Claudio Grizonic v Maurice Blackburn Cashman Pty Limited

PARTIES : Claudio Grizonic Maurice Blackburn Cashman Pty Limited

COUNSEL : M Willmott SC and C Locke (Plaintiff) A S McGrath and J S Williams (Defendant)

SOLICITORS : Oliveri Lawyers (Plaintiff) Mallesons Stephen Jaques (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20164/2005 CLAUDIO GRIZONIC v MAURICE BLACKBURN CASHMAN PTY LIMITED

JUDGMENT 1 HIS HONOUR: The plaintiff, Claudio Grizonic, sues the defendant, Maurice Blackburn Cashman Pty Limited trading as Maurice Blackburn Cashman Lawyers for damages. The plaintiff and Suzanne Ranken Suttor were joint owners of a house premises at 9 Magdala Road East Ryde (the property) and partners in a business that conducted a restaurant called Da Valentinos (the business). They also had a common interest in a business carried out by a company call Find-a-Flat Pty Limited. The plaintiff brought proceedings in the Equity Division against Ms Suttor as first defendant and Find-a-Flat Pty Limited as second defendant, seeking orders including orders to dissolve the partnership in the business and to sell the property. The proceedings were numbered 6141 of 2003. I shall call them the Equity proceedings. The plaintiff was represented in those proceedings by a barrister, Mr G C Jones, without the medium of a solicitor, and Ms Suttor was represented by Mr CJ Dimock, solicitor, and counsel. On 19 December 2003, on the advice of their respective legal advisers, the plaintiff and Ms Suttor signed a document called 'Heads of Agreement,' the substance of which was as follows - 1. The property known as 9 Magdala Rd, East Ryde (the property) is to be sold by auction. The parties will use their best endeavours to have such auction occur within eight weeks from the date of this agreement. 2. From the proceeds of the sale of the property the following payments will be made: (i) payment of any outstanding mortgage to RAMS Home Loans. (ii) payment of all the agents' fees and fees incidental to the sale of the property. (iii) payment of any outstanding council/water rates and other outstanding charges. (iv) 50% of the proceeds to the plaintiff and 50% of the proceeds to the first defendant. (v) from the proceeds given to the plaintiff there is to be paid to the first defendant a sum equal to 50% of costs incurred in repairing the property up to a limit of $5000. 3. The business known as Da Valentinos (the business) is to be sold. From the proceeds of the sale of the business there is to be paid: (i) all outstanding accounts incurred on behalf of the partnership; (ii) 50% of the proceeds to the plaintiff and 50% of the proceeds to the first defendant. (iii) from the proceeds given to the first defendant there is to be paid the plaintiff a sum equal to 50% of partnership debts paid by the plaintiff from his own personal funds. 4. Each party will enter into a deed releasing the other from any claim under: (a) Partnership Act (b) Property (Relationships) Act 1984 (c) Family Provisions Act 5. The parties consent to orders 1, 2, 3, and 5 of the Short Minutes of Order attached to this Heads of Agreement. 6. That the plaintiff be permitted to draw $1000 per week from the takings of the business and the first defendant be permitted to draw $450 per week from the takings of the business. 7. That the matter be relisted before the vacation judge in the week commencing 22 December 2003.

2 The orders referred to in cl 5 of the Heads of Agreement were as follows - 1. That the bank account known as Da Valentinos at the Commonwealth Bank (Crows Nest Branch, Account No 062 151 10006583) be operated by the plaintiff and first defendant as a joint account with both parties required to sign withdrawals upon that account. 2. That both the plaintiff and the first defendant be restrained from making any withdrawals from Commonwealth Bank Account No 062 151 10006583 until all such steps as are necessary for such account to be operated on a "both parties to sign" basis have been undertaken. 3. That both the plaintiff and the first defendant are to, by 5:00pm Monday 22 December 2003, take all steps necessary to have Commonwealth Back Account No 062 151 10006283 operate on a "both parties to sign" basis . 5. That the plaintiff and/or the first defendant deposit all takings from Da Valentinos restaurant into Commonwealth Bank Account No 062 151 10006583 and be otherwise retrained from taking, using or dealing with the takings of the Da Valentions restaurant except as in accordance with the ordinary course of business of the restaurant.

3 On the same day Barrett J made orders accordingly. 4 Differences arose between the plaintiff and Ms Suttor. He took the view that she was refusing to comply with the Heads of Agreement in that she was preventing him from operating the business and that she was not complying with the orders. On 13 January 2004 the plaintiff filed a notice of motion in the Equity proceedings, seeking orders setting aside the Heads of Agreement and orders made on 19 December 2003. On 15 January 2004 the motion was adjourned. On 5 February Ms Suttor filed an application for an order appointing receivers and managers of the business. On 27 February the plaintiff filed an application for an order appointing trustees for the sale of the property. In due course receivers and managers were appointed to the restaurant business and a trustee was appointed to sell the property. The plaintiff incurred the expense and costs of the Equity proceedings and of the costs and fees of the receivers and managers and of the trustee for sale. He brings this action to recover those and other amounts from the defendant because, he says, the Equity proceedings were brought on the advice of the solicitor employed by the defendant. He says that that advice was wrong and made negligently and in breach of contract. He says that the defendant negligently failed to advise him that the Heads of Agreement were enforceable. There are counts under the Trade Practices Act 1974 as well. 5 The plaintiff says that the defendant - (1) breached its duty to exercise reasonable care, skill and diligence in providing legal services to the plaintiff; (2) breached its duty to provide legal services to the plaintiff to the standard of a specialist legal practitioner in commercial law; (3) breached a term of its contract with the plaintiff to provide services to the standard of a specialist legal practitioner in commercial law; (4) breached a term of its contract with the plaintiff to provide such legal services with reasonable care, skill and diligence; (5) breached a warranty implied by s74(1) Trade Practices Act 1974 to render legal services with due care and skill; (6) breached a warranty implied by s74(1) Trade Practices Act by failing to render legal services which were reasonably fit for the plaintiff's purpose and by failing to provide legal services of a nature and quality that might reasonably be expected to achieve the plaintiff's purpose; (7) engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive within the meaning of s52 Trade Practices Act in that it falsely represented to the plaintiff that it was a firm that specialised in commercial law, that it would provide legal services to the standard of a specialist legal practitioner in commercial law and falsely represented to the plaintiff that it would provide legal services with reasonable skill, care and diligence; (8) falsely represented to the plaintiff that it would provide legal services to a particular standard, quality, value or grade within s53 Trade Practices Act ; (9) made presentations without reasonable grounds that were misleading or deceptive or likely to mislead or deceive or deceive within s51A Trade Practices Act ; and (10) engaged in unconscionable conduct within s51AA or s51AB Trade Practices Act . 6 In every case the particulars of breach, conduct, false representation and the like is pleaded in para 26 of the further amended statement of claim thus - a. Failure to advise the Plaintiff that the Heads of Agreement and Short Minute of Order were enforceable b. Advising the Plaintiff that the Heads of Agreement of Short Minute of Order were not enforceable c. Failure to advise the Plaintiff to institute proceedings to enforce the Heads of Agreement and Short Minute of Order d. Advising the Plaintiff that the proper course to protect the Plaintiff's interests would be to file a Notice of Motion to set aside the Heads of Agreement and the Short Minute of Order e. Advising the Plaintiff that a new agreement was required to replace the existing Heads of Agreement f. Failure to advise the Plaintiff of the adverse legal and/or financial consequences to which he would be exposed in the event that the Heads of Agreement and Short Minute of Order were to set aside and/or not enforced, including (but not limited to) the losses and/or expenses which may be incurred as the result of the appointment of: (i) a receiver and manager of the partnership business; and/or (ii) trustee/s under Section 66G of the Conveyancing Act 1919 for the sale of the property g. Failure to exercise reasonable skill, care and diligence when providing the said legal services to the Plaintiff. 7 The resolution of this action depends on what happened at the defendant's office on 7 January 2004. Direct evidence about that comes from the plaintiff, Mrs Dawn Wade, the defendant's employed solicitor Mr Jason Geisker and, to a lesser extent, Mr Andrew Quigley, a solicitor with the defendant. It will all be necessary to consider evidence of events that happened before and after the conference of 7 January 2004 as bearing on the likelihood of the truth of the plaintiff's version, and to assess the credibility of the witnesses by reference to those events.

