Surrounding events
17 These events are relevant to the present action. The plaintiff's summons, commencing the Equity proceedings, sought the following orders -
"1. A declaration for the dissolution of the business partnership between Suzanne Ranken Suttor and Claudio Grizoinic[sic] trading as Da Valentinos Restaurant situated at 69 Willoughby Road Crows Nest.
2 An order that the First Defendant deliver or cause to be delivered to the Plaintiff all tax returns, check buts[sic], bank statements for the past seven years and the lease between Da Valentino's and the Landlord within 7 days of the making of this order for the purpose of valuing the business trading as Da Valentinos.
3. An order that the First and Second Defendants deliver or cause to be delivered to the Plaintiff all tax returns, check buts[sic], bank statements belonging to Find-a-Flat Pty Ltd and Lynx Shareflatmates within 7 days of the making of this order for the purpose of establishing what monies are owed to the Plaintiff by the First and Second Defendants.
4. An order that the First and Second Defendants allow all accounts of Da Valentinos and Find-a-Flat Pty Ltd be audited by a firm of forensic accountants appointed by the Court.
5. An order that the First Defendant transfer her 50% interest in the partnership Trading as Da Valentinos to the Plaintiff for a consideration yet to be established after all accounts have been audited and the Defendant's share valued by a Registered Business Valuer acceptable to the Court.
6. An order that the property known as 9 Magdala Road, East Ryde, NSW 2113 the registered proprietors being the Plaintiff and the First Defendant as tenants in common in equal shares be listed for sale with a licensed Real Estate Agent within 30 days of the making of this order.
7. An order that the First Defendant be restrained from denying the Plaintiff reasonable access to the property known as 9 Magdala Road, East Ryde pending the sale of the property.
8. An order that the Plaintiff be at liberty to borrow $100,000 against his equity in the property known as 9 Magdala Road, East Ryde without the consent of the First Defendant pending the sale of the property.
9. Further orders as the Court thinks fit.
10. Costs.
18 Mrs Wade and the plaintiff have been in a domestic relationship for some years. She has no legal qualifications but has been directly or closely concerned in the conduct of a number of court proceedings and has drafted court documents. She has secretarial skills. She has a better command of English than the plaintiff. The plaintiff discussed the commencement of the Equity proceedings with Mrs Wade. He told her what he wanted and what the facts were. She prepared the summons and the affidavit. The plaintiff satisfied himself that they conveyed what he wanted them to convey, swore the affidavit and filed the documents. The plaintiff did not consult any lawyer to advise about commencing the Equity proceedings, about preparing the summons or the affidavit or about filing and serving them. The summons was made returnable on 17 February 2004. Before the return date the plaintiff filed a notice of motion seeking orders generally restraining Ms Suttor from carrying out certain activities in the business and interfering with the plaintiff's conduct of the business. The notice of motion was accompanied by an affidavit sworn by the plaintiff on 17 December 2003. No lawyer was involved in advising on or preparing the documents. The plaintiff attended court and obtained leave to bring his motion before the court on 19 December 2003. He served the documents.
19 On 19 December 2003 the plaintiff and Mrs Wade attended court. Mr Jones was at court dealing with another case that Mrs Wade knew about. He had formerly appeared for her or members of her family. She asked him to appear for the plaintiff. She handed him copies of the notion of motion and the supporting affidavit. He spoke to the plaintiff in the presence of Mrs Wade. He agreed to act. There was no solicitor. He conferred with Ms Suttor's counsel and negotiations ensued, resulting in the Short Minutes of Order and the Heads of Agreement.
20 There were certain important matters which, though permitted and presumably contemplated by the parties in the orders and the Heads of Agreement, were not specified. One was that the plaintiff wished to be permitted to borrow $100,000 secured on his share of the partnership property. The form of the Deed of Release had still to be arrived at. A time limit had to be agreed for the sale of the restaurant. There was no particular requirement for Ms Suttor to deliver up financial records so that the business could be valued. The plaintiff's claims against Find-a-Flat Pty Ltd were not provided for. The plaintiff was especially concerned that there was no express provision for him to charge his interest in borrowing money. He mentioned the matter to Mr Jones at court. Mr Jones, having spoken to his opponent, told him that it would be provided for. He told the plaintiff that the proceedings would be adjourned to allow a time for the parties to complete the settlement.
21 At the conclusion of the business at court on 19 December 2003, the Equity proceedings were adjourned to 23 December.
22 On 22 December the plaintiff twice telephoned Mr Jones. In the first conversation he said that the restaurant staff had walked out. He said that he had invested $200,000 in Find-a-Flat Pty Ltd and that Ms Suttor was a director of that company. He wanted her to deliver up the books of the restaurant and the cheque butts and the bank statements for all accounts as there were many bills to be paid. The new staff he intended to appoint would have to be paid as well.
23 In the second telephone call the plaintiff told Mr Jones he would not proceed with a claim against Find-a-Flat Pty Ltd. He wanted Mr Jones to settle the matter as soon as possible.
