Re Opes Prime Group Ltd (in liquidation)
[2015] VSC 27
•11 February 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2010 01230
BETWEEN:
| OPES PRIME GROUP LIMITED (ACN 120 372 223) (IN LIQUIDATION) (SCHEME ADMINISTRATORS APPOINTED) and OPES PRIME GLOBAL SECURITIES PTY LTD (IN LIQUIDATION) (ACN 127 245 354) | First Plaintiff Second Plaintiff |
| v | |
| NIAKO INVESTMENTS PTY LTD (ACN 091 529 341) and | First Defendant |
| NICK MITRIS | Second Defendant |
| and | |
| NIAKO INVESTMENTS PTY LTD (ACN 091 529 341) | First Plaintiff by Counterclaim |
| and | |
| NICK MITRIS | Second Plaintiff by Counterclaim |
| v | |
| OPES PRIME GROUP LIMITED (ACN 120 372 223) (IN LIQUIDATION) (SCHEME ADMINISTRATORS APPOINTED) | First Defendant by Counterclaim |
| and | |
| LIRIM EMINI | Second Defendant by Counterclaim |
| and | |
| MARK RICE | Third Defendant by Counterclaim |
---
JUDGE: | ROBSON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3 February 2015 |
DATE OF JUDGMENT: | 11 February 2015 |
CASE MAY BE CITED AS: | Re Opes Prime Group Ltd (in liquidation) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 27 |
---
PRACTICE AND PROCEDURE – Summary proceeding - Application by plaintiffs by counterclaim for leave to discontinue counterclaim as against the second defendant by counterclaim on basis that matter had been settled.
CONTRACTS – Whether binding settlement agreement reached between the parties - Offer and acceptance – Offer to settle the proceeding made orally – Whether offer accepted by words and/or conduct – Objective test of reasonable person with regard to surrounding circumstances and facts – No agreement reached.
---
APPEARANCES: | Counsel | Solicitors |
| For the First Defendant and First Plaintiff by Counterclaim | No appearance | |
| For the Second Defendant and Second Plaintiff by Counterclaim | In person | |
| For the Second Defendant by Counterclaim | Mr Julian Vagg, solicitor | Oakley Thompson & Co |
HIS HONOUR:
The respective claims between the parties to the proceeding have been settled, save for the claim by Niako Investments Pty Ltd (Niako) and Nick Mitris as the first and second defendants and plaintiffs by counterclaim against Lirim Emini, the second defendant by counterclaim.
Mr Emini was a director of Opes Prime and Mr Mitris and his company were clients of Opes Prime.
The matter was listed for trial on Tuesday, 3 February 2015. In December 2014, notices of discontinuance were filed, save as for the counterclaim referred to above. On 9 January 2015, Mr Mitris and Mr Emini met. Mr Mitris alleges that he and Mr Emini resolved the counterclaim on the basis that the counterclaim would be discontinued and Mr Mitris and Niako would pay Mr Emini $20,000.
The matter came on for directions on Wednesday, 28 January 2015, where Mr Mitris, who appeared in person, relied on an affidavit alleging that the matter had been settled. Mr Vagg for Mr Emini denied that any agreement had been reached and that the matters relied on by Mr Mitris did not go beyond mere negotiations.
Relying on Roberts v Gippsland Agricultural and Earthmoving Contracting Co Pty Ltd,[1] I ruled that the appropriate course to resolve the alleged settlement was a summary proceeding, and made orders for the plaintiffs by counterclaim to issue an appropriate application and also for the filing any of an affidavit by Mr Emini.
[1](1956) VLR 555.
By summons dated 30 January 2015, the plaintiffs by counterclaim sought leave to discontinue the counterclaim against Mr Emini and sought an order that there be no orders as to costs. They also asked the Court to note in other matters that in effect, the matter was resolved, and that Mr Mitris was to pay Mr Emini $20,000 costs on or before 20 April 2015.
The matter came on before me on 3 February 2015. Both Mr Mitris and Mr Emini gave oral evidence in addition to their affidavits.