The Conference of 7 January 2004 8 The plaintiff swore in an affidavit on 19 July 2006 that he telephoned the office of the defendant on 5 February 2004 (sic: he meant January) and spoke to Mr Jason Geisker. He told Mr Geisker that he needed a solicitor. Mr Geisker told him to come in two days' time and bring all the paperwork with him. He had a conference with Mr Geisker on 7 January 2004 at the defendant's office. He told him that he had signed an auction agreement with an agent to put the property up for auction but that Ms Suttor was refusing to sign it. He said that he had a buyer for the business, whom he named Mark Komandino. He told Mr Geisker some detail of the agreement or arrangement he had made with that person. He went on to say that Ms Suttor was refusing to comply with the Short Minutes of Order. She was refusing to sign cheques. Consequently he could not buy supplies or pay staff. The business was losing money because he was having to close the restaurant on some evenings. Mr Geisker read the Heads of Agreement and this conversation followed - Geisker: Look, this is just an agreement to agree. It is not binding. Perhaps parts of it may be enforceable. It will have to be re-negotiated if you want a binding agreement. Plaintiff: But these Heads of Agreement were made and filed in court. Geisker: I will speak to Dimocks Lawyers.

9 Later that day the plaintiff and Mr Geisker had this conversation on the telephone - Geisker: Chris Dimock said the agreement is not binding because the house and the restaurant came out of a defacto relationship and it will have to be re-negotiated and I agree with him. We can't represent you until you put money into our trust account. Plainitff: I will need some time to get the money. What should I do? Geisker: You should go and file a Notice of Motion to have the Short Minutes of Order and the Heads of Agreement set aside and if you find some money for us we will represent you when the Motion is before the court. 10 The plaintiff swore that he was acting on that advice when he prepared the notice of motion that he filed on 13 January 2004. 11 In an affidavit of 2 March 2007 Mrs Wade said that on 5 January 2004 she telephoned Mr Quigley of the defendant and that these things were said - Wade: My boyfriend needs a good law firm to enforce a settlement with regards to a partnership resolution which is before the Supreme Court. Do you practice in that sort of law? Quigley: Absolutely. We are specialists in commercial law. You had better come and see us. I am busy but I'll make you an appointment for you to see Jason Geisker. 12 On 7 January 2004 she spoke on the telephone to Mr Geisker and he said that she and the plaintiff had better come and see him on that day. Accordingly they attended a conference later on the same day with Mr Geisker. There was this conversation - Wade: Claudio wants to enforce the Heads of Agreement through the court urgently. He has a buyer for the restaurant. He needs the books from Suttor to enable the business to be valued.

Geisker: I don't think it is as simple as you think. As I see it the house and the restaurant came out of a de facto relationship and it will have to be settled under the De Facto Relationship Act.

Wade: Claudio and Suzanne haven't lived together as man and wife for more than 15 years as I understand it so how could it be considered a de facto relationship?

Geisker: You don't have to sleep with someone for them to be in a de facto relationship.

Wade: You mean to tell me he can't force her to honour the Heads of Agreement?

Wade: What about the house sale? Can't he force her to sell the house?

Geisker: Well, parts of it might be binding. It would be best to file a Notice of Motion and have it set aside so it can be re-negotiated afresh.

Wade: Well, Claudio is unable to run the business. Suzanne won't sign cheques. I don't know what to do anymore. Either he buys her out or she buys him out before everything gets eaten in legal costs.

Geisker: We will need funds before we can formally go on the record and represent you.

Wade: Claudio is unable to withdraw any money from Da Valentino's bank account without Suzanne's signature. He is totally without funds. Perhaps he can sell something to fund your fees. 13 Mr Geisker swore an affidavit on 27 March 2007. He said that it was Mrs Wade, an existing client of the defendant, who, in a telephone conversation, raised with him the subject of the plaintiff's proceedings. He did not remember speaking to the plaintiff on the telephone. Mr Geisker arranged for a conference at 2:30pm on 7 January 2004. Mrs Wade telephoned him on 7 January and changed the time of the conference. Before the conference began, Mr Jones sent Mr Geisker by facsimile transmission a letter with copies of documents, including the Heads of Agreement and the Short Minutes of Order. That was the first time Mr Geisker, or, as far as he knew, anyone on behalf of the defendant, had seen those documents. Mrs Wade attended the conference at the newly arranged time. Mr Geisker could not remember whether the plaintiff attended. He gained the impression that Mrs Wade had been handling the matter on behalf of the plaintiff but that the matter was becoming too hard for her deal with. Mr Geisker said that during the meeting Mrs Wade gave no formal instructions to the defendant to act. Mr Geisker thought that the purpose of the meeting was to impart information about the Equity proceedings, which were proposed to be referred to the defendant. Mr Geisker realised that Mr Jones had acted for the plaintiff in the Equity proceedings but was unsure about the scope of his retainer. 14 Mr Geisker produced file notes of his telephone conversations with Mrs Wade and of the matters discussed at the conference. Those dealing with the telephone calls contain the following relevant entries -

Discussion with: Dawn Wade Date: 5/1/04 … - Dymocks family lawyers Peter Cook solicitor - Greg Jones - Barrister - Notice of Motion Aff. sent to Andrew Quigley - Conference 2:30pm Wednesday 7/1/04 Dawn Wade 7/1/04 - Has a potential matter - Greg Jones - has returned the brief - Offered $90K to our client to buy business from our client - Wants business sold home sold - 3:30pm conference now 15 The file note of the conference itself has these entries - Conference 7 January 2004 - Manager + licensee of restaurant - 14 years. - Filed summons - They want to appoint a trustee - Barry Hancock 9602 0200 - Suzanne Suttor - has failed to give accounts 19/12/03 Matter adjourned to - 5 February 2004 - Liberty to apply on 24 hours notice - On Friday 19 December 2003 - Home - East Ryde Value $750K ? Mortgage $165K ? Heads of Agreement 1. Agreed 2. Agreed 3. Agreed 4. Agreed 5. - Not agreed --------but 1. Agreed 2. Agreed 3. 6. Agreed on the basis that he could borrow $100K on the security of house at East Ryde 7. Agreed - s/o 5 February 2004 - Moved out about 10 years ago. - Wants to see books & records of business. - Cannot value the business without the books & records. - Partnership Agreement. - Dawn Wade - is prepared to fund the matter. - Home is half owned by Suzanne Suttor & Claudio and - Mark Komdino - business assoc. will assist him to escape the problem - Will buy the - Docs 1. Lease - lot 2 in DP Z07997 - Claudio Grizonic mailing : PO BOX 31 CROWS NEST 1585 (Ph) 04225219591 (m) (w) 9436 4278 (h) 9966 5044 16 Mr Quigley swore an affidavit on 10 April 2007. He said that the plaintiff was referred to the defendant by Mrs Wade for whom he had acted on previous occasions. He had little involvement with the plaintiff. He did not recall, though he did not deny, the conversation that Mrs Wade said took place on 5 January 2004. He was not present at the conference with Mr Geisker on 7 January 2004.

