Ward v Keet
[2008] WASC 33
•12 MARCH 2008
WARD -v- KEET [2008] WASC 33
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 33 | |
| Case No: | CIV:1566/2006 | 14 & 28 FEBRUARY 2008 | |
| Coram: | MASTER SANDERSON | 11/03/08 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | SUSAN ANNE WARD as executrix of the estate of DOROTHY MURIEL LUKIN JULIA MURIEL LAURISSON as executrix of the estate of DOROTHY MURIEL LUKIN SUSAN ANNE WARD as administratrix of the incapable estate of LOUISE LUKIN JULIA MURIEL LAURISSON as administratrix of the incapable estate of LOUISE LUKIN LAKE WAY STATION PTY LTD (ACN 008 667 169) JOHN FRANCIS DESMOND KEET NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937) CLIVE STEWART BAIN |
Catchwords: | Mediation Application to summarily enforce settlement said to be reached at mediation Turns on own facts |
Legislation: | Nil |
Case References: | Dalmatian Nominees Pty Ltd v Marinovich (Unreported, WASC, Library No 980670, 20 November 1998) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First-named First Plaintiff
JULIA MURIEL LAURISSON as executrix of the estate of DOROTHY MURIEL LUKIN
Second-named First Plaintiff
SUSAN ANNE WARD as administratrix of the incapable estate of LOUISE LUKIN
First-named Second Plaintiff
JULIA MURIEL LAURISSON as administratrix of the incapable estate of LOUISE LUKIN
Second-named Second Plaintiff
LAKE WAY STATION PTY LTD (ACN 008 667 169)
Third Plaintiff
AND
JOHN FRANCIS DESMOND KEET
First Defendant
NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937)
Second Defendant
CLIVE STEWART BAIN
Third Party
Catchwords:
Mediation - Application to summarily enforce settlement said to be reached at mediation - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
First-named First Plaintiff : Mr B G Grubb
Second-named First Plaintiff : Mr B G Grubb
First-named Second Plaintiff : Mr B G Grubb
Second-named Second Plaintiff : Mr B G Grubb
Third Plaintiff : Mr B G Grubb
First Defendant : Mr R K O'Connor QC & Mr A M Brook
Second Defendant : Mr J Lin
Third Party : Mr J G Farquharson
(Page 3)
Solicitors:
First-named First Plaintiff : Arthur Metaxas & Co
Second-named First Plaintiff : Arthur Metaxas & Co
First-named Second Plaintiff : Arthur Metaxas & Co
Second-named Second Plaintiff : Arthur Metaxas & Co
Third Plaintiff : Arthur Metaxas & Co
First Defendant : Brook & Co
Second Defendant : Jackson McDonald
Third Party : DLA Phillips Fox
Case(s) referred to in judgment(s):
Dalmatian Nominees Pty Ltd v Marinovich (Unreported, WASC, Library No 980670, 20 November 1998)
(Page 4)
1 MASTER SANDERSON: This is an application by the plaintiffs seeking to enforce a compromise they allege was reached at mediation. The relief sought in the summons was as follows:
1. a declaration the parties have compromised the action in the terms of the deed of release attached at annexure 'BGG1' page 5 to the affidavit of Bruce Graeme Grubb, sworn 2 October 2007 ('Deed');
2. orders that:
2.1 the parties pay the following amounts in accordance with the Deed:
(a) the first defendant pay to the plaintiffs:
(i) $125,000 forthwith; and
(ii) $500,000 on or before 27 October 2007;
(b) the second defendant pay the plaintiffs $25,000 forthwith;
(c) the third party pay to the first defendant $125,000 forthwith.
2.2 the parties to the Deed otherwise do everything necessary to comply with, and give, the Deed its full force and effect;
2.3 the first defendant pay the plaintiffs' costs of this application on an indemnity basis; and
2.4 subject to order 2.3 above, there be no order as to costs.
3 When this matter first came on for hearing, only the plaintiffs directed any attention to the question of whether a compromise agreement allegedly reached at a mediation conference could be enforced summarily and, if it could, what principles were to be applied. I asked the parties for further submissions on that question. Both parties agreed that it was open to the court to summarily enforce a compromise agreement which had been reached at mediation. There was some difference between the
(Page 5)
- parties as to precisely what test applied, but really it was a matter of emphasis.
4 For present purposes, it is enough if I say that I adopt what was said by Murray J in Dalmatian Nominees Pty Ltd v Marinovich (Unreported, WASC, Library No 980670, 20 November 1998). Dealing with the court's power to summarily enforce a compromise agreement reached at mediation, his Honour said (13 - 14):
So clearly, if, for example, some real question of fact arose which required investigation or some question of law arose, such as whether an aspect of the agreement for compromise would or would not be the subject of an order for its specific performance, the court would in all probability decline to make an order to enforce such aspects of the compromise … which relate to the conduct and defence of the action, or the grant or refusal of relief claimed in the action, would more readily be made the subject of an order summarily made in the action, but to enforce the compromise agreement.
