Nguyen v Nguyen [2010] NSWSC 894 (13 July 2010)

Last Updated: 13 August 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Nguyen v Nguyen [2010] NSWSC 894


JURISDICTION:
Equity Division

FILE NUMBER(S):
2009/289203

HEARING DATE(S):
12 July 2010

JUDGMENT DATE:
13 July 2010

PARTIES:
Quoc Tuan Nguyen (plaintiff)
Thi Thanh Hong Nguyen (defendant)

JUDGMENT OF:
Rein J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
A Luong (solicitor) (plaintiff)
P Strasser (defendant)

SOLICITORS:
A Luong & Associate Lawyers (plaintiff)
Grech Partners Solicitors (defendant)


CATCHWORDS:
PROCEDURE - Supreme Court procedure - New South Wales - procedure under Uniform Civil Procedure Rules and other rules of court - miscellaneous proceedings and matters - where proceedings earlier settled in principle, but now dispute as to terms of settlement agreement - whether defendant entitled to indemnity costs where defendant made settlement offer by letter to plaintiff - whether costs recoverable by defendant should be limited

LEGISLATION CITED:
Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

CATEGORY:
Principal judgment

CASES CITED:


TEXTS CITED:


DECISION:
Held that the settlement was not subject to agreement as to the amount payable to the mortgagee.
Held that the defendant is entitled to have a settlement deed prepared and executed in the form proposed by her.
Plaintiff to pay the defendant’s costs of the Notice of Motion of the defendant and the costs of the defendant in resisting the plaintiff’s Notice of Motion, as agreed or assessed.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


Rein J

Date of Hearing: 12 July 2010
Date of Judgment: 13 July 2010

2009/289203 Quoc Tuan Nguyen v Thi Thanh Hong Nguyen

JUDGMENT (EX TEMPORE)

1 REIN J: These proceedings, the parties are agreed, settled on 1 March 2010 on the first day of the hearing before me. A dispute has arisen as to the terms of the settlement.

2 The plaintiff, Mr Nguyen, seeks by way of the Notice of Motion to invoke s 73 of the Civil Procedure Act 2005 (NSW), which is in the following terms:

“73 (1) In any proceedings, the court:

(a) has and may exercise jurisdiction to determine any question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them, and

(b) may make such orders as it considers appropriate to give effect to any such determination.”

3 The defendant has also brought a Notice of Motion seeking relief in relation to the settlement agreement.

4 In the substantive proceedings, the plaintiff claimed the beneficial interest in a property at St Clair (“the property”), which had been bought in the defendant’s name. The defendant, who I shall refer to as “Ms Hong”, is a niece of the plaintiff. The family was involved in a number of bread shops, and the defendant worked in a bread shop at St Clair for which, she asserted in a cross-claim in the substantive proceedings, she had not received any proper compensation.

5 The mortgage over the property was in the name of the defendant. She had withdrawn monies on the mortgage account. She had also paid the weekly mortgage repayments since the property was purchased by means of a direct debit arrangement on an account operated by her. The plaintiff has resided in the property and has renovated it over a long period of time.

6 The parties are agreed that the matter was settled in principle on 1 March, and neither side resiles from there having been a settlement reached. The Court was informed on 1 March that a settlement had been reached in principle.

7 The parties are agreed that the settlement included the following elements:

(1) the plaintiff would pay $85,000 to the defendant;

(2) the defendant would transfer title to the property to the plaintiff;

(3) the plaintiff would pay out the mortgage debt owed by the defendant to the mortgagee, Permanent Custodian Limited, the account being managed by International Credit Corporation (ICC);

(4) each party would pay his or her own costs;

(5) there would mutual releases given, including a release by the plaintiff of members of the defendant’s family and a release by the defendant of the plaintiff from any employment-related claims;

(6) the plaintiff would reimburse the defendant for any amounts paid after 1 March 2010 by her and compensate her for any rates or taxes and the like payable by her from that date; and

(7) the agreement was subject to the preparation of the deed reflecting the terms.

