Re Group 7 Services Pty Ltd
[2022] VSC 189
•14 April 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2021 02457
IN THE MATTER of GROUP 7 SERVICES PTY LTD (ACN 624 615 596)
BETWEEN:
| PANAGIOTIS MANTZANAS | Plaintiff |
| v | |
| GROUP 7 SERVICES PTY LTD (ACN 624 615 596) & ANOR (according to the attached Schedule) | Defendants |
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JUDGE: | Irving AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 March 2022 |
DATE OF JUDGMENT | 14 April 2022 |
CASE MAY BE CITED AS: | Re Group 7 Services Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VSC 189 |
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PRACTICE AND PROCEDURE — Compromise of proceeding — Enforcement of deed — By application in proceeding — Discretion of court — Whether summary enforcement of terms “clearly just” – Proceeding entered into Supreme Court of Victoria’s Oppression Proceeding Program – Deed executed following mediation – Finding that it is appropriate to exercise discretion and accede to request to exercise power summarily to enforce deed — Seachange Management Pty Ltd v Pital Business Pty Ltd (2009) 23 VR 396 — Australian Xinyangfeng Fertilizer Pty Ltd v Freshwater [2020] VSC 450.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr H Kirimof of counsel | Themida Legal |
| For the Defendants | Mr A E Klotz of counsel | Attica Lawyers |
HIS HONOUR:
Introduction
On 14 July 2021, Panagiotis Mantzanas (Mantzanas) commenced oppression proceedings under s 233 of the Corporations Act 2001 (Cth) (Act) against the defendants. The proceeding was case managed in the Supreme Court’s Oppression Proceeding Program (Program). As part of the Program, the parties were directed to attend an early mediation. At the mediation, the parties agreed to settle the proceeding. They signed a deed of settlement (deed) reflecting the terms of that agreement.
On 20 January 2022, the defendants filed an interlocutory process seeking orders to compel the plaintiff’s compliance with the deed. In short, the defendants allege they have complied with the deed, the deed remains on foot and they seek orders compelling Mantzanas to comply with the terms of the deed.
Mantzanas resists that application, saying that the deed has come to an end because the parties did not complete their obligations within the timeframes provided by the deed.
For the reasons set out below, I have decided to exercise the Court’s discretion to summarily enforce the terms of the deed.
Factual background
In 2016, Mantzanas operated a cleaning and handywork business as a sole trader with ABN 52 842 268 202. At this time, the business operated through the business name ‘Group 7 Services’.
In late 2017, Tony Parissis (Parissis) engaged Mantzanas to provide painting and handywork services for his holiday home, and then later, for his car wash business.
In early 2018, Parissis and Mantzanas agreed to start a new business together. This new business would provide the same cleaning and handywork services as Mantzanas was providing as a sole trader, except the new business would be operated through a corporate entity.
The new company, Group 7 Services Pty Ltd (ACN 624 615 596) (G7S) was incorporated on 23 February 2018.
Both Parissis and Mantzanas say that:
(a) it was intended that once G7S was incorporated, Mantzanas would transfer the equipment, tools and contracts he held in his business as a sole trader to G7S and Parissis would make a payment:
(i) Mantzanas describes this payment as a ‘contribution’ in the sum of $50,000; whereas
(ii) Parissis describes this payment as $20,000 for:
[T]he equipment and notional goodwill of the company as part of establishing a new company.
(b) Parissis and Mantzanas would each hold a 50% shareholding in G7S;
(c) Parissis would be the sole director and sole secretary of G7S; and
(d) G7S would operate out of the premises used by Parissis for his car wash business located in Oakleigh (Oakleigh address).
Manzanas’ case
In his affidavit filed in the proceeding and sworn 21 June 2021, Mantzanas says that because Parissis had no knowledge of running a cleaning and handywork business, it was agreed that Mantzanas would find new contracts for work and organise the work for G7S, whereas Parissis would manage the office and bring in work via electronic advertising. He says at [11] of his affidavit that:
Soon after the establishment of the company we also purchased a food van to position it outside the office to serve customers of the car wash business.