…
It is right, I think, to regard an application to summarily enforce an agreement to compromise an action as being one akin to an application for summary judgment expressly so made. If the court takes the same approach to both applications, in my opinion, the same position will be reached. It is said of an application for summary judgment that it will not be granted unless it is clear that there is no real question to be tried because the result of the application is the making of a final judgment determining the rights of the parties inter se: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99. And so it will be for the applicant for summary judgment to satisfy the court that the ground exists for the grant of the remedy because there is no question to be tried by which the applicants claim to judgment may be resisted, so that the action may be disposed of summarily, there being no reason that the action should go to trial: Singh v Varinder Kaur (1985) 61 ALR 720, 722.
5 The facts in this case may be briefly stated. The first plaintiffs are the executrices of the estate of the late Dorothy Muriel Lukin. The second plaintiffs are joint administratrices of the incapable estate of Louise Lukin. The first defendant carries on business as an accountant. In or around 1999, the deceased, Louise Lukin and the third plaintiff agreed that the first defendant would invest money the property of the three plaintiffs in a term deposit account with the second defendant. The account was to be in the names of the deceased, Louise Lukin and the third plaintiff. Withdrawal of moneys from the account would be authorised by the beneficiaries of the funds or an authorised
(Page 6)
- representative. The account was duly opened on 22 January 1999 and operated satisfactorily up to 16 February 2000.
6 At all relevant times the first defendant employed one Douglas John Smith (Smith). Smith was a rogue. On various dates between May 2000 and May 2005, he forged documents which resulted in withdrawals from the account in an amount of just over $590,000. It seems that the withdrawals were initially transferred into a trust account held by the first defendant and then misappropriated by Smith from that trust account. Smith is now dead and it would appear there is no prospect of any recovery from his estate.
7 The third party in these proceedings was the auditor of the trust account. He was brought in as third party by the first defendant. The first defendant alleges that as auditor of his trust account, he ought to have picked up the fraud by Smith.
8 The matter went to mediation on 26 July 2007. The mediation was held before Registrar S Boyle. All of the parties including the third party were represented by solicitors. At the end of the mediation, the registrar, the solicitors for the plaintiffs, the solicitors for the second defendant and the solicitors for the third party all believed that the action had been settled. The first defendant now says that he did not believe a settlement had been reached. There is no evidence from the solicitor who represented the first defendant at the mediation. The first defendant is now represented by new solicitors.
9 The alleged compromise agreement anticipated preparation of a deed. It was the position of the plaintiffs, the second defendant and the third party that agreement had been reached and the deed was to do no more than document the terms of that settlement. The first defendant now says that any settlement was subject to a deed being prepared - that is to say, agreement between the parties as to the terms embodied in the deed was a necessary pre-condition to the action being settled. For the moment, that disagreement can be put to one side while the narrative is completed.
10 On 7 August 2007, the first defendant's solicitors forwarded to all the parties a first draft of a deed of settlement. Thereafter, negotiations as to the terms of the deed took place between the respective solicitors. As a part of the settlement, the third party agreed to pay to the first defendant an amount of $125,000. The first defendant was then to make payment of around $500,000 to the plaintiffs over a period of time. The first
(Page 7)
- defendant's solicitors accepted the third party's contribution cheque on 10 September 2007 and paid it into their trust account. On 11 September 2007, a final draft of the deed of settlement was received from the first defendant's solicitors. Later that day, the first defendant's solicitors wrote to all parties advising that their client refused to settle.
11 Given the conclusion that I have reached in this matter, it would be inappropriate for me to express concluded views on any issues dividing the parties. But it is necessary for me to explain in broad terms why it is that I have concluded that judgment ought not be entered on the plaintiffs' claim.
12 It is the first defendant's position that at the mediation he acted on a material misrepresentation. As I understand the first defendant's position, the representation in question was to the effect that the plaintiffs had never received any notice that withdrawals were being made from the account. The first defendant deals with his position at the mediation in his affidavit sworn 18 December 2007. It reads as follows:
3. At the first mediation conference held on or about 6 July 2007 a discussion took place in which the Plaintiffs stated that they had not received any information or statements with regards to their financial affairs that had been managed by Keet and Associates and that they had been kept in the dark.
4. I particularly remember Julia Muriel Laurisson, the Plaintiff stating that the Plaintiffs had not been receiving any information.
5. At the time of hearing this statement, I considered this comment to be rather unusual since a time period of four to five years had elapsed. I concluded that perhaps the Plaintiffs had not been getting information even though they most certainly should have been.
