Young v Geo Group Australia
[2019] VSC 320
•17 May 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PERSONAL INJURIES LIST
S CI 2012 07031
| DANIEL YOUNG | Plaintiff |
| v | |
| THE GEO GROUP AUSTRALIA PTY LTD (ACN 051 120 600) | Defendant |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 10 May 2019 |
DATE OF JUDGMENT: | 17 May 2019 |
CASE MAY BE CITED AS: | Young v GEO Group Australia |
MEDIUM NEUTRAL CITATION: | [2019] VSC 320 |
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CONTRACT –Whether an ‘agreement in principle’ to settle a proceeding is a concluded agreement that is final and binding –Masters v Cameron (1954) 91 CLR 353, considered and applied – Correspondence between counsel purporting to settle the proceeding – Where client had no direct involvement in the negotiations – Cook v Taing [2014] VSC 428, considered and applied – Whether counsel had the actual or ostensible authority to bind his client – Harvey v Phillips [1956] 95 CLR 235 and Donellan v Watson (1990) NSWLR 335, referred to – Declaration that the settlement agreement is valid and enforceable, subject to approval of the Court
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APPEARANCES: | Counsel | Solicitors |
| The Plaintiff in person | ||
| For the Defendant | Mr N Murdoch QC with Ms J Cowen | Meridian Lawyers |
HER HONOUR:
The plaintiff is a former prisoner at Fulham Prison in Sale, Victoria, a custodial facility operated by the defendant. This proceeding was issued on 17 December 2012, when the plaintiff filed a claim against the defendant seeking damages for psychological injury, said to have been caused by the defendant subjecting him to improper and humiliating visual cavity searches or ‘strip searches’.
The writ and statement of claim were served on the defendant in late 2013. The plaintiff took no further steps for almost five years. The defendant filed an application to dismiss the claim for want of prosecution in April 2018 (‘first summons’).
On 25 May 2018, the defendant’s application was listed for the hearing before Ierodiaconou AsJ. At the hearing the defendant raised the issue of whether the plaintiff intended the proceeding to be an individual proceeding or a group proceeding. If the matter was a group proceeding, the plaintiff would need to comply with the notice requirement under section 33X of the Supreme Court Act 1986 (Vic) before the defendant’s application could proceed. The plaintiff was ordered to serve a draft amended statement of claim to confirm whether the proceeding was intended to be an individual or group proceeding. Subsequently, the Court has directed the plaintiff to file his amended statement of claim on two further occasions. However, no amended statement of claim has been filed.
The defendant’s summons was listed for hearing on 19 October 2018. Prior to the hearing date, the parties were engaged in settlement negotiations through their legal representatives. The defendant contends that an agreement was reached on 18 October 2018. However, a dispute arose between the parties as to whether or not the purported agreement to resolve the proceeding (‘settlement agreement’) was enforceable. At a directions hearing on 16 November 2018 before Ierodiaconou AsJ, her Honour directed the defendant to file a formal application to bring the dispute before the Court.
On 13 December 2018, the defendant filed a summons (‘second summons’) pursuant to the orders made on 16 November 2018. The defendant seeks a declaration from the Court that a valid and enforceable agreement to resolve the proceeding was reached between the parties on 18 October 2018, which is binding upon the plaintiff, subject to approval of the Court as required under s 104S of the Corrections Act 1986 (Vic).
The primary issue raised by the second summons is whether the settlement agreement is a concluded agreement between the parties. The High Court in Masters v Cameron[1] laid down the test for whether the parties intended a written agreement arising out of negotiations between the parties to be binding upon them.
[1](1954) 91 CLR 353.
In Masters v Cameron,[2] the Court considered whether a contract for a sale of land was a binding contract between the parties, or merely a record of terms upon which the parties would agree upon following the execution of a formal document. The document in question expressly stated that the contract was made subject to the preparation of a formal contract of sale that would be acceptable to one of the solicitors for one of the parties.
[2]Ibid.