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;

agreed to the appointment of the accountant proposed; and

made available for inspection by the plaintiff the partnership records

the plaintiff would approach the court to apply for orders, including these orders - (a) That the partnership business be wound up under the direction of the Court. (b) An order that a nominated person be appointed receiver and manager of the partnership business without security. (c) An order that the proceedings be referred to Master in the Equity Division to take accounts of and enquire into: (i) All the dealings and transactions of the said partnership and of the said partners or either of them in relation thereto; (ii) What are the assets and liabilities of the said partnership; (iii) What are the respective interests of the said partners in the said assets? (d) Appoint trustees of the house and vest the same in such trustees to be held by them on the statutory trust for sale. (e) Costs. 36 The letter charged that Ms Suttor had failed to co-operate in enabling the plaintiff to mortgage his interest to secure the loan he desired and said that if she did not co-operate immediately he would hold her responsible for any resulting loss. 37 The letter ended with a request that Ms Suttor consent to the release of funds from a nominated interest bearing deposit to enable the payment of rent for the business. 38 When he received these instructions and wrote the letter Mr Jones was instructed only by the plaintiff and not by any solicitor. 39 On 8 January Mrs Wade spoke to Mr Geisker about other matters. During the course of her conversation she mentioned that Ms Suttor was to cancel an American Express card and that the plaintiff consequently could not use it. 40 On 9 January the plaintiff wrote to Mr Dimock as follows - This letter is to advise you that I am intending to seek leave of the court to have the terms of agreement filed in the Supreme Court amended or set aside as which I have good legal grounds for. I am putting you on notice that I have no intention in [sic] entering in to a deed to release your client, Ms Ranken Suttor from any claims for damages that I may bring against her, with regards to the partnership act. Information has just come to hand that suggests that Ms Ranken Suttor may be attempting to organise a contract on my life. I am putting you on notice that I have today changed my will and I am seeking that your client deliver to the court all insurance policies that she holds on my life. 41 On 12 January Ms Suttor filed in the Equity proceedings a notice of motion seeking various orders the effect of which would be to exclude the plaintiff from the business. On the same day the plaintiff sent a letter to Mr Jones by facsimile transmission, instructing him to put an offer of settlement. The principal points were that Ms Suttor should buy the plaintiff's share of the house for $250,000 and that Mr Komadina should buy out Ms Suttor's share of the business for $40,000. 42 On 11 January and 13 January the plaintiff prepared an affidavit and a notice of motion, both with the assistance of Mrs Wade and without the assistance of any solicitor or counsel. The plaintiff personally filed those documents and they were made returnable on 15 January, the same day as Ms Suttor's motion. The plaintiff's notice of motion sought these orders - 1. An order that the heads of agreement entered into between the plaintiff and the first and second defendants on the 19th December, 2003 be set aside. 2. An order that the short minute of order made by consent be set aside. 3. An order that all or any insurance policies on the life of the plaintiff where the first defendant is named the beneficiary be cancelled immediately. 4. An order that a Manager / Receiver be appointed for the partnership know as Da Valentio [sic]. 5. Costs 43 In the affidavit supporting the motion the affidavit the plaintiff gave reasons why he considered the Short Minutes of Orders and Heads of Agreement were not binding. I shall refer to those reasons later in this judgment. 44 As recorded in Mr Geisker's file note of 13 January, Mrs Wade told him on the telephone on that day that the plaintiff had been served with a notice of motion returnable on 16 January. I think that an error must have been made in imparting the information or in recording it, and that the reference was to 15 January, when Ms Suttor's motion was returnable. Mrs Wade did not tell Mr Geisker that the plaintiff had filed his own notice of motion, seeking to set aside the short minutes of order and Heads of Agreement. She told Mr Geisker that Mr Jones was not tough enough. 45 The plaintiff spoke to Mr Geisker on the telephone on the same day and a conference was arranged for 2:30pm on that day. The plaintiff and Mrs Wade attended that conference. The purpose was to respond to Ms Suttor's motion. Mr Geisker's file note of the conference contains much detail of the personal history of the plaintiff and Ms Suttor, but no reference to the plaintiff's motion to set aside the Short Minutes of Order and the Heads of Agreement. According to the evidence of Mr Geisker, which I accept, he was told about the plaintiff's notice of motion only as the conference was coming to an end. 46 The defendant continued to act for the plaintiff until its instructions were withdrawn on 29 January. The plaintiff instructed another solicitor, Mr D Khoury, who telephoned Mr Geisker on 4 February and said that he was instructed by the plaintiff. Mr Khoury instructed Mr Jones at court on 5 February. Young CJ in Eq made certain orders. 47 On 6 February the plaintiff dispensed with the services of Mr Khoury and appointed the solicitor who now represents him.