6. At the conclusion of the first mediation, I felt that Keet and Associates had let the clients down badly. I felt very angry towards Smith for allowing this situation to happen. I believed what the Plaintiffs had said must be true and I relied on what they said since it had been so vehemently stated.
7. I returned to my office and made a search of the files in the office to see if I could confirm that this statement was correct. I could not find anything in the files to indicate to me that their claim was untrue. I firmly believed that what had been stated by the Plaintiff to be true.
(Page 8)
- 8. At the second conference held on 26 July 2007, the Plaintiffs again stated that they had received no statements from Keet and Associates.
9. Hearing this statement a second time at a mediation conference, established in my own mind that this statement must be true. I felt that the Plaintiffs in making this statement before the Court severely compromised my position to settle the claim on more favourable terms.
10. After the second mediation conference, I referred to my Solicitor Piet Jarman the Plaintiffs' comment of not receiving any statements and I expressed my disbelief and disappointment. I said that I could not believe that in all that time the Plaintiffs had not received from Keet and Associates any information or statements relating to their financial affairs nor had they requested me to look into the matter.
11. During the days that followed, I found myself totally focused on the allegation that the Plaintiffs had not received any financial information relating to their affairs from Keet and Associates. I questioned how this could possibly have continued over a period of five years and during that time how it was never questioned and how the Plaintiffs had never requested that I provide information in relation to their affairs as Trustees and Guardians of their mother's and incapable sister's estate and as directors of Lakeway.
12. I asked my secretary to see if there was anything that was still remaining in the files that had not been discovered before. She informed me that she had had a good look and that there was nothing.
13. This prompted me to look myself in other areas where I thought the file may be placed. A thorough search conducted in my office discovered a file under the name D M Lukin not previously looked at.
14. I immediately noted that in Mrs D M Lukin's file there were the following file copies of three documents which I believe the originals had been sent to the Plaintiffs:
(a) an 'Advice of Making Investment Statements' received from the National Australia Bank dated 15 January 2003 and bearing a Keet and Associates date stamp of 20 January 2003;
(b) a 'Confirmation of Renewal/Requisition' received from the National Australia Bank and signed by Barbara Di Labio dated 11 April 2002 with a Keet and Associates date stamp of 12 April 2002. This document showed a
- previous investment amount in the sum of $855,000 (eight hundred and fifty five thousand dollars) and a new investment amount of $855,000 (eight hundred and fifty five thousand dollars); and
- (c) An 'Advice of Maturing Investment' dated 15 January 2003 with a Keet and Associates date stamp of 20 January 2003. This document shows an investment amount of $770,000 (seven hundred and seventy thousand dollars). This document, if received by the Plaintiffs, would have confirmed to the Plaintiffs that a lower amount had been re-invested and that the amount of capital had been reduced by $85,000 (eighty five thousand dollars).
- 15. The procedure at Keet and Associates has always been that any original client correspondence received from either the Australian Tax Office or any banking or other financial institution is date stamped, a copy is then placed on the client file and the original is immediately sent out to the address of the client on the client file for the client to initiate further instructions on those matters.
16. With the knowledge that these filed documents would have been incriminating to Douglas John Smith, I verily believe that they were in the file without Douglas John Smith's knowledge or input. I also verily believe that, in accordance with the practices of Keet and Associates, the original documentation would have been sent to the Plaintiffs.
17. At point 5 of the Affidavit of Discovery of Susan Anne Ward sworn 15 September 2006 verifying a list of document and annexure 'SAW 1' Susan Anne Ward discloses that in the Plaintiffs' possession are copy transfer authority facilities from Keet and Associates to the National Bank of Australia. I have now inspected these documents. However, if they are similar to the Transfer Authority facsimiles listed in Items 40-80 of the same Affidavit, these documents will reveal that the Plaintiffs were aware that the principal sum on 11 June 2002 was $820,500 (eight hundred and twenty thousand and five hundred dollars) and on 31 March 2005, it had reduced to $450,000 (four hundred and fifty thousand dollars) since each authority revealed the current capital sum that was being reinvested.
18. In addition, each authority bore the signature of Julia Muriel Laurisson which allegedly had been copied into the document without her knowledge.
13 The first defendant further expanded upon this alleged misrepresentation in his affidavit of 6 February 2008. That reads as follows:
(Page 10)
- 9. At the Mediation Conference held on or about 6 July 2007 and on 26 July 2007 the Plaintiffs stated that they had not received any information or statements with regard to their financial affairs that had been managed by my firm Keet and Associates and that they had been kept in the dark. See paragraphs 3 and 8 of my Affidavit sworn and filed 18 December 2007.
