Soteriou v Soteriou
[2015] VCC 425
•15 April 2015
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-13-06207
CI-15-00764
| VICKY SOTERIOU | First Plaintiff |
| MARIE SKARLATOS | Second Plaintiff |
| DIMITRIOS SKARLATOS | Third Plaintiff |
| THEODORA SKARLATOS | Fourth Plaintiff |
| v | |
| CHRIS SOTERIOU | Defendant |
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JUDGE: | HIS HONOUR JUDGE O'NEILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 30 March 2015 | |
DATE OF RULING: | 15 April 2015 | |
CASE MAY BE CITED AS: | Soteriou & Ors v Soteriou | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 425 | |
RULING
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Subject: STRIKE-OUT APPLICATION
Catchwords: Resolution of proceeding by terms of settlement, and subsequent consent orders – proceeding struck out with liberty to apply – subsequent application to set aside terms of settlement and orders – alleged lack of agreement by plaintiffs to consent orders – alleged failure by solicitor and barrister to obtain consent – application to strike out statement of claim
Legislation Cited: County Court Civil Procedure Rules 2008, Order 23; Civil Procedure Act 2010, s62, s63
Cases Cited:Donellan v Watson (1990) 21 NSWLR 335; Chown v Parrott (1863) 14 CB NS 74; 143 ER 372; Prestwich v Poley (1865) 18 CB NS 806; 144 ER 662; Little v Spreadbury [1910] 2 KB 658; Waugh v H B Clifford and Sons Ltd [1982] Ch 374; Thompson v Howley [1977] 1 NZLR 16; Neale v Gordon Lennox [1902] AC 465; Harvey v Phillips (1956) 95 CLR 235; Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158; Karam v Palmone Shoes Pty Ltd [2012] VSCA 97
Ruling: Leave to the defendant to enter judgment. The plaintiffs’ Statement of Claim is struck out.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr K Dorey | Defteros Lawyers |
| For the Defendant | Mr G Moloney | Esser Legal |
HIS HONOUR:
1 This application concerns Summonses filed in two proceedings. The first is Proceeding No. CI-13-06207, where Mr Chris Soteriou (“Chris”) is plaintiff, and the plaintiffs in the present proceeding (“Vicky”, “Marie”, “Dimitrios” and “Theodora” respectively) are defendants (“the first proceeding”); the second is the present proceeding, Proceeding No. CI-15-00764 (“the second proceeding”).
2 By Summons filed 18 February 2015 in the first proceeding (“the first Summons”), Chris seeks orders that:
(a) the first proceeding be reinstated; and
(b) judgment be entered against Vicky, Marie, Dimitrios and Theodora in the sum of $110,000 plus interest, plus costs.
3 In support of the first Summons, affidavits of Chris’ solicitor, Mr Kurt Esser, sworn 16 December 2014 and 25 March 2015, were relied upon.
4 By a further Summons filed 5 March 2015 (“the second Summons”), Chris seeks an order that the Statement of Claim in the second proceeding be struck out pursuant to Order 23 of the County Court Civil Procedure Rules 2008; alternatively, pursuant to s62 and s63 of the Civil Procedure Act 2010.
5 Without having filed any formal summons, Vicky, Marie, Dimitrios and Theodora sought orders in accordance with the prayer for relief in their Statement of Claim, namely:
· a declaration that the Terms of Settlement in the first proceeding did not constitute a binding agreement between the parties;
· an injunction restraining Chris from entering judgment pursuant to the Terms of Settlement in the first proceeding.
6 In support of their application, Vicky, Marie, Dimitrios and Theodora filed an affidavit of their solicitor, Mr Kevin Dorey, sworn 24 March 2015.
7 The application was conducted on the basis of the affidavits and no witnesses were called to be cross-examined. Each party filed written submissions.
8 To give context to this Ruling, it is necessary to know something of the facts of the first proceeding.
9 Chris was the husband of Vicky. Marie and Dimitrios are Vicky’s parents. Theodora is Vicky’s sister. Vicky was convicted of conspiring to murder Chris and was sentenced to a lengthy gaol term. Chris suffered serious injury in the murder attempt.