The question of liability 48 It was submitted for the plaintiff that there were six reasons why the evidence of the plaintiff and Mrs Wade should be preferred to that of Mr Geisker and why the court should conclude that Mr Geisker advised the plaintiff that the Heads of Agreement were unenforceable and that he should move the court to set them aside. 49 It was submitted that the plaintiff must have been present with Mrs Wade and Mr Geisker at the conference because it was inconceivable that Mr Geisker would have taken instructions not directly involved in the Equity proceedings. Mr Geisker's evidence, that the conference was for information purposes, that the defendant was not instructed to do anything and that he was concerned only to take the plaintiff's details against the possibility that he should become a client of the firm, should not be accepted. 50 Secondly, it was submitted that Mr Geisker's file note was a full and complete record of instructions, like one a solicitor would make in conference with a client. 51 Thirdly, the defendant issued an invoice dated 30 January 2004 including a charge for the conference of 7 January 2004 described as "conference with Mr Claudio Grizonic and Dawn Wade (1 hour)". 52 Next, it was submitted that the letter sent by Mr Jones to the defendant enclosing the Heads of Agreement and Short Minutes of Order, as well as another document, included this passage - I understand Ms Wade and Mr Grizonic will be attending a conference with you this afternoon. 53 Next it was submitted that the plaintiff's filing the notice of motion on 13 January 2004 was consistent with the advice he says Mr Grizonic gave him on 7 January 2004. 54 Finally, it was submitted that there was no reason why the plaintiff should have said that he had attended the conference if indeed he had not. 55 It was submitted it was inappropriate for the case to be decided on questions of credibility. With that I disagree. 56 The only contemporary record of what was said at the conference on 7 January 2004 is Mr Geisker's file note. Mr Geisker had no reason to make any inaccurate record and there appears no reason not to regard the note as accurate as far as it goes. It cannot have recorded everything that was said, of course, and does not purport to do so. I think, however, that since the purpose of the conference was to establish the circumstances that were facing the plaintiff, that some substantial note of them was likely to be made. 57 I accept the evidence of Mr Geisker that it was not yet then established that the plaintiff would become a client of the defendant or that the defendant would do any legal work on his behalf. An important attribute of the note is that although it recorded what the plaintiff agreed and disagreed with, and at least some of what he wished to achieve, it contained no record of any advice given. If advice had been given about the effectiveness of the arrangements made before Barrett J on 19 December 2003 one might have expected Mr Geisker to make a note of it. If advice had been given about what steps should be taken, one might have expected Mr Geisker to make a note of it, as he did for example, when noting a detail of a telephone conversation thus on 14 January - - advised him that he must comply with orders. - need to comply with orders on 19/12/03. 58 Mr Geisker gave evidence. I thought him honest. He claimed to have no particular recollection of the conversation on 7 January 2004. He did not remember the plaintiff being present. He said that the conference was held for "information purposes" (T219). He continued - We weren't instructed to do anything at that point. I took Mr Grizonic's details at that time. 59 Although in his note Mr Geisker referred to the plaintiff as "our client", I am satisfied that it was by no means settled at that stage that the plaintiff would become a client of the defendant. I am satisfied that Mr Geisker was correct in his evidence that at the conclusion of the conference the defendant was not instructed to do anything. One of the problems facing the plaintiff was that he was short of money and had to put the defendant in funds. 60 The difficulties to be discussed were those of the plaintiff, of course, and if instructions to act were to be given one would expect that he would be the one to give them. As I have said, I am not satisfied that any instructions were given at that conference, so the fact of the plaintiff's position is not determinative of the question of whether he was present. Mrs Wade, who was his domestic partner and confidante, had a thorough knowledge of his affairs and the difficulties facing him and was in a practical sense, because of her secretarial experience and her experience in the conduct of court cases, as well as by her better command of English, to give any solicitor the information needed to understand his case. 61 Of the other matters put forward in submissions, the expectation expressed in Mr Jones' letter that the plaintiff would be present and the invoice charging for a conference at which he was present tend to suggest that he was. 62 I think that the plaintiff may have been present at the conference on 7 January 2004, though I cannot confidently conclude that he was. I have serious difficulties in accepting the evidence of the plaintiff himself and I am not prepared to accept his statement to that effect. As I shall explain, I have reservations also about the evidence of Mrs Wade. 63 However that may be, there are several reasons why I am not prepared to accept the evidence of the plaintiff that Mr Geisker said the words attributed to him, advising that the Heads Of Agreement were unenforceable and that he should move the court to set them aside, or any words to like effect. 64 I listened carefully to the plaintiff as he gave evidence. English is not his first language. That is not his fault, of course, but it does and did give rise to a doubt whether, if he was at the conference, he carefully listened to and understood whatever Mr Geisker said. There were numerous instances in his evidence when he was not prepared to listen to the question and give a thoughtful answer. He was impatient and irascible. He insisted on answering questions before they had been fully asked. He was evasive. I will give some examples. 65 The plaintiff was being asked about the affidavit of 11 January 2004, put on in support of his motion for orders setting aside the Short Minutes of Order and Heads of Agreement. There were these questions and answers at T75 - 76 - Q. No-where in this affidavit do you say that you had received legal advice from Maurice Blackburn Cashman that the heads of agreement was not binding, do you? A. He told me it was binding, but he didn't give me - he said, "Until you don't pay money in my account, I can't represent you."

Q. No-where in the affidavit does it refer to the fact that you had received legal advice from Maurice Blackburn Cashman that the heads of agreement was not binding, do you? A. But that's why I wrote this, because I put nothing on, because--

Q. Mr Grizonic? A. He told me they were binding--

Q. Will you listen to my question please. No-where in the affidavit do you say that you received advice from Mr Geisker to the effect that the heads of agreement was not binding, do you? A. Mr Geisker said to me, "We have to do new agreement, and that's not good enough, it is de facto."

Q. I am asking you a question about this affidavit. Could you just listen to my question? A. Yes.

Q. No-where in this affidavit do you say that you received advice from Mr Geisker? A. No, I didn't write about Mr Geisker, no, until it started after when I gave him the money that he will represent me.

Q. Could you listen to my question-- A. I did.

Q. --and then answer it. No-where in this affidavit do you say that Mr Geisker had told you that Ms Suttor's solicitors did not consider the heads of agreement to be binding either, do you? A. He didn't tell me anything about her solicitors. He said to me that this is de facto, and the agreement is, has to be negotiated.

Q. So are you saying to his Honour that Mr Geisker did not tell you anything about what Mr Dimock had said to him about the heads of agreement? A. No, he didn't tell me anything about the Dimocks. We didn't spoke about Dimocks. Mr Geisker said to me that the heads of agreement, they have to be renegotiated.

Q. Mr Grizonic, could you listen to my question please. Is it your evidence that at no time did Mr Geisker tell you that Mr Dimock considered that the heads of agreement was not binding?

A. Never spoke to Dimocks. 66 On another topic he gave this evidence at T138 - 140 - Q. There is nothing in the affidavit that you swore on 30 August 2005 about a telephone call between yourself and Mr Geisker on 7 January 2004, is there? A. Telephone call?

Q. Yes, a telephone call? A. I rang him - no, I met him in January 2004. I met him.

Q. Do you recall in the affidavit that you have sworn in these proceedings against Maurice Blackburn-- A. Yeah.

Q. --that you allege that you had a telephone conversation with Mr Geisker following the conference? A. Oh, yeah. I was running late.

Q. Do you recall that? I am not asking you what you were or weren't doing? A. Yes, I was running late.

Q. I'm asking you what is in your affidavit? A. Yeah, I was running late.

Q. No. I am asking you what is in your affidavit. Do you recall that you say in your affidavit in these proceedings against Maurice Blackburn Cashman that after you had had a conference with Mr Geisker on 7 January 2004 you had a telephone conversation with him? A. In the restaurant. I went back to the restaurant.

Q. I am asking you about your evidence in these proceedings? A. Yeah, yeah, I did. I think I had a phone call, yeah.

Q. And you allege that in that telephone call-- A. Yes, I had a phone call in the restaurant.

Q. What do you allege was said in the telephone call? A. wouldn't know.

Q. You have no idea? A. I really can't remember, but probably I had a phone call, yes.

Q. You say you probably had a phone call but you can't remember a single thing about that telephone call; is that the case? A. Well--

Q. I have asked you a very direct question. A. I understand.

Q. You cannot remember a single thing about that telephone conversation, can you? A. Yeah. I met him and he said--

Q. Please concentrate on my question? A. He said to me to bring the money. I said "I haven't got it. I try to organise it." I rang the barrister, you know, and I told him "I'm going to organise the money. I'm going to employ Maurice Blackburn Cashman and I'm going to organise the money."

Q. --you can't remember a single thing about that telephone conversation that you allege you had with Mr Geisker-- A. I did have. I had a phone call.

Q. --can you? A. I definitely know I had.

Q. Mr Grizonic, you cannot remember a single thing about that telephone conversation, can you? A. We did talk. Yes, we did.