In Mr Mitris’ affidavit, he deposes that on 8 January 2015, he spoke with Mr Emini on the telephone to see if he was free to meet on Friday, 9 February 2015. Mr Emini advised Mr Mitris that he had a couple of commitments on Friday morning, but would give him a call in the morning to confirm a suitable meeting time. Mr Mitris says that Mr Emini called him on 9 January 2015 and asked whether he would be free to meet up later that morning, to which Mr Mitris agreed. Mr Mitris says that Mr Emini came to his office at about 12.15 to 12.30 on 9 January 2015. Mr Mitris says that after some brief introductory comments and small talk, Mr Emini and Mr Mitris then had a cup of coffee together and spoke in general about a number of things that had occurred over the past few years. They then went into a board room and sat either side of the table.
Mr Mitris advised Mr Emini that he had caused him a lot of trouble and heartache over the structure of the Opes Prime financing arrangements, and particularly the personal guarantee that he had given. Mr Emini responded by saying that the guarantee had always been in place. Mr Mitris advised Mr Emini that the Opes Prime experience had personally cost him a lot of money. Mr Mitris told Mr Emini that Niako and he had now reached a settlement with the liquidator of Opes Prime and Mr Mark Rice, the third defendant by counterclaim. Mr Mitris informed Mr Emini that notwithstanding the settlement, Mr Mitris’ personal financial position was tight and that he still owed approximately $450,000 to friends and relatives.
Mr Mitris said to Mr Emini that the only outstanding matter in relation to the proceeding was their dealings. He said to Mr Emini that he would not want to go to Court. Mr Emini responded and said that he did not want to either, and that he had had enough of the whole matter.
Mr Mitris says that he then asked Mr Emini how they could sort out their situation. He says that Mr Emini responded and asked what Mr Mitris had in mind. Mr Mitris then said that he would prefer Mr Emini to put something forward for discussion. Mr Emini resisted and asked Mr Mitris to come up with something.
Mr Mitris then asked Mr Emini when Easter was this year. Mr Emini said that it was on or around 5 April 2015.
After hearing Mr Emini give evidence, it is clear that he generally agrees with what Mr Mitris says to this point. Mr Mitris says that he said to Mr Emini that he would be able to pay him $20,000 on 20 April 2015 to fully settle the matter between them. Mr Mitris says that at this point, Mr Emini immediately rose from his chair and lent over the table and shook Mr Mitris’ hand whilst getting emotional at the same time. Mr Mitris said that Mr Emini then apologised to him for getting so emotional and said that he was just so relieved that the matter was now all over.
At this point, I should say that Mr Emini does agree that the offer was made, although he does not agree that the date was 20 April 2015; he said it was some two weeks after Easter, but he does agree that Mr Mitris offered $20,000 to settle the matter. Mr Emini also agrees that he immediately rose from his chair and shook hands with Mr Mitris, and that he got quite emotional at the same time.
Mr Mitris said that he then said to Mr Emini that the final step was to get “this documented” and to advise the Court accordingly. Mr Mitris said that Mr Emini responded and said that he would immediately advise his legal representative of the settlement that they had just agreed. Mr Mitris says that at this time he also tried to contact his corporate adviser, Mr John Patton of Wilson Hannah, and left a message on his mobile phone. Mr Mitris then says that he gave Mr Patton’s contact number to Mr Emini so that Mr Emini and his legal adviser could coordinate the settlement process with Mr Patton.
Mr Emini does agree that after this conversation, Mr Mitris did try to contact his corporate adviser, Mr Patton, and left a message on his mobile phone. He does agree that Mr Mitris did give him Mr Patton’s contact number so that Mr Emini and his legal adviser could speak to each other.
Where the parties differ is that Mr Emini deposes that upon shaking hands with Mr Mitris, he said: “Nick, this is the first time someone had offer me anything since Opes collapse”. Mr Emini then says that Mr Mitris asked: What do we do now?”, and he says that he said he would have to speak to Julian Vagg, his solicitor, to “see if something could be worked out”.
