Thomas v Irwin
[2020] ACTSC 47
•5 March 2020
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Thomas v Irwin |
Citation: | [2020] ACTSC 47 |
Hearing Date: | 17 February 2020 |
DecisionDate: | 5 March 2020 |
Before: | Crowe AJ |
Decision: | See [113] |
Catchwords: | CONTRACTS – FORMATION – AGREEMENT – Intention to make a concluded bargain – parties litigating dispute in the Supreme Court of the Australian Capital Territory – court ordered mediation of dispute – agreement to settle at end of mediation – settlement agreement sufficiently certain to be specifically enforced. |
Legislation Cited: | Family Provision Act 1969 (ACT) Family Provision Act 1972 (WA) Trustee Act 1925 (ACT) |
Cases Cited: | Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27 Attorney-General for the Commonwealth v Breckler & Ors [1999] HCA 28; 197 CLR 83 Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1997) 79 FCR 469 |
Parties: | Robert Bryant Thomas (Plaintiff) Michelle Elizabeth Irwin (as Executor of the Will of Lindsay Bryant Thomas) (Defendant) |
Representation: | Counsel C. Erskine SC (Plaintiff) S. Chapple (Defendant) |
| Solicitors Colquhoun Murphy Lawyers (Plaintiff) DDCS Lawyers (Defendant) | |
File Number(s): | SC 491 of 2018 |
Crowe AJ
Background
Lindsay Bryant Thomas (the deceased) died on 10 February 2018. He made his last will on 21 January 2018 whereby he appointed his wife Michelle Elizabeth Irwin (the defendant) as executor. The deceased left his entire estate to the defendant, providing that she survived him by 30 days, which she did.
On 4 May 2018, the defendant was granted probate of the 21 January 2018 Will.
On 2 November 2018, Robert Bryant Thomas (the plaintiff) filed an Originating Application seeking relief under the Family Provision Act 1969 (ACT). The plaintiff is the son of the deceased from a previous relationship. The deceased’s estate contained a real property in Western Australia and property in the Australian Capital Territory. On 6 February 2019, the plaintiff filed an Amended Originating Application to add to his prayer for relief a claim under the Family Provision Act 1972 (WA). The Plaintiff relied upon the Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT) and the Jurisdiction of Courts (Cross-Vesting) Act 1987 (WA) to seek that relief.
Pursuant to the directions made on 18 November 2018, the parties attended mediation on 5 March 2019 (the Mediation). The Mediation was conducted by Ms Harriet Louise Donohoe SC. In addition to the parties, the following persons took part in the Mediation:
(1) Ms M Lim, solicitor for the plaintiff.
(2) Mr D Stretton, counsel for the plaintiff.
(3) Mr J Buxton and Ms K Binstock, of McInnes Wilson Lawyers, solicitors for the defendant (at the time of the Mediation).
(4) Ms P Williams, the plaintiff’s wife.
(5) Ms T Martin, the plaintiff’s mother.
Mediation commenced with the plaintiff offering to settle his claim on the basis that the defendant pay him the sum of $345,000.00 inclusive of costs. Thereafter there occurred a series of offers and counter offers, which I will address in detail below. This process resulted in the disputed settlement “agreement” which included a settlement payment of $317,500.00 made up of lump sum amounts (on certain terms) totalling $70,000.00 and the balance of $247,500.00 to be paid to an independent trustee to hold on trust for the plaintiff and his son (Nate) for a period of 10 years. The terms of the trust arrangement will be discussed further below.
Ms Binstock, the defendant’s then solicitor, obtained instructions from the defendant and then provided Ms Lim with a handwritten document containing the disputed settlement agreement which was signed by the defendant. Ms Lim took the document and, after obtaining instructions from the plaintiff, signed the document on his behalf.
The document (Exhibit “D1”) provided:
1.Michelle to pay Colquhoun Murphy $40,000 upon provision of invoice
2.Michelle to pay motorbike loan up to $10,000 upon being provided with payout signature
3.$20,000 payable to Rob to buy a car
4.Perth to be sold and $247,500 settled on trust upon the sale of the Perth property or 9 months whichever occurs earlier
The trust to be managed by an independent solicitor as a trustee as agreed between the parties.
Beneficiaries: Nate + Robert
To be used for their education, advancement and maintenance in life
Trust to vest on purchase of property or 10 years.
Following the Mediation, the case was removed from its next directions listing (on 18 March 2019) and the solicitors for the parties embarked on a lengthy interchange of communications attempting to document the apparent settlement. The documents, initially drafted by the defendant’s solicitors, consisted of a settlement deed (draft settlement deed) and a trust deed (draft trust deed). The exchange between the parties’ solicitors culminated in a letter from Ms Binstock dated 22 August 2019 in which she advised that the defendant was seeking a second opinion in relation to “the Deed” (meaning the proposed settlement deed). Copies of the draft settlement deeds, the draft trust deeds and communications between Ms Lim and Ms Binstock are contained in Exhibit MMSL1 to Ms Lim’s affidavit (Exhibit “P2”).
On 8 October 2019, the defendant’s current solicitors (DDCS) wrote to the plaintiff’s solicitors to indicate that the defendant was not prepared to proceed with the proposed settlement deed. The letter from DDCS expressed the view that the “Heads of Agreement” was uncertain and unenforceable. It indicated that any attempt to enforce it would be defended. It is apparent from the context that the “Heads of Agreement” is a reference to Exhibit “D1”.
By Application in Proceeding dated 4 November 2019 (the Enforcement Application) the plaintiff sought substantive relief in the following terms:
1.A declaration that a binding and enforceable agreement to settle these proceedings (settlement agreement) was made:
a.at mediation on 5 March 2019; or
b.alternatively, at mediation on 5 March 2019 and by subsequent exchange of correspondence between the parties’ solicitors.
2.A declaration that the settlement agreement ought to be specifically performed and carried into execution.
3.An order that the defendant forthwith execute all such documents and do all such things as are necessary to carry the settlement agreement into execution and completion, including (without limitation):
a.paying a sum of $40,000 including GST from the estate of the late Lindsay Bryant Thomas (estate) to the plaintiff’s solicitors (Colquhoun Murphy Lawyers Office Account, BSB 012-950, account number 4053 70472) in respect of legal costs;
b.paying the sum of $10,000 from the estate to Yamaha Motor Finance Australia Pty Ltd ACN 101 928 670 in partial repayment of the plaintiff’s motorbike loan (account number CL1052069);
c.paying the sum of $20,000 from the estate to the plaintiff for the purpose of purchasing a car;
d.settling $247,500 of estate funds on trust for the plaintiff and his son Nate Thomas for their education, advancement and maintenance in life in accordance with the document titled “The Terms and Conditions of the Robert Bryant Thomas and Nate John Thomas Trust” circulated by the defendant’s solicitor on 3 July 2019 (including terms appointing Mr Andrew Freer, solicitor, as trustee, and with the trust to vest in the plaintiff upon his purchase of a property using the remaining trust funds or after 10 years, whichever occurs first);
e.signing consent orders to have these proceedings dismissed (or alternatively discontinued) on the basis that the previous costs order is vacated and the parties are to bear their own costs of the proceedings (other than the costs of this application); and
f.signing and returning to the plaintiff’s solicitors the settlement deed in the form of Item 14 of Exhibit MMSL 1 to the affidavit Mabel Mei Shei Lim sworn 4 November 2019 (or alternatively in such form as the Court may direct).
