Lucke v Cleary
[2011] SASCFC 118
•26 October 2011
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
LUCKE v CLEARY & ORS
[2011] SASCFC 118
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice David and The Honourable Justice Stanley)
26 October 2011
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - AGREEMENTS CONTEMPLATING EXECUTION OF FORMAL DOCUMENT
CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - AUTHORITY OF AGENTS - IN GENERAL
Appeal from a declaratory order of a judge of the District Court - dispute over property - before a trial in the District Court commenced the parties informed the court that they had reached an agreement to settle litigation - the trial date was vacated at the request of the parties - a deed was drafted, circulated and signed by the four defendants - the plaintiff did not execute the deed - whether there was an enforceable agreement made by the parties in settlement of litigation - whether there was an intention to be bound before the execution of a deed - whether the terms of agreement were uncertain - whether the appellant’s then solicitors had ostensible authority to enter into a contract on behalf of the appellant.
Held: the parties had entered into an enforceable contract - the parties intended to be bound immediately by the terms of their agreement and expected to make a further contract with additional terms in substitution for the original contract - the requirement of a deed was a mechanism to implement the settlement agreement - the appellant’s solicitor had ostensible authority to settle the litigation - appeal dismissed.
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW - WHEN NOT ALLOWED TO BE RAISED ON APPEAL
Application for permission to amend the notice of appeal - appellant sought to add a ground of appeal that the deed was ineffective pursuant to s 29 of the Law of Property Act 1936 (SA) - the defendants opposed the amendment - previous counsel for the appellant had abandoned reliance on a s 29 based argument at the trial – whether the argument was abandoned inadvertently – whether the argument involves the determination of a question of law only.
Held: the ground of appeal is not properly characterised as a strict question of law - the argument was not abandoned at trial inadvertently - it is neither expedient nor in the interests of justice to grant permission – permission refused.
Law of Property Act 1936 (SA) s 29, s 29(1), s 29(2), s 41; Electronic Transactions Act 2000 (SA) s 9; Electronic Transactions Regulations 2002 (SA) s 5(1)(a), referred to.
Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310; Branir v Owston Nominees (No 2) (2001) 117 FCR 424; Love & Stewart Ltd v S Instone & Co Ltd (1917) 33 TLR 475; Waugh v H B Clifford & Sons Ltd [1982] Ch 374, applied.
The University of Wollongong v Metwally (No 2) (1985) ALJR 481, distinguished.
Masters v Cameron (1954) 91 CLR 353; Coulton v Holcombe (1986) 162 CLR 1; Water Board v Moustakas (1988) 180 CLR 491; Fingleton v The Queen (2005) 227 CLR 166; National Australia Bank Ltd v KDS Construction Services Pty Ltd (In Liq) (1987) 163 CLR 668; CIC Insurance Ltd v Bankstown Football Club Ltd (1994-95) 8 ANZ Insurance Cases 61-232; Humphris-Clark v Lazaridis [2010] NSWSC 318; Humphris-Clark v Lazaridis [2010] NSWCA 349, discussed.
GR Securities v Baulkham Hills Private Hospital (1986) 40 NSWLR 631; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622; Godecke v Kirwan (1972-73) 129 CLR 629; Eccles v Bryant and Pollock [1948] Ch 93; D'Silva v Lister House Development [1971] Ch 17; CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588; Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9606; Pianta v National Finance and Trustees Ltd (1964) 180 CLR 146; Nowrani Pty Ltd v Brown [1989] 2 Qd R 582; Strauss v Francis (1866) 1 QB 379; Across Australia Finance v Bassenger [2008] NSWSC 799; Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; ABC Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; Needlework Warehouse Pty Ltd v Chansonette Pty Ltd (2006) 226 ALR 252, considered.
LUCKE v CLEARY & ORS
[2011] SASCFC 118Full Court: Gray, David and Stanley JJ
GRAY J: I would dismiss the appeal. I agree with the reasons of Stanley J. I do not wish to add to those reasons.
DAVID J: I would dismiss the appeal. I agree with the reasons of Stanley J.
STANLEY J:
Background
This is an appeal from a declaratory order made by a judge of the District Court.
The District Court had to determine whether there was an enforceable agreement made by parties in settlement of litigation in that Court.
The Court found that the parties to the proceedings, by their solicitors, reached a binding agreement and agreed the terms of a deed of settlement provided by the appellant’s then solicitors on 1 November 2010.
The appellant in this Court was the plaintiff in the District Court.[1] The District Court proceedings concerned land at 22 Wingfield Street, Clovelly Park.
[1] For the purpose of these reasons I will refer throughout to the appellant as the plaintiff, and the respondents as the defendants.
The plaintiff and the first defendant in the District Court had been in a de facto relationship. They had planned to develop the property at Clovelly Park (“the Clovelly Park property”). The first defendant was the registered proprietor of the Clovelly Park property. After the breakdown of their relationship there had been negotiations to resolve the issues between them in relation to the property. Subsequently, the third and fourth defendants in the District Court claimed that they acquired an interest in the Clovelly Park property. The second defendant was the mortgagee of the property. Issue was joined in the proceedings not only between the plaintiff and the defendants, but also between the defendants by way of cross-claims. The proceedings were complex.
The matter was listed for trial before a judge of the District Court.
On 18 October 2010, before the trial commenced, the parties informed the Court that they had “settled the matter”. On 15 December 2010 the parties informed the Court that there was a dispute as to the alleged settlement. At issue was whether the parties had reached a concluded agreement binding on each of them in settlement of the litigation. The parties agreed that this issue should be determined by separate trial.
This appeal lies from the declaratory judgment made in that matter.
The trial
At trial the Court heard evidence concerning events in mid-October and early November 2010.
On 14 October 2010 the solicitors for the third and fourth defendants sent an email to the other parties in the following terms:
Dear All
I refer to my clients’ offer dated 11 October 2010.