Mantzanas says that G7S was doing well, however Parissis did not make payment of the additional $30,000 and would not provide him with any reports in relation to G7S’s financial operations. He says that because he had a bank card he used for funding jobs, he was able to see that client payments which were being deposited into the company’s account would subsequently disappear. Mantzanas says that when he asked Parissis about these withdrawals, Parissis told him those monies had been transferred into Parissis’ personal bank account.
Mantzanas says that he discovered Parissis was not paying G7S’s cleaning contractors who were working at Globe Williams Australia (Globe), being one of the contracts Mantzanas had transferred to G7S. He also says that Parissis has failed to pay G7S’s invoices, including invoices from its accountant and 3XY Radio who was engaged to advertise the business for G7S.
Parissis’ case
In Parissis’ affidavit filed in the proceeding and sworn 2 September 2021, he says that in February 2018, he discussed with Mantzanas the terms of their agreement to operate a business together which included, amongst others, that:
(a) the tools, trailers and equipment being transferred to G7S would be stored at Mantzanas’ residence in Clayton (Clayton address);
(b) Mantzanas would work exclusively for the new company, performing maintenance and cleaning and partner with other contractors (as required) to complete work. Mantzanas would invoice the new company on an hourly basis at an agreed rate using the ABN previously used when ‘Group Services 7’ was being operated by him as a sole trader; and
(c) as Parissis and Mantzanas were 50% shareholders, any dividends would be distributed equally once costs were met,
(collectively, the G7S agreement).
Parissis says that he prepared a contract of sale of business reflecting the G7S agreement which he provided to Mantzanas, however it was not executed. Parissis says that they operated G7S and worked together on the basis of the terms of the G7S agreement, however he believes Mantzanas has breached the G7S agreement, including because:
(a) Mantzanas has refused to provide him with financial records for financial years FY2018 and FY2019 in respect of Mantzanas’ sole trading business;
(b) Mantzanas has been passing himself off as G7S by performing jobs using his old quote book (which he had used whilst operating as a sole trader under the business name ‘Group Services 7’) and had issued invoices under that business name, retaining the income received for his sole benefit;
(c) Mantzanas has been competing with G7S by using its advertising leads and using the tools which were transferred to G7S, for his exclusive benefit; and
(d) Mantzanas made withdrawals from G7S’s bank account which were unrelated to the business and had damaged G7S’s reputation by sending correspondence to Globe without his prior approval.
Parissis says that the tools and equipment belonging to G7S have been held at the Clayton property without his consent and must be returned to G7S. He also says that the food van was owned by his car wash business (Anaston House Pty Ltd) and has been held by Mantzanas at the Clayton property for over two years, with Mantzanas refusing to allow it to be moved.
Parissis denies the allegation that he has wrongly retained company funds and says that he only received payment for director’s fees and reimbursement of business expenses.
Judicial mediation
On 12 October 2021, the parties attended a mediation conducted by a judicial registrar and agreed to settle the proceeding on the terms provided in the deed, without any admission of liability by any party.
Before setting out the parties’ conduct following execution of the deed, it is helpful to set out the terms of the deed.
Deed of Settlement
The key terms of the deed are as follows:
2. Settlement of matters involving G7S
(a) Mantzanas agrees to sell and Parissis agrees to purchase, [Mantzanas]’s 50 shares in G7S for nil consideration.
(b) Within 14 days of the date of this Deed, Parissis and Mantzanas will do all things necessary to effect the transfer of Mantzanas’ 50 unencumbered Shares in G7S to Parissis. All documents necessary to effect the share transfer will be prepared at Parissis’ cost.
(c) Mantzanas warrants that the 50 Shares are unencumbered and he warrants that he will not encumber those Shares.
3. Settlement of matters involving assets of G7S and Parissis
(a) Within 14 days of the date of this Deed, Mantzanas shall make available for collection at [a South Clayton address] by both Parissis and G7S the [food van] with registration number F92777.
(b) Mantzanas and G7S and Parissis shall otherwise retain all equipment, vehicles and furniture in their possession as at the date of this Deed.
(c) The parties will do all things necessary, including the signing of all necessary documents to give effect to this clause regarding the transfer of any equipment.
(d) Within 14 days of the date of this Deed, G7S shall make available for collection at [the Oakleigh address] a rectangular glass table with 6 vinyl chairs, in their current state and condition, that were previously located at the Oakleigh premises.