4.In default of the defendant complying with order 3, a Registrar of the Court be empowered pursuant to ss 71(2)(i), (m) and (o) and 79 of the Trustee Act 1925 (ACT), and/or the inherent power of the Court, to execute all such documents and do all such things in the name of and on behalf of the defendant as may be necessary to specifically perform the settlement agreement and carry it into execution and completion.
The Enforcement Application
At the hearing the plaintiff was represented by Mr C Erskine SC and the defendant by Mr S Chapple. The parties agreed on the evidence which was relevant to the resolution of the dispute. It consisted of:
(1) The affidavit of the defendant affirmed on 19 December 2018 (Exhibit “P1”);
(2) The affidavit of Ms M Lim sworn on 4 November 2019 (Exhibit “P2”);
(3) A further affidavit of Ms M Lim sworn on 6 November 2019 (Exhibit “P3”);
(4) The affidavit of Mr D Stretton affirmed on 1 November 2019 (Exhibit “P4”); and,
(5) The affidavit of Ms H L Donohoe sworn on 10 December 2019 (Exhibit “P5”).
Mr Chapple separately tendered the original of the document which had been signed at the Mediation. It became Exhibit “D1”.
The facts recounted in the above affidavits were not in dispute. None of the deponents were cross-examined. It is necessary to set out the course of negotiations at the Mediation and the subsequent exchanges between the solicitors for the parties.
The Mediation
As summarised in para [5] above, the negotiations commenced with an offer by the plaintiff to settle for the sum of $345,000.00. That offer was rejected by the defendant who made a counter offer. The terms of the counter offer as set out at para [9(b)] of Exhibit “P2” were as follows:
(i)the Western Australia Property is transferred to the Plaintiff and if the Plaintiff:
(A)Sells the Western Australian Property within 5 years he must refund $200,000 of 50% of the purchase price (whichever is higher) to the Defendant; or
(B)Sells the Western Australia Property within 10 years he must refund $150,000 or 30% of the purchase price (whichever is higher) to the Defendant; or
(C)Sells the Western Australia Property after 10 years he can retain the proceeds of the sale of that property,
(ii)and otherwise:
(A)the Plaintiff is responsible for rates, outgoings, maintenance of the property;
(B)each party bear their own costs of these proceedings; and
(C)any orders on costs previously made in these proceedings be discharged.
I note from Mr Stretton’s affidavit (para [9], Exhibit “P4”), that he recalled that Ms Binstock said when putting the counter offer, that the proceedings should be discontinued with the parties bearing their own costs and previous costs orders being vacated. During the Mediation, Mr Stretton made notes of the offers and counter offers from (and including) the time of the defendant’s first counter offer. A copy of those notes is at Annexure “A” to Mr Stretton’s affidavit.
The plaintiff rejected the counter offer. Mr Stretton responded on the plaintiff’s behalf with another counter offer. Although the proposed settlement sum would still total $345,000.00, it was now broken up into two components. The first component, of $90,000.00, would be paid to the plaintiff for his legal costs, personal liabilities and current needs. The second component was described in the following terms (at para [9(c)] of Exhibit “P2”):
(ii)$255,000.00 to be placed into a trust to be managed by a trustee with the usual powers to invest and expend monies for the education, maintenance and advancement of the Plaintiff, including reasonable living expenses. The Trust will vest after 10 years or upon the Plaintiff purchasing a home, whichever occurs sooner.
Mr Stretton’s recollection of the offer, assisted by his notes, is consistent with the terms as described in Exhibit “P2” above. However, Mr Stretton’s evidence is that in putting the offer he said (at para [11] of Exhibit “P4”):
“...The trustee would have a general power to invest the trust funds…
The appointed trustee could be either a solicitor or either or both of Robert’s aunties [the deceased’s sisters], Donna and Bronwyn. Any of those is fine by us. Michelle may have a preference.”
The defendant again rejected the plaintiff’s offer. In turn, she made a counter offer. The terms of that offer were described as follows by Ms Lim (at para [9(d)] of Exhibit “P2”):
(i)The Defendant pay a lump sum of $55,000 to the Plaintiff broken down as follows:
(A)$25,000.00 towards the Plaintiff’s legal fees;
(B)$10,000.00 towards the Plaintiff’s personal loan for a motorbike;
(C)$20,000.00 towards the Plaintiff’s purchase of a new car.
(ii)The Defendant pay a sum of $255,000.00 into trust to be managed by an independent trustee for a period of 10 years in which the Plaintiff and his son would be eligible beneficiaries. The sum will be paid upon the sale of the Western Australia property or 12 months from the settlement, whichever occurs first.
Mr Stretton’s account is a little more complete. At para [13] of Exhibit “P4” Mr Stretton records the counter offer as containing the following in relation to the proposed trust:
$255,000 would be put into a trust to be managed by an independent person. The beneficiaries would be Robert and Nate [Robert’s son], with the funds to be used for their education, maintenance and advancement in life. The trust would vest after 10 years or Robert’s purchase of the property. The $255,000 would come from the sale of the Perth property as soon as it’s sold; otherwise Michelle would need to come up with that amount within 12 months.
This offer totalled $310,000.00. It also introduced, for the first time, the plaintiff’s son (Nate) as a beneficiary of the proposed trust.
The plaintiff rejected that offer and made a further counter offer which was said to be his “final” offer. According to Ms Lim the terms were (at para [9(e)] of Exhibit “P2”):
(i)The Defendant pay a lump sum of $70,000 to the Plaintiff broken down as follows:
(A)$40,000.00 towards the Plaintiff’s legal fees;
(B)$10,000.00 towards the Plaintiff’s personal loan for a motorbike;
(C)$20,000.00 towards the Plaintiff’s purchase of a new car.
(ii)The Defendant pay a sum of $255,000.00 to be managed by an independent trustee for a period of 10 years in which the Plaintiff and his son would be the eligible beneficiaries. The Trust will vest after 10 years or upon the Plaintiff purchasing a home, whichever occurs sooner.