8 The plaintiff, however, claims that the agreement I have set out above was not the complete agreement. The precise formulation of what that further agreement is, or was said to be, is in some doubt by reason of matters which I shall refer to in a moment. But on one view, it can described as an agreement that the settlement agreement was subject to an agreement about the amount for which the mortgage would have to be discharged. The defendant disputes that any such term, or any other term apart from those I have previously identified, was imposed by the settlement.

9 The defendant had stated in her affidavit of 15 February 2010 filed in the substantive proceedings that the amount owing on the mortgage was, as at that date or close to it, $199,512.53. The plaintiff did not, at the substantive hearing, accept that that figure was correct. Indeed, he sought to demonstrate by means of a “reverse schedule” that if it were correct, the amount paid by the defendant that he would have to repay would only be some $19,900. I think it is agreed that he sought to tender a cheque in that amount at the hearing, or at least indicated that a cheque would be tendered in that amount.

10 The plaintiff’s case is that he did not know as at 1 March 2010 that Ms Hong had drawn an amount of some $18,000 in February 2009, being an amount in addition to a sum of $130,000 of which he had been made aware prior to the substantive hearing.

11 Ms Hong agrees that she did not, in her affidavit of 15 February 2010, make any specific reference to the $18,000, but she draws attention to the fact that she stated that as at 15 February, the amount owing on the mortgage was $199,512.53. That amount as stated was correct, as has now been established by statements obtained from ICC, acting on behalf of the lender/mortgagee: see tab 3 of Exhibit 1. That amount included the $18,000 withdrawn in February 2009 by the defendant.

12 The plaintiff first became aware that the defendant had withdrawn an amount of $18,000 in February 2009 when a copy of a page of the ICC mortgage account was provided to his solicitors in early May this year.

13 The plaintiff wants to see a reduction of the amount of $85,000 that was otherwise payable to the defendant to reflect the $18,000 figure, but he accepts that the reduction should itself be offset by the amounts paid by defendant since 1 March 2010 – that is, an agreed total of $9,935.20, which amount includes payments withdrawn from the defendant’s account in the last two weeks.

14 Evidence was called in the plaintiff’s case from the plaintiff, who gave his evidence through an accredited interpreter proficient in Vietnamese and English, Mr Luong, the plaintiff’s solicitor, and Mr Laughton SC. Both Mr Laughton, as counsel, and Mr Luong, as solicitor, appeared for the plaintiff in the March proceedings.

15 Evidence was called in the defendant’s case from the defendant, Ms Lisa Doust of counsel, Mr Peter Zeda and Ms Pamela Mete. Ms Doust appeared for the defendant at the March hearing, instructed by Mr Zeda and Ms Mete, but a new firm of solicitors have taken over conduct of the matter and Mr Strasser of counsel is now briefed and appears on behalf of the defendant.

16 No transcript was obtained of the proceedings before me on 1 March, but as I have said, there was agreement that the Court was informed that the proceedings had settled in principle.

17 Mr Luong, who appeared for the plaintiff on the Motion, sought in his submissions to introduce notions of fairness and equity, but as Mr Strasser pointed out, there was no juridical basis for such concepts here.

18 Mr Strasser also pointed out that the plaintiff’s case seemed to be that he had entered into the settlement agreement on the basis of a mistake (see T11.41-46, where Mr Luong articulates the plaintiff’s case), yet it was no part of the plaintiff’s case that the agreement should be set aside, and no case for mistake is brought.

19 Given that both sides maintained that an agreement was reached, what the Court must determine is what was agreed and what is its effect. Focusing now only on the differences between the parties, on Ms Doust’s evidence, the plaintiff agreed to take over the mortgage in return for a payment of $85,000 and the transfer of title to the property.

20 On Mr Laughton’s evidence, this was subject to agreement on the amount of the discharge of the debt to the lender. Ms Doust and Mr Laughton were agreed that in the settlement discussions, there was no reference to $130,000 that had been identified in the substantive proceedings as an amount previously withdrawn by the defendant, on the plaintiff’s case: see paragraph 22 of Ms Doust’s affidavit and T6.1-5 of Mr Laughton's evidence.