4. Proceeding
4.1 Upon the transfer of shares and provision of vehicle and the equipment provided in clause 2(a) and 3 herein, the parties shall file orders in the Proceeding by consent that the Proceeding is dismissed with there being no order as to costs of the Proceeding.
….
14. Time is of the essence
Time shall be of the essence in respect of the parties’ obligations under this Deed.
Conduct after execution of the deed
After the deed was executed, on 12 October 2021 Parissis says that he called Tom Kouros (Kouros), an acquaintance of his who had also performed work as a sub‑contractor for Mantzanas, and informed Kouros that a settlement was reached with Mantzanas.
Parissis asked Kouros to assist by:
(a) collecting the food van from Mantzanas at the South Clayton address; and
(b) contacting Mantzanas to make arrangements for Mantzanas to collect the table and chairs (furniture) from the Oakleigh address.
On 14 October 2021, Kouros say that he contacted Mantzanas to make arrangements to collect the food van and to inform Mantzanas that the furniture was available to be collected from the Oakleigh address, however Kouros was told by Mantzanas that the food van was not at the South Clayton address. Kouros says that Mantzanas would not tell him the location of the food van and told him that he (Mantzanas) was busy with work and would get back to Kouros when he had time.
On 20 October 2021, Mantzanas’ solicitors emailed Parissis’ solicitors asking for a suitable day and time to exchange the food van and furniture.
Kouros deposes to informing Parissis of his conversation with Mantzanas on 25 October 2021.
On 26 October 2021, Parissis’ solicitors emailed Mantzanas’ solicitors enclosing a copy of the share transfer form and requesting Mantzanas execute it and return it for execution by Parissis. The unsigned share transfer form provides for Mantzanas to sell his 50 shares to Parissis for consideration of $1.00 and lists a purchase date of 26 October 2021.
On 28 October 2021, Parissis’ solicitors emailed Mantzanas’ solicitors asking whether Mantzanas had signed the share transfer form and stating:
1. An aquittance [sic] of both parties will be collecting the food van. Currently the van will be collected on 30 October 2021, however, we understand the parties are attempting to co-ordinate an appropriate time,. [sic]
2. We confirm the table and chairs will be available for collection on the landing at [the Oakleigh address] from 12:00pm on 30 October 2021.
Please confirm your client is agreeable to the above.
On 29 October 2021, Mantzanas’ solicitors emailed Parissis’ solicitors advising that:
[O]ur client has not been communicating with an acquaintance in relation to this matter and was not aware of any arrangements made for the exchange of the van with the table and chairs. We note that our office had emailed your office on 20 October 2021 in relation to the exchange but we did not receive a response until yesterday.
The van is secured in storage and our client needs to organise access to it. He will not be able to make these arrangements for tomorrow but will endeavour to make it available on Monday 1 November 2021.
Later that day, Kouros says he spoke with Mantzanas and was told that the deed had lapsed and he would not make the food van available or collect the furniture from the Oakleigh address.
On 1 November 2021, Parissis says he called Kouros to seek a further update on the food van, but was informed by Kouros that Mantzanas had not provided any further information.
At 12:43pm on 3 November 2021, Mantzanas’ solicitors emailed Parissis’ solicitors stating:
Our position if that your client failed to comply with the settlement agreement.
However, in order to give the parties an opportunity to resolve the matters between them, and to avoid the expense of appearances tomorrow, we propose that the parties consent to an order adjourning tomorrow’s hearing with no order as to costs.
Later that day on 3 November 2021 at 1:27pm, Parissis’ solicitors emailed Mantzanas’ solicitors saying that:
I am surprised at your suggestion that our client has failed to comply with the Deed of Settlement (Deed). I confirm your client has failed to comply with the terms as follows:
1. In accordance with clause 2(b), your client was required to transfer the shares to our client. I have sent the Share Transfer to your office, however we have not received it signed by your client. I confirm your client is in breach of clause 2(b) of the Deed.
2. In accordance with clause 3(a), your client to make the Food Van available from the Premises [address omitted]. I received correspondence from your office confirming that the Food Van was now at an undisclosed storage facility. It appears that your client is attempting to frustrate the collection of the Food Van. Would you please urgently confirm a time when your client can attend the Premises [address omitted] to collect the Food Van as your client is currently in breach of clause 3(a) of the Deed.
