Sirianni v LBC Nominees Pty Ltd

[2012] VCC 1869

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
GENERAL DIVISION

Case No. CI-12-04391

STEPHAN SIRIANNI	Plaintiff
v.
LBC NOMINEES PTY LTD & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	28 November 2012
DATE OF JUDGMENT:	28 November 2012 (revised 29 November 2012)
CASE MAY BE CITED AS:	Sirianni v. LBC Nominees Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2012] VCC 1869

REASONS FOR JUDGMENT

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Catchwords:            Practice and procedure – Summary judgment – Terms of settlement executed by third defendant in presence of her solicitors – Third defendant unaware of counsel’s advice that there was “very little basis for the claim” against her – Whether third defendant’s defence had a real prospect of success.     

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T. Mulcahy	Oldham Naidoo Lawyers
For the First and Second Defendant	No appearance
For the Third Defendant	Ms C. Welsh	Dellios West & Co

HIS HONOUR:

1The present application is for summary judgment to enforce terms of settlement in respect of Federal Court proceedings which resolved on 26 May 2011. The terms of settlement were signed by or on behalf of the first defendant, a company, and by the second and third defendants, who were shareholders in the company. Together they were the three respondents in the Federal Court proceeding.

2The present application is not opposed by the first and second defendants. The third defendant seeks leave to defend the proceeding. She admited in an affidavit filed in opposition to the plaintiff’s summary judgment application that she signed the terms of settlement and did not contest that the defendants are in default pursuant to the terms.

3The third defendant is the wife of the second defendant. They each have 50% of the shares in the first defendant. The first defendant conducted a real estate agency business. The second and third defendants worked as licenced real estate agents in the business.

4The Federal Court proceeding concerned the purchase by the plaintiff of a half share of the real estate agency business and the monies he paid to the defendants for that half share and work he performed during the period of about 18 months in which he said he was involved in the business.

5The Federal Court proceeding included claims against each of the defendants. The claim in respect of the third defendant was more limited than the claims in respect of the first two defendants. The third defendant said that her husband had engaged solicitors to represent the defendants and she has no recollection of providing instructions to the solicitors, although she was present at the office of the solicitors on 26 May 2011 when she signed the terms of settlement.

6An advice of Ms Kaye of counsel has been exhibited to the third defendant’s affidavit. It is a comprehensive advice prepared on 1 February 2011 in which all the issues in the case are traversed. These included the personal liability of the third defendant.

7Ms Kaye expressed the view that, “There is very little basis for the claim brought against Ms Thomson [the third defendant]”. Ms Kaye advised that an application might be brought by the third defendant “seeking to strike out the proceedings brought against herself”. Ms Kaye advised, “On balance it is probably preferable that Ms Thomson does not pursue a strike out application. However, this is a matter I can discuss further with my instructing solicitor and Ms Thomson in conference”.

8The reasons for Ms Kaye’s conclusion were stated to be that if the application were unsuccessful the third defendant would incur costs to the plaintiff and the third defendant would in any event be required as a witness at the trial, whether she was a party or not.

9The pleadings filed in the Federal Court proceeding referred specifically to two receipts signed by the plaintiff as well as by the second and third defendants on behalf of the first defendant.  The documents acknowledge the receipt of two payments, one for $62,468.58 and the second for $100,000. Each payment was expressed to be “part payment for the purchase of a 50% share in our company”. The third defendant said that she signed these letters “only at the insistence of the plaintiff”.

10The third defendant stated in her affidavit that she only became aware of Ms Kaye’s written advice in July 2012. As a consequence, she said, “I believe that I am not liable to the plaintiff in this proceeding or in the Federal Court proceeding”. She said, “I would not have signed the terms of settlement had I been advised by Lewenberg Solicitors of the existence, meaning and effect of counsel’s advice with respect to my legal position in the Federal Court proceeding”.

11She said, “Had I been provided with this advice, I would have sought to be removed from the Federal Court proceeding”, and that she was not advised by the solicitors at any time to obtain independent legal advice in respect to that proceeding.

12The third defendant is a licensed real estate agent. She was employed in the real estate agency business in which she held 50% of the shares of the first defendant, which conducted the business. The plaintiff was apparently involved in the business for a period of about 18 months.

13The third defendant signed written acknowledgements of the receipt of monies recorded as having been paid for a half share in the business. Although the third defendant said the documents were signed at the plaintiff’s “insistence”, she does not say that she was unaware of any of the matters set out in the documents, including the fact that the payments were stated to be made “for the purchase of a 50% share in our company”.

14The first document also referred to the fact that, “This letter/receipt of acknowledgement should be read in conjunction with the memorandum of agreement between the said parties which both have signed”. That is a document apparently signed and sealed by the plaintiff and the second defendant and sealed by the first defendant in the presence of the second defendant and another person whose signature has not been identified.

15Although the third defendant says that it was her husband who engaged solicitors, and she has no recollection of providing instructions to the solicitors, she does not state in her affidavit that she was unaware of the nature of the proceeding or the allegations made against the defendants including herself and the fact that a cross claim was made on behalf of all defendants against the plaintiff.

16In the circumstances, it is difficult to see any basis upon which the third defendant can resile from the terms of settlement which she signed on 26 May 2011 in the presence of her solicitors.

17It may be that the third defendant might have a claim against the solicitors if she can establish that they neglected to advise her properly by failing to pass on Ms Kaye’s advice to her or in the circumstances in which she executed the terms of settlement. These are matters that she can pursue if she wishes, but are independent of the obligations that she had assumed in relation to the plaintiff.

18In my view, it is appropriate that judgment be entered for the plaintiff against each of the defendants. In respect of the third defendant, it cannot be said that she has demonstrated she has a defence to the proceeding which has a real prospect of success.

19I will make orders as follows:

1. Judgment for the plaintiff against the defendants that each of the defendants pay to the plaintiff the sum of $296,000 and statutory interest from 2 June 2012 to today of $15,285.25, total judgment $311,285.25.

2. The defendants must pay the plaintiff’s costs of the proceeding, including any reserved costs and the costs of the plaintiff’s summons filed 30 October 2012 and of the hearing today, to be taxed in default of agreement.

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Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 28 November 2012 and revised on 29 November 2012.

Dated:       29 November 2012

Philippa Gilkes    

Associate to His Honour Judge Anderson

1

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Certificate

I certify that these       pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on       2012.

Dated:       2012

Associate to His Honour Judge Anderson