I have now received responses from all parties in respect of that offer.
Could all parties please confirm by return email their agreement to settle the matter on the following terms:
1. The whole of land be transferred to our clients.
2.Our clients will become solely responsible for the mortgage/s to the Bank of Adelaide whose present payout figure is approximately $305,000.
3.Mortgages over the land reflecting our clients’ indebtedness in the sum of the mortgage payout figure referred to in 2 above will be registered over the land as part of the transfer referred to in 1 above.
4.At settlement, our clients will pay:
4.1The sum of $180,000.00 to the Plaintiff;
4.2The sum of $15,000.00 to the First Defendant; and
4.3The sum of $50,000.00 to the Second Defendant.
5.The parties agree between themselves and our clients to a discontinuance of all claims and cross claims with each party bearing their own costs.
6.As between the parties and our clients there will be mutual discharges and releases (save for our clients’ obligations under the mortgages referred to in 2 above) to be perfected in a Deed.
7.Settlement on the transfer of the land would occur within six weeks of execution by all parties of the Deed.
8.Our clients will pay the First Defendant a further sum of $35,000.00 and the Plaintiff a further sum of $20,000.00:
8.1Upon settlement of the sale of the last property developed by our clients on the land; or
8.2Within sixteen (16) months from settlement of the transfer of the land to our clients;
whichever is the earlier.
If all parties confirm their agreement to the above, we will commence the preparation of the Deed.
Nadia, we also confirm that our clients’ valuer will require access to the property in the next couple of weeks.
We look forward to hearing from you as a matter of priority.
Without prejudice.
The plaintiff’s solicitors replied by email on the same day as follows:
Dear All
We confirm our client’s agreement to the terms set out in your email.
Regards.
The other parties to the litigation over the Clovelly Park property also indicated their agreement to the terms of settlement set out in the email from the solicitors for the third and fourth defendants.
At trial the defendants alleged that this correspondence constituted a concluded agreement binding on the parties to the litigation, including, in particular, the plaintiff.
In support of this submission the defendants relied on the evidence of correspondence subsequently sent to the Court, with the consent of all parties, informing the Court that the matter had settled and the trial would no longer be required, which included the following words inserted at the insistence of the solicitors for the plaintiff on 15 October 2010:
[A]djourn the matter to a time suitable to the court pending documentation of the agreement reached and giving effect to the terms of settlement, which date can be abandoned if discontinuances are filed in the meantime.
The defendants further relied on the evidence that on 18 October 2010 when the matter returned to Court, counsel for the plaintiff, while the plaintiff was present in Court, informed the trial judge that the matter had settled with the following words:
We’ve settled the matter and the structure of the settlement is such that a deed will be executed in the next couple of days. That provides a six week period for settlement and we wonder if the matter could be adjourned for six weeks for mention and, if everything has gone in accordance to plan, a notice of discontinuance will be filed.
Subsequent emails from the plaintiff’s solicitors were relied on as evidence of the concluded agreement alleged to have been made on 14 October 2010. On 26 October 2010 the plaintiff’s solicitors wrote:
The process to settlement is mechanical only … It is now nearly 14 days since we agreed a settlement and we are not getting timely return drafts from you.
The reference to “return drafts” is to a number of versions of the deed document contemplated in the email of 14 October 2010.
At trial the plaintiff denied that there had been a concluded settlement reached on 14 October 2010 because the terms of the negotiations evidenced in the emails of 14 October 2010 contemplated that any agreement by the parties would be made by execution of a deed. This had not occurred as at 14 October 2010.
The plaintiff contended that the requirement of a deed in the email of 14 October 2010 had the same effect as stipulating that the agreement was “subject to contract” and that there was no intention to be bound before execution of the deed. The plaintiff also argued that there was not a concluded bargain reached then as there was uncertainty as to all the terms of the agreement. He pointed to the subsequent negotiations over the drafting of the deed as evidence of this point.
In the alternative, the defendants alleged that a concluded settlement was reached on 1 November 2010 when the solicitors for the plaintiff forwarded to the solicitors for the defendants a deed for execution. That deed was executed by the defendants on 2 November 2010 and returned to the solicitors for the plaintiff.
The deed was in the following terms:
THIS DEED OF SETTLEMENT AND RELEASE is made this day of 2010
BETWEEN:PAUL JAMES LUCKE c/- Level 4, 122 Pirie Street, Adelaide SA 5000 (“Lucke”).
AND:PAMELA JEANNETTE CLEARY c/- 17 Sturt Street, Adelaide SA 5000 (“Cleary”)
AND:BENDIGO AND ADELAIDE BANK LIMITED (ACN 068 049 178) c/- 167 Flinders Street, Adelaide SA 5000 (“Adelaide Bank”)
AND:CAMERON DOBLE and VICTORIA DOBLE (NEE KAMINSZKY) c/- 123 Wright Street, Adelaide SA 5000 (“the Dobles”).
RECITALS
A. Cleary is the registered proprietor of a property situated at 22 Wingfield Street, Clovelly Park (“the Property”).
B. Lucke and Cleary entered into an oral agreement to develop the Property with a view to selling the Property for mutual profit (“the Oral Agreement”).
C. On 21 April 2006 Lucke lodged a caveat, namely registered caveat no. 10449029, over the Property to protect his interest in the Oral Agreement (“the Caveat”).
D. On 20 November 2006 Lucke and Cleary entered into a formal Deed settling and formalising their arrangements in respect of the development of the Property (“the Deed”).
E. On or about 1 December 2008 Adelaide Bank had transferred to it all the assets and liabilities of Adelaide Bank Limited ACN 061 461 550.
F. On or about 1 December 2008 Adelaide Bank became the successor at law of Adelaide Bank Limited ACN 061 461 550 pursuant to section 22 of the Financial Sector (Business Transfer and Group Restructure Act (Cth) 1999.