In determining whether a contract has been formed an objective approach is required. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd,[2] the High Court of Australia affirmed that terms of agreement must be determined objectively. Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said in that case:
It is not the subjective beliefs and understandings of the parties about their rights that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.[3]
[2](2004) 219 CLR 165, 179.
[3]Ibid.
Similarly in concluding whether a contract was reached I am required to determine what each party by words and conduct would have led a reasonable person in the position of the other party to believe. In this case, the critical issue is whether the words and conduct of Mr Emini would have led a reasonable person in the position of Mr Mitris to believe that Mr Emini had accepted Mr Mitris’ offer.
For the following reasons, I am not satisfied that a reasonable person in the position of Mr Mitris would have believed that Mr Emini had accepted the offer.
What is clear as between the parties is that at no stage did Mr Emini say to Mr Mitris that he accepted his offer. On the other hand, there is agreement between the parties that $20,000 was offered, although there was some dispute as to whether it was to be paid on 20 April 2015 or the week after Easter on 3 April 2015.
It was submitted by Mr Mitris that the shaking of hands after the offer was made indicates that a deal was done and that Mr Mitris’ offer was accepted.
In his oral evidence, Mr Mitris was not sure exactly what was said by Mr Emini immediately after they shook hands. His affidavit does not refer to any conversation but Mr Mitris agreed in the witness box that, in fact, something was said by Mr Emini to Mr Mitris. As I have indicated, Mr Emini says that he said: “Nick, this is the first time someone had offer me anything since Opes collapse”. When asked in cross-examination if the word “offer” was actually used by Mr Emini, Mr Mitris said: “Ah I can’t remember if he says offer or give me. One of the two but he did mention something like that”.[4]
[4]Transcript of hearing of 3 February 2015, page 15, line 16-18.
The parties also rely upon subsequent dealings to confirm whether or not there was a contract; but, in my view, the subsequent dealings do not take the matter one way or the other. The issue is really, would a reasonable person in the position of Mr Mitris have concluded that the parties reached agreement upon the shaking of hands and the subsequent conversations about what should be done thereafter? The onus is on Mr Mitris to establish that there was a binding agreement. In view of the doubt about precisely what was said immediately after the shaking of hands, I am not satisfied that Mr Emini did not say ”Nick, this is the first time someone had offer me anything since Opes collapse”. The reference to an offer does not sit well with the submission that there was a binding agreement.
I found both witnesses to be honest. I was impressed with both witnesses. In my view, the different views were those of different understandings. In my view, it was quite natural for Mr Mitris to conclude on the handshake that a deal had been done. However, with regard to what Mr Emini says was said immediately after the handshake, then in my view, if that was in fact said, a reasonable person in the position of Mr Mitris would form the view that the handshake did not indicate an agreement having been reached, but only that it was an indication of goodwill in trying to resolve the matter to reach agreement.
There was a dispute between the parties about whether Mr Emini said that his costs were somewhere between $60,000 and $100,000 as he says in his affidavit, or about $50,000 as Mr Mitris said in his oral evidence. I do not think it is necessary to resolve that dispute.
Mr Vagg, who appeared for Mr Emini, conceded that an agreement could be concluded by conduct such as the shaking of hands. However, in this case, both parties have agreed that the shaking of hands was combined with a comment by Mr Emini to Mr Mitris. I am not satisfied that that comment was consistent with a binding agreement having been reached. As indicated, Mr Mitris has not satisfied me that Mr Emini did not say “Nick, this is the first time someone had offer me anything since Opes collapse”.
Further, one must look at the objective circumstances where, on any view, Mr Emini’s costs were well in excess of $20,000 and the previous offer made in the September 2014 mediation of $35,000 had been rejected.
Accordingly, for these reasons, I would dismiss the application by Mr Mitris upon my finding that no binding settlement had been reached.
In the circumstances, I will confirm the order that I made that the further hearing of the counterclaim be adjourned to a date to be fixed.
0
0
0