(iii)The sum will be paid upon the sale of the Western Australia Property or by 31 December 2019, whichever occurs first.
Mr Stretton’s account of the “final” offer accords with that of Ms Lim (see para [14] of Exhibit “P4”).
It is apparent that by this stage the plaintiff had dropped the total amount sought to $325,000.00.
Ms Lim’s recollection is that the legal advisors and the Mediator then engaged in a discussion about “splitting the difference” between the parties’ different positions. Mr Stretton’s account is a little more detailed. He said in his affidavit:
16.Ms Binstock went away to take instructions. When we returned to the main mediation room, she made a counter-offer in words to this effect:
“Michelle is happy to pay $70,000 upfront on those terms instead of $55,000, but the difference of $15,000 would then have to come off the amount put into the trust, which would then go down to $240,000. The total would be the same as before - $310,000.”
17.At this point the parties’ offers were for a total of $325,000 (plaintiff) and $310,000 (defendant). The Mediator said words to the effect:
“You’re not far apart. It would be a shame not to settle. Why don’t you both see if you can get instructions to split the difference at $317,500 to be made up of $70,000 upfront and $247,500 on trust.”
18.Ms Binstock and I went away to seek instructions. When we returned, we both said words to the effect: “I have instructions to split the difference.”
Ms Lim said (at para [9(f)] of Exhibit “P2”) that the terms were “resolved” at a meeting of the Mediator, Mr Stretton, herself and Ms Binstock as follows:
(i)The Defendant pay a lump sum of $70,000 to the Plaintiff broken down as follows:
(A)$40,000.00 towards the Plaintiff’s legal fees;
(B)$10,000.00 towards the Plaintiff’s personal loan for a motorbike;
(C)$20,000.00 towards the Plaintiff’s purchase of a new car.
(ii)The Defendant pay the sum of 247,500.00 to be managed by an independent trustee for a period of 10 years in which the Plaintiff and his son would be the eligible beneficiaries. The Trust will vest after 10 years or upon the Plaintiff purchasing a home, whichever occurs sooner.
(iii)The sum will be paid upon the sale of the Western Australia Property or within 9 months, whichever occurs first.
Again, Mr Stretton’s account is a little more detailed:
19. The mediator, Ms Binstock and I then confirmed the agreed terms. One or more of us (I cannot remember who, or if we took turns) described the terms in words to this effect:
“A total of $317,500 will be held on trust and distributed as follows.
$40,000 to Colquhoun Murphy for legal fees.
$10,000 towards the motorbike.
$20,000 to Rob to buy a car.
The Perth property is to be sold and $247,500 from the sale proceeds is to be put into the trust when it is sold; otherwise that amount is to be put into trust within 9 months.
Robert and Nate are to be the beneficiaries of the trust. The trustee is to be an independent solicitor with experience in estate matters. The trust will vest when a house is bought in Robert’s name or within 10 years, whichever comes first.”
20. As we went through the terms, Ms Binstock and I said “Yes” or similar words indicating agreement to each term.
21. The mediator then concluded the formal part of the mediation.
22. Ms Lim and Ms Binstock then sat outside the main mediation room and prepared a written document to record the agreed terms. I did not assist with that task, but at one point I asked them: “Who is going to draft the trust deed?” (or words to that effect), and I suggested Ms Binstock do so.
Mr Stretton’s affidavit concludes as follows:
24.At the mediation (apart from any conversation between Ms Binstock and Ms Lim that I am not aware of), there was:
a. no mention of the plaintiff or his son receiving regular (fixed) income from the trust;
b. no mention of the likely amount of income from the trust;
c. no mention of the agreed settlement terms being “in principle” only, or binding upon only some later date or event (although there was, equally, no discussion to the effect of “these terms are immediately binding”); and
d. no mention of the upfront payments (in total $70,000) be deferred until after a deed was drafted or signed.
Ms Donohoe SC, the Mediator, said in her affidavit (Exhibit “P5”) that she routinely destroys any notes she may have made in the course of the mediation. Ms Donohoe SC was first asked for her recollection of the Mediation in October 2019. Ms Donohoe SC said that she did have some memory of this Mediation because of the emotional state of the defendant. She also remembered the plaintiff as being somewhat “surly” and “uncommunicative”. Ms Donohoe SC said in her affidavit:
8.To the best of my recollection, the following events occurred during Mediation:
(a) negotiations took place between the parties in relation to issues relevant to these proceedings;
(b) I recall communicating offers and spending quite a deal of time with the executor, carefully explaining the offers to her;
(c) I was satisfied that she understood the offers and I was satisfied that she understood and was content with the final offer, which, to the best of my recollection, involved a reasonably straightforward discretionary trust. I cannot recall the amount of provision agreed upon.
(d) the Mediation culminated in a closing open session with all parties present, in which I congratulated the parties and I recorded that the matter had settled;
(e) as I was leaving the court’s mediation facility, the executor thanked me for assisting her in resolving the matter; and
(f) I wrote the word “settled” on the sticker that I placed on the court file relating to these proceedings.
9. My usual practice when acting as a mediator in court-ordered mediations is as follows:
(a) where I am sure that a matter has settled following mediation, I place a sticker on the relevant court file and write the word “settled” on the sticker;
(b) where I am sure that a matter has not settled following mediation, I place a sticker on the relevant court file and write the words “not settled” on the sticker; and
(c) where I am sure that a matter has settled following mediation but requires the parties to attend to certain practical matters such as executing deed or other such documents, I place a sticker on the relevant court file and write the words “? Settled parties to place matter in the settlement list” on the sticker.
10. As I wrote “settled” on the sticker that I placed on the court file relating to these proceedings, I am of the firm belief that these proceedings were settled at mediation on 5 March 2019.
After the Mediation
The following events are taken from paras [13]-[29] of Ms Lim’s affidavit (Exhibit “P2”).
On 7 March 2019, Ms Binstock emailed Ms Lim. That email contained the following:
I confirm our discussion this afternoon and that you will contact Andrew Freer. Let me know if you want me to talk to John Buxton about who else might be suitable.
I will send a draft Deed over shortly. Can you prepare a Notice of Discontinuance and advise whether you require any special terms in the Deed for tax reasons (i.e. so that the trust can be considered a testamentary trust if that is a possibility/advantageous). …
On 8 March 2019, Senior Deputy Registrar Kenneally emailed the solicitors for the parties. After referring to the matter the email said:
I understand that the matter resolved at mediation on 5 March 2019.
Subject to comment from either party, I will make the following orders in chambers:
1.The directions listing on 18 March 2019 is vacated;
2.The matter is adjourned to the settlements list on Thursday, 11 April 2019 at 10am (pending the filing of terms).