Q. Is the answer to my question that you cannot remember a single thing about that telephone conversation? A. There are too many paperwork. I can't remember everything. I can't remember everything. There are too many papers. Too many things. I know if I did write down I did call him.

Q. The answer to my question is that you cannot remember a single thing about that telephone conversation, can you? A. The phone conversation? I must say I know I rang him in the afternoon. I was back in the restaurant.

Q. I am only going to ask this one more time. A. Yes.

Q. You can't remember anything about that telephone conversation, can you? A. I went back to the restaurant, 3.30, 4. I was back at 4, something. I rang Jones. I said to Greg Jones to fax all the papers, heads of agreement, again. No. I can't recall it. I don't remember what was in conversation.

Q. Nothing about it? A. I don't remember, no. He rang me. And again at T130 - 131 - Q. And in acting for you they have been incurring professional costs and disbursements, haven't they? A. That's right.

Q. You haven't been paying any of those bills, have you? A. I was thinking after my proceedings I sell off the house, sell off the restaurant, pay all my bills.

Q. Mr Grizonic-- A. All my legal bills and I have some left.

Q. The simple answer to my question is, no, you haven't been paying those bills? A. No.

Q. All of those various costs that you have been incurring, by having Oliveri Attorneys acting for you, are costs that you are seeking to recover in these proceedings, aren't they? A. This wouldn't happen if--

Q. Is the answer to my question yes or no? A. Yes. I wouldn't have a court case if Blackburn Cashman did the right thing. Enforce it. Then I wouldn't have this legal action.

Q. Mr Grizonic-- A. Wouldn't happen. Became like a pyramid.

Q. Mr Grizonic, please stop. A. It's like a cycle--

Q. Please stop. A. That's how it happened. You don't ask me how it happened.

Q. I am not asking you how it happened. I am asking you questions and I am asking you to answer those questions. You are also seeking, in this action, to recover all of the costs that have been incurred by the receivers and managers and the trustees and their various advisers in responding to all of the various claims that you have made against them, aren't you? You understand that to be the case? A. If I had right advice from Blackburn Cashman then this wouldn't occur.

Q. Is the answer to my question yes or no? A. Yes. 67 When he was asked about the notice of motion there was this evidence at T78 - 79 - Q. No, you filed it on the 13th of January? A. Not for receiver.

Q. We went to the notice of motion earlier. Remember order 4 in that, in the notice of motion? Order 4 in your notice of motion sought the appointment of a receiver and manager? A. Yes, on advice, but I really didn't want receivers anyway.

Q. You say you didn't want them, but you were applying for them. Is that the case? A. No - on advice I got from MBC.

Q. Mr Grizonic, could you answer my question please? A. Yes.

Q. The notice of motion that is referred to in paragraph 15 of this affidavit is the notice of motion you filed on 13 January 2003? A. 13 January.

Q. And the reasons that you give for filing that notice of motion appear in paragraph 15, don't they? A. No, right through, even December, it is not only there.

Q. Mr Grizonic-- A. The business can't be operated.

Q. Mr Grizonic, can you answer my question please? The reasons you give for filing that notice of motion in this affidavit are what appear in paragraph 15? A. Some of them, but there are other reasons.

Q. But you don't point in this affidavit to any other reasons, do you? A. Got advice.

Q. So the answer to my question is, yes, you don't point to any other reasons? A. I had advice from Blackburn Cashman who instructed me, I had advice. 68 There was this evidence when he was asked about his letter to Dimock's on 9 January 2004 at T60 - 61 - Q. You advised that you intended to seek the leave of the court of the terms of agreement? A. Terms of agreement set aside.

Q. Amended or set aside? A. That's right, because--

Q. Wait for the question please. In the second paragraph you say, "I am putting you on notice, I have no intention of entering into a deed of release"? A. That's right.

Q. "To release your client, Miss Suttor, from any claim for damages I might bring". You recall, won't you, that the heads of agreement contain provision for a deed of release to be entered into? A. Yes.

Q. You were saying, by the second paragraph, you had no-- A. I had no intention, yes, because she did not--

Q. Could you please wait for my question-- A. She did not--

HIS HONOUR: Please listen to the question, Mr Grizonic.

Q. It was the case, wasn't it, at this time, 9 January 2004, that you had decided you had no intention of complying with the paragraph in the heads of agreement which referred to entering into a deed of release with Miss Suttor; that's the case, isn't it? A. With Find-A-Flat, not with Miss Suttor.

Q. It says Miss Suttor, doesn't it, in your letter? A. Right, but it meant Find-A-Flat. She is a director of Find-A-Flat.