Again later that day at 4:07pm, a further email was sent from Parissis’ solicitors to Mantzanas’ solicitors saying that:
We refer to our telephone conversation this afternoon.
Would you please provide a suitable time for your client to collect the table and chairs from [the Oakley address], so that we can notify our client. Furthermore, can you please confirm a time when our client can attend [the South Clayton address] to collect the Food Van.
We confirm that our client is ready, willing and able to settle the matter and is awaiting confirmation of a suitable time to complete the exchange of goods.
Mantzanas’ solicitors replied at 4:13pm advising they were ‘in the process of obtaining our client’s instructions and will respond in due course’.
On 5 November 2021, Parissis’ solicitors sent a letter by email to Mantzanas’ solicitors which again requested a suitable time and date for Parissis to collect the food van and for Mantzanas to collect the furniture. This letter said:
[A]s the Premises is a multi-tenancy premises, our client does not want to leave the [furniture] in a public place where there is a possibility they may be stolen.
This letter again requested the signed share transfer form from Mantzanas and confirmed Parissis was ready, willing and able to settle the matter.
Later that day, Parissis’ solicitors emailed Mantzanas’ solicitors advising that the furniture would be available for collection on 6 November 2021 at the Oakleigh address for a period of two hours and requested Mantzanas collect them during that time.
Parissis says that he called Kouros on 5 November 2021 to notify him that the furniture would be left at the top of the stairs at the Clayton address on 6 and 7 November 2021. Kouros says that he called Mantzanas that same day and advised that the furniture would be made available for collection on those dates.
Parissis also says that on 6 November 2021, he called John Leloudas (Leloudas), to advise him that the furniture was ready to be collected by Mantzanas from the Clayton address. Parissis says Leloudas was another acquaintance of Mantzanas.
On 7 November 2021, Parissis says he was told by Leloudas that Mantzanas was not going to pick up the furniture as the matter was now with his solicitors.
On 8 November 2021, Parissis’ solicitors emailed to Mantzanas’ solicitors, noting the furniture was not collected and again requested a time and date that Mantzanas could collect the furniture. They reiterated their request for a time to collect the food van and to receive the signed share transfer form.
On 9 November 2021 and twice on 11 November 2021, Parissis’ solicitors emailed Mantzanas’ solicitors advising that the furniture would be delivered to Mantzanas’ solicitors’ office on 12 November 2021. In their email sent 12:23pm on 11 November 2021, they advised that they would be seeking an order from the Court enforcing the terms of the deed and that costs would be sought from Mantzanas due to his breach of the deed.
Parissis made arrangements for the delivery of the furniture to the address of the Mantzanas’ solicitors, with delivery occurring on 12 November 2021. Parissis says that the furniture was accepted by Mantzanas’ solicitors.
Against this, Mantzanas says that he was advised by his solicitor on 12 November 2021 that Parissis and another man were at their office leaving the furniture. He says that his solicitors told him that they said the furniture could not be left, but that they was ignored. Mantzanas says that he did not provide instructions to his solicitors to accept the furniture.
On 12 November 2021, Mantzanas’ solicitors sent Parissis’ solicitors a letter (by email) which was seven pages long. Some of the relevant paragraphs state:
Your emails appear to assume the settlement deed will have its intended effect if your client belatedly proceed to take the steps that were required to occur much earlier.
In our view, that is not the case.
The primary purpose of the deed is to provide releases and facilitate the dismissal of the proceeding.
The releases are in clause 6 and the ‘absolute bar’ is in clause 8.
The release in clause 6.1 is conditional upon compliance with clause 3(d).
The release in clause 6.2 is conditional upon compliance with clauses 2 and 3(a).
….
Importantly, we note that the releases are plainly conditional rather than promissory; the non fulfillment of the precondition leaves the release inoperative. No termination is necessary, and the release does not terminate, rather it simply does not come into being.