The High Court identified three categories of cases:
(a) where the parties have reached finality on the terms of their bargain and ‘intend to be immediately bound to the performance of those terms but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect’; or
(b) where the parties have agreed upon all the terms of their bargain, but ‘nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document’; or
(c) where the intention of the parties is ‘not to make a concluded bargain at all, unless and until they execute a formal contract’.[3]
(d) The Court stated as follows:
In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution … Cases of the third class are fundamentally different. They are cases in which the terms of the agreement are not intended to have, and therefore do not have, any binding effect of their own … The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document … or simply because they wish to reserve to themselves the right to withdraw at any time until the formal document is signed … The question depends upon the intention disclosed by the language the parties have employed, and no special form of words is essential to be used in order that there shall be no contract binding upon the parties before the execution of their agreement in its ultimate shape.[4]
[3](1954) 91 CLR 353, 360.
[4]Ibid, 360-362, as abridged in Reginald & Goddard, Leading Cases in Contract Law, The Federation Press, 2017, 17-18.
The second issue in the application is whether counsel for the plaintiff had the actual or ostensible authority to bind the plaintiff.
Evidence
The defendant relied upon an affidavit of counsel retained by it in the proceeding, Ms Jennifer Cowen, sworn on 19 December 2018.
In opposing the application, the plaintiff relied upon the following evidence:
(a) an affidavit sworn by the plaintiff on 8 February 2019; and
(b) an affidavit sworn by a founding committee member and current public officer of Prisoners Advocate Victoria Incorporated (‘PAV’), Mr Helmut Kirsch, on 15 February 2019.
At the hearing of the application, reference was made to a further affidavit sworn by Mr Kirsch, but this affidavit has not been filed. However, it became apparent during the course of the hearing that the affidavit did no more than repeat matters which were the subject of the plaintiff’s submissions.
Ms Cowen swore an extensive affidavit regarding the communications between the parties between September 2018 and November 2018. She exhibited a number of file notes and emails to her affidavit.
Ms Cowen gave evidence as to what occurred at a settlement conference that took place on 26 September 2018, as follows:
(a) the conference was attended by the following:
(i) the defendant’s solicitor, a paralegal, a representative of the defendant, and herself on behalf of the defendant;
(ii) the plaintiff’s counsel, Mr James Humphris, on behalf of the plaintiff; and
(iii) Mr Kirsch attended by telephone.
(b) Mr Kirsch stated during the conference that:
(iv)he had instructions to accept settlement on behalf of the plaintiff;
(v) the plaintiff would be willing to compromise the claim on the basis of a small donation to a prisoners’ rights group and a contribution towards the plaintiff’s counsel fees;
(vi)the plaintiff was willing to accept a term that there be no admission of liability on the part of the defendant;
(vii) the plaintiff would agree to a donation being made to a prisoners’ rights charity in the sum of $10,000; and
(viii) in consideration of the proposed settlement, Mr Kirsch would execute an undertaking on behalf of PAV not to take any further proceedings against the defendant on behalf of other prisoners in relation to strip searches at the prison operated by the defendant; and
(c) the defendant’s representatives stated that in addition to the terms proposed by the plaintiff, any settlement would need to include terms including an acknowledgment by the plaintiff that the proceeding was not a group proceeding, a confidentiality clause, a non-disparagement clause and a statement of goodwill. These terms were accepted by Mr Kirsch.
Ms Cowen deposed that later on 26 September 2018, she advised Mr Humphris that any settlement reached between the parties would need to be approved by the Court pursuant to the Corrections Act 1986 (Vic), and would be subject to any required repayment to Medicare.