(emphasis in original).
On the same day both Ms Lim and Ms Binstock responded to Mr Keneally’s email indicating agreement with the proposed orders.
On 27 March 2019, Ms Lim wrote a letter to Ms Binstock enclosing a copy of the plaintiff’s loan account for his motorbike and copies of the invoices evidencing the legal costs incurred by the plaintiff.
On 5 April 2019, Ms Binstock wrote to Ms Lim enclosing a draft deed of settlement and a draft trust deed. The covering letter stated:
Our client’s priority is that the trust is managed equally for both beneficiaries and that they receive income and capital on an equal basis. It is also essential that there is minimal risk to the capital.
On 3 May 2019, Ms Lim responded in the following terms:
Our client is dismayed at your client’s departure from the agreement made between the parties and signed by their respective legal representative [sic] at the mediation on 5 March 2019 (“the Agreement”).
To be clear, it was not agreed that:
a. our client and his son were to receive income and capital at the trusts vesting on an equal basis;
b. any residential property purchased should be purchased in both our client and his son’s names, noting that our client’s son is currently only four years old; or that,
c. any further trust in favour of Nate would continue after vesting until Nate turned 18.
It is surprising that your client now asserts her priority is to ensure that the trust is managed equally for both Robert and Nate, in the circumstance where Robert is the only plaintiff in these proceedings. It was only agreed that Robert and Nate would stand to benefit from the trust for the purposes of their maintenance, education and benefit while the Trust is in operation, but certainly not after the trust vests.
(emphasis in original).
Ms Lim then went on to propose a number of amendments to the draft settlement and trust deeds consistent with the position advanced in the above extract.
On 4 June 2019, Ms Binstock replied by letter. In that letter Ms Binstock addressed the details of the amendments to the draft settlement and trust deeds which had been proposed by Ms Lim. Many of the less controversial matters were agreed. Under “Point 5” in her letter, Ms Binstock asked for confirmation that Mr Andrew Freer is to be the trustee, and for evidence of his acceptance of the appointment.
Under “Point 8” of her letter, Ms Binstock wrote:
This was not discussed prior to the Heads of Agreeing [sic] being executed.
We propose that Robert and Petrina be permitted to purchase a property together, however, if that occurs Robert is to be registered on title as tenants in common with Petrina in the proportion in which they contributed to the purchase.
If a property is purchased by Robert and Petrina as tenants-in-common Robert needs to have a Will passing his interest in the property to Nate upon his turning 18.
Under “Point 9” of her letter, Ms Binstock wrote:
The Heads of Agreement states that Nate and Robert are the beneficiaries of the trust.
We propose that the trustee be permitted to exercise [sic] discretion to make income and capital distributions to Robert and Nate as required for their maintenance, education and advancement in life. This is consistent with the fact that they are both beneficiaries of the trust.
Under “Point 10”, which addresses the eventuality of the plaintiff’s death before the vesting of the trust, Ms Binstock wrote:
The Heads of Agreement states that Nate and Robert are the beneficiaries of the trust.
We propose that, upon the vesting of the trust, Robert is to receive the capital. If, however, Robert dies, the capital is to pass to Nate as the surviving beneficiary. This is consistent with the fact that Nate and Robert are the beneficiaries of the trust.
On 18 June 2019, Ms Lim responded to the letter from Ms Binstock. She enclosed a copy email from Mr Freer in which he indicated his willingness to act as trustee. She attached further copies of the draft settlement and trust deeds. These were amended to reflect substantive agreement to “Points 8-10”. The “settlement date” was proposed to be “the earlier of the settlement of the sale of the Property or 23 December 2019”. (The reference to the Property here was to the WA property.)
On 3 July 2019, Ms Binstock replied. Agreement was indicated to the settlement date change (although the letter mistakenly referred to “3 December 2019”). However, the letter raised the following additional points:
We note that you will not agree to discontinue the proceedings prior to December 2019. Accordingly, we require an indemnification for losses incurred until the proceedings are discontinued (see clause 2(g)) [sic].
We require an indemnification and acknowledgement regarding the enforceability of the Deed and losses resulting therefrom (see clauses 2(h) and 4(c)).
Ms Lim replied by letter of 15 July 2019. She wrote:
Clause 2.1(g)
Not agreed. Please delete this clause. The definition of “Actions” is not limited to acts initiated by our client so that our client might well be held responsible for matters well outside his control. The Deed sufficiently deals with any issue arising from breach of this Deed.
This clause creates an unreasonable burden for our client, is repetitive and unnecessary.
Clause 2.1(h)
We seek a mutual indemnification in the event either party breaches this Deed, as is the usual practice.
Clause 4(c)
The sentence “The Parties further acknowledge that Robert Indemnifies the Estate and Michelle against all losses and costs incurred as a result of a breach of the Deed, including all costs incurred in achieving compliance with the terms of the Deed” is unnecessary and repetitive. Subject to the amendment proposed in clause 2.1(h), this sentence should be deleted.
(emphasis in original).
The next communication was that from Ms Binstock on 22 August 2019 advising that the defendant was seeking a second opinion.
Plaintiff’s Submissions
Mr Erskine SC put the plaintiff’s case on two bases. His primary argument was that the agreement to settle fell into the first of the Masters v Cameron (1954) 91 CLR 353 categories. That is, the agreement was final as to the terms of the contract and the parties intended to be immediately bound by it. However, the parties intended to have the terms stated in a form which would be fuller and/or more precise, but not different in effect.
If that submission was not successful, the plaintiff’s fall back position was that the settlement agreement fell into the fourth category of cases explained in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd & Ors (1986) 40 NSW LR 622 (Baulkham Hills) at 628 and referring to Sinclair, Scott & Co v Naughton (1929) 43 CLR 310 at 317. That is, the parties, at the Mediation, reached agreement intending to be bound immediately and exclusively by the terms which they had agreed upon while, at the same time, they expected to make a further contract in substitution containing, by consent, additional terms.
Mr Erskine SC argued that the analysis of whether the parties intended (on an objective basis) to enter into a binding and enforceable contract required consideration of the following:
(1) The language employed in the alleged agreement;
(2) Whether legal representatives were involved;
(3) The execution of the alleged agreement by the parties;
(4) The context in which the alleged agreement was reached; and,
(5) The subsequent conduct of the parties.
Mr Erskine SC argued that in relation to (1) the language used in Exhibit “D1” expressed clear actionable obligations on the parties. Mr Erskine SC also submitted that the description of the trust was sufficiently certain. In particular, Mr Erskine SC submitted that it was certain as to the property to be subject to the trust ($247,500.00), the beneficiaries, the purpose, the method of appointment of the trustee and the vesting date. All of this was consistent with the parties intending the terms to be immediately binding.