Q. But you were referring to her personally, weren't you? A. No, no. I was thinking about the website.

Q. No, you weren't, Mr Grizonic. You were thinking about the claims that you had personally against Miss Suttor, weren't you? A. No, the website. 69 I think that his evidence confining the threat to the Find-a-Flat business was opportunistic and false. 70 Leaving aside the notice of motion of 13 January 2004, there are examples of the plaintiff's preparedness, without legal advice, to commence legal proceedings. The first was the Equity summons itself. Then there were the complaint and summons seeking an apprehended violence order against Ms Suttor. Later on there was a notice of motion prepared by the plaintiff and Mrs Wade and filed by the plaintiff, returnable on 26 February 2004, seeking orders appointing named persons as managers and receivers and other orders in the Equity proceedings. 71 There are examples also of other substantial steps taken by the plaintiff without advice and, apparently, without much serious thought. On 5 January 2004 Mr Jones was advising him and appearing for him. He was away from chambers but due to return on the next day, as the plaintiff knew. Without waiting for Mr Jones to advise or write a letter, he wrote on 5 January 2004 to Mr Dimock stating his intention to file further documents in the Equity proceedings. 72 There is an example of the plaintiff's preparedness rapidly to change his position in the two telephone conversations he had with Mr Jones on 22 December 2003, stating first one position and then, shortly afterwards, another. 73 This evidence fortifies my impression that the plaintiff was not a man who was inclined to listen carefully to advice or to give careful consideration to what he should do. Rather, he was apt to act precipitately on the advice he gave himself. 74 There is also evidence to show that when things go against him, the plaintiff readily blames others. I have drawn attention to some of his unresponsive assertions made against the defendant during cross-examination and to his accusations against Ms Suttor over the business bank account when, according to the agreement made on 19 December, he was obligated to arrange for them both to sign cheques, a requirement he never appears to have fulfilled. 75 In this action he says nothing critical of Mr Jones, nor on the evidence, could he reasonably have done so. Yet when he swore his affidavit to support the motion to set aside the Heads of Agreement he criticised Mr Jones for failing to advise him. The affidavit of 11 January 2004 deals in part with advice that the plaintiff was saying he had or had not received. It includes these passages - 13 I was aware that on the 19th December 2003 Mr Jones appeared on my behalf before the duty judge and handed up some document which I believed was Heads of Agreement. However I was not advised by Mr Jones as to the binding affect of it and believed it was only of a preliminary nature with regards to a settlement… 28 As I have been refused access to any business records for the past 14 years with regards to the partnership Da Valentino I am unaware of what the true assets and liabilities are of the partnership. I have now been advised by Maurice Blackburn Cashman Lawyers that there can be no dissolution of the partnership until there is a final accounting of all liabilities and assets under the partnership act 1892 No 12 rule 28… 33 As a result of the above pleaded herein and the fact that I was not adequately legally advised. I am seeking the orders requested in the notice of motion filed in these proceedings. 76 It seems to me that what the plaintiff was intending to say in that affidavit was that, whereas he formerly believed that the Heads of Agreement were of a preliminary nature and therefore not binding, he had come to realise that they did in fact bind him, hence the motion to set them aside. It is remarkable, I think, that although the plaintiff was asserting that Mr Jones had not advised him as to the binding effect of the Heads of Agreement, and his consequent belief that the document was only of a preliminary nature, and although he was asserting that he had received advice from the defendant, he nowhere stated what he now says, that the defendant had advised him that the Heads of Agreement were not binding. 77 The plaintiff had a great deal of difficulty remembering the details of past events. I observed so much myself. He conceded that he had difficulty with names and dates. I have extracted above his eventual, grudging acceptance that he remembered nothing of his telephone conversation with Mr Geisker, the text of which he had set out in his affidavit. 78 I should refer to two other matters that bear on the reliability of the plaintiff's evidence. The plaintiff was later involved in bankruptcy proceedings in the Federal Magistrates Court. On 30 August 2005 he swore an affidavit that included these passages, dealing with the meeting 7 January 2004 - Andrew Quigley and Jason Geisker both said to me during that meeting, "The agreement is not enforceable. You will need to re-negotiate the whole settlement." I said, "Greg Jones has told me that he believes it is enforceable." Andrew Quigley said to me, "He wouldn't know. I am a commercial lawyer. I don't see how you can have a settlement until you have an account of the partnership taken." I said, "I don't want to have an account taken. I just want the restaurant and house to be sold or I will buy her out or she can buy me out and we will split fifty fifty. I will sue her and Share-A-Flat later for the money she has stolen from the restaurant to build the web site later." Andrew Quigley and Jason Geisker assured me that my only alternative was to enter into further negotiations with my[sic] Suttor… 79 It is accepted by both sides in the present action that Mr Quigley was not present at the conference and gave no advice about the Heads of Agreement. He swore an affidavit in these proceedings and was cross-examined. He denied being present at the conference on 7 January. He said he was at court on 13 January with Mr Geisker acting for the plaintiff. His denial that he was at the conference on 7 January was accepted and it was never put to him that he had advised the plaintiff that the Heads of Agreement were not enforceable. 80 The second matter concerns the appointment diary that was kept for the restaurant. The plaintiff's first affidavit in the present action was sworn on 19 July 2006. In it he said that he and Mrs Wade had attended the meeting with Mr Geisker, who had given the advice relied on. The defendant responded with an affidavit from Mr Geisker sworn on 27 March 2007. In that affidavit, speaking of the conference of 7 January 2004, he said - I do not recall the plaintiff being present on that occasion as I recall that my first meeting was with Wade alone. 81 The plaintiff swore a further affidavit on 14 June 2007. Responding to Mr Geisker's evidence, he reiterated that he had been present at the conference and annexed what he said was a true copy of his diary records for 7 and 13 January 2004. In cross-examination he said that he had made those diary entries at the time that the appointments recorded thereon were made. 82 The page for 7 January 2004 contains these entries - 6 1230 Haize 92611488 Appointment with Jason New solicitor, take all

papers regarding court & Heads of Aggreement [sic] Level 20 201 Elizabeth St, City 83 The page for 13 January 2004 contained, in the top left corner an illegible entry which had been crossed out. It was not suggested that it had anything to do with the issues in the case. Beneath it was this - Confrence [sic] with Jason GEISKE* Maurice Blackburn & Cashm* 92611488 84 Only a photocopy of the diary page came into evidence. It did not show the whole of the right hand margin. The words marked * ended at the edge of the photocopied page. 85 The telephone number written on each page was that of the defendant and the address recorded was that of the defendant. It does not appear that the first part of the entry on the page for 7 January has any relevance to this matter. 86 About three years earlier, in an affidavit of 7 July 2004 sworn and filed in the Equity proceedings, the plaintiff dealt with the takings of the business. He exhibited copies of a number of diary pages including those for 7 and 13 January 2004. The one for 7 January bears no entry at all, not the booking and no reference to any conference with Mr Geisker. The page for 13 January 2004 contains the crossed out entry in the top left hand corner but is otherwise blank. It follows that in the absence of any other explanation, all the relevant entries on the two pages were written after the plaintiff's affidavit sworn on 7 July 2004. 87 The plaintiff was asked in cross-examination to explain the absence of the entries on the diary pages he had exhibited. He was unable to give any satisfactory answer. I think that the evidence he gave before me, to the effect that he had made the entries when the appointments were made, was false. I think that he fabricated the entries in order to give verisimilitude to his assertion that notwithstanding Mr Geisker's evidence he was present at the conference on 7 January 2004. This evidence does not prove that he was not present, of course, merely, as with his assertion about advice given by Mr Quigley, that he is prepared to resort to falsehood if to do so might advance his case. 88 The only other witness who asserts that Mr Geisker gave the evidence contended for by the plaintiff is Mrs Wade. In so far as he asserts that the defendant represented that it was a specialist in commercial law the plaintiff relies solely on the evidence of Mrs Wade. In her affidavit of 2 March 2007 she said this - On or about 5th January 2004, I contacted Andrew Quigley at Maurice Blackburn Cashman by telephone and had a conversation with him to the following effect: Wade: My boyfriend needs a good law firm to enforce a settlement with the regards to a partnership resolution which is before the Supreme Court. Do you practice in that sort of law? Quigley: Absolutely. We are specialists in commercial law. You had better come and see us. I am busy but I'll make you an appointment for you to see Jason Geisker. 89 Mrs Wade has no direct interest in the result of this action, but she has a strong indirect interest, being in a domestic relationship with the plaintiff and having assisted him in a material way to produce a number of originating documents and affidavits for use in court. That she was not taking an independent and objective stance is apparent from answers she gave during cross-examination. She had prepared the plaintiff's affidavit of 11 January 2004, intended to support the motion to set aside the Heads of Agreement. She was asked about the plaintiff's statement in paragraph 14 of that affidavit to the effect that Mr Jones had not told the plaintiff that the Heads of Agreement were binding and that the plaintiff believed that the document was only of a preliminary nature. She understood, I think, that it was contrary to the case that the plaintiff was putting in the action before me. There was this evidence at T151 - Q. Is that an affidavit in which you were involved in its preparation, A. Well, I would have been, yes.

Q. Undoubtedly so? A. Undoubtedly so, yes.

Q. Could you please read paragraph 13 of that affidavit? A. 13?

Q. Yes. A. (Witness complied.) Well, I have got the word "preliminary" in it.

Q. You just gave evidence to his Honour that you had never ever heard Mr Grizonic use that expression in the heads of agreement? A. I could say I don't remember him using the word "preliminary".

Q. You now assert that Mr Grizonic held that view? A. I believe that he held the view that they had to be completed.

Q. Could you answer my question. Do you now agree that you were aware that Mr Grizonic held the view that the heads of agreement was only of a preliminary nature with regards to a settlement? A. Look, I don't think that - all I know, that it was incomplete and, I mean, I think it is just a play on words. Preliminary, to me, is something that is not near finished, whereas something that just has to be completed is something that may be 90 per cent complete. Whether it is binding or not.