Ms Cowen also deposed as to subsequent communications between her and Mr Humphris, as follows:
(a) on 2 October 2018, Ms Cowen sent an email to Mr Humphris enclosing proposed heads of agreement in accordance with the terms of the offer that had been discussed on 26 September 2018 (‘heads of agreement’);
(b) on 5 October 2018, Mr Humphris sent an email to Ms Cowen enclosing a marked up version of the heads of agreement with proposed (minor) amendments, but otherwise confirmed that Ms Cowen’s email of 2 October 2018 had correctly set out the proposed terms of settlement; and
(c) on 16 October 2018, Ms Cowen spoke to Mr Humphris by telephone in which she conveyed an offer made by the defendant to resolve the proceeding. This was followed by an email to Mr Humphris on the same day attaching the amended heads of agreement reflecting the changes made by Mr Humphris, and an expanded form of undertaking that the defendant sought from Mr Kirsch on behalf of PAV. The heads of agreement referred to the recipient of the donation as the Mental Health Legal Centre.
On 17 October 2018, Mr Humphris sent an email to Ms Cowen stating the following:
I am instructed to offer to resolve the proceeding on the following terms:
·Geo to pay $10,000 to Mental Health Legal Centre less any required repayment is [sic] made to Medicare and/or the Secretary to the Adult Parole Board;
·Geo to pay costs of $10,000; and
·the plaintiff will enter in the proposed heads of agreement (subject to amending it to reflect the above settlement amount).
If Geo accepts the plaintiff’s offer, Prisoners Advocate Victoria has confirmed that it will enter into the undertaking as set out in your email below.
The plaintiff’s offer remains open for acceptance for 7 days.
Ms Cowen deposed that on 18 October 2018, she spoke again with Mr Humphris by telephone. During this conversation:
(a) Ms Cowen informed Mr Humphris that the defendant would accept the plaintiff’s offer if the term concerning the plaintiff’s costs was amended to provide that the defendant pay $5,000 towards the plaintiff’s costs of the proceeding, plus $5,000 towards costs thrown away by reason of the first summons; and
(b) Mr Humphris agreed to the proposed breakdown of the costs.
Later that day, Ms Cowen sent an email to Mr Humphris, as follows:
I refer to our telephone discussion today and confirm that the parties have reached an in principle agreement to resolve the claim for $10,000 to be paid to the Mental Health Legal Centre [once any required payment is made to Medicare and/or the Secretary to the Adult Parole Board], plus costs of $5,000 and costs of $5,000 thrown away by reason of the defendant’s summons dated 21 March 2018
The terms of the settlement are that:
1.the plaintiff agrees to the terms set out in the attached proposed heads of agreement; and
2.Prisoners Advocate Victoria Incorporated agrees to provide an undertaking that:
(a)in consideration of the settlement, it will not take any further proceedings on behalf of any individual or group against the defendant in respect of searches of prisoners that were conducted by the defendant within the time frame specified in the plaintiff’s proceeding, being 30 June 2001 to 9 May 2011;
(b)it will keep the provisions of the Heads of Agreement confidential and will disclose the eight other potential claimants described in the affidavit of Mr Helmut Kirsch dated 24 May 2018 no more than that the plaintiff’s proceeding has been discontinued.
I have attached consent orders, to be signed by you and forwarded to the Court.
Later that day, Mr Humphris returned signed consent orders to Ms Cowen by email, and Ms Cowen forwarded them to the Court with the following covering email:
Please find attached signed consent orders in the above matter.
An in-principle agreement to resolve the proceeding has been reached between the plaintiff and the defendant, and as a result, the plaintiff will need to seek an approval of the compromise under section 104S of the Corrections Act 1986.
The parties request guidance from the Court as to whether in the circumstances it will be necessary for the plaintiff to issue a summons in order to make application for the approval, or whether the application may be made ‘on the papers’.
Ms Cowen deposed that she described the settlement agreement as an ‘in principle’ agreement as she was aware that the settlement agreement required the approval of the Court.
The consent orders provided as follows:
1.The defendant’s application made by summons filed on 21 March 2018 be dismissed with no order as to costs.
2.The plaintiff is to make application for an approval of compromise of the proceeding pursuant to s 104S of the Corrections Act 1986, on or before 1 November 1986.
The defendant relied upon the communications between counsel referred to above as representing a concluded agreement between the parties.