G. In or about April 2007 Cleary and the Dobles entered into a verbal joint venture agreement whereby:
i.Cleary would transfer one half of the Property to the Dobles for the sum of $120,000.00 (“the Transfer”);
ii.Both the Dobles and Cleary would jointly arrange to raise finance with Adelaide Bank to discharge Cleary’s existing mortgage on the Property to Perpetual Trustees (“the Discharge of Mortgage”); and
iii.The Dobles and Cleary would develop and sell the Property for mutual profit.
(“the Dobles and Cleary Agreement”)
H. On 16 July 2007 Cleary and the Dobles executed:
i.A sale and purchase agreement in respect of the Transfer (“the Sale Contract”); and
ii.A loan agreement (“the First Loan”) in the amount of $220,000.00 secured over the Property with the Adelaide Bank as mortgagee and Cleary and the Dobles as mortgagors;
iii.A loan agreement (“the Second Loan”) in the amount of $100,000.00 secured over the Property with the Adelaide Bank as mortgagee and the Dobles as mortgagor;
iv.The First and Second Loans were to be secured by the Adelaide Bank by the registration of mortgages over the Land.
I. On 20 July 2007 the Dobles and Cleary, jointly represented by their conveyancer, Duncan Sande Conveyancers (“the Conveyancer”), attended at the Lands Titles Office to attend settlement of the Sale Contract (“Settlement of the Contract”).
J. At or prior to Settlement of the Contract:
i.A representative of Lucke’s solicitors, Caldicott & Co., provided the Conveyancer with a Withdrawal of Caveat (“the Withdrawal of Caveat”).
ii.The Conveyancer provided the Withdrawal of Caveat and a Memorandum of Transfer (collectively “the Documents”) executed by Cleary and the Dobles to the Adelaide Bank for acceptance and lodging;
iii.Adelaide Bank lodged the Documents to register the transfer of the Property and its mortgages; and
iv.Adelaide Bank released funds in respect of the First Loan and the Second Loan.
K.As a result of the Caveat the registration of the Transfer, the Discharge of Mortgage and the Adelaide Bank’s mortgages did not occur.
L.On 29 August 2007 Lucke commenced District Court proceedings against Cleary in respect of the Property, namely District Court Action No. 1474 of 2008. Subsequently the Adelaide Bank and the Dobles were joined as parties. During the course of District Court Action No. 1474 of 2008 an appeal was made to the Supreme Court, being Action No. 1927 of 2009. The two actions are referred to as “the Proceedings”.
M.Some and/or all of the parties asserted rights in respect of the Property, the Deed, the Doble and Cleary Agreement, the First Loan and Second Loan as set out in the pleadings filed and served in the Proceedings.
N.On 2 October 2009 on the application of Lucke, Master Bampton granted an injunction in the proceedings (“the Injunction”).
O.The parties have agreed to settle all claims that either party has either now or in the future against each other in respect of the subject matters of the Proceedings and the Property by way of this Deed.
The parties agree as follows:
1.OPERATIVE PART
1.1.The parties agree that to the extent of their personal information the Recitals are accurate and form part of this Deed.
2. SETTLEMENT
2.1.The parties agree to waive all previous costs orders made as between each other in relation to the Proceedings.
2.2.The parties agree that by their respective solicitors they will cause minutes of order to be signed in the form of minutes of order and an e-application which are annexed hereto and marked as “Annexure A” and are to do such things as are necessary so as to effect the discharge of the Injunction.
2.3.The consent e-application will be held by Corsers and they undertake to lodge this immediately upon settlement herein.
2.4.Lucke will deliver a Withdrawal of the existing Caveat at the Settlement to enable the Settlement to proceed.
2.5.After the Settlement Cleary will not deal with her remaining interest in the Property (save as provided herein) but either or both of Lucke and the Dobles may, at the Dobles expense, register permissive caveats over the Property to protect their interests under this Deed.
2.6.Within (7) days of the execution of this Deed by all parties, Lucke agrees to provide access to the Property to the Dobles for the purposes of their financier inspecting (on such reasonable prior notice and occasions as may be necessary) the Property for valuation purposes. The date and time of any inspections will be mutually agreed between Lucke and the Dobles in good faith.
2.7.Cleary agrees to transfer her remaining interest in the Property to the Dobles and/or nominee within six (6) weeks from the execution by all parties of this Deed (the “Settlement”).
2.8.Cleary will execute a Memorandum of Transfer to give effect to the requirements of clause 2.7 at and upon the date of the execution of this Deed.
2.9.The Memorandum of Transfer will be held in escrow by the Dobles solicitors and may only be lodged if all the requirements of this Deed have been met.
2.10.Lucke agrees that he will give vacant possession of the property within fourteen (14) days after the date of the Settlement and that he will deliver up and maintain the Property in reasonable order and as in its present condition.
2.11.Prior to the Settlement the Dobles will be responsible for any payments due in respect of the First Loan and Second Loan, as well as any insurance with respect to the Property.
2.12.At the Settlement:
2.12.1.Any permissive caveats will be withdrawn at the expense of the caveatee and Lucke will produce an executed Withdrawal of the existing Caveat for lodgement;
2.12.2.The Dobles will cause the discharge of the First Loan and the Second Loan;
2.12.3The Dobles will pay to Corsers Trust Account for Lucke the sum of $180,000.00 by bank cheque.
2.12.4.The Dobles will pay to Johnston Withers Trust Account for Cleary the sum of $15,000.00 by bank cheque;
2.12.5.The Dobles will pay to Piper Alderman Trust Account for Adelaide Bank the sum of $50,000.00 by bank cheque (being an amount in addition to the payment necessary under 2.12.2).
2.12.6.Adelaide Bank will withdraw the unregistered mortgage over the Land securing the First Loan and the Second Loan.