21 Mr Zeda’s evidence, and that of Ms Mete, was supportive of the defendant’s contentions, but it was accepted that the agreement reached was one reached by counsel, not by the solicitors.

22 Neither Mr Laughton nor Ms Doust have any notes of the agreement reached. I think it is clear from Mr Laughton’s evidence that he was aware that there was a dispute as to the amount of the discharge figure on the mortgage as a precursor to settlement, since the plaintiff did not accept that the amount was as high as the amount stated by Ms Hong and there was no statement from the lender or its manager made available on 1 March.

23 Fortunately and appropriately, there was agreement between Mr Strasser and Mr Luong that neither the honesty nor the credibility of Ms Doust and Mr Laughton are in doubt.

24 It might have been expected that the plaintiff, before reaching agreement, would either have required to see copies of the statements from ICC or to have imposed some condition as to the provision of statements, or alternatively, to have predicated the sum payable upon the basis of expressed assumptions which, if incorrect, would have reduced the amount payable by the plaintiff, but Mr Laughton gave no evidence of any such specific arrangement having been agreed or discussed.

25 On the other hand, given that Mr Nguyen was to pay out the mortgage and obtain finance in order to do so, it is obvious that he would need to know exactly how much was owed to the lender, and yet there is no evidence of that being discussed. If it be correct, in accordance with Mr Laughton’s recollection, that the settlement was “subject to agreement on the pay out figure”, then it would appear there that was no agreement at all, since the amount payable was not agreed. That, however, is not the position of the plaintiff.

26 If the agreement was a binding agreement, then a qualification cannot stand unless it was really only a requirement that the plaintiff had to be provided with an accurate statement of how much was in fact to be paid to the lender, which is not the plaintiff’s case either.

27 A matter ought not be described as “settled” or “settled in principle” without more detail if, in truth, there is only an agreement to agree on an important aspect of the settlement. When the Court is informed that a matter has settled, the time set aside for the balance of the hearing can be vacated and other matters allocated.

28 It may be unrealistic to expect that barristers and solicitors will make notes of what has been said in the course of settlement negotiations, but I do think that once an agreement has been reached, a note should be made of what it is that has been agreed, preferably as a heads of agreement signed by both parties, and at the very least there should be some record made of the key elements of what has been agreed.

29 Sometimes there may be a dispute as how a particular term of the settlement is to be interpreted, which is unsatisfactory, but a dispute over what has been agreed when counsel and solicitors are retained is a most unfortunate outcome. It is even more unfortunate when the dispute, as it now stands, involves at most the sum of $18,000, and on one view, I was told, the dispute is really over about $9,000.

30 I accept that the plaintiff may have been concerned as to whether the figure of almost $200,000 identified in Ms Hong’s affidavit was the amount due to the lender. I note that Mr Nguyen had received from Ms Hong a document which is labelled as Item Q and which is now an exhibit in these proceedings, which document records an amount of $187,500 payable to the lender. Although the document bears no date, it is clear that it was created on a date prior to 15 February 2010. Although the date is unclear and a failure to make payments or changes in interest rates could explain the discrepancy, whatever the reasons, the plaintiff knew that the defendant claimed to have been informed of the $199,512.53 figure a few days or two weeks before 1 March, and as I have noted before, the evidence demonstrates that what she said was accurate.

31 Returning to the plaintiff’s concerns, they are not relevant unless they are incorporated in the settlement reached between Mr Laughton and Ms Doust.

32 Mr Luong, in his affidavit of 9 July 2010, said this at paragraph 12:

“At the time, the parties agreed to settle the matter on the basis that the plaintiff pay the defendant the sum of $85,000 and that the plaintiff would assume responsibility for the mortgage on the property, with a figure on the mortgage to be determined by provision of mortgage statements for transparency.”

33 Ms Doust and Mr Zeda dispute that the words “with a figure on the mortgage to be determined by provision of mortgage statements for transparency” were used. Mr Laughton’s evidence does not support the use of those words either. Even if those words were, in fact, the words used, contrary, as I say, to the evidence of others, they are ambiguous and quite consistent with there being a need for the plaintiff to satisfy himself that the amount of $199,512.53 was in fact the amount owing.