Ms Cowen also deposed that, after 18 October 2018:
(a) on 19 October 2018, Ms Cowen sent an email to Mr Humphris attaching again the final heads of agreement to be signed by the plaintiff, and an undertaking to be signed by Mr Kirsch on behalf of PAV. In the email, Ms Cowen also requested Mr Humphris provide the amended statement of claim referred to in the settlement agreement;
(b) on 23 October 2018, Mr Humphris sent an email to Ms Cowen, in which he stated that Mr Kirsch wished to change the identity of the charity to which the money was to be paid to ‘Rejoin Network’;
(c) on 30 October 2018, Ms Cowen telephoned Mr Humphris informing him that the defendant did not know of Rejoin Network and would not agree to change the settlement agreement in that regard. She said and that there was a binding agreement reached between the parties as of 18 October 2018, and that the defendant did not consider that the plaintiff could not resile from the settlement agreement;
(d) on 1 November 2018, Ms Cowen sent an email to Mr Humphris in which Ms Cowen reiterated that the plaintiff was required to make its application to the Court for approval of the settlement by that date. Later that day, Mr Humphris replied that the plaintiff might not agree to sign the terms of settlement if the defendant did not agree to pay the donation to Rejoin Network. There was further email exchange between Ms Cowen and Mr Humphris, where Ms Cowen repeated her view was that an ‘in principle agreement’ had been reached on 18 October 2018, which included that a donation would be made to the Mental Health Legal Centre. In response, Mr Humphris stated that there was no binding agreement reached between the parties;
(e) later on 1 November 2018, Mr Humphris sent an email to the Court stating that his client was not in a position to make an application for approval of the settlement because there was no binding agreement between the parties;
(f) between 2 November 2018 and 11 November 2018, Ms Cowen and Mr Humphris exchanged brief emails and had a brief discussion. These communications failed to resolve the impasse between the parties;
(g) on 12 November 2018, Ms Cowen again spoke with Mr Humphris by telephone. Mr Humphris said he was trying to contact Mr Kirsch to obtain the plaintiff’s instructions. He also queried whether the defendant took the view that the undertaking given by Mr Kirsch was binding as no consideration had been given by the defendant. Ms Cowen disagreed, stating there was consideration for the undertaking; and
(h) later that day, Mr Humphris sent an email to Ms Cowen saying that his client’s position was that the agreement was not binding, in part because it was conditional upon a proposed undertaking being entered into, and that the undertaking had not been executed and was unenforceable.
In his affidavit sworn on 8 February 2019, the plaintiff deposed, in summary as follows:
(a) on 20 October 2018, the plaintiff attended the home of Mr Kirsch of PAV, where he and Mr Kirsch discussed a proposal to settle the proceeding;
(b) the plaintiff believed that the PAV was committed to the welfare of prisoners and would act in his best interests, having stayed in PAV’s hostels and received support from them for many years;
(c) the plaintiff understood from previous discussions with Mr Kirsch that the defendant was not the primary target of legal action to be taken by PAV;
(d) at the meeting, he learned that the defendant’s settlement offer involved the defendant paying $10,000 to registered charity, Rejoin Network, which would pass the money to the plaintiff to purchase a small car and to have an operation to replace his teeth;
(e) he described the alleged conduct of the staff at Fulham prison which was the subject of his claim in this proceeding, and its impact upon him;
(f) the plaintiff became emotional when describing his feelings about settling the proceeding and decided not to agree to settle the proceeding;
(g) further, the plaintiff received a letter from Medicare regarding its claim over the proceeds of the settlement. The plaintiff believed that the government or Medicare would seize most of the money that the defendant would pay to him. The purpose of the proposed donation to Rejoin Network was to avoid seizure of settlement sum by Medicare and the government, and as such, was for the plaintiff’s benefit;
(h) the plaintiff believed that the defendant had no defence to his claims in the proceeding, because no defence had yet been filed; and
(i) the plaintiff told Mr Kirsch to instruct Mr Humphris not to settle the proceeding.
