEEN ZVONKA 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 Kusenko-Taskovic, Solicitor which relate to or are associated with the said Andersons or Jasmina Kusenko-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 Kusenko-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 Kusenko-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 Kusenko-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 10th day of August
1999 by the plaintiff.  (Signature)
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  (Signature)
Insurance Scheme  Director of Law Claims
In the presence of RICHARD SMITH”
The court records show that on 10 August 1999 Judge Lunn entered a consent judgment for Mr Djukanovic for $75,000 inclusive of costs and interest. His Honour also noted that a Deed had been executed as part of an overall settlement and that there was to be a stay of execution for 21 days. I shall refer to this again in a moment.
Ms Kuzenko-Taskovic filed an amended defence to the counterclaim in this action on 8 August 2002 pleading that, by the Deed, Mr Djukanovic had released and discharged her from any liability and was barred from bringing the counterclaim. She filed the present application on 12 November 2002 seeking orders pursuant to R25.04 that the counterclaim be dismissed and that there be summary judgment in her favour.
When the application came on before the Master Mr Djukanovic was represented at first by a legal practitioner, but when the hearing resumed at a later date he acted for himself. The Master allowed the application to the extent of dismissing the counterclaim and indicated that, subject to any appeal, he proposed to remit the claim back to the Magistrates Court for final hearing.
The application proceeded before the Master on the basis that, as was asserted by both parties, Judge Lunn had not entered a judgment in the Jordan matter but had merely noted a settlement. The same assumption underlay submissions on the hearing of this appeal. However, because there seemed to be an element of doubt, an inspection of the court file in the Jordan matter was undertaken after the hearing, and it revealed that there is no longer any record on the file itself of how the matter concluded. The file copy of the transcript finishes at 11.57am on 10 August 1999 with his Honour leaving the bench to enable the parties to continue with negotiations, but there is nothing later than that. This is most unusual and I therefore directed that there be a search of the court records. This showed that there was a consent judgment pronounced by Judge Lunn on that day 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 benchbook kept by his Honour’s secretary shows that the court reconvened to enter this judgment at 12.57pm, ie, an hour after the adjournment noted on the transcript. Counsel were informed about this and invited to make further submissions if they wished to do so.
When the matter came on again a few days later, Mr A. J. Crocker, for Ms Kuzenko-Taskovic, did not dispute the record but Mr Collett, for Mr Djukanovic, advised the court that he was instructed that his client still maintains that no judgment was ever entered in the Jordan matter. I note the protest but it is clear that judgment was entered. As it was fundamental to the reasons for the Master’s decision that no judgment had been entered in the Jordan matter, the matter must be considered afresh.
The issue is whether, by reason of the Deed, Mr Djukanovic’s counterclaim should be dismissed summarily under R25.04. To succeed in her application, Ms Kuzenko-Taskovic must show that in relation to the Deed, there is no real question to be tried, i.e. that because of the Deed the counterclaim must fail. The approach to be taken to R25.04 is set out in Kadeh v Gill and Ors (2000) 211 LSJS 88 by Doyle CJ at 93:
“......... the power to enter summary judgment ‘should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried’: Fancourt & Anor v Mercantile Credits Ltd (1983-1984) 154 CLR 87 at 99. Whether the questions to be decided are questions of law or questions of fact, the applicant must demonstrate that the ‘action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail’: Webster & Anor v Lampard (1992-1993) 177 CLR 598 at 602, Mason CJ, Deane and Dawson JJ.
............................................................................
An application for summary judgment invites the court to do more than determine the adequacy of a Statement of Claim or Defence. It usually invites the court to try and to determine facts by a summary process, usually by affidavit. If the proceedings are disposed of on affidavit, it deprives the relevant party of the usual right to a trial on oral evidence. Unless there are circumstances of urgency, the only basis for making an order can be that the case is, as a matter of law and as a matter of fact, bound to fail. There has to be some good reason to deal with a claim or defence in this summary fashion.”
There is no question of urgency in this action and, in my judgment, it cannot be said that there is no triable issue in relation to the Deed.
The Deed extends the compromise and release in the Jordan matter to include what is now the counterclaim in this action in return for a consent judgment for $75,000 against Mr Jordan but with Mr Djukanovic agreeing to a stay of execution for 21 days. There are some exceptions but they are not relevant at this point. On 24 August 1999, 14 days after judgment, the solicitors instructed by the Law Society wrote to Mr Djukanovic as follows:
“Dear Mr. Djukanovic,
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.
Yours faithfully.”
Although the letter says that Mr Djukanovic has been “previously advised” about matters in relation to the balance of $3,000, there is nothing in the Deed that refers to it and nothing in any of the affidavits to explain what occurred or when. Clause 2 of the agreement in the Deed certainly contemplates that some part of the judgment monies may be paid from the Guarantee Fund but it does not help beyond that.