34 Given the following matters:

(a) the lack of any record what was agreed;

(b) the divergence of evidence between Mr Laughton and Ms Doust;

(c) the absence of any evidence from Mr Luong that the agreement reached was stated to be “subject to agreement” as to the pay out figure; and

(d) the indication given to the Court on 1 March 2010 that the matter had settled in principle
I am not satisfied on the balance of probabilities that this settlement was subject to agreement as to the amount payable to the mortgagee.

35 As I have indicated, if the agreement were subject to agreement as to the amount to be paid by the defendant, it would be an agreement to agree, it would be inconsistent with the position of the plaintiff (who does not assert that there is no binding agreement between the parties) and it would not support the conclusion that is asserted by the plaintiff that the defendant is required to pay the plaintiff a further $18,000. At most, it would be something that would have to be negotiated.

36 It follows, in my view, that the defendant is entitled to have the deed prepared and executed in the form proposed in its Notice of Motion, as amended by clause 3 of MFI 1.

37 In this matter, there is now a dispute about costs. The defendant, having been successful in resisting the plaintiff’s claim and in the relief that it seeks in relation to the settlement, seeks an order for indemnity costs.

38 The letter, Exhibit 4, which makes the offer which is relied on, does not say anything about indemnity costs. An earlier letter, which made no offer of compromise and which would not constitute a Calderbank letter, does make a reference to indemnity costs.

39 In my view, the letter that has to be considered is Exhibit 4, which is a letter of 21 June 2010. I regard the letter as significant, in that I indicated to the parties on Monday morning that I regarded it as a matter that might warrant an order that there be no order as to costs, given the circumstances out of which the matter arose and the very small amounts involved.

40 The matter did not resolve, but has proceeded to a full hearing in relation to the respective Notices of Motion. I regard the letter of 21 June as a reasonable resolution of the proceedings, which ought to have been accepted. I do not rely on the letter to support an order for indemnity costs, but I do regard the letter as a matter to be taken into account in determining whether or not the normal rule should apply, namely that the successful party should have his or her costs paid. I regard the normal rule as applying in this matter, and I order the plaintiff to pay the defendant's costs of the Notice of Motion of the defendant and the costs of the defendant in resisting the plaintiff’s Notice of Motion, as agreed or assessed.

41 The only other matter remaining is whether there should be some limit placed on the amount of costs. I think that, unfortunately, the defendant was placed in the situation where, because her counsel and former solicitors had to given evidence in the case and could no longer act in the matter, she had to engage new solicitors who had no involvement in the original proceedings. The defendant has incurred, I am informed, considerable costs in relation to the preparation of the proceedings. Once again taking into account the letter of 21 June as another matter, I do not think that it is appropriate to impose any cost cap or limit in accordance with Rule 42.4 of the Uniform Civil Procedure Rules 2005 (NSW), notwithstanding, as I have said, that the amounts involve are very small.

42 I have taken into account, as well, a further matter which concerns me, and that is that for the reasons which I have remarked upon in dealing with the issues on these Notices of Motion, the problems have arisen, in a sense, because of the failure of the legal representatives of both sides to record in a document what had been agreed in principle between them.

43 I have taken that into account, but in all the circumstances I am not persuaded that it is sufficient reason to deny the defendant the costs of these proceedings.

44 I direct that the matter will be listed before me on Thursday at 2 o’clock with a view to the defendant’s solicitor providing to the plaintiff’s solicitor no later than 5 o’clock tomorrow afternoon a proposed deed which contains the terms that were always agreed, including the terms upon which I have adjudicated, with a view to an order being made that the plaintiff and defendant execute the deed of settlement.

45 In the event that there is agreement as to execution and that can be arranged by consent between the solicitors on behalf of their clients, the matter can be taken out of the list at 2 o’clock, so that the solicitors do not need to attend on that occasion.

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LAST UPDATED:
12 August 2010