During the course of the hearing before me on 10 May 2019, the plaintiff told the Court that:
(a) he did not know anything about the settlement of this proceeding until he received a letter from the Medicare in around October 2018;
(b) he had never met Mr Humphris in person and had never spoken to him on the telephone; and
(c) he never agreed to settle the proceeding.
Mr Kirsch deposed, in his affidavit sworn 15 February 2019, in summary, as follows:
(a) Mr Kirsch has been associated with PAV since 1994. The PAV has a history of supporting and coordinating litigation in Victoria and other states on behalf of prisoners and ex‑prisoners;
(b) Mr Kirsch has known the plaintiff since around 2000, when the plaintiff first sought accommodation and support from PAV;
(c) In 2006, PAV became aware that private prisons in Victoria were breaching the Corrections Act 1986 (Vic) by conducting visual cavity searches of prisoners. In addition to making representations to government, PAV sought out affected individuals with a view to commencing a class action against the defendant;
(d) During settlement negotiations between the parties in around early to mid-October 2018, there were discussions to the effect that the defendant pay counsel’s fees together with an amount of $10,000 to Rejoin Network Limited;
(e) Mr Kirsch sought the agreement of the committee of Rejoin Network to use such funds for the sole benefit of the plaintiff. Mr Kirsch denies approving counsel’s acceptance of the Mental Health Law Centre as the charity nominated by the settlement agreement;
(f) on 20 October 2018, Mr Kirsch met with the plaintiff to discuss the proposed settlement. At the meeting, the plaintiff instructed him to refuse settle the proceeding. After the meeting, Mr Kirsch informed Mr Humphris that there was to be no settlement; and
(g) Mr Kirsch deposed at some length as to his views concerning the conduct of the defendant with respect to the alleged abuse of prisoners under its control.
Save that he deposed that the parties had discussed the defendant making a donation to a prisoners’ rights group, Mr Kirsch did not contradict Ms Cowen’s evidence regarding what occurred at the settlement conference on 26 September 2018. He was silent as to the question of what communications he had with Mr Humphris between the settlement conference and 18 October 2018. Significantly, the plaintiff did not adduce any evidence from Mr Humphris. In all of the circumstances, given that the plaintiff was represented by solicitors until the evening prior to the hearing before me, and had filed affidavits and submissions on behalf of the plaintiff, I am entitled to infer that Mr Humphris’ evidence would not have assisted the plaintiff.[5]
[5]Jones v Dunkel (1959) 101 CLR 298.
As noted above, the plaintiff represented himself at the hearing of the defendant’s application, his solicitors having informed the Court the previous day that they no longer represented him.[6] Mr Kirsch accompanied the plaintiff to Court, and I allowed the plaintiff to consult with Mr Kirsch during the course of the hearing. The plaintiff largely relied upon the affidavits and written submissions filed with respect to the defendant’s application.
[6]No Notice of Ceasing to Act has yet been filed.
The defendant submitted that the settlement agreement reached between Ms Cowen and Mr Humphris on 18 October 2018 is final and binding, subject only to the Court’s approval, as the settlement agreement fell within either the first or second of the three categories identified by the High Court in Masters v Cameron.[7]
[7](1954) 91 CLR 353, 360.
The defendant submitted that the evidence shows that the parties had:
(a) reached finality in relation to each of the terms of the agreement on 18 October 2018. That they intended to be immediately bound by the terms of the settlement agreement was demonstrated by each party proceeding to perform their obligations under the agreement, in that both counsel signed consent orders to facilitate the steps required to be taken by the parties under the settlement agreement; and
(b) agreed for the terms of the settlement agreement to be recorded in the final version of the heads of agreement, as amended by Ms Cowen and sent to the plaintiff on 18 October 2018 for execution.