2.12.7.The Dobles may secure the interests of their financier or financiers by the registration of a mortgage or mortgages over the Property.
2.13.Upon registration of the mortgages referred to in paragraph 2.12 Luke and Cleary may each lodge permissive caveats to protect their right to the payments referred to in 2.17 below.
2.14.Within seven (7) days from the Settlement all parties agree to file Notice of Discontinuances against each other in relation to all actions, cross actions (including contribution notices) in the Proceedings.
2.15.The parties acknowledge that after the Settlement the Dobles intend to develop the Property by inter alia, subdividing the Property (“the Subdivision”).
2.16.Each of Lucke and Cleary will, if they have lodged a permissive caveat under clause 2.13 above:
2.16.1Consent in writing to the deposit of the Subdivision; and
2.16.2Provide at their own expense a discharge of their caveat to allow the sale of any allotments created by the subdivision of the Property.
2.17.The Dobles agree pay each of Cleary a further sum of $35,000.00 and Lucke a further sum of $20,000.00 without set off or other claims whatsoever upon the earlier of
2.17.1.settlement of the sale of the last of the allotments developed by the Dobles by the subdivision of the Property; or
2.17.2.sixteen (16) months from the Settlement in 2.12 above;
2.18.The parties agree to bear their own legal costs incurred in respect of all issues arising out of or in relation to or connected with the Proceedings.
2.19.Doble will pay Lucke’s costs of withdrawal of any caveat arising from 2.13 above upon payment of the said $20,000 set out in 2.17 above.
3. RELEASE
3.1Subject to the parties carrying out their respective obligations under this Deed each party releases and discharges all other parties from all damages, interest, costs or otherwise arising out of or in connection with the matters alleged in the Recitals, the Proceedings and the subject matter thereof and each party undertakes to indemnify and keep indemnified and save harmless the other from all liability for damages, interest and otherwise arising out of or in connection with the Proceedings and the subject matter thereof.
4. COSTS
4.1Each party agrees to pay their own costs of and incidental to the preparation of this Deed and the performance of the terms of settlement.
5. CONFIDENTIALITY
5.1All parties agree to keep the existence and the terms of this Deed and the settlement it records confidential at all times and not to disclose this information to any other party unless such disclosure is to the parties’ professional advisors or as required by law or as necessary to perform that party’s obligations under this deed, or by consent of all parties.
6. GOVERNING LAW
6.1This Deed and the rights and obligations of the parties to this Deed must be construed in accordance with and governed by the laws of the State of South Australia and the parties submit to the exclusive jurisdiction of the courts of that State.
7. WAIVER
7.1A party may only waive a provision of this Deed expressly and in writing. A waiver only applies to such matter, non-compliance or breach to which it expressly relates and not to any other subsequent or other matter, non compliance or breach.
8. SEVERABILITY
8.1If any provision of this Deed is invalid or of no force or effect under any statute then this Deed is to be construed as if that provision is not in this Deed but the remainder of the Deed retains its full force and effect and the parties must attempt to renegotiate that provision in good faith.
9. THE WHOLE AGREEMENT
9.1This Deed records the whole agreement between the parties.
9.2If all parties have not executed this Deed but have executed counterpart Deeds then this Deed and the executed counterparts form the one agreement between the parties.
10. MODIFICATION
10.1Each modification, variation or amendment to this Deed must be in writing and signed by each party.
11. ASSIGNMENT
11.1A party may only assign the benefit of this Deed with the prior written consent of all other parties.
12. SUCCESSORS AND ASSIGNS
12.1This Deed is binding on and remains for the benefit of the parties and their respective executors, administrators, successors and permitted assigns.
13. CO-OPERATION
13.1Each party agrees to sign any documents and do everything necessary to give effect to this Deed.
14. HEADING
14.1The headings in this Deed are inserted for convenience of reference only and do not affect the interpretation of this Deed.
15. NOTICES AND COMMUNICATIONS
15.1Any notice, request, consent, waiver, approval, communication or other document to be given to a party under or by virtue of this Deed must be in writing and addressed to the address of each party set out above, and will be delivered by hand or mailed by prepaid registered post or sent by facsimile or by electronic email.
16. DEFINITIONS AND INTERPRETATION
Unless the contrary intention appears in this Deed:-
16.1words importing the singular include the plural and vice versa and words importing gender include all genders;
16.2a reference to any act or regulation includes a reference to any act or regulation amending, or in substitution for, that act or regulation;
16.3words importing persons include a firm, company, corporation, authority or body whether or not incorporated;
16.4an obligation of two or more parties shall bind them jointly or severally;
16.5if an expression is defined, another part of speech and grammatical form of the expression have a corresponding meaning; and
16.6no rule of construction applies to the disadvantage of a party because that party was responsible for the preparation of this Deed.
17. COUNTERPART
17.1This deed may be executed and exchanged in counterparts subject to all parties executing the deeds and delivering the deed by way of a settlement.
18. CONDITIONAL SETTLEMENT
18.1This deed and the caveats are subject to and conditional in all respects to the Settlement in clauses 2.7 and 2.12.
EXECUTED as a Deed.
SIGNED by the said PAUL JAMES LUCKE this day of 2010
in the presence of:SIGNATURE OF WITNESS
NAME OF WITNESS (PRINT)
)
)
)SIGNED by the said PAMELA JEANETTE CLEARY this day of 2010
in the presence of:
SIGNATURE OF WITNESS
NAME OF WITNESS (PRINT)
)
)
)BENDIGO AND ADELAIDE BANK LIMITED ABN 11 068 049 178
BY ITS APPOINTED ATTORNEYIN THE PRESENCE OF:
SIGNATURE OF WITNESS………………………………
FULL NAME OF WITNESSOf 169 PIRIE STREET ADELAIDE 5000 Under POWER OF ATTORNEY No.
