Owerhall v Bolton & Swan Pty Ltd - [2016] VSC 91

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2015 04682

EERIK JUHANI OWERHALL	Plaintiff
v
BOLTON & SWAN PTY LTD (ACN 153 647 360)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	25 February 2016
DATE OF JUDGMENT:	11 March 2016
CASE MAY BE CITED AS:	Owerhall v Bolton & Swan Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 91

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EQUITY – Application to set aside settlement agreement – Execution of agreement on advice of Solicitor engaged by plaintiff–Alleged unconscionable conduct – Plaintiff claimed special disadvantage due to intoxication by reason of medication taken – Whether special disadvantage known to the defendant – Whether defendant took unconscionable advantage of plaintiff ‑ Allegation of undue influence by plaintiff’s solicitor – Solicitor not a party to the transaction or this proceeding ‑ The principles relating to undue influence not applicable in the circumstances – Application dismissed ‑ Commercial Bank of Australia Ltd v Amadio, (1983) 151 CLR 447 ‑ Kakavas v Crown Melbourne Limited (2013) 250 CLR 392 ‑ Blomley v Ryan (1956) 99 CLR 362 ‑ Turner v Windever [2003] NSWSC 1147 (approved on appeal Turner v Windever, [2005] NSWCA 73 at [2]).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person	-
For the Defendant	Mr J Sinisgalli, Solicitor Advocate	Ainslie Harding & Wood

HIS HONOUR:

Introduction

The plaintiff applies for a declaration that a Deed entitled ‘Terms of Settlement’ entered into between him and the defendant on 21 May 2015 (‘Settlement Agreement’) is invalid and for an order that it be set aside.[1]
[1]Originating Motion filed 3 September 2015.

The application now before the court was initially made in the course of the hearing of a summons for taxation commenced by the plaintiff against the defendant on 2 February 2015.[2] That application was referred by the Costs Court judge to the judge sitting in the Practice Court pursuant to r 63.51 of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’).[3] That rule enables the Costs Court to refer to a judge of the Court any question arising on a taxation.
[2]Proceeding S CI 2015 00420 (‘Costs Court proceeding’).
[3]Order dated 24 July 2015 in the Costs Court proceeding.

The reference came on before Bell J on 7 August 2015. He construed the reference as raising two questions. First, whether the plaintiff’s application to set aside the Settlement Agreement is within the jurisdiction of the Costs Court. Second, whether, if the Costs Court has that jurisdiction, the reference judge should determine that the Agreement should be set aside and direct the Costs Court accordingly.

On 7 August 2015, Bell J decided that the application to set aside the Settlement Agreement does not relate to the “assessment, settling, taxation or review of costs” and is, therefore, beyond the jurisdiction of the Costs Court.[4] His Honour ordered that the plaintiff’s application to the Costs Court was beyond its jurisdiction, but would be within the jurisdiction…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2016] VSC 91
Decision Date: 11 March 2016

CaseChat Overview and Summary

The case of Owerhall v Bolton & Swan Pty Ltd involved a plaintiff seeking to set aside a settlement agreement with the defendant, Bolton & Swan Pty Ltd, on the grounds of alleged unconscionable conduct. The plaintiff claimed that they were intoxicated by medication at the time of executing the agreement, constituting a special disadvantage, and that the defendant was aware of this condition and took advantage of it. Additionally, the plaintiff argued that their solicitor, who was engaged to represent them in the proceedings, exerted undue influence over them. The matter was heard in the Supreme Court of New South Wales.

The primary legal issues before the court were whether the plaintiff's alleged special disadvantage was known to the defendant and whether the defendant took unconscionable advantage of the plaintiff. Another issue was whether the plaintiff's solicitor exerted undue influence on the plaintiff. Notably, the solicitor was not a party to the settlement agreement or the current proceeding, complicating the applicability of principles relating to undue influence. The court had to determine if the principles set out in precedents such as Commercial Bank of Australia Ltd v Amadio, Kakavas v Crown Melbourne Limited, Blomley v Ryan, and Turner v Windever were applicable to the facts of the case.

In assessing these issues, the court held that the principles of unconscionable conduct and undue influence had to be strictly applied. The court found that the plaintiff's alleged special disadvantage due to intoxication was not known to the defendant, and there was no evidence that the defendant took unconscionable advantage of this condition. Furthermore, the court held that the principles relating to undue influence were not applicable since the solicitor was not a party to the transaction or the proceeding. Consequently, the court dismissed the plaintiff's application to set aside the settlement agreement.

The final orders of the court were that the plaintiff's application to set aside the settlement agreement was dismissed, and the settlement agreement remained binding on both parties.

Orders