24 There is no evidence that the plaintiff took any step to give effect to the agreement in the first three orders of 19 December that both he and Ms Suttor become necessary signatories to cheques drawn on the business accounts.
25 On the following day Ms Suttor's solicitors wrote to Mr Jones, complaining it had come to Ms Suttor's attention that the plaintiff had sacked one member of the restaurant staff, which had caused the other to leave, and that he had withdrawn $4000 from the partnership account, leaving only $1500 to pay bills which exceeded $10,000. The letter stated that Ms Suttor would proceed to a settlement of all matters only if by 11am on that day her solicitors received confirmation that the plaintiff agreed to the following -
1. The immediate reinstatement of the two employees.
2. An agreement that, pending the sale of the business, all decisions about the employment of staff would be made jointly, with Ms Suttor.
3. There would be an accounting for the takings of the business in respect of the period from 1 October, 2003 to the date of the sale, which would include both parties making available to the other for inspection all such records of the business, including dockets, as they may have in their possession.
4. An agreement that, pending the sale, neither party would prevent the other from attending at the Restaurant during the ordinary course of business.
26 Mr Jones sent the plaintiff a copy of the letter and they spoke about it. As a consequence, Mr Jones replied on the same day as follows -
I refer to your letter of today's date.
My client has instructed me as follows:
(i) The $4,000 he withdrew from the Partnership Account was used for:
(a) Holiday and termination pay for Siad & Asmea.
(b) Wages for 3 casual staff.
(ii) He did not sack Siad and Asmea as they resigned & did not give him prior notice. It is not practicable to reinstate the above named as he has already replaced them with other staff being Peter who is now the chef, Tom is the kitchen hand and a waitress.
(iii) Mr Grzonic[sic ] will not agree that pending the sale of the business, all decisions about employment of staff will be made jointly with your client, because as licensee and manager coupled with his extensive experience in the restaurant trade he is more suitable to manage staff.
(iv) My client in agreement with matter 3 provided your client promptly co-operates reasonably at all times by making available for inspection to him and interested third parties such as the prospective buyer Mark Comomodino all records in her possession pertaining to the business including bank statements, invoices etc. However, in addition he requires that your client immediately produces to him all reords [sic] in her possession pertaining to the partnership for the last 7 years.
(v) That since at least the beginning of October this year the business has been operating at a loss due primarily to a downturn in the restaurant trade brought about by such factors as the Rugby World Cup and the trend for office Christmas parties to be held at the workplace rather than at restaurants.
(vi) He has endeavoured to keep the business afloat by amongst other things borrowing $40,000 & providing $20,000 of his own funds and he will be looking to your client to meet half such loan repayment & reimburse him 50% of such funds provided.
(vii) With respect to matter 4, we will agree to you [sic] client attending the restaurant on the following basis:
(a) that she gives him reasonable prior notice by telephone so that he can be absent whilst she attends;
(b) that when she so attends she does not have any involvement or contact with the staff or the operation of the business;
(c) that such visits will cause minimum disruption to the business. For example your client does not attend the restaurant during busy periods as my client will need to be present during such periods so that he can perform his managerial role efficiently.
(viii) I confirm that my client has been approached by a potential buyer of the business a Mark Comomondino who is prepared to purchase the business on the following terms;
(a) Purchase price of the business will be $100,000 on a Walk in Walk Out (WIWO) with stock included. It is proposed to sell the business at this price because not all books, records have been made available for inspection. In this regard Mr Grzonic[sic] instructs that a Mr Frank Kelly a restaurant broker left at least two telephonic messages with your client yesterday to call him back, but your client did not return such calls to him;. Accordingly my client will require your client to promptly make available for inspection all records she has pertaining to the business to Mr Comomondino.
(b) Deposit of $20,000 to be paid into an independent solicitors trust account prior to Mr Comomondino commencing his trial period as specified below.
(c) There will be a trial period for 6 weeks commencing in the first week January 2004. The purpose of his trial period will be to give Mr Comomondino the opportunity to decide by the end of the trial period whether he wants to go ahead with the purchase of the business.
(d) The above deposit will be returned to Mr Comomondino if at the end of the trial period the weekly takings of the business do not exceed $10,000 during such period & Mr Comomondino decides not to go ahead with the purchase.
(e) Mr Comomondino will forfeit the deposit if during the trial period the weekly takings exceed $10,000 & he decides not to go ahead with the purchase of the business.
(f) During the trial period & until the restaurant is sold my client is to remain as manager of the business.
It is submitted that the abovementioned proposals made by my client will in the circumstances reasonably progress the matters in dispute between our clients towards a harmonious resolution.
I reiterate that my client has contacted Ray White Real Estate for the purpose of their agents to inspect the house at 9 Magdala Road, East Ryde & he would appreciate your clients co-operation by allowing such inspection to take place as soon as possible.