The defendant referred to the decision of Sackar J of the New South Wales Supreme Court in Universal Music Australia Pty Ltd v Pavlovic,[8] in which email communications between lawyers were held to constitute a binding agreement, even though the settlement deed was not signed. Therefore, the settlement agreement is a binding contract between the parties, regardless of the fact that the documents contemplated by the settlement agreement were not executed by the plaintiff and Mr Kirsch.
[8][2015] NSWSC 791.
The defendant also relied on the decision of Lindsay J of the New South Wales Supreme Court in Boardman v Boardman[9] where his Honour stated:
The fact that a settlement agreement such as the Heads of Agreement is, expressly or by implication, subject to the approval of the Court does not, of itself, mean that the agreement is not a contract. On the contrary, the parties may be regarded as having a contractual obligation, in good faith, to apply for the Court’s approval.[10]
[9][2012] NSWSC 1257.
[10]Ibid [47].
The defendant submitted that the following observations by Elliott J of this Court in Cook v Taing[11] are applicable to the current case:
... the intention of the parties is to be ascertained by a consideration of the communications that occur between the solicitors, rather than any instructions that the clients may have given their solicitors. In circumstances where the clients had no direct involvement in the negotiations, it is not relevant to consider whether the instructions given to the solicitors accorded with the communications made by the solicitors to the opposing parties. If the solicitors, by their conduct, settled the proceeding then that conduct bound their clients.[12]
[11][2014] VSC 428.
[12]Ibid [95].
Moreover, the defendant noted that the meeting between Mr Kirsch and the plaintiff took place on 20 October 2018, after a binding settlement agreement had already been reached between the parties.
The defendant submitted that Mr Humphris had the actual or ostensible authority to negotiate on the plaintiff’s behalf and to bind the plaintiff. The defendant relied on the decision of the High Court in Harvey v Phillips[13], which states that the court does not have a discretion to set aside a compromise, where the compromise is made with the actual and apparent authority of counsel. Exceptions may apply such as where there is misapprehension or mistake made by counsel in consenting to an order of settlement, or where there are some other grounds by which it is said the agreement is voidable[14]. However, the plaintiff has not demonstrated that any such exception applies in the circumstances of the current case.
[13][1956] 95 CLR 235.
[14]Ibid, 243-244.
Counsel for the defendant referred to the decision of the Court of Appeal of New South Wales in Donellan v Watson[15] as authority for the contention that a solicitor retained to conduct litigation ordinarily has both implied and ostensible authority to bind his client to a compromise of those proceedings, unless the other party is put on notice that there is some restriction upon the solicitor’s authority.[16] Further, the authority of counsel briefed in a proceeding does not differ from the authority of a solicitor in settlement negotiations.[17]
[15](1990) 21 NSWLR 335.
[16](1990) 21 NSWLR 335, 342.
[17]Ibid
Counsel for the defendant submitted that the defendant had not been put on notice throughout the negotiations, by either the plaintiff, the plaintiff’s solicitors, Mr Kirsch, or Mr Humphris, that Mr Humphris did not have proper authority to enter into the settlement. There was no reason for the defendant to doubt Mr Humphris’ authority. Therefore, it would be impossible, and indeed improper, for the defendant to look behind the instructions that Mr Humphris told Ms Cowen he had received.
In the plaintiff’s outline of submissions, the plaintiff maintained that there was no binding agreement between the parties.
In his submissions filed on 9 April 2019, the plaintiff submitted that:
(a) there was no binding agreement because the draft heads of agreement and draft undertaking had not been executed by the plaintiff and Mr Kirsch;
(b) the draft undertaking which the defendant sought from PAV was unsupported by consideration, and had not been approved by the committee of PAV;
(c) the plaintiff’s offer was capable of being withdrawn prior to unconditional acceptance; and
(d) Mr Humphris had a potential conflict of interest, as counsel was acting for the plaintiff and other class members in a contemplated group proceeding, given that the terms of the settlement agreement required the ‘abandonment’ of the other group members.
In his further submissions provided to the Court on the day of the hearing, the plaintiff submitted that solicitors and barristers have different roles and capacities, and therefore counsel did not have authority to bind the plaintiff.