10. To the extent to which terms of settlement were agreed at the second Mediation Conference (but I deny that all terms were agreed), I relied upon the representation of the Plaintiffs, as referred to in the preceding paragraph, as representing the truth in deciding to settle the claim of the Plaintiffs for the amount agreed upon at the Mediation Conference. See paragraphs 7 and 9 of my Affidavit sworn and filed on 18 December 2007.
11. That representation by the Plaintiffs has been maintained. In her Affidavit sworn 2 January 2008 Julia Muriel Laurisson stated at paragraph 7.2:
'Neither the Plaintiffs, nor the beneficiaries, received any documents from the First Defendant pertaining to the Account or the loss of funds therefrom, save as otherwise deposed in the Affidavit of Discovery from Susan Anne Ward sworn 15 September 2006.'
12. On 11 December 2007 my Solicitor, Alan Michael Brook, and I attended the Plaintiffs' Solicitors' offices Metaxas & Hager ('the Plaintiffs' Solicitors') for inspection of documents in the Plaintiffs' possession. I saw that the Plaintiffs had in their possession approximately twenty two (22) original transfer authorities which had been sent from my firm Keet and Associates to the Second Defendant and which had originated from the business premises of Keet and Associates.
13. I noticed that those transfer authorities had the following features:
(a) They did not have any facsimile markings on them which would have suggested that they had been received by the Second Defendant as faxes;
(b) They contained original writing in different coloured ink on different documents; and
(c) They contained original 'Fax' stamp marks.
14. It was unclear to me how those original transfer authorities came to be in the possession of the Plaintiffs.
15. I instructed my Solicitors Brook and Co to write to the Plaintiffs' Solicitors asking them how the original transfer authorities came to be in the possession of the Plaintiffs, and I am informed and verily
- believe that on 12 December 2007 my Solicitors sent that letter to the Plaintiffs' Solicitors. See Annexure 'JFDK-1' to this my Affidavit.
- 16. I am informed and I verily believe that in an email letter dated 12 December 2007 the Plaintiffs' Solicitors replied as follows:
'Documents were given to my client by Simon Lloyd, Bank Officer employed by NAB, 1st Floor, 50 St Georges Terrace on or about 14 September 2005 - and well after the alleged frauds were committed against my client's account.'
- See Annexure 'JFDK-2' to this my Affidavit.
17. I am informed and verily believe that in a letter dated 22 January 2008 to Brook and Co, the Solicitors for the Second Defendant, Jackson McDonald, stated:
'…
(a) the documents discovered by the Plaintiffs and produced for inspection do not include the originals of the faxes;
(b) our client does not have and never had the faxes in their original form. Our client received the faxes through its fax machine in the ordinary course.'
- (I take the words in paragraph (a) above to mean the documents of the Second Defendant which were the subject of their Discovery and which they produced for inspection by the Plaintiffs.) See Annexure 'JFDK-3' to this my Affidavit.
18. The information provided in the preceding paragraph by the Second Defendant's Solicitors is in direct contradiction to the statement of the Plaintiffs' Solicitors in paragraph 16 above.
19. The transfer authorities are particularly important documents since each authority states the principal sum to be reinvested with the Second Defendant. More specifically, the transfer authorities reveal that from June 2002 the principal sum of $820,500.00 gradually reduced to a figure of $450,000.00 by 31 March 2005.
20. I have instructed my Solicitors to subpoena for the production of the 22 original transfer authorities by the Plaintiffs at the hearing on 7 February 2008.
21. I did not personally provide the original transfer authorities to the Plaintiffs when I made Discovery of my documents.
(Page 12)
- 22. It is my honest belief that the 22 original transfer authorities were provided to the Plaintiffs by Douglas John Smith at the times at which he prepared those original transfer authorities, that the Plaintiffs have been in possession of those original transfer authorities since those times, and that the Plaintiffs therefore had in their possession at those times documents from Keet and Associates which showed that the amounts invested by the Plaintiffs with the Second Defendant had reduced from about $850,000.00 to about $430,000.00.
14 The plaintiffs deny that they ever received any correspondence from the first defendant or the second defendant and that they had no knowledge of the fraud. They say that the transfer documents came into their possession via the second defendant. They maintain that there is nothing in the evidence which could lead to a conclusion that the first defendant was misled by a representation so as to render any agreement unenforceable.
15 In my view, the position here is not so clear as to warrant judgment being entered. It is by no means clear that there was any misrepresentation by the plaintiffs to the first defendant and, if there was, whether that misrepresentation would have affected the outcome of the mediation. But the first defendant has raised a triable issue and he should have the chance to put his case before the court.
16 The application for judgment ought be dismissed. I will hear the parties as to the form of order and as to costs.