10 In 2012, Chris instituted proceedings against Vicky[1] seeking compensation for the injury suffered (“the damages proceeding”).
[1]Proceeding No. CI-12-00932
11 On 13 December 2012, his Honour Judge Misso ordered there be judgment for Chris against Vicky in the sum of $2,409,000 in the damages proceeding. It was alleged that in June 2012, Vicky conspired with Marie, Dimitrios and Theodora to transfer an interest she held in land at Reservoir into their names so as to avoid the judgment in the compensation proceedings being enforced against that land. In order to give effect to the alleged conspiracy, on 14 June 2012, a Transfer was lodged at the Office of Titles purporting to transfer Vicky’s interest in the Reservoir land to Marie, Dimitrios and Theodora.
12 In the prayer for relief in the first proceeding, a declaration was sought that the Transfer was void and of no effect.
13 Vicky, Marie and Dimitrios had solicitors, Messrs Cash & Stavroulakis, acting on their behalf in the first proceeding, although application was made subsequently by those solicitors to withdraw. That application was granted. Theodora did not have solicitors acting on her behalf.
14 By Notice dated 11 September 2014, Ian G Hone, solicitor, of Dandenong, filed a Notice of Appointment to Act for Vicky, Marie and Dimitrios. Prior to that, judgment had been entered against Theodora.
15 The trial of the first proceeding came on for hearing before his Honour Judge Jordan on 17 September 2014. His Honour ordered that the trial be referred for judicial mediation before his Honour Judge Brookes. The mediation took place on 17 and 18 September 2014. At the time, Vicky, Marie, Dimitrios and Theodora were represented by Mr Hone, solicitor, who retained Mr Thomas Moloney, of Counsel. After the mediation and on 18 September 2014, Terms of Settlement were signed by Mr Esser, on behalf of Chris, and Mr Moloney as “barrister for first, second, third and fourth defendants” (“the Terms of Settlement”). The Terms of Settlement provided that Vicky, Marie, Dimitrios and Theodora jointly pay to Chris an initial payment of $15,000 within thirty days, and the balance of $110,000 within seventy-seven days. It was agreed that the default judgment earlier entered against Theodora was to be vacated. In default of payment by the due date, Chris was at liberty to enter judgment for the amount outstanding plus costs. It was agreed that the proceeding be struck out with a right of reinstatement.
16 On 19 September 2014, his Honour Judge Jordan made orders that the first proceeding be struck out with liberty to apply.
17 On 22 September 2014, Mr Esser received a bank cheque in the sum of $15,000, in payment of the initial amount referred to in the Terms of Settlement, from Dimitrios.
18 On 10 February 2015, Vicky, Marie, Dimitrios and Theodora commenced the second proceeding.
19 According to the affidavit of Mr Dorey, he was informed by Vicky, Marie, Dimitrios and Theodora and believed that:
· On a number of occasions prior to 17 September 2014, Mr Hone met them to discuss the first proceeding. Marie and Dimitrios have only limited English and there was another person present to act as translator. When asked by Marie and Dimitrios whether he could act for Vicky and Theodora, he replied there was a conflict of interest and he was unable to do so.[2] Theodora attended one of the meetings.
[2]It is not clear from the evidence what the conflict was said to be
· On a date in September 2014, Vicky was visited in prison by Mr Hone, and he informed her he was acting for her parents. The first proceeding was briefly discussed and Mr Hone informed her that he was not acting for her in that proceeding.
· On the date of the trial of the first proceeding, Vicky was taken to the cells of the County Court and was there spoken to by a person who “may have been a barrister”. She did not give any instructions to resolve the first proceeding.
· Marie and Dimitrios were told little about what was happening in the course of the judicial mediation. An interpreter was present, but not all the time. Dimitrios did not consent to the mediation taking place.