Mantzanas’ solicitors’ letter also details their assertion that because time was of the essence, it ‘means non-compliance is immediate upon any time stipulation elapsing’. It suggests the releases in the deed have become inoperable upon Parissis’ non‑compliance with clause 2 and clause 3(a) and 3(d): ‘the non-compliance was fatal immediately upon the relevant time from for compliance expiring’. It further suggests that Parissis’ attempts to comply with these clauses at a later time ‘will not activate the releases’. They assert the last day for compliance of clauses referring to a 14‑day time period was 26 October 2021 and assert that Parissis failed to comply with the deed and failed to do ‘all things necessary’ to effect the transfer of shares by only providing the share transfer form ‘less than 2 hours before the deadline for non-compliance’. They say the releases in the deed ‘have passed their used [sic] by date’ and contend that a new deed must be drawn, at Parissis’ expense.
The letter proceeds to say:
In our view that work should commence immediately however we will not presently commit to executing a new deed. Our client is entitled to consider his options.
This letter, in its concluding paragraphs, says that Mantzanas’ ‘reserves his right to continue with the proceeding and seek final relief’, and that ‘circumstances now give him a better opportunity to advance his claim’.
Based on the material before the Court, this appears to be where communication between the parties’ solicitors regarding compliance with the deed concludes.
In his affidavit filed 1 March 2022, Mantzanas denies speaking to Kouros on 14 October, 29 October and 5 November as alleged. He also says that he only spoke to Kouros on the phone ‘via text message on 15 November 2021’ in relation to these proceedings, and that Kouros had responded saying he knew nothing about the proceeding and would ‘be on my side’. A copy of these text messages are exhibited to his affidavit sworn 1 March 2022, however they are in the Greek language and are not translated. He has also exhibited his mobile phone logs for outgoing calls only, however he does not depose to Kouros’ mobile number or other contact numbers. In addition, a significant number of numbers are blacked out. In these circumstances it is difficult to give this evidence much weight.
Kouros swore a responsive affidavit on 18 March 2021 which was filed by the defendants. Kouros deposes to the various calls, text messages and in person meetings with Mantzanas concerning the proceeding which span from August 2021 to 15 November 2021.
Amongst other things, Kouros says that he spoke with Mantzanas concerning the proceeding on numerous occasions, that Mantzanas was ‘unhappy’ with the settlement reached between the parties and that Mantzanas had made threats to issue legal proceedings against him in relation to a separate matter. Kouros does not deny sending a message to Mantzanas stating that he would ‘be on your side if needed be’ but says he sent this because:
I was intimidated by Mantzanas’ threats towards me and I wanted him to leave me alone.
Exhibited to his second affidavit is a copy of Kouros’ mobile telephone records in which a number of calls alleged to be between himself and Mantzanas’ mobile telephone number are highlighted. Kouros says he could not exhibit the text messages with Mantzanas because he has purchased a new telephone and no longer has access to those messages.
Lastly, Mantzanas says that he does not know anyone by the name of John Leloudas and has not been communicating with any other mutual acquaintances about the deed.
Interlocutory Process
On 20 January 2022, the defendants filed an interlocutory process seeking orders:
(a) requiring Mantzanas (or the Prothonotary, should he fail) to provide an executed share transfer form to effect transfer of his 50 shares to Parissis;
(b) requiring Mantzanas to make the food van available for collection and to provide an address for which it can be collected; and
(c) for Mantzanas to pay Parissis’ costs of the application on an indemnity basis.
That application is supported by the affidavit of Parissis sworn 13 December 2021 (and his earlier affidavit filed in the proceeding sworn 2 September 2021), affidavit of Kouros sworn 13 December 2021 and the affidavit of his solicitor, Norrie Strintzos, sworn 18 January 2022, along with submission filed 20 January 2022.
In opposing the application, Mantzanas relies upon his affidavit sworn 1 March 2022 (along with his supporting affidavit filed in the proceeding and sworn 21 June 2021), with submission filed 2 March 2022.
I now turn to the submissions filed in support, and in opposition to the application.