SIGNATURE:
…………………………………………………
…………………………………
ADDRESS OF WITNESS
…………………………………
…………………………………
PHONE No.…………………………………
At trial the plaintiff contended that no settlement could occur until the deed was executed by all parties. A ceremony of signing was required before there could be a binding agreement. As the plaintiff did not execute the deed, there was no settlement.
The plaintiff put a subsidiary argument that his solicitors at the time, however, lacked ostensible authority to bind him to the execution of the deed. For reasons which will become relevant later in my reasons, it is important to note, however, that the plaintiff did not dispute that his solicitor was cloaked with ostensible authority to settle the litigation in the District Court.
The District Court’s reasons for judgment
The learned trial judge commenced with a consideration of the principle in Masters v Cameron.[2]
[2] (1954) 91 CLR 353.
Her Honour considered the principle applicable to the resolution of disputes where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract. Her Honour referred to the three classes of case identified by the High Court in Masters v Cameron.[3]
[3] (1954) 91 CLR 353 at 360.
Her Honour noted that the High Court concluded that the first two classes constituted binding contracts, the third did not.
Applying these principles, the learned trial judge considered whether the parties had reached an agreement and, if so, into which class the agreement fell. The learned trial judge was not satisfied that there had been a concluded agreement as at 14 October 2010 but was satisfied that the parties had reached a concluded agreement by early November 2010. She set out her reasons as follows:[4]
I agree that commonsense has a part to play in this inquiry. I think that the evidence that the parties intended to make a binding agreement as at 1 November 2010 and prior to the execution of a formal contract is clear and compelling. The documentary evidence of the email correspondence together with the final form of the deed published by the plaintiff are evidence of such an agreement. There is no express statement that agreement was subject to execution of the deed. The deed was, in my view, the mechanism to implement the agreement. The terms are readily apparent, there is no uncertainty and acceptance of the terms was made in writing. I agree with the plaintiff that there may have been some uncertainty as to the terms as at 14 October 2010 but there was no uncertainty at 1 November 2010. I am of the view that the Deed published by the plaintiff on 1 November 2010 reflected a binding agreement. The parties evidenced an intention to make a concluded bargain. The discussions were not at an incomplete stage. The plaintiff’s solicitors had ostensible authority to make a concluded bargain in the terms of the Deed published by them on 1 November 2010. In my view they had such authority by necessary implication.
[4] Reasons for Decision at [47].
Accordingly, the learned trial judge found for the defendants and made a declaration that the parties by their solicitors reached a binding agreement and agreed the terms of the deed of settlement provided by the plaintiff’s then solicitors on 1 November 2010.
The appeal to this Court
The appeal raises three issues:
1Whether the “agreement” by the plaintiff’s then solicitors to a proposal for the settlement of the action submitted by one of the defendants on 14 October 2010 constituted a binding contract enforceable against the plaintiff;
2Whether the circulation of the final draft of an unexecuted deed of settlement on 1 November 2011 constituted a binding contract enforceable against the plaintiff; and
3Associated with the two principal questions, whether the plaintiff’s then solicitors had any ostensible authority to, and did, enter into a contract on behalf of the plaintiff in the terms proposed.
The first issue is raised by a notice of contention filed by the third and fourth defendants. On the hearing of the appeal the plaintiff made application to amend the notice of appeal to raise a further ground of appeal.
Application to amend the notice of appeal
The plaintiff sought to amend the notice of appeal to add the following ground:
The Deed was ineffective pursuant to s 29 of the Law of Property Act 1936 insofar as it purported to create or dispose of an interest in land without bearing the signatures required by that section.
On the hearing of the appeal the Court reserved its judgment on the application to amend.
In my view the application should be refused.
At the trial of the matter the plaintiff expressly abandoned any reliance on an argument based on s 29 of the Law of Property Act 1936 (SA).
In support of the application for an amendment the solicitor for the plaintiff filed an affidavit, which was received by the Court on the hearing of the appeal, which deposed to the explanation proffered by the plaintiff’s then counsel at the trial, for the forensic decision to abandon the point. Counsel said that he considered the point should be abandoned for two reasons. First, the Electronic Transactions Act 2000 (SA) was sufficient writing for the purpose of s 29, and second, that in any event s 29 did not apply to the agreements propounded by the defendants.
It appears that counsel for the plaintiff at trial at that time was not aware of the exemptions to s 9 of the Electronic Transactions Act contained in the regulations to that Act.[5]
[5] Electronic Transactions Regulations 2002 (SA).
Regulation 5(1)(a) provides that inter alia s 9 does not apply to “a requirement under a law of this jurisdiction that the disposition of land, the creation or disposition of an interest in land, or any other dealing or other action relating to an interest in land be effected by instrument or be evidenced in writing”.
Counsel for the plaintiff at trial is now unable to say whether, had he been aware of the regulation, he would still have abandoned the argument.
Against that background, the plaintiff submitted on appeal that the Court should allow the amendment sought, for the purposes of putting the s 29 argument that had been abandoned at trial.
The defendants opposed the amendment.
Permission to amend
In The University of Wollongong v Metwally (No 2),[6] the High Court enunciated the principle relevant to the determination of an application to raise on appeal an argument not put at trial. The Court said:[7]
It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.
[6] (1985) 59 ALJR 481.
[7] (1985) 59 ALJR 481 at 483.
In Coulton v Holcombe,[8] the High Court explained the underlying principles justifying this approach:[9]
It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards.
[8] (1986) 162 CLR 1.
[9] (1986) 162 CLR 1 at 7-8.
The High Court reaffirmed the position in Water Board v Moustakas:[10]
More than once it has been held by this Court that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law, then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied.
(Footnote omitted)
[10] (1988) 180 CLR 491 at 497.