Q. You would say that something of a preliminary nature would be something a long way short of being completed? A. Yes, I would.

Q. So if you were to use those words, that would indicate in your mind that there were many, many things still to be agreed? A. Well, look, at that time, in this affidavit, when this affidavit was done, which was on 11th day of January, I'd already been advised that they weren't enforceable.

Q. Could you just please address the question I asked you, rather than the-- A. Well, it is a play on words. Preliminary, it had to be completed

Q. Those are the words that Mr Grizonic asked you to put in his affidavit, aren't they? A. Well, I don't know, because I probably dictated it and my secretary typed it and sometimes, if she can't understand something, she will just--

Q. You are not going to suggest-- A. Sometimes she changes words.

Q. Are you seriously going to suggest to his Honour that the words that appear in that paragraph are not the words of Mr Grizonic? A. Well, he would have read it and signed it. Preliminary meant not completed. I really don't know.

Q. You are not going to suggest to his Honour that those are the words used by your secretary as opposed to you or to Mr Grizonic? A. I don't know. It was typed in a hurry. Look, I may have done it and not thought about it.

Q. It is the case, isn't it, that in your view the heads of agreement was of a preliminary nature. That's the case, isn't it? A. Look, honestly, at that time I wouldn't know. I didn't know what a heads of agreement were. I didn't draft the contract. I had no idea what it was. I know now, but I didn't know then. 90 I thought the attempt to attribute the problematical text to an errant secretary dishonest. There were these questions and answers at T158 - Q. Mr Geisker was telling you that the heads of agreement were not binding? A. Yes.

Q. You would understand it to be the case that there would be no need at all to make an application to have them set aside? A. Well, the short minutes of order were between Suzanne and Claudio--

Q. I am just asking-- A. Well, parts were binding. I can understand that. Some of it was binding.

Q. According to you, Mr Geisker told you that he didn't think that the heads of agreement was binding? A. Yes, that's correct.

Q. I just want to ask you this question. As you would understand it, if the heads of agreement were not binding, then it wouldn't require any application to have it set aside, correct? A. I don't know. The law is too complex. 91 I thought Mrs Wade evasive in those answers also. 92 It will be recalled that the plaintiff spoke to Mr Jones on 7 January and that Mr Jones wrote a letter to Mr Dimock on the following day. Mrs Wade was asked about the plaintiff's having instructed Mr Jones on 7 January. It might appear less likely, if the plaintiff were instructing and receiving advice from Mr Jones on 7 January, that he was also instructing and receiving advice from the defendant, it being common ground that the defendant did not brief Mr Jones. There was this evidence at T160 - 164 - Q. Do you remember that on 7 January 2004 you participated in a telephone conversation with Mr Jones? A. What date was that?

Q. 7 January 2004? A. Oh, possibly. I don't remember the exact date.

Q. Mr Grizonic was party to this telephone conversation with Mr Jones on 7 January 2004. Do you recall that? A. I don't know, because there were too many telephone conversations.

Q. Do you recall Mr Jones being given instructions by Mr Grizonic to draft, prepare and send a letter to Dimocks dealing with the Suttor proceedings? A. I didn't hear that. I think Mr Jones had returned the brief by that time.

Q. Is it your evidence, is it, that Mr Jones had said he would no longer act in the matter by that time? A. He said he would have to return the brief.

Q. Just so I understand this correctly, is it your evidence that before 7 January 2004 the brief had been returned by Mr Jones? A. Well, I understood that that was his desire.

Q. I am asking you whether it had or had not been returned? A. Well, it hadn't been physically. I mean, I didn't go to his office and physically pick it up, but he was saying "Look, I can't give you any more advice. This has to be enforced. I can't advise you. I have to have a law firm."

Q. Is it the case that Mr Jones then no longer acted for Mr Grizonic in the matter? Is that your evidence? A. My understanding is that Mr Jones was waiting for Mr Grizonic to get a law firm to instruct him.

Q. Could you address my question please? A. That's my understanding.

Q. No. I asked you whether it was your understanding that before 7 January 2004 Mr Jones had said that he would no longer act in the matter? A. No. He didn't say he would no longer act in the matter. He said he couldn't retain instructions unless it came through a lawyer.

Q. Did he then proceed to act in the matter, so far as you were concerned? A. I think he was just trying to hold it together for Claudio because he was a very agreeable man.

Q. It is the case that Mr Jones did act directly on instructions from Mr Grizonic right throughout the course of January, isn't it? A. I think we were acting on the advice we were given from Maurice Blackburn Cashman.

Q. Could you please answer my question? A. Look, I think he just wrote letters trying to hold it together.

Q. Acting on instructions from Mr Grizonic; is that the case? A. I don't know.

Q. On whose behalf do you think he wrote the letters? A. Well, I'm not sure.

Q. Have you any idea what made him write the letters? A. I think Dimocks kept writing him letters and he knew that Claudio was, like, in a very dangerous position and he - we said "We are going to find funding. We are going to get a law firm to brief you." I think out of the goodness of his heart, he was trying to hold it together until he got a law firm.

Q. Are you intending to imply that he did it of his own initiative? A. No. Claudio was calling him. I was calling him. Maurice Blackburn Cashman said "This has to be done and that has to be done."

Q. Are you or are you not saying that whatever Mr Jones wrote he wrote because of what Claudio told him to write? A. Well, I don't know what was in his mind. …

Q. You were one of the people who was making the complaint, or was it just Mr Grizonic? A. From memory - look, there has been so much drama. Yes, I think I was. Yes.

Q. And you provided some of the material contained in that complaint, didn't you? A. Yes.

Q. And you heard Mr Grizonic provide other material to be included in that complaint? A. Yes.

Q. Now, at the time that the letter of 8 January 2004 was sent, you understood Mr Jones to be giving legal advice to Mr Grizonic on its contents, didn't you? A. On this letter?

Q. Yes. A. Well, I mean, I wasn't sure what was happening any more, because there was so much drama going on. I didn't know--

Q. Is the answer to my question "No" then? A. I don't exactly know who was giving who advice.

Q. You knew that this letter contained a settlement proposal to Miss Suttor, didn't you? A. Well, I would have known at the time, yes. Yes.

Q. And you knew that Mr Grizonic had reached the view that it was no longer practicable for the short minutes of order to continue? A. Restraining the restaurant?

Q. Yes, but he had reached the view that it was no longer practical for those orders to continue. That's the case, isn't it? A. Well, he was trying to survive.

Q. Is the answer to my question "Yes" or "No"? A. I don't really know what was in his mind. He was frantic, trying to survive in this beautiful business of his.

93 When she was asked whether she understood the plaintiff to have been saying in his affidavit of 11 January 2004 that he had not been properly advised by Mr Jones about the Heads of Agreement, Mrs Wade gave this evidence, which I consider evasive, at T172 -

Q. You understood, didn't you, that Mr Grizonic was asserting in this affidavit that he had not been adequately legally advised by Mr Jones on 19 December 2003? You understood that, didn't you? A. Well, I didn't know what to think any more. I was so confused. I didn't know what was what any more.