The defendants’ submissions
By submissions filed 20 January 2022, the defendants say that:
(a) the terms of the deed did not require completion within 14 days but rather the taking of steps within 14 days of the various matters requiring completion by performance;
(b) the terms of the deed did not provide for the deed to come to an end simply by reason that a party failed to take steps within the 14 days required by the deed. Non-compliance might give the innocent party an election to treat the deed as being at an end and a right to inform the defaulting party of its position in that regard;
(c) Mantzanas affirmed the deed after the lapse of the 14 days by:
(iii) his lawyers’ email sent 29 October 2021 which stated that the food van had been in storage but that Mantzanas would make arrangements to access it and endeavour to make it available for collection from 1 November 2021; and
(iv) his lawyers’ acceptance of the furniture on 12 November 2021;
(d) even if Mantzanas had a right to terminate the deed because of Parissis’ non‑compliance, he waived that right by his lawyers’ email sent 29 October 2021 and by his lawyers’ acceptance of the furniture on 12 November 2021; and
(e) Parissis’ non-compliance was due in large part to a deliberate course of conduct by Mantzanas in not collecting the furniture, refusing to disclose the location of the food van and not taking any steps to effect the share transfer. A party who is unwilling or unable to perform the contract is not entitled to terminate the contract for breach by the other party.
Plaintiff’s submissions
By submissions filed 2 March 2022, Mantzanas says:
(a) the defendants’ interlocutory process seeks orders for specific performance and mandatory injunctions;
(b) the Court does not have power to hear, summarily, in the same proceeding in which a settled claim originated, an application for orders to enforce the settlement agreement; and
(c) there is no basis to make the orders sought.
Consideration
I cannot accept Mantzanas’ contention that the Court does not have power to hear, summarily, in the same proceeding, an application for orders to enforce the settlement agreement. The power summarily to enforce a compromise has been exercised by the courts in Victoria in numerous cases.[1] The submission that summary enforcement is not appropriate because it would amount to specific performance and/or mandatory injunctive relief is rejected.
[1]Per Sloss J in Australian Xinyangfeng Fertilizer Pty Ltd v Freshwater [2020] VSC 450, [61].
The authorities on the summary procedure to enforce terms of settlement were considered by the Court of Appeal in Seachange Management Pty Ltd v Pital Business Pty Ltd.[2] In that case, Maxwell P and Nettle JA stated at [40]:
In summary, therefore, the net effect of the authorities to this point seems to be that, although the power summarily to enforce a compromise is discretionary and is wider now than once was the case, it is not to be invoked unless the court is “clearly satisfied that justice can be done”; and whether justice can be done is a question of degree. Consistently with the equitable origins of the power, one must weigh among other competing considerations the extent to which enforcement would involve extraneous matters, how substantial the questions to be determined as a precursor to enforcement may be, and procedural considerations like the desirability of pleadings and discovery and substantial cross-examination.
[2](2009) 23 VR 396 (Seachange).
Here, the underlying proceeding is an oppression case being managed in the Court’s Oppression Proceeding Program. The Court instituted the Program in recognition of the fact that many oppression proceedings involve small businesses where the value of the business is not substantial. One aim of the Program is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute in applications under s 233 of the Act. In particular, the Program seeks to assist the parties to explore resolution at an early stage before significant costs have been incurred.
In this case, Mantzanas and Parissis agree that the deed has not been fulfilled. There is disagreement over which party or whether both have breached the deed’s terms and the effect of the alleged breaches.
I cannot agree with Parissis’ submission that all that was required by the deed was the taking of steps to undertake the task within the relevant timeframe in the deed’s terms. It is plain on the face of the deed that time was of the essence (clause 14). This meant that the times stipulated in the terms of the deed became essential conditions, a breach of which gave rise to a right to terminate or to affirm the deed. What was required was completion of the task by the stipulated time. In relation to clause 2(b), this was to, within 14 days, do all things necessary to effect the transfer of Mantzanas’ shares in G7S to Parissis. In relation to clause 3(a), it was for Mantzanas to make the food van available for collection within 14 days. In relation to clause 3(d), it was for G7S to make the furniture available for collection within 14 days.
In my view, all parties appear to have breached the deed. On the material available, Parissis provided the unexecuted share transfer form to Mantzanas’ solicitors barely within the 14 day time period. Parissis did not contact Mantzanas’ solicitors about collecting the furniture until after the 14 day period had ended. Mantzanas appears not to have taken any steps beyond his solicitor’s correspondence of 20 October 2021, to make the food van available for collection within the 14 day time period despite the fact his obligation to do so under the deed was not conditional upon Parissis providing the share transfer form or G7S making the table and chairs available for collection.
