Pratap v Permanent Custodians Limited

[2013] NSWSC 1918

Supreme Court

New South Wales

Medium Neutral Citation:	Pratap v Permanent Custodians Limited [2013] NSWSC 1918
Hearing dates:	11 November 2013
Decision date:	20 December 2013
Jurisdiction:	Equity Division
Before:	Young AJ
Decision:	Settlement of action ordered.
Catchwords:	DEEDS - Settlement - Settlement of action by deed - Four parties - Where one party had not executed deed when first party sought to withdraw - Whether deed binding on those who had executed it.
Legislation Cited:	Civil Procedure Act 2005
Cases Cited:	Katsaitis v Commonwealth Bank of Australia (1987) 5 BPR 12,049 Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 Naas (Lady) v Westminster Bank Ltd [1940] AC 366
Category:	Principal judgment
Parties:	Katherine Pratap (Plaintiff) Permanent Custodians Limited (First defendant) Firstfolio Wholesale Pty Ltd (Second defendant) AFIG Wholesale Pty Ltd (Third defendant) Neil Lal (Fourth defendant)
Representation:	Counsel: R Partap (son of plaintiff) L Shipway (First and third defendants) H Altan (Second defendant) Solicitors: Gadens Lawyers (First and third defendants) TressCox Lawyers (Second defendant)
File Number(s):	2011/301929
Publication restriction:	Nil

Judgment

1. There are three Motions before the Court all of which basically seek to determine whether these proceedings have been settled.

1. The factual background to the Motions is that a mortgage was entered into between the parties in respect of a property at Moorebank. In September 2005 the first defendant advanced $260,000 by way of loan. There was obviously something fraudulent about the transaction involving the mortgage broker and when the money was not repaid and the first defendant sought to recover its money the fraud became apparent. The first defendant says that the matter was then settled by a Deed of Settlement executed by the plaintiff, the first defendant and the second defendant and exchanged on 4 June 2013.

1. The plaintiff is not able to speak for herself and on a number of occasions during the proceedings she has been represented by her son. Although I formally declined to hear the son, in actual fact at the hearing before me on 11 November 2013 I did hear submissions from the son as to why the order settling the matter should not be made. It would seem that the basal difference in fact between the parties is that the plaintiff did not understand that the Deed contained a provision that she would not speak to the media about the settlement and that in fact she or her son had made some preliminary arrangements to do so.

1. The case was relatively straightforward when it was put before me on 11 November 2013 on which occasion the son, Mr Raman Partap, appeared to represent the plaintiff. Mr L Shipway appeared for the first and third defendants and Mr H Altan for the second defendant. The first defendant was the lender Permanent Custodians Limited. The other defendants are Firstfolio Wholesale Pty Ltd which is a mortgage service provider and broker and AFIG Wholesale Pty Limited which again provides broking services in the mortgage industry.

1. The Deed has four parties, namely the plaintiff and the first, second and third defendants. The Deed provided for settlement by a person other than the plaintiff paying out the mortgage and the mortgage being discharged and the parties being given and granted various releases. In view of its confidentiality I will not say more than that. It was signed, sealed and delivered by a representative of the first defendant and the second defendant and the plaintiff but not by the third defendant, AFIG. The evidence is that AFIG only executed the document on about 7 June. The evidence is that on 7 June 2013 a representative of AFIG emailed to Gadens, who are the solicitors for the first defendant, a counterpart of the Deed of Settlement executed on behalf of AFIG. On 7 June Ray Partap advised Gadens that his mother wished to amend the Deed, being concerned about the confidentiality exclusion.

1. At the hearing on 11 November I was concerned that the Deed may not have become effective and that the plaintiff had withdrawn her authority to have the Deed properly delivered before it had become perfected by AFIG signing it. Accordingly, I asked for further submissions and reserved my decision.

1. The thoughts that went through my mind on 11 November were that the Deed provided that copies would be exchanged the following day. They were not. The settlement would seem to me to have been conditional upon the Deeds becoming binding. With some sorts of deeds particularly guarantees the Courts usually take the view that the deed is not to operate until all the parties have signed it. Does this apply to a deed other than a guarantee? Can a person who has delivered a deed on the basis that everyone else will deliver it by a certain time be freed from the deed if that circumstance does not arise?

1. However having considered the further submissions and having re-read Naas (Lady) v Westminster Bank Ltd [1940] AC 366 and my own decision in Katsaitis v Commonwealth Bank of Australia (1987) 5 BPR 12,049, I realise my concerns were baseless. These cases make it quite clear that once a person has signed, sealed and unconditionally delivered a deed that deed is binding on that person even if there is a party to the deed who has not executed it or delivered it unless the failure of that third party will throw an additional burden on the other parties. There is no additional burden in the instant case. Accordingly the Deed is effective. As pointed out by Mr Shipway, counsel for the first and third defendants, the decision of the Court of Appeal in Mirzikinian v Tom & Bill Waterhouse Pty Ltd [2009] NSWCA 296 confirms these views.

1. Accordingly, my reservations about making the order on 11 November have not been substantiated and I should now proceed on the basis that the Deed is binding.

1. There are three Notices of Motion before me: (a) one filed on 25 September 2013 by the first and third defendants who seek an order under s 73 of the Civil Procedure Act 2005 that the proceedings have been settled and an order that the proceedings as against the first and third defendants be dismissed with no order as to costs and they claim costs of the Motion; (b) a Notice of Motion filed by the second defendant on 1 July 2013 seeking the same orders, except that they seek costs on the indemnity basis; and (c) a Notice of Motion filed by the plaintiff on 30 July 2013 seeking to set aside the Deed or alter certain clauses in the Deed and set a new hearing date for the plaintiff's claims.

1. I should deal with the plaintiff's Notice of Motion first. In view of my conclusion that the Deed is binding, prima facie that is the end of the matter. The Court has jurisdiction in my view to decline to enforce a settlement even a settlement by Deed if it considers that the settlement is obtained unconscientiously or that there is some defect in the understanding of the parties known to the other party. However there is not the material in the present case to indicate either of those things. The Deed was entered into with proper precautions and unfortunately the understanding that there would be no publicity only came upon the plaintiff later. It was then too late.

1. Accordingly I should dismiss the plaintiff's Motion. The first and third defendants are entitled to succeed on their Motion and so is the second defendant. However, there was no need for separate Motions and there should only be one set of costs between the defendants. Accordingly the Court orders pursuant to s 73 of Civil Procedure Act 2005 that these proceedings have been settled in accordance with the terms of the Deed of Settlement executed by the plaintiff, the first and second defendants and exchanged on 4 June 2013 and order that the plaintiff pay the costs of the Motions filed by the first and third defendants on the one hand and the second defendant on the other hand however there is only to be one set of costs between the two sets of defendants.

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Decision last updated: 23 December 2013