Examples of the High Court allowing a new point to be raised for the first time on appeal can be found in Coulton v Holcombe,[11] National Australia Bank Ltd v KDS Construction Services Pty Ltd (In Liq),[12] and Fingleton v The Queen.[13]
[11] (1986) 162 CLR 1.
[12] (1987) 163 CLR 668.
[13] (2005) 227 CLR 166 at 218-219.
The threshold test to be met by a party which seeks to raise an argument for the first time on appeal is high. An appeal court will only permit a party to do so in the most exceptional circumstances. Where all the facts have been established beyond controversy or where the point is one of construction or of law, the appeal court may, in the exercise of its discretion, entertain the point where it is expedient in the interests of justice to do so but, even in those circumstances, the exercise of the court’s discretion is informed by the proposition that a party will only be permitted to do so in the most exceptional circumstances.
By way of illustration, in Coulton v Holcombe[14] the High Court permitted the appellants to raise a point for the first time on appeal as the point touched upon issues of public law which affected the wider community including executive government and the Parliament, all of whom had an interest in the clarification of statutory duties and the observance of law by statutory office holders. The Court distinguished the case from one of private litigation inter partes. In Fingleton v The Queen,[15] Kirby J noted that in criminal appeals the rule is tempered by the focus of the relevant statute upon issues of miscarriage of justice and by the heightened concern of the law with questions of the liberty of the individual, status and reputation.[16] These authorities emphasise the exceptional nature of the case.
[14] (1986) 162 CLR 1.
[15] (2005) 227 CLR 166.
[16] (2005) 227 CLR 166 at 218.
On the other hand, in National Australia Bank Ltd v KDS Construction Services Pty Ltd (In Liq),[17] the Court upheld an argument that the appellant was entitled to relief based on the existence of a lien notwithstanding that point had not been raised in the courts below. It did so on the basis there was nothing in the evidence or in the relationship of the parties that pointed to the possible existence of an agreement or of circumstances which would have negated the existence of the lien. Accordingly, the Court gave effect to the appellant’s submission that it had a lien and allowed the appeal on that basis.
[17] (1987) 163 CLR 668.
Plainly, this involved the exercise of a discretionary judgment.
The plaintiff in this matter submits that it should be permitted to amend the grounds of appeal to raise the s 29 point because it was abandoned at trial inadvertently and involves the determination of a question of law only.
I cannot accept this submission. It is not the case that the s 29 argument was not put at trial by inadvertence. It was not put because of a deliberate decision by the plaintiff, on advice, not to pursue the point. Moreover, it is by no means clear that the s 29 argument sought to be raised by the plaintiff now is characterised properly as a strict question of law.
The plaintiff’s s 29 point turned on whether the settlement agreement amounted to the disposition of an interest in land. The second defendant contested that proposition. It submitted that while the plaintiff asserted the settlement agreement disposed of an interest in land, that matter had not been determined by the learned trial judge. The plaintiff articulated the nature of the interest in land in various ways. He pleaded in paragraph 2A of the second further amended statement of claim[18] that the first defendant held the property on trust for the plaintiff. Counsel for the plaintiff described this in argument as being in the nature of a constructive or resulting trust. In the alternative, he characterised the interest as an equitable charge over the property to secure the repayment of the monies expended or the profit to be derived from the joint venture between the plaintiff and the first defendant.[19]
[18] Casebook Volume 2, p 4.
[19] T 57.
Section 29 of the Law of Property Act 1936 (SA) provides as follows:
29—Instruments required to be in writing
(1)Subject to the provisions hereinafter contained with respect to the creation of interests in land by parol—
(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;
(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;
(c) a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.
(2)This section shall not affect the creation or operation of resulting, implied, or constructive trusts.
Section 29(2) qualifies the requirements imposed by s 29(1). The suggestion that the nature of the interest in land asserted by the plaintiff, which he claims was being disposed of by the settlement agreement, might involve the operation of a resulting or constructive trust, highlights why, if this issue had not been expressly abandoned at trial, evidence might have been required to determine the nature of the interest in land asserted by the plaintiff and whether it was being disposed of pursuant to the settlement agreement. In the circumstances, I consider that it is neither expedient nor in the interests of justice for the Court to entertain the point now on appeal. This is not a case of the most exceptional kind contemplated by the rule in Metwally.
Relevant legal principles
The existence of a binding contract
In this matter, the parties have reached agreement upon terms of a contractual nature. They have also agreed that those terms would be reduced to writing in a deed. The deed was not executed by one party. Whether there exists, in those circumstances, a binding contract is a matter to be determined having regard to the intentions of the parties objectively ascertained.[20] In Masters v Cameron,[21] the High Court referred to three classes of case, in the first two of which there is a binding contract, and in the third of which there is not. The Court said:[22]
Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiations shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
[20] GR Securities v Baulkham Hills Private Hospital (1986) 40 NSWLR 631 per McHugh JA at 634.
[21] (1954) 91 CLR 353.
[22] (1954) 91 CLR 353 at 360.
There is said to be a fourth class of case in which there is a binding contract. In Sinclair, Scott & Co Ltd v Naughton,[23] the High Court referred to a case:[24]
[i]n which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.
[23] (1929) 43 CLR 310.
[24] (1929) 43 CLR 310 at 317.
An example of the case in which it was held that the agreement fell within the fourth class of case is Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd,[25] and on appeal GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd.[26]In delivering the judgment of the Court of Appeal, McHugh JA (with whom Kirby P and Glass JA agreed), said:[27]
The decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances: Godecke v Kirwan (1973) 129 CLR 629 at 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 332-334, 337. If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction.
Even when a document recording the terms of the parties’ agreement specifically refers to the execution of a formal contract, the parties may be immediately bound.
[25] (1986) 40 NSWLR 622 at 628.
[26] (1986) 40 NSWLR 631.
[27] (1986) 40 NSWLR 631at 634.