Each parties’ breach of the deed gave rise to a right to an election to terminate or affirm the deed. In my view, both Parissis and Mantzanas acted to affirm the deed. Parissis did so by continuing to try to make arrangements to collect the food van and requesting the executed share transfer form. He also, on behalf of G7S continued to try to make arrangements for the furniture to be available for collection by Mantzanas.
When Mantzanas’ solicitors emailed Parissis’ solicitors on 29 October 2021, more than 14 days after the deed was signed, indicating that Mantzanas would organise access to the storage facility where the food van was located and would endeavour to make it available on Monday 1 November 2021, Mantzanas affirmed the deed. Having affirmed the deed, the option to terminate the deed for the defendants’ breaches, asserted in somewhat equivocal terms in the letter of 12 November 2021, was no longer available to him. In this context, the letter of 12 November 2021 evinced Mantzanas’ continuing unwillingness to comply with the conditions of the deed.
In my view, Mantzanas has no defence to the enforcement of the deed based on Parissis’ failure to comply within the time period specified in circumstances where the deed was later affirmed, by email sent 29 October 2021 and acceptance of the furniture on 12 November 2021.
Given the first of these affirming acts occurred on 29 October 2021, it is unnecessary for me to decide whether Mantzanas spoke with Kouros.
At the hearing, Mantzanas’ counsel submitted it would be inappropriate for the Court to order enforcement of the deed because it concerned, at least in part, the food van, a matter alleged to be extraneous to the proceeding.
I am not satisfied that the inclusion of the food van in the orders sought involves extraneous matters. First, matters in the Program proceed on the basis of short affidavits rather than formal pleadings. Both Mantzanas and Parissis filed affidavits which put the food van in issue. Second, the Court has very broad powers under s 233 of the Act to make any orders it considers appropriate, including an order requiring a person to do a specified act.
In circumstances where I have find the parties conduct has affirmed the deed from 29 October 2021 onwards, there is no need to resolve any factual disputes as alleged by the plaintiff in his submissions, nor is it necessary to put the parties to the task of discovery or ‘substantial cross-examination’. Even if this was not the case, the time and expense to undertake such tasks is vastly disproportionate to the modest value of the claim.
I am not persuaded that there are ‘substantial questions to be determined as to the proper construction of the terms of the settlement deed’. The plaintiff contends the releases are spent because the time for performance of obligations has expired and says that this raises questions on the deeds proper construction. I do not agree with this proposition. The question of whether the parties lose the benefit of the releases in the deed fell away when the previous breaches were affirmed.
I also have regard to the:
(a) desirability that parties are held to settlement agreements reached in mediation. Here, the deed was executed by the parties following a judicial mediation where all parties were legally represented;
(b) comparatively modest value of the claim (as ascribed by the parties under the terms of the deed) as compared to the likely costs the parties will face if the enforceability of the deed is determined in a fresh proceeding;
(c) fact that Mantzanas has not pointed to any loss or damage said to flow from Parissis’ breach of the deed;
(d) issues in the underlying proceeding being straightforward and not particularly complex;
(e) lack of prejudice articulated by Mantzanas in having the question of enforceability of the deed determined summarily, rather than in a fresh proceeding; and
(f) obligations on the Court under ss 7 and 8 of the Civil Procedure Act 2010 (CPA) when exercising any of its powers to give effect to the overarching purpose of the CPA to facilitate the timely, cost just, efficient, timely and cost‑effective resolution of the real issues in dispute.
In this case, I am satisfied that justice can be done by exercising the Court’s discretion to summarily enforce the deed.
I will order the relief sought by the defendants in the interlocutory process filed 20 January 2022, save that I will hear the parties on the question of costs.
SCHEDULE OF PARTIES
| S ECI 2021 02457 | |
| BETWEEN: | |
| PANAGIOTIS MANTZANAS | Plaintiff |
| - v - | |
| GROUP 7 SERVICES PTY LTD (ACN 624 615 596) | First Defendant |
| TONY PARISSIS | Second Defendant |
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