Q. Would you address my question please? A. No, I wouldn't say that. 94 Mrs Wade had no contemporary record of any conversation she had had with Mr Quigley or Mr Geisker on 5 January or 7 January 2004. 95 In my opinion Mrs Wade was an unsatisfactory witness, whose evidence displayed a lack of objectivity. 96 In my opinion the evidence of the plaintiff and Mrs Wade about advice said to have been given by Mr Geisker on 7 January 2004 cannot stand in the face of the absence of any contemporary record to that effect, the unlikelihood that Mr Geisker would give such advice, because he was not of that opinion, the illogicality of advice to move to set aside an instrument that had no legal effect, the plaintiff's assertions in his affidavit of 11 January that he believed that on 19 December that the Heads of Agreement were of a preliminary nature only and not binding, the fact that the plaintiff never made any effort to give effect to the requirements of the agreement reached on 19 December to make himself and Ms Suttor joint cheque signatories, a vital component of the arrangement to continue operating the business, and the plaintiff's failure to assert in his affidavit of 11 January 2004, when dealing with the advice given by the defendant, that the defendant had advised that the Heads of Agreement were not binding. 97 In my opinion the plaintiff did not wish and did not intend to be bound, on and after 19 December, by the terms of the agreement he had made through Mr Jones. I think that he had decided to back away from that agreement well before he spoke to anybody at the defendant's office. I think the action he took in his notice of motion of 13 January was foreshadowed in his letter of 5 January, written direct to Mr Dimock without the advice or assistance of the defendant or any legal practitioner. 98 I accept the evidence of Mr Geisker that he gave no such advice. 99 I am satisfied that on 7 January the plaintiff and the defendant never proceeded past a tentative position in which the plaintiff might thereafter become a client of the defendant. I am not satisfied that anything said or done on 7 January obligated the defendant to advise whether the Heads of Agreement were binding or not. I am not satisfied, therefore, that the fact that the subject was not mentioned, as I think was the position, amounted to an actionable failure to advise that the Heads of Agreement were binding. 100 In view of these findings, the question whether Mr Quigley informed Mrs Wade that the defendant was a specialist in commercial law is irrelevant. Mr Quigley does not expressly deny saying such a thing. The fact is, however, that the firm was not at the time a specialist in commercial law, as I would understand that term, but a specialist in litigation, including commercial litigation. There is a difference, I think. I am not satisfied that Mr Quigley did use the words attributed to him. 101 The plaintiff has failed to satisfy me that the defendant was in breach of any duty of care or of the express or implied term of any contract, or of any warranty or engaged in any conduct or representation that constituted a breach of any obligation under the Trade Practices Act. The plaintiff's claim has wholly failed.

Damages 102 It is usual when a verdict is to be entered for a defendant that the court consider and perhaps quantify damages in case the question of liability should be reviewed. The particulars of loss and damage pleaded in the further amended statement of claim are as follows - a. Costs incurred in connection with attempted renegotiation of settlement with Suttor $30,000.00 b. Costs and expenses incurred in connection with and/or consequential upon the appointment of receivers and managers of Da Valentino's restaurant $138,000.00 c. Costs and expenses incurred in connection with and/or consequential upon the appointment of trustees for the sale of property pursuant to Section 66G of the Conveyancing Act 1919 $40,000.00 d. Costs and expenses incurred in defending the Notice of Motion filed by Defendant to set aside a subpoena in Proceedings No. 6141/03 in the Supreme Court at Sydney $30,000.00 e. Costs incurred in defending creditor's petition filed by the Defendant in the Federal Court $22,000.00 f. Costs and expenses incurred in connection with and/or entering into and/or consequential upon entering into a Personal Insolvency Agreement $25,000.00 g. Capital loss from sale of business (50% share) $150,000.00 h. Loss of income $450,000.00 103 I do not consider it appropriate to quantify damage in the present case. If, contrary to my findings, the defendant advised the plaintiff on 7 January 2004 that the Heads of Agreement were not binding or if on that day, in breach of some requirement, it failed to advised him that they were binding, the evidence is plain that on 14 January, the day before the return date of the motion to set aside the Heads of Agreement, Mr Geisker advised the plaintiff in a conference that he needed to comply with the orders of 19 December 2003. The text of Mr Geisker's file note is set out at para 57 above. In my opinion the terms "orders" and "orders on 19/12/03" can only be understood as embracing the Short Minutes of Order and the Heads of Agreement, which were brought into existence in contemplation of each other. There is no evidence that the plaintiff had suffered any loss by 14 January 2004 or had incurred any expense for the preparation, filing or service of the notice of motion and affidavit. Anything said or implied by Mr Geisker on 7 January 2004 that the Heads of Agreement were not binding must have ceased to have any effect on the plaintiff's mind on and after Mr Geisker gave the recorded advice on 14 January 2004. Moreover, when the plaintiff was cross-examined about his notice of motion prepared on 24 February 2004, he said this at T115 - 116 - Q. You knew, didn't you, that what you were seeking to do by part of this notice of motion was actually to restrain the receivers and managers from selling the restaurant business for less than $160,000? A. That's correct.

Q. And you also knew, didn't you, that by order 2 you were seeking an order that the property be sold under section 66G of the Conveyancing Act? A. That's right.

Q. You understood, didn't you, that that order was, in effect, seeking the appointment of a trustee to sell? A. Yes.

Q. You were also seeking an order, in order 3, that you be allowed to borrow against your equity, pending the sale of the property? A. That's right.

Q. You were also seeking, weren't you, by order 6, copies of various records? A. Yes, that's right.

Q. From the receivers and managers relating to the partnership? A. Yes.

Q. You were also seeking, weren't you, by order 9, an order that paragraph 1 of the heads of agreement, which had been entered into on 19 December, be sealed by the Court? A. By the Court, yes.

Q. What did you mean by that order? A. I was thinking, when Mr Geisker said to me the agreement has no value, then I found out it was binding in Court, it only has to be completed, then I was thinking, if I file them, I go to the Court and they are sealed in the Court, they are more valid in form than written. That's what I was thinking.

Q. So, is it your evidence that by the time you arranged for this notice of motion to be filed-- A. Yes.

Q. --you considered that the heads of agreement were binding and you were seeking to enforce them? A. I found out. They told me they were binding, yes.

Q. Who told you that they were binding? A. I really don't know. I really don't know. But somebody. Because I was looking for law firm and somebody mentioned that's binding and I said "Binding? But I was told what's in an agreement if you don't agree." That's all they told me. They said "No, I think it's binding." I don't know who it was. I was looking for law firm, and I have been to many law firms. 104 In that evidence the plaintiff may well have been referring to the advice he had been given by Mr Geisker on 14 January. I am satisfied that when he prepared his notice of motion on 24 February he believed that the heads of agreement were binding. Neither that nor any subsequent action on his part resulted from any belief that the Heads of Agreement were not binding. 105 Independently of those matters, any assessment of loss must to a significant extent depend on the court's impression of the plaintiff. For example, the largest single component of the claim for loss and damage, comprising a little more than half the amount claimed, is for loss of income. The assessment of that head seems likely to vary according to the court's assessment of the reliability of the plaintiff's evidence. I have expressed my view about that. If the plaintiff is to recover damages, any fair assessment can be made only by a court that takes a view different from mine.

Orders 106 I direct the entry of a verdict and judgment for the defendant. I order the plaintiff to pay the defendant's costs. **********

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