In relation to the other criteria (at para [47] above), Mr Erskine SC pointed out that both parties were legally represented, the document (Exhibit “D1”) was executed by the plaintiff’s solicitor and the defendant, and the agreement was reached to settle legal proceedings after lengthy negotiations in the context of a mediation designed to facilitate just such a settlement.
Finally, Mr Erskine SC submitted that the conduct of the parties after the Mediation demonstrated that the parties intended to be bound to the terms of the agreement contained in Exhibit “D1”. This included the confirmation to the Court that the matter had settled (by way of email to the Senior Deputy Registrar) and the drafting of the settlement and trust deeds.
All of these factors were said to support the proposition that the parties had intended the settlement agreement to be immediately binding and enforceable.
In so far as the defendant challenges the agreement on the basis of certainty, Mr Erskine SC relied upon Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27 at [25] and the decision of Kirby P (as he then was) in Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551 (Geebung Investments) to support the proposition that a binding agreement may be reached notwithstanding that some non-essential or mechanical terms are left for later formulation. It was submitted that the terms of the agreement were certain, and so far as any terms were left for later inclusion in the settlement documents, these were relatively minor and non-essential.
A similar submission was made in relation to the trust. Mr Erskine SC pointed to the certainties of the trust referred to in para [48] above and said that insofar as there were any omissions they were not critical and, in any event, could be remedied pursuant to the Trustee Act 1925 (ACT) if the parties were unable to agree.
In anticipation of an argument which might be put on behalf of the defendant, it was further submitted that the description of the trust in Exhibit “D1”:
... Evidences an intention by the parties that a fixed trust with a discretionary distribution structure in relation to the capital and income of the Trust be created:
(a)The purpose of the Trust is for the beneficiaries’ “education, advancement and maintenance in life”. This ordinarily connotes a discretionary distribution structure where the trustee is empowered to make decisions for the distribution of trust capital and income to meet expenses of this nature;
(b)The Trust is silent as to the specific proportion of the trust capital and income the respective parties are entitled to;
(c)If the parties had intended for the Trust capital and income to be distributed in an equal and fixed proportion to the beneficiaries, the Defendant’s solicitor would have included words to that effect whilst drafting the Terms of Settlement;
(d)At the Mediation, the Mediator understood the Settlement Agreement to include “a reasonably straightforward discretionary trust”.
Mr Erskine SC put by way of an alternative position in relation to the trust, that if the Court was not satisfied that the terms of cl 4 of Exhibit “D1” were sufficiently certain, that any such uncertainty was rectified in the exchanges between Ms Lim and Ms Binstock from the date of the Mediation up to 3 July 2019. By that time, the parties had agreed to the substantive terms of the trust. The only remaining issues were minor amendments to the terms of the draft Deed of Settlement.
Defendant’s Submissions
Mr Chapple at the outset pointed to cl 15 of the Mediation Agreement entered into by the parties in the lead-up to the 5 March 2019 Mediation. That agreement provided:
Settlement of the Dispute
If agreement is reached at the mediation, the terms of a final or in principle agreement must be written down and signed by the parties before they leave the mediation.
Mr Chapple submitted that it was clear from that clause that it was in the contemplation of the parties that they might reach an “in principle” agreement at the end of the Mediation which must be reduced to writing and signed by the parties. Indeed, it was the position of the defendant that Exhibit “D1” set out no more than an “in principle” agreement.
Mr Chapple referred me to a decision of Black J in the Supreme Court of New South Wales. In P J Leahy & Ors v A R Hill & Anor [2018] NSWSC 6 (Leahy), the parties had been engaged in a dispute in proceedings in the New South Wales Civil and Administrative Tribunal. There were numerous issues between the parties and it appears that negotiations which had commenced at a mediation had continued the next day culminating in a letter sent by the solicitor for the Leahy parties putting a detailed settlement offer pursuant to the principles in Calderbank v Calderbank [1976] Fam 93; [1975] 3 All 333. The solicitor for the Hill parties responded in the following terms (extracted at para [10]):
I confirm as discussed that my clients have given in principle agreement to your clients’ offer subject to a suitable deed being agreed between the parties.
Further negotiations broke down and the Leahy parties sought relief in the Supreme Court of New South Wales to enforce the alleged agreement. The Hill parties argued that a binding agreement had not been reached. That argument was successful.
At para [15] Black J said:
[15] Mr Tyson, who appears with Ms Laing for the Hill parties, draws attention to the New Zealand decision in BP Oil New Zealand Ltd v Van Beers Motors Ltd (unreported, 10 March 1992), approved by a unanimous Court of Appeal in Oracle New Zealand Ltd v Price Waterhouse Administration Ltd [2010] 1 NZLR 553, where the Court held that the words “in principle” are read, when used by a commercial party, as indicating that it lacked an intention at that time to enter into a binding contract. That approach is broadly similar to that which was taken by Brereton J in Cacace v Bayside Operations Pty Ltd [2006] NSWSC 572 at [18], where his Honour observed that the phrase “agreed in principle” is often used to indicate that “although consensus on a matter has apparently been reached, there is not yet a final agreement” and that the words “settled in principle” refer to a “state of consensus somewhat short of ‘settled’”. I appreciate that, in some cases, there may be countervailing considerations which displace the view which his Honour expressed, and the decision in Masters v Cameron is one possible example of such a situation, and the decision of the Court of Appeal in Sayed v National Australia Bank Ltd [2013] NSWCA 304 is another. In Boyd v Feeney [2017] NSWSC 1595, I followed the view expressed by Brereton J, and noted that the language “in principle” seemed to me to indicate something short of a binding commitment, although there were also other factors in that case, to which Mr White draws attention, which displaced the settlement there having binding effect.
Mr Chapple relied on that analysis in relation to the agreement alleged to have been set out in Exhibit “D1”.
In relation to the indicia available from the document itself, Mr Chapple pointed to the fact that it was drafted by solicitors and then referred to four factors suggesting that it was not intended to contain the terms of an immediately binding agreement. They were:
(1) The absence of any heading. One would expect a heading such as “Agreement”, “Settlement Agreement” or “Essential Terms”, particularly where the document was drawn up by a solicitor. The inference which should be drawn from the absence of such a heading is that the parties did not intend the document to be binding.
(2) The lack of any clear identification of the parties. In that context the reference to “Colquhoun Murphy” in cl 1 is confusing. Was it intended that the firm be a party? Moreover, the reference to “Michelle” was unclear. Did it refer to her in her personal capacity, or in her capacity as the executor and trustee of the deceased’s estate.