The next item of evidence is a letter from the Law Society to Mr Djukanovic on 1 October 1999 referring to “the claim which you made against the Guarantee Fund” and advising that it had been considered at a committee meeting on 21 September. The letter goes on to inform him:
“The Committee resolved that the claim which you made should be determined to be a valid claim in the sum of $3,000.00 and should be admitted against the Guarantee Fund for payment.
Before payment can be made, the Attorney-General’s authorization will be required. To facilitate that process, could you please sign the enclosed Release. On return of this document, I shall seek authorization from the Attorney-General.”
The enclosed Release makes no reference to the Deed and it contains a number of clauses commonly found in a Release including limited rights of subrogation, authorization to conduct litigation in Mr Djukanovic’s name, an undertaking by him to cooperate in any such proceedings and an agreement to indemnify the Law Society against certain claims and proceedings which might arise from Mr Jordan’s default. There is no mention either in the Deed or in any of the other evidence that conditions and requirements of this type were part of the terms of the overall settlement or that payment of some part of the judgment monies would be subject to validation by a committee of the Law Society and at the discretion of the Attorney-General.
In his affidavit dated 13 December 2002, Mr Djukanovic states that when he received that letter he was confused. He says that he formed the belief that the $3,000 being offered was over and above the $75,000 referred to in the Deed. Mr Djukanovic also states that he objected to the terms of that Release so he amended it before signing it and returning it to the Law Society. It is unnecessary to discuss the details of his amendments but it is clear from one of them that he was asserting that the $3,000 was “completely separate” from the judgment for $75,000.
On 28 October 1999 the Law Society wrote back to Mr Djukanovic. It is not clear from the letter how many versions of the Release were included, but exhibited to his affidavit is a copy of the letter and a copy of a document referred to by the Law Society as a “draft Release” which he was asked to sign. The letter continues:
“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.”
That copy of the Release shows that although the Law Society mainly ignored his amendments, it made some changes to the original version, and one of them makes it clear that $3,000 is the unpaid balance of $75,000 i.e., the excess on Mr Jordan’s policy of professional indemnity insurance which would not be paid by the insurer. Mr Djukanovic did not sign the Release and he has never received the balance of $3,000.
The issue at this stage is not whether the Deed in fact operates to prevent Mr Djukanovic from bringing the counterclaim. Nor is it whether he is being opportunistic about the $3,000 and not co-operating sufficiently to achieve settlement in the manner agreed by the parties. Rather it is whether Ms Kuzenko-Taskovic has shown that the components of the agreement on which she relies are so clear cut and supportive of her position that any argument to the contrary must fail. On the face of it, the agreement recorded in the Deed is straightforward: discharge if there is judgment for $75,000 with a stay of execution for 21 days. But, to put it at its lowest, there is a strong indication even from the material produced by the Law Society that there was more to the agreement than that.
It was submitted by Mr Crocker that there has been accord and satisfaction. The elements of that concept were summarized by Dixon J in McDermott v Black (1940) 63 CLR 161 at 183-184 as follows:
“The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim.”
The nub of his submission is that entry of the consent judgment constituted satisfaction and that what occurred thereafter is irrelevant, including the fact that Mr Djukanovic has so far received only $72,000; he could take action to enforce the judgment if he wished. This argument may be sound and it may lead to success on the plea, but it begs the question: What was the accord? As mentioned, there is already some evidence to suggest that the Deed may not stand alone and that there may have been a variation. If there was, what are its terms?
Mr Crocker submitted that the Law Society’s actions in relation to the money that was to come from the Guarantee Fund were because of the requirements of the Legal Practitioners Act 1981. I have no difficulty accepting that money cannot be paid out of the Guarantee Fund unless that payment is authorised by the Attorney-General - s57(5). But that does not address the question of the apparent inconsistency between the conduct of the Law Society in relation to the settlement and the overall objective of the Deed and judgment, namely unconditional payment of $75,000 within 21 days. Has there been a repudiation of the agreement, as is asserted by Mr Djukanovic, whether that be because of an inability on the Law Society’s part to perform according to the terms of the Deed or for some other reason?
Ms Kuzenko-Taskovic may succeed in her argument that the Deed operates as a bar to the counterclaim, but it cannot be said that there is no basis at all for Mr Djukanovic to argue that there has been a repudiation of the agreement by the Law Society or, at the least, a variation. The difficulty is that it is not yet possible to assess the merits of these arguments because there are unanswered questions about which it looks certain there will be a dispute. That means evidence which will need to be tested.
For these reasons Ms Kuzenko-Taskovic has not shown that there is no triable issue in relation to the efficacy of the Deed as a bar to the counterclaim and, therefore, she cannot succeed in her application for summary judgment. Mr Collett presented an alternative argument about the effect of the Deed on her claim if I were to uphold the order that it barred the counterclaim, but in view of my ruling it is unnecessary to discuss that.
I allow the appeal and reinstate the counterclaim.

[2003] SADC 177

17 December 2003