· Offers of settlement were discussed with Dimitrios, including that he should offer the sum of $130,000 to resolve the proceeding. He said that he did not have the money, and wanted the matter to proceed to trial. He was told that the matter had settled, with Vicky, Marie, Dimitrios and Theodora agreeing to pay a total of $125,000.
· Vicky, Marie, Dimitrios and Theodora did not see the Terms of Settlement document.
· Chris was aware that Vicky, Marie, Dimitrios and Theodora did not voluntarily agree to the Terms of Settlement, because:
§ Chris would know Vicky, Marie, Dimitrios and Theodora’s views regarding the proceeding
§ Dimitrios had alternative claims which he wanted to bring against Chris
§ Chris knew Vicky, Marie, Dimitrios and Theodora did not wish to mediate the matter
§ Vicky, Marie, Dimitrios and Theodora were rarely in court and did not understand what was going on
§ Vicky was not present during the course of the mediation.
20 It is clear from the authorities that where counsel or a solicitor has ostensible authority to compromise litigation by signing terms of settlement on behalf of a party, then, in the absence of fraud or specific knowledge on the part of the party seeking to enforce the terms, the terms are enforceable whether or not the specific consent of the party had been obtained.
21 In Donellan v Watson,[3] the New South Wales Court of Appeal (per Handley JA) said:
“A solicitor retained to conduct litigation ordinarily has both implied and
ostensible authority to bind his client to a compromise of those proceedings: see Chown v Parrott (1863) 14 CB NS 74; 143 ER 372; Prestwich v Poley (1865) 18 CB NS 806; 144 ER 662; Little v Spreadbury [1910] 2 KB 658 and Waugh v H B Clifford and Sons Ltd [1982] Ch 374 at 388. Any instruction from the client which restricts the solicitor's authority to compromise the proceedings will only affect the other party who is on notice of that restriction: see Thompson v Howley [1977] 1 NZLR 16 at 23-25 and the cases there cited.The authority of counsel briefed in the cause to bind his client to a
compromise of the litigation is governed by the same principles: see Neale v Gordon Lennox [1902] AC 465 and Harvey v Phillips (1956) 95 CLR 235.”
[3](1990) 21 NSWLR 335 at 342
22 On the face of it, the Terms of Settlement appears to be a document properly executed by Mr Moloney on behalf of Vicky, Marie, Dimitrios and Theodora.
23 Although it is clear by the Notice dated 11 September 2014 that Mr Hone was representing Vicky, Marie and Dimitrios, the fact that there was no formal notice filed with the Court does not prevent him from representing Theodora. A solicitor may be retained to act on behalf of a party regardless of whether there is a formal notice filed. A retainer may be oral.[4] The solicitor’s authority to act for his client arises from the retainer. Further, the fact that there was agreement that the judgment previously entered against Theodora would be set aside shows an involvement by Theodora and that her interests were being taken into account. Theodora was present at the judicial mediation.
[4]Halsbury’s Laws of England (4th ed) – Solicitors – paragraphs 84, 85, 86
24 Mr Dorey submits that it is clear from the matters raised in his affidavit that Vicky, Marie, Dimitrios and Theodora did not authorise nor consent to the resolution of the proceeding. Further, Mr Dorey submits Chris either knew or ought reasonably to have known they were not consenting.
25 However, I accept the submissions of Mr Moloney that there is no sufficient evidence that Chris had any such knowledge. I accept Mr Moloney’s submissions that:
· There is no direct evidence before the Court by affidavit sworn by any of Vicky, Marie, Dimitrios and Theodora that Chris had any such notice. In an application such as this, I would have expected evidence from them direct, rather than from their solicitor.
· There is no evidence to suggest there was any basis upon which Chris or his lawyer ought to have gone behind the Terms of Settlement. Vicky, Marie, Dimitrios and Theodora were apparently being represented by a competent solicitor and counsel, and whatever Chris’ private view of their attitude towards the litigation, a litigant may at any time change his or her mind and determine to resolve a proceeding for any number of reasons.