(3) The language used is vague and shorthand. This is particularly so in relation to the trust provisions in cl 4. The inference that such language would not be seen as sufficient for a binding agreement was all the stronger given that it was prepared by solicitors.
(4) There was no statement in the document that it should be immediately binding, nor was that said in the lead up to its creation. Mr Chapple referred to para [14] in Leahy where reference was made to a comment by Beazley P in Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313; 90 NSWLR 605 (Pavlovic) at para [83] that “… it was probable, as a matter of commercial reality, that if the parties had intended to be bound immediately before a deed was signed, one or other of the solicitors would have said so…”.
In relation to the communications between solicitors after the Mediation, Mr Chapple accepted that that evidence can be taken into account in relation to the issue of whether the parties intended the alleged agreement to have been binding and enforceable. However, Mr Chapple submitted that the evidence is not available to inform the content of the alleged agreement.
Moreover, Mr Chapple submitted that while the parties might have been getting very close on agreeing to the final terms of the trust deed, final agreement was not reached.
If it was concluded, notwithstanding his submissions, that the parties did intend Exhibit “D1” to set out a binding and enforceable agreement Mr Chapple says that it would then be necessary for the Court to determine the content of the agreement. In that context, Mr Chapple submits that the parties failed to reach agreement on two essential terms. They were:
(1) The identity of the trustee; and,
(2) The issues of what right the plaintiff and/or Nate had to fixed income from the trust, what happened to the corpus on vesting and the manner in which the discretion to advance monies for education, advancement and maintenance might be exercised. Of these, Mr Chapple focussed on the vesting issue in his oral submissions.
As to the identity of the trustee, Mr Chapple referred me to the decision in Muschinski v Dodds [1985] HCA 78; 160 CLR 583 (Muschinski) at 613-4 for the proposition that there is a requirement for certainty of trustee before an express trust can come into existence.
In relation to (2), Mr Chapple pointed to the disagreements between the parties evident from the correspondence between the solicitors after the Mediation to demonstrate the differences between them on these vital issues. A crucial problem was that Exhibit “D1” failed to specify what should occur upon vesting. Should it vest in Robert alone, or should it vest in both Robert and Nate? The failure to make express provision in that regard was, it was submitted, fatal to the claim for specific enforcement.
Plaintiff’s Submissions in Reply
Mr Erskine SC took issue with the proposition that Exhibit “D1” was silent as to who should benefit upon vesting. In response to a question from the bench Mr Erskine SC accepted the proposition that the reference to the plaintiff and Nate as beneficiaries, without more, would lead to the inference that they were intended to take equally as tenants in common.
However, Mr Erskine SC pressed the argument that the interchanges between the solicitors had resulted in a slightly different final agreement, being that contained in the final form of the Deed of Trust as attached to the 3 July 2019 letter from Ms Binstock.
Consideration
Although I accept that the primary focus in determining whether the parties intended to make a binding and enforceable agreement at the end of the Mediation must be the determination, on an objective basis, of their intentions (see Pavlovic at paras [64], [65] and [69]), and that it is not essential that alleged agreement must fall within one or another of the Masters v Cameron categories (Pavlovic at para [69]), those categories and that added in Baulkham Hills, still provide valuable guidance.
The framework identified by Mr Erskine SC (see para [47] above) provides, in my view, a convenient means of analysing the circumstances of this case as required by the authorities. I propose to address each of those matters in turn.
Language Use in Exhibit “D1”
It is true, as submitted by Mr Chapple, that the language in Exhibit “D1” is somewhat vague and in shorthand. It is a little surprising that it is not more precise, particularly as to the trust, given that it was drawn by solicitors. However, it seems to me that the context in which it was drawn must be taken into account. The plaintiff was claiming for relief under the Family Provisions legislation of the ACT and WA. The defendant, as executor of the estate, was seeking to defend the estate and no doubt to bring the litigation to an end by paying from it no more than was reasonably necessary to resolve the plaintiff’s claim.
I reject Mr Chapple’s submission that the reference to “Michelle” in Exhibit “D1” was unclear. There can be no doubt, in my view, that each reference to Michelle in the document was a reference to her in her capacity as executor of the deceased’s estate. That was the only capacity in which the plaintiff sued her, and there was nothing raised in the course of the negotiations to suggest any reason why the settlement should include an obligation to pay the plaintiff from her personal assets.
The negotiations which had proceeded during the Mediation made it clear that the parties knew which assets were in play. Thus, the reference to “Perth” in cl 4 of Exhibit “D1” was unambiguously a reference to the property at Fortescue Road, Cooloongup in Western Australia which formed part of the deceased’s estate; (see the inventory attached to Exhibit “P1”). Similarly, the reference in cl 1 to “Colquhoun Murphy” was a reference to the term which had been put as part of the plaintiff’s “final” offer that the defendant pay “$40,000 towards the plaintiff’s legal fees”. In strictly technical terms the correct characterisation of the payment probably should have been something along the lines of:
The defendant pay the sum of up to $70,000.00 to the plaintiff on the following conditions:
(1) The defendant will pay up to $40,000.00 in relation to the plaintiff’s legal fees for this litigation upon production of tax invoices from his lawyers proving that his fees exceed that sum…
However, having regard to what had passed between the parties it is clear, in my view, that they both understood the rather abbreviated sentence in cl 1 to mean that which is expressed in more detail above.
I am also not persuaded that the absence of a heading or express statement that the agreement should be immediately binding makes any real difference here. The terms as formally announced in the closing session with the Mediator (see para [19] of Mr Stretton’s affidavit extracted at para [26] above) where the Mediator congratulated the parties, and then recorded that the matter had settled are strong indicators that the parties intended that the agreement they had reached should settle the dispute once and for all.
Apart perhaps from the language describing how the trust was to operate (which is discussed further below) in my view the description of the obligations set out in the document at Exhibit “D1” is sufficiently specific to support the conclusion that the parties did intend the agreement to be immediately binding, notwithstanding the need for further documentation.
Legal Representation
The plaintiff was represented by his solicitor and by counsel. The defendant was represented by two solicitors. Exhibit “D1” was drawn by one or other of the solicitors to record the agreement which the Mediator had gone through with the defendant before the closing session. This had occurred after lengthy negotiations. All of these circumstances support the likelihood that the parties intended to be immediately bound; see per Sackar J in Lahodiuk v Pace [2013] NSWSC 512 at para [22].
Execution of the Document
Ordinarily the signing of the documents by (or on behalf of) each of the parties provides an indication of formality consistent with the intention that the document should create enforceable legal relations. However, the strength of that implication is somewhat watered down here by cl 15 of the Mediation Agreement (see para [56] above). As Mr Chapple pointed out, that clause requires the parties to document and sign an “in principle” agreement. In that context, it seems to me that the formality of execution carries less weight than might otherwise be the case.