It will always be a question of construction on the facts of the particular case as to which category is applicable. In Godecke v Kirwan,[28] Walsh J said:[29]
It has been held repeatedly that the question is one of construction in each case of the document or documents which are put forward as showing that a contract was made. … In Von Hatzfeldt-Wildenburg v Alexander, Parker J. used language which has been cited with approval in many later cases. He said:
It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.
(Footnote omitted)
[28] (1972-73) 129 CLR 629.
[29] (1972-73) 129 CLR 629 at 638-639.
The authority of a solicitor to bind his client
As a general proposition, a solicitor does not have ostensible authority to bind his or her client to a contract.[30]
[30] Eccles v Bryant and Pollock [1948] Ch 93; D’Silva v Lister House Development [1971] Ch 17 at 28‑29; CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588; Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9606; Pianta v National Finance and Trustees Ltd (1964) 180 CLR 146; Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 at 586.
That general proposition, however, is subject to the qualification that, in the context of litigation, a legal practitioner has ostensible authority to bind his or her client to a contract which relates to and, in particular, compromises that litigation.[31] In CIC Insurance Ltd v Bankstown Football Club Ltd,[32] Kirby P drew a clear distinction between ostensible authority in litigious and non-litigious matters:[33]
It is not unreasonable for the appellant to view the conduct of the club, in apparently instructing its solicitor to pursue the subject insurance claim, as including all necessary authority to give effect to those instructions. Incidental to those instructions, it can be inferred, was the power to deal with the issue of the purported cancellation of the contract. Indeed, I should have thought that the instruction of a solicitor to pursue a matter such as a controversial insurance claim would leave a third party dealing with the solicitor with the impression that that solicitor, having been retained for his or her legal expertise, would have all necessary authority to deal with all issues which reasonably and foreseeably arose in the pursuit of that claim. It is not a situation akin to the instruction of a solicitor to pursue non-litigious business where the nature and extent of the solicitor’s authority is not so easily inferred to be so widely encompassing.
[31] Strauss v Francis (1866) 1 QB 379 at 381; Across Australia Finance v Bassenger [2008] NSWSC 799.
[32] (1994-1995) 8 ANZ Insurance Cases 61-232.
[33] (1994-1995) 8 ANZ Insurance Cases 61-232 at 75,555.
Even so, in the context of litigation the practitioner’s authority to bind his or her client to a contract is confined to a contract that actually and genuinely relates to the litigation.
In Waugh v H B Clifford & Sons Ltd,[34] Brightman LJ explained that there may be ostensible authority to enter into a contract that compromises an action so long as the contract does not contain terms which are “collateral to the action”. His Lordship said:[35]
It follows, in my view, that a solicitor (or counsel) may in a particular case have ostensible authority vis à-vis the opposing litigant where he has no implied authority vis-à-vis his client. I see no objection to that. All that the opposing litigant need ask himself when testing the ostensible authority of the solicitor or counsel, is the question whether the compromise contains matter “collateral to the suit”.
[34] [1982] Ch 374.
[35] [1982] Ch 374 at 387.
His Lordship explained that a compromise does not involve collateral matter merely because it contains terms which the court could not have ordered by way of judgment in the action.[36]
[36] [1982] Ch 374 at 387.
Consideration
The principal attack mounted by the plaintiff on the reasoning of the learned trial judge is that her Honour failed to have proper regard to the intention of the parties that their agreement would be subject to the execution of a deed. He submitted that the terms of the settlement contemplated the execution of a deed and that, until that had occurred, there could be no binding agreement between the parties. As such, the nature of the parties’ negotiations, which were subject to the execution of a deed, led to the conclusion that this case fell into the third category identified in Masters v Cameron.[37]
[37] (1954) 91 CLR 353 at 360.
I do not accept this submission.
In my view, the relevant issue which fell for determination by the learned trial judge was whether the parties had entered into a binding contract. As Allsop J (as he then was) said in Branir v Owston Nominees (No 2):[38]
The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement … which bespeaks an intention to be legally bound to the essential elements of a contract.
[38] (2001) 117 FCR 424 at 525.
In my view, the evidence discloses an intention on the part of all of the parties to be legally bound to the essential elements of a contract as at 14 October 2010. At that time, the parties had agreed the essential terms of an agreement pursuant to which the litigation was settled.
True it is that the agreement concluded between the parties at that stage contemplated that there would be mutual discharges and releases to be perfected in a deed, the execution of which would fix the date by which settlement would occur on the transfer of the Clovelly Park property, and that the drafting of the deed necessarily implied that there would be further negotiations between the parties as to its contents. Nonetheless, I consider that at this stage the parties had reached a binding agreement. The essential terms of that agreement were set out in the email of 14 October 2010 from the solicitors for the third and fourth defendants. The suggestion of a deed came not from the plaintiff, but from the third and fourth defendants. The requirement of a deed was, as the learned trial judge found, no more than a mechanism to implement the settlement agreement itself which was contained in that email.
In my view, it would be erroneous to construe what occurred as evincing an intention on the part of the plaintiff, or any of the other parties, to the settlement agreement to reserve his, or their, negotiating position until such time as a deed was executed. This was not an ‘in principle’ agreement, or an agreement to agree at some future time.[39] On the contrary, the subsequent conduct of the plaintiff evidenced the existence of a binding agreement from the time the other parties accepted the proposal contained in the email of 14 October 2010.
[39] Booker Industries Pty Ltd v Wilson Parking (Qld)Pty Ltd (1982) 149 CLR 600 at 604.
There can be no doubt that a court can consider evidence of subsequent conduct on the part of parties to determine the issue of whether a contract has come into existence.[40] In my view, the agreement between the parties falls into the so-called fourth category to Masters v Cameron. This was a contract where the parties were content to be bound immediately and exclusively by the terms which they agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms. It was a contract of the kind referred to by Lord Loreburn in Love & Stewart Ltd v S Instone & Co Ltd,[41] referred to with approval by McLelland J (as he then was) in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd:[42]
It was quite lawful to make a bargain containing certain terms which one was content with, dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with the full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, none the less that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain.