In my view, the settlement reached between the parties on 18 October 2018 was a concluded agreement. It falls within the first category in Masters v Cameron,[18] in that there was intention by the parties to be immediately bound by the terms of the settlement agreement, with the execution of the heads of the agreement and the undertaking being obligations imposed upon the plaintiff by the terms of the settlement agreement. There was nothing left to be agreed. As well as the communications between counsel, that the parties had reached a concluded agreement was evidenced by the parties taking steps to carry out their agreement, including signing consent orders and sending them to the Court.
[18] (1954) 91 CLR 353, 360.
The fact that the heads of agreement and undertaking had not been executed does not evince any intention of the parties not to be bound by the settlement agreement, and the fact that the settlement agreement must be approved by the Court is no obstacle to finding that there was a concluded agreement. Ms Cowen described the settlement agreement as an ‘in principle agreement’ in her email of 18 October 2018, and there was no suggestion on the part of Mr Humphris that the settlement agreement was subject to him receiving instructions from his client, or anyone else. Indeed, Ms Cowen was simply responding to an offer made by Mr Humphris on behalf of the plaintiff. Save for some inconsequential tweaking of the term regarding costs, the defendant accepted the offer made on behalf of the plaintiff by Mr Humphris.
I have no reason to doubt the evidence given by Ms Cowen, who was involved in the settlement negotiations at all relevant times. Her evidence is supported by the email exchanges between her and Mr Humphris, and her contemporaneous files notes record their telephone conversations. Ms Cowen’s evidence was not disputed by Mr Kirsch, who participated in the meeting on 26 September 2018, although Mr Kirsch and the plaintiff denied giving instructions to Mr Humphris to agree to the terms of the settlement agreement. There is no evidence that Mr Kirsch did not have the authority to negotiate with the defendant on behalf of the plaintiff, or instruct Mr Humphris to negotiate on behalf of the plaintiff. There is no evidence of any reason why the defendant had cause to suspect he might not have such authority.
It is noteworthy that neither Mr Humphris, nor the plaintiff’s former solicitor has given evidence to contradict Ms Cowen’s version of events. I note that the plaintiff’s solicitors were copied in on the email to the Court enclosing the consent orders sent on 18 October 2018. If Mr Humphris was indeed on a frolic of his own, as contended for by the plaintiff, one would expect the plaintiff’s solicitors to promptly draw to the attention of Mr Humphris, the defendant, and possibly also the Court that the proceeding had not been settled, notwithstanding the terms of the consent orders.
The decision of Elliott J in Cook v Taing[19] is authority for the proposition that in cases where the clients have no direct involvement in the negotiations, the intention of the parties shall be ascertained by communications that occur between the solicitors, rather than any instructions that the clients may have given their solicitors. This is merely another expression of, or an extension of, the general principle that an agent acting with the actual or ostensible authority of his or her principal has the capacity to bind the principal. Accordingly, I am satisfied that Mr Humphris had the ostensible authority to bind the plaintiff to the settlement agreement.
[19][2014] VSC 428.
Further, I do not accept that Mr Humphris was in a position of conflict of interest, or, if he was, how that is relevant to the question of whether he had the authority to bind the plaintiff. It is entirely unclear how Mr Humphris’ asserted conflict of interest could have put the defendant on notice that he did not have the authority to negotiate on behalf of the plaintiff. In any event, if Mr Humphris did have such a conflict, it was the other potential group members who were arguably adversely affected by the terms of the settlement agreement, not the plaintiff. In any event, the terms of settlement did not release the defendant from any claims by any other party.
For the reasons outlined above, the defendant is entitled to a declaration that the compromise on 18 October 2018 is a valid and enforceable agreement between the parties and is binding on the plaintiff, subject to approval of the Court under s 104S of the Corrections Act 1986 (Vic).
I will hear further from the parties in relation to any further order, any further directions for the conduct of the proceeding, and the question of costs.
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