I should note however, that the Mediation Agreement is not internally consistent. Notwithstanding the reference to an “in principle” agreement in cl 15, cl 16 states:
Any party may enforce the terms of the settlement agreement by judicial proceedings.
It may be preferable for these clauses to clearly distinguish between settlement agreements intended to be immediately binding and enforceable, and “in principle” agreements which may, as in Leahy, indicate something less.
Context
I have already referred to the context of the document in Exhibit “D1” in discussing the language used in Exhibit “D1”. Allsop J said in Barry v City West Water Limited [2002] FCA 1214 at para [135], notwithstanding that the document setting out the basic terms of an alleged agreement was said to be “rudimentary, difficult to read and couched in highly abbreviated shorthand..” and “..incomprehensible to anyone other than the participants.” His Honour continued:
...However, the parties were present on an occasion organised in order that they might enter legal relations. That is the point of a mediation. The mediation agreement said as much.
His Honour ultimately upheld the agreement made at the mediation in that case, notwithstanding its brevity and the complexity of the subject matter.
At 14,750-1 of Geebung Investments, Kirby P said in relation to a meeting between the parties to litigation over an alleged breach of contract:
…precisely to avoid the imposition upon them of the high costs of litigation, the parties met amongst themselves to settle their dispute without lawyers present. Yet lawyers now tell them that their agreement, signalled by words and by the shaking of hands, will not be enforced by the Court. I regard that as an unacceptable obstruction. If business people have agreed upon essential terms and shake their hands upon their agreement, it is normally the business of the common law to uphold and enforce that agreement. It should not be the purpose of the law to rifle through the terms to find some particular which has not been agreed, which a party later seeking to renege relies upon in order to escape its bargain…
His Honour’s comments have all the more force in relation to a mediation ordered by the court to try and assist the parties to resolve the litigation in which they are involved. A consensual resolution of such litigation is not only in the interests of the parties, it is also in the public interest in relieving the pressure on the courts to deal with the pressing list of cases awaiting hearing. That should be seen as part of the context in which the agreement to settle the case was made here.
The context of the Mediation in the circumstances of this case provides strong support for the conclusion that the parties intended their agreement to be immediately binding and enforceable. That context includes the evidence that the Mediator recorded the matter as “settled”, and, perhaps to a lesser extent, the fact that the defendant thanked the Mediator for “assisting me in resolving the matter”. (The latter is not unambiguous – see the comment of Gleeson J in Geebung Investments at 14,552 in relation to the handshake between the parties. Kirby P took a slightly different view having regard to the circumstances; see 14,571).
Subsequent Conduct of Parties
A notable feature of this case is the unconditional basis on which the solicitors for the parties confirmed to the Court (through the Senior Deputy Registrar) that the matter had settled. This led to the case being removed from the list of cases being managed towards a hearing. This provides further strong support for the inference that the parties and their solicitors intended the Mediation settlement terms to have been immediately binding. Had it been intended by either party that the terms should await further agreement and formalisation by the Deeds of Settlement and Trust it is most unlikely that they would have allowed the case to be removed from the Listing Hearing on 18 March 2019.
The subsequent preparation and submission of the draft settlement and trust deeds was entirely consistent with the intention of the parties to formalise their agreement by more detailed documentation (Masters v Cameron, category 1) or perhaps to substitute the agreement with a written contract containing more detailed terms and conditions (Baulkhalm Hills category 4).
Intention
Having regard to the above considerations I am satisfied that the circumstances of this case lead inexorably to the conclusion that, viewed objectively, the parties intended the settlement agreement made at the end of the Mediation and summarised in Exhibit “D1” to be immediately binding and enforceable.
Certainty
Mr Chapple relied on the failure of the parties to identify the trustee of the planned trust, and a number of crucial uncertainties as to how the trust was to operate, as indicating that, whatever their intention, the parties had fallen short of reaching an enforceable agreement at the Mediation.
It is important to distinguish the terms of the alleged settlement agreement from the formation of the trust. Clause 4 of “D1” was not intended to be a declaration of trust. Rather, it seems to me, it was intended to be a contractual promise by the defendant, in consideration for the termination and release of the plaintiff’s claims against the estate, to settle the sum of $247,500.00 on a trustee by a certain time in the future. It was clearly contemplated that the full terms of the trust should be reduced to writing and signed by the defendant during some reasonable time after 5 March 2019.
It is in that context that it becomes necessary to determine whether the terms of cl 4 were sufficiently certain.
In relation to the identification of the proposed trustee Mr Chapple relied on Muschinski at 613-4 in his submission that the identity of the trustee was one of the required certainties for an express trust. The passage Mr Chapple referred to was one in which Deane J was comparing constructive trusts with express and implied trusts. His Honour said:
The constructive trust shares, however, some of the institutionalised features of express and implied trusts. It demands the staple ingredients of those trusts: subject matter, trustee, beneficiary (or, conceivably, purpose), and personal obligation attaching to the property…
It may be accepted that by the time of the formal settlement of funds on the proposed trustee it was going to be necessary for there to be an identified trustee. That is to say, a person authorised and willing to act as such. However, it is a well known principle that equity will not allow a trust to fail for want of a trustee; see Sinnot v Hocking (1882) 8 VLR(Eq) 205 at 210, and Charlesworth Nominees Pty Ltd v Charlesworth [2017] VSC 445 per Croft J at para [25]. It seems to me that it was plainly in the contemplation of the parties at the Mediation on 5 March 2019 that they could leave the identification of the trustee to the solicitors and, if that was for some reason unsuccessful, they had as a fall back the inherent or statutory jurisdiction of this Court to appoint a trustee; see s 70 of the Trustee Act 1925 (ACT).
The mechanism for the appointment of a trustee was, in my view, sufficiently certain. Indeed, that mechanism was successful and by June 2019 the parties had agreed that Mr Andrew Freer should be appointed as the initial trustee, and he had agreed to act as trustee.
I do not see the failure to have identified a willing trustee at the time of the agreement on 5 March 2019 as a matter affecting the binding and enforceable nature of that agreement.
The other matters relied upon by the defendant are:
(1) Lack of agreement as to the plaintiff and/or Nate’s rights to receive fixed income from the trust;
(2) The identification of the beneficiary, or beneficiaries, upon vesting of the trust; and,
(3) The manner in which the trustee’s discretion to advance money for education, advancement and maintenance might be exercised.
It is true that the correspondence between the solicitors after the Mediation when they were attempting to reach agreement as to the settlement and trust deeds evidences some confusion and contention in relation to these matters.