· There is nothing from the evidence to indicate the mediation was conducted in anything other than an appropriate manner. There was an interpreter present to assist Marie and Dimitrios. Vicky was present in the Court building, albeit in the cells. Theodora was present.
· There is no explanation by Vicky, Marie, Dimitrios or Theodora as to how the initial payment of $15,000 was made. While it is not completely clear from which of their bank accounts the money was withdrawn, nonetheless it is clear that the payment was made in compliance with the Terms of Settlement. It stands in clear contrast to the claim that Vicky, Marie, Dimitrios and Theodora were not aware of the Terms of Settlement, and did not consent to them.
· According to the affidavit of Mr Esser, it was not until 16 December 2014 that Mr Dorey indicated an intention to set aside the Terms of Settlement. The Writ was not issued until 10 February 2015.
26 I am not satisfied, on the basis of any of the evidence presented, that Chris was on notice, nor could be expected to have been on notice of any lack of consent to the Terms of Settlement.
27 According to the written submissions on behalf of Vicky, Marie, Dimitrios and Theodora, it is said they proposed to amend their Statement of Claim in the second proceeding as a result of –
“… detailed instructions having been taken from the plaintiffs as to numerous loans of significant value which have been advanced to the defendant over many years. It appears that in the first instance the fact that many of those loan advances which were made more than six years ago led to an initial belief that recovery would be statute barred. Upon closer enquiry however (bearing in mind the language difficulty sustained by the first and second plaintiffs) it has become apparent that a legitimate cause of action in relation to the imposition of a resulting trust arises through the advancement of monies for the purchase of the properties.”[5]
[5]Plaintiffs’ submissions – paragraph 9
28 A draft Amended Statement of Claim was said to be with counsel. However, no proposed Amended Statement of Claim was provided to this Court. I made it clear to Mr Dorey that it would be inappropriate to seek leave to file a further Statement of Claim after the hearing in circumstances where Chris had made application to strike out the second proceeding.
29 For these reasons, Chris’ Summons in the first proceeding that that proceeding be reinstated and judgment be entered against Vicky, Marie, Dimitrios and Theodora should be upheld.
30 Chris further seeks summary judgment in respect of the second proceeding.
31 Sections 62 and 63 of the Civil Procedure Act 2010 provide:
“62 Defendant may apply for summary judgment in proceeding
A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success.
63 Summary judgment if no real prospect of success
(1)Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2)A court may give summary judgment in any civil proceeding under subsection (1)—
(a)on the application of a plaintiff in a civil proceeding;
(b)on the application of a defendant in a civil proceeding;
(c)on the court’s own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.”
32 In Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd,[6] the Court considered whether, under s63, the previously established test upon which a statement of claim would be struck out, that is that it was hopeless or bound to fail, ought be accepted in an application under s63. The Court said:
“It follows that, for present purposes, the test under s 63 of the Civil Procedure Act should be construed as one of whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success; that the ‘real chance of success’ test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding.”[7]
[6][2013] VSCA 158
[7]At paragraph 29
33 The Court referred to Karam v Palmone Shoes Pty Ltd,[8] which noted that the power to award summary judgment should be exercised with caution, and that s63 of the Civil Procedure Act was a more liberal test than the “hopeless” or “bound to fail” test.
[8][2012] VSCA 97
34 I am of the view that Vicky, Marie, Dimitrios and Theodora’s proposed cause of action set out in the Statement of Claim to the second proceeding has no reasonable prospect of success. I am satisfied that Mr Moloney, Counsel for Vicky, Marie, Dimitrios and Theodora, had ostensible authority to sign the Terms of Settlement on their behalf. I am not satisfied Chris had any notice they did not consent to the terms. There is no evidence on the material before me, nor any other material to which Mr Dorey could point, to indicate Vicky, Marie, Dimitrios and Theodora’s claim has any real prospect of success.
35 The claim in submissions that there are other matters not currently raised in the Statement of Claim are vague and not supported by any affidavit material, nor proposed pleading. The allegations have no substance.
36 The Statement of Claim in the second proceeding should be struck out.
37 I shall hear from the parties as to further orders.
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