27 The plaintiff did not appear at court on 23 December. Neither did Mr Jones, who was engaged in writing the letter I have referred to. Representatives for Ms Suttor had the matter adjourned to 5 February 2004 with liberty to re-list it before the vacation judge. They informed Mr Jones what had happened and he informed the plaintiff. Mr Jones advised the plaintiff to retain a solicitor to instruct him. The plaintiff agreed, but did not engage a solicitor.
28 On 24 December the plaintiff reported to Mr Jones that the restaurant bank account had been closed. Mr Jones explained that that was a consequence of Order number two of 19 December and that both parties were required to attend the bank so that the account could be made to operate on a "both parties to sign" basis.
29 On 25 December an interim Apprehended Violence Order was served on the plaintiff on behalf of Ms Suttor. It was returnable on 9 January.
30 On 30 December the plaintiff, assisted by Mrs Wade, prepared and lodged his own apprehended violence complaint and summons.
31 Mr Jones was away from chambers between 25 December and 5 January, a fact of which the plaintiff was aware. On 5 January, without the intervention of a solicitor, he telephoned Mr Dimock's office several times to complain about the bank account. Mr Dimock sent this letter in reply -
We refer to the writer's telephone conversations with you today, resting with our recent telephone conversation at about 1.50pm.
The writer understands that when you first spoke with his Administrative Assistant this morning, you complained that you having difficulty operating the restaurant business without being able to write cheques.
In this regard, we refer you to the Orders that were made on 19 December 2003 in accordance with a "Short Minute of Order" filed in Court, and in particular the following Orders:
'3. That the Bank Account known as Da Valentino's at the Commonwealth Bank (Crows Nest Branch), Account No. 062 151 1006583, be operated by the Plaintiff and First Defendant as a joint account with both parties required to sign withdrawals upon that account.
4. That the Plaintiff and/or the First Defendant deposit all takings from Da Valentino's restaurant into Commonwealth Bank Account No. 062 151 1006583 and be otherwise restrained from taking using or dealing with the takings of the Da Valentino's restaurant except as in accordance with the ordinary course of business of the restaurant'.
We advise that our client is willing to meet with you tomorrow afternoon at 12pm, so that you can provide her with documentary evidence of any bills of the restaurant business that require to be paid, and, upon being satisfied that there are sufficient funds in the Account and also that the bills required to be paid, our client can then arrange with you for the necessary cheques to be co-signed.
Our client proposes that you and she meet at 12 midday tomorrow at Chatswood Police Station. Our client requests that you do not bring with you to that meeting Ms Dawn Wade, especially in view of the pending proceedings before the Local Court at Ryde.
We are writing to you direct because at this stage we have not yet heard from Mr Jones, to indicate whether he is or is not still acting for you, but we understand from your telephone calls today that there is a degree of urgency about the matter.
If you do not meet with our client at 12pm tomorrow, then she will be forced to assume that you do not require any cheques to be drawn at this stage upon the Partnership Account.
We take this opportunity to remind you of the obligation placed upon you to deposit all taking from the Restaurant into this Account.
As a matter of courtesy, can you please call us upon your receipt of this letter, to confirm that you will be present at Chatswood Police Station tomorrow at 12 noon, and that you will not bring Ms Wade with you.
32 The plaintiff responded as follows -
In response to your letter received on today's date, I am advising you that I will not be attending Chatswood Police Station at 12pm tomorrow. I have made other arrangements to pay the urgent trading accounts myself.
I have approached three separate business brokers and valuers to value the restaurant. All have advised that they can not value the restaurant with out the books and various other pieces of documentation. The restaurant at the moment can only be sold for surface value.
I will be filing and serving further documentation on your firm tomorrow with regards to the dissolution of partnership and other related matter.
33 At the same time Mr Dimock wrote to Mr Jones -
With further reference to this matter, this firm has this morning received several telephone calls from Mr Grizonic. He informed me that you were no longer acting for him. Is this true?
If so, then please urgently advise me, especially in the light of threats made by Mr Grizonic to members of this firm this morning, including a threat that he was going to 'take the brains out of everyone who worked here'.
If you are in fact still acting for Grizonic, then please tell him not to communicate with this firm directly again.
We do of course reserve our position in relation to the verbal threats made to members of staff, which I take very seriously indeed.
34 On 7 January the plaintiff spoke to Mr Jones by telephone and gave him instructions to write to the solicitor for Ms Suttor. As a result Mr Jones wrote a long letter on 8 January 2004, relaying many complaints about Ms Suttor's conduct. The letter said that she had failed to co-operate in putting into effect clauses 1, 2 and 3 of the Heads of Agreement and that she had failed to make available the records of the business. The letter specified the records required to be delivered within seven days and included this passage -
In light of the further deterioration of the relationship between our respective clients and your client's AVO proceedings against my client it is probably no longer practicable for the Consent Orders 1, 2, 3 and 5 as outlined in the Short Minutes of Order to continue.
35 The letter went on to propose that a certain firm of accountants be appointed to operate the business bank account. The letter stated that unless within five days Ms Suttor -
permitted real estate agents to inspect the house to list it for auction;
made available the financial records of the business;