[40] ABC Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 547-548; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164.
[41] (1917) 33 TLR 475.
[42] (1986) 40 NSWLR 622 at 628.
The court should not be deflected from a consideration of the real issue by the stipulation in the contract that its terms would be reduced to a deed. While there are features of a deed that distinguish it from a simple contract,[43] the fact that the parties have agreed to reduce their agreement to writing in a deed, as opposed to any other form of written contract, does not detract from a consideration of the real issue which arose in this matter, namely, if and when the parties had reached a binding agreement. Humphris-Clark v Lazaridis[44] demonstrates that a binding agreement can be made in circumstances where the parties agree that litigation will be settled on terms which include the parties entering into a deed of release as a condition of the payment of settlement moneys, even where the deed is not subsequently executed.
[43] Eg. a deed does not require consideration and must be signed or sealed, but see s 41(4) of the Law of Property Act 1936 (SA) which provides a deed will be taken to be valid notwithstanding any defect in its execution if it appears from evidence external to the deed that the party intended to be bound by it.
[44] [2010] NSWSC 318 and on appeal [2010] NSWCA 349.
In that case, litigation was resolved in an action for professional negligence on the basis that there would be a verdict in favour of the defendant and payment to the plaintiff of $4999.99, inclusive of costs, which would be paid under a separate deed of release. A deed of release was prepared that sought to encompass the terms of the settlement between the parties. The plaintiff refused to execute the deed of release and the defendant commenced proceedings seeking a declaration that there had been a binding settlement between the parties on the terms agreed. The court found there was, notwithstanding the failure to execute the deed. The court held that the requirement there would be a separate deed prepared setting out the terms of the settlement agreement was merely a mechanism for the implementation of their agreement. The court held that this was an agreement which fell within the first class in Masters v Cameron. It was not an agreement to agree at some time in the future. There were no further matters to be agreed. All that had to occur was that the deed had to be prepared consistently with the terms of the settlement agreement.[45]
[45] Another example where an unfulfilled requirement for the execution of a deed as part of a settlement agreement was held not to be an obstacle to the court finding the existence of a binding contract is Needlework Warehouse Pty Ltd v Chansonette Pty Ltd (2006) 226 ALR 252.
In my view, this agreement falls into the fourth category, because the parties had in contemplation that, notwithstanding the terms agreed as set out in the email of 14 October 2010, the provisions of the deed, while reflecting those terms, might include additional matters beyond those terms agreed, as set out in the email of 14 October 2010. Plainly, the terms of the deed go beyond the terms of the email of 14 October 2010, but the deed is not inconsistent with those terms.
Comparing the two documents, it is apparent that clause 2.7 of the deed conforms with paragraph 1 of the email. Clauses 2.11 and 2.12.2 of the deed conform to paragraph 2 of the email. Clauses 2.12.2 and 2.12.7 of the deed conform to paragraph 3 of the email. Clauses 2.12.3 to 2.12.5 of the deed conform to paragraph 4 of the email. Clauses 2.1, 2.14, 2.18 and 4 of the deed conform to paragraph 5 of the email. Clause 3.1 of the deed conforms to paragraph 6 of the email. Clause 2.7 of the deed conforms to paragraph 7 of the email. Clause 2.17 of the deed conforms to paragraph 8 of the email; and clause 2.6 of the deed conforms to the reference in one of the later unnumbered paragraphs of the email to the requirement for the third and fourth defendants’ valuer to have access to the property for valuation purposes.
The absence of a date by which the Clovelly Park property is to be transferred, due to the failure of the plaintiff to execute the deed, can be addressed by an appropriately crafted order. The difficulty it represents is not an obstacle to this Court concluding that the parties reached a binding agreement on 14 October 2010.
This conclusion is amply supported by the evidence of the parties’ subsequent conduct, as set out earlier in these reasons, in particular, the advice to the District Court that the matter had settled and the drafting of the deed in conformity with the email of 14 October 2010. Nothing in the parties’ conduct is consistent with any binding agreement being conditional upon execution of the deed. On the contrary, the parties’ subsequent conduct points to their intention that they were bound to perform the obligations agreed upon, as set out in the 14 October 2010 email.
Accordingly, I am of the view that the learned trial judge was in error in impliedly rejecting the existence of a binding agreement as at 14 October 2010. I do not consider that there was any uncertainty as to the essential terms of the agreement reached between the parties as set out in the email of 14 October 2010. The terms of the deed prepared by the plaintiff’s solicitors and executed by the defendants merely evidenced the existence of a binding agreement between the parties as at 14 October 2010.
Given my conclusion that there was a binding agreement between the parties as at 14 October 2010, I consider that this conclusion effectively disposes of the subsidiary agreement of the plaintiff concerning the lack of authority for his solicitor to bind him to the deed.
In my view, the plaintiff’s solicitor was cloaked with ostensible authority to settle the litigation between the parties as at 14 October 2010. He did so. The terms of agreement at 14 October 2010 compromising the proceedings did not contain terms which were collateral to the action. To adopt the language of Lord Justice Brightman in Waugh v H B Clifford & Sons Ltd,[46] “a compromise does not involve ‘collateral matter’ merely because it contains terms which the court could not have ordered by way of judgment in the action.”[47]
[46] [1982] Ch 374.
[47] [1982] Ch 374 at 387.
In my view, none of the terms of the agreement of 14 October 2010 were collateral to the action. The terms were directly related to the subject matter of the dispute between the parties the subject of the litigation in the District Court, namely, the Clovelly Park property and the mortgage over the property.
Conclusion
Accordingly, for these reasons, I would dismiss the appeal.
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