However, I do not accept the submission of the defendant that the contents of Exhibit “D1”, having regard to the course of negotiations at the Mediation, were sufficiently uncertain to establish the lack of a finalised agreement.
I will deal with each of the matters referred to in para [96] above.
Firstly, it seems to me that the idea of a right to fixed income was a red herring. It was implicit from the reference to plaintiff and Nate as “eligible” beneficiaries (see Exhibit “P2” at paras [9(d)], [9(e)] and [9(f)]), the lack of any reference to fixed income (see Exhibit “P4” at para [24a.]) and the power of the trustee to use the funds for the “education, maintenance and advancement in life” of the beneficiaries, that the parties had in mind a discretionary trust in which the trustee would have an unfettered discretion to use trust monies (income and/or capital) for those purposes. I am fortified in that conclusion by the recollection of the Mediator that the settlement “involved a reasonably straightforward discretionary trust” (see Exhibit “P5”, para [8(c)]).
Secondly, I do not accept that there was any uncertainty as to the beneficiaries upon the vesting of the trust. It is clear from the context that the trust was to vest upon the purchase of a residential property or 10 years from the settlement, whichever occurred first. Having regard to the negotiations, it was implicit that the purchase of property referred to was a purchase to be made by the plaintiff. In that context, if that event caused the trust to vest, the funds held in trust at that time should vest in the plaintiff. At no point in the negotiations was there any reference to the property being purchased by the plaintiff and Nate.
On the other hand, I do not see any indication that the vesting of the trust by effluxion of time should benefit the plaintiff only. The named beneficiaries are the plaintiff and Nate. They were referred to as “eligible” beneficiaries in the negotiations. It was implicit that the trustee would have a discretion as to the distribution of the residual trust property at the end of the 10 year period. Given that Nate is only four years of age, it would follow that any final distribution could not be made to him personally. There would be a need for a continuing trust of some kind until he reached 18 years of age.
Thirdly, I do not see there to have been a need for prescription of the manner in which the trustee of a discretionary trust should exercise his/her discretion. I have concluded that it was the intention of the parties that the trust should be a true discretionary trust (except for the vesting should the plaintiff purchase a property). Once that conclusion is reached, the manner in which the discretion is to be exercised is entirely a matter for the trustee. A challenge to such an exercise can only be made on narrow grounds going to the issue of whether the discretion was exercised in good faith. In Attorney-General for the Commonwealth v Breckler & Ors [1999] HCA 28; 197 CLR 83 at 99-100 the plurality (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) said, quoting from the judgment of Heerey J in Wilkinson v Clerical Administrative and Related Employees Superannuation Pty Ltd (1997) 79 FCR 469 at 480 (omitting case references):
‘Where a trustee exercises a discretion, it may be impugned on a number of different bases such as that it was exercised in bad faith, arbitrarily, capriciously ..., wantonly, irresponsibly ..., mischievously or irrelevantly to any sensible expectation of the settlor ..., or without giving a real or genuine consideration to the exercise of the discretion ... . The exercise of a discretion by trustees cannot of course be impugned upon the basis that their decision was unfair or unreasonable ... or unwise ... . Where a discretion is expressed to be absolute it may be that bad faith needs to be shown ... . The soundness of the exercise of a discretion can be examined where reasons have been given, but the test is not fairness or reasonableness ...’
(emphasis added).
It follows from the above that I reject the submission of the defendant that the terms of the proposed trust were sufficiently uncertain so as to indicate that the parties had not made a complete agreement.
Was there a Subsequent Variation of the Terms of the Proposed Trust?
Mr Erskine SC put as an alternative submission, should the Court find that the terms of cl 4 of Exhibit “D1” were too uncertain to be enforceable, that the parties had rectified any uncertainty by having reached agreement as to the terms of the proposed trust deed by 3 July 2019. While it is not necessary for me to decide that question, the submission does raise the possibility that the parties agreed to vary the terms of the trust as agreed on 5 March 2019.
It was, of course, open to the parties to make such a variation, particularly as to subsidiary or administrative matters arising from the detailed provisions of the Deed of Trust.
However, I do not accept that the parties had reached that point. While it is true that a consensus had been reached as to the contents of the trust deed, that was not a stand alone matter. The exchanges between the parties had included the terms of the Deed of Settlement which was treated, so far as I can determine, as interdependent with the Deed of Trust. It is apparent that the parties did not reach a consensus in relation to the former; see the letter from the plaintiff’s solicitors dated 15 July 2019, 16 and 27 August 2019 contained in exhibit MMSL1 to Exhibit “P2”.
Moreover, it seems to me that given the differences between the terms as agreed at the Mediation and the draft Deed of Trust enclosed with the letter from Ms Binstock to Ms Lim dated 3 July 2019, there is force in the submission of Mr Chapple relying on the statement of Higgins J in Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 650 that: “.. It is one thing for two parties to settle what are to be the terms of an agreement, if it should be made; and quite another thing to make the agreement.” I do not believe that there was a consensus between the parties sufficient to vary the agreement made on 5 March 2019.
Conclusion
I have concluded that the parties did reach a binding and enforceable agreement on 5 March 2019. In consideration of the plaintiff discontinuing his proceedings against the defendant with each party bearing his/her own costs, and entering an appropriate release in relation to his claims against the estate, the defendant agreed to pay $70,000.00 to the plaintiff on the terms set out in Exhibit “D1”, and to settle the sum of $247,500.00 on trust for the plaintiff and Nate as discussed above. The trust settlement should have occurred no later than 5 December 2019.
It appears that the relevant invoices and the loan statement relating to the motorcycle were provided to the defendant’s then solicitors by April 2019. Thereafter the parties became bogged down in the details of the draft settlement and trust deeds until October 2019 when the defendant, through her new solicitors, indicated that she would not proceed with the agreement made at the Mediation.
In my view, from October 2019 the defendant has been in breach of the agreement. It is one which, in my view, should be specifically enforced and I am prepared to make orders accordingly. I invite the parties to file short minutes of orders to give effect to this judgment. I will relist the matter for consideration of the orders to be made.
I see no reason why the costs of this application should not follow the event. However, I note the plaintiff has sought indemnity costs. I propose to give liberty to the parties to provide written submissions as to the appropriate order as to costs.
Orders of the Court
The orders of the Court are:
(1) The plaintiff file and serve his written submissions as to costs, not exceeding 4 pages, on or before close of business on 19 March 2020.
(2) The defendant file and serve her written submission as to costs, not exceeding 4 pages, on or before close of business on 01 April 2020.
(3) The matter is relisted for mention on 02 April 2020 at 9:30am.
(4) The parties have liberty to apply on 2 days notice.
| I certify that the preceding one hundred and thirteen [113] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Crowe. Associate: Date: |
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