Lampion v Lampion; Lampion by tutor Lampion v Lampion

The parties' submissions

1. The defendant has provided written submissions setting out the basis upon which he asserts that the proceedings are not settled. There is no dispute that the correspondence is authentic, or that the solicitors for defendant did not have authority, or that the court does not have jurisdiction. There are no submissions from the respondent, Mrs Tina Lampion.
2. The defendant's written submissions identify three issues for determination. The first is whether it is "appropriate" for the District Court to make orders in accordance with the plaintiff's motions. It is submitted that the court retains a discretion to require enforcement of settlement claims to be brought in separate proceedings. This argument was not developed before me, and I propose to treat it as having been abandoned.
3. The other two issues are whether the proceedings are settled and, if so, what form the orders should take. The principal basis upon which it was asserted that the proceedings were not settled was that the agreement was conditional upon certain events occurring. The key event that did not occur was that Mrs Lampion had not signed the agreement. This submission is dealt with in more detail below.
4. An additional basis for claiming there was no settlement was that the failure of the plaintiffs to seek orders under the Compensation to Relatives Act action to seek any orders is significant; furthermore, the discontinuance order meant that the proceedings could not be settled without a deed. The nature of a discontinuance is such that it requires a deed to be effective, and the absence of a deed is fatal: Uniform Civil Procedure Rules 2005 (NSW) r 12.3.
5. The first basis of this additional submission is erroneous; the plaintiffs seek to enforce the whole settlement. As to the claim that no settlement can be effected without a deed (and that the absence of the deed means there is no agreement), the terms of the agreement were for all three proceedings to be settled for the agreed sum of $370,000 inclusive of costs, and such an agreement would be a bar to suit, even if one or all of the claims were discontinued. More relevantly, a deed is not necessary, as discontinuance can be effected on terms preventing the bringing of subsequent proceedings (see Ritchie's Uniform Civil Procedure (NSW) at [12.3.15]).
6. Having noted these side issues, I return to a consideration of the principal basis upon which the defendant resists the application, namely the assertion that the proceedings have not settled because the relevant conditions upon which the agreement was predicated have not been able to be fulfilled.

The relevant principles of law

1. As Beazley J noted in Hills Industries Ltd (t/as Hills Eco) v Hiley [2012] SADC 148 at [137], there has been "a flood of case law" concerning the compromise of litigation. The judgments in these cases generally commence with an examination of the principles in Masters v Cameron (1954) 91 CLR 353 at 360, where Dixon CJ, McTiernan and Kitto JJ identified three classes to which formation of contractual obligations may belong: "Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: " . . . as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed" (1878) 3 App Cas, at p 1151: see also Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310, at p 317. A case of the second class came before this Court in Niesmann v Collingridge (1921) 29 CLR 177 where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made "on the signing of the contract". Rich and Starke JJ observed (1921) 29 CLR, at pp 184, 185 that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of agreement. Their Honours, agreeing with Knox CJ, held that there was no difficulty in decreeing specific performance of the agreement, "and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion" (1921) 29 CLR, at p 185: see also O'Brien v Dawson (1942) 66 CLR 18, at p 31. Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own: Governor & c of the Poor of Kingston-upon-Hull v Petch (1854) 10 Exch 610 (156 ER 583). The parties may have so provided either because they have dealt only with major matters and contemplate that others will or may be regulated by provisions to be introduced into the formal document, as in Summergreene v Parker (1950) 80 CLR 304 or simply because they wish to reserve to themselves a right to withdraw at any time until the formal document is signed. These possibilities were both referred to in Rossiter v Miller (1878) 3 App Cas 1124. Lord O'Hagan said: "Undoubtedly, if any prospective contract, involving the possibility of new terms, or the modification of those already discussed, remains to be adopted, matters must be taken to be still in a train of negotiation, and a dissatisfied party may refuse to proceed. But when an agreement embracing all the particulars essential for finality and completeness, even though it may be desired to reduce it to shape by a solicitor, is such that those particulars must remain unchanged, it is not, in my mind, less coercive because of the technical formality which remains to be made" (1878) 3 App Cas, at p 1149. And Lord Blackburn said: parties often do enter into a negotiation meaning that, when they have (or think they have) come to one mind, the result shall be put into formal shape, and then (if on seeing the result in that shape they find they are agreed) signed and made binding; but that each party is to reserve to himself the right to retire from the contract, if, on looking at the formal contract, he finds that though it may represent what he said, it does not represent what he meant to say. Whenever, on the true construction of the evidence, this appears to be the intention, I think that the parties ought not to be held bound till they have executed the formal agreement (1878) 3 App Cas, at p 1152. So, as Parker J said in Von Hatzfeldt-Wildenburg v Alexander (1912) 1 Ch 284, at p 289 in such a case there is no enforceable contract, either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract."
2. As Bergin CJ in Eq noted in Humphris-Clark v Lazaridis [2010] NSWSC 318 at [25], a fourth class has been recognised, where the parties are content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms: Sinclair Scott & Co Ltd v Naughton (1929) 43 CLR 310 per Knox CJ, Rich and Dixon JJ at 317. In this regard, in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 McLelland J, as his Honour then was, referred to the following passage of the speech of Lord Loreburn in Love & Stewart Ltd v S Instone & Co Ltd (1917) 33 TLR 475 at 628: "It was quite lawful to make a bargain containing certain terms which one was content with, dealing with what one regarded as essentials, and at the same time to say that one would have a formal document drawn up with the full expectation that one would by consent insert in it a number of further terms. If that were the intention of the parties, then a bargain had been made, none the less that both parties felt quite sure that the formal document could comprise more than was contained in the preliminary bargain."
3. The parties agree that the issue of whether there was such an agreement is essentially one of fact: Grave v Blazevic Holdings Pty Ltd [2012] NSWCA 329 at [60]. The parties agree that the question of whether the parties had entered into a binding agreement must be assessed objectively, that the apparent purpose of the agreement will be taken into account (Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [11]), and that post-contractual conduct, such as informing the court that proceedings had settled (Grave v Blazevic, supra, at [60]; Humphris-Clark v Lazaridis at [34] - [38]) may be taken into account.
4. The correspondence in these proceedings could not be clearer. The plaintiff's letter of 3 November 2014 was in the following terms: "We refer to our discussions late last week. We confirm that we hold instructions to resolve all three claims for the amount of $370,000.00 inclusive of costs. There will need to be an apportionment of the figure between the three claims and the settlement is obviously subject to the approval of the Court in relation to the claims involving Elise Lampion and the Compensation to Relatives Act claim. Otherwise, we note the following conditions would also apply:- 1. Payment of judgment sums would be made as follows:- i. From the proceeds of sale of Orchard Avenue, our client would receive 50% of the net sale proceeds, the net sale proceeds being proceeds received less legal costs on sale, agent's commission and your legal costs of the proceedings. ii. Our client would also receive 50% of the net sale proceeds of the property at 562 Gresford Road, Sedgefield (1/41293 and 1/558326), the net sale proceeds being sale proceeds received less agent's commission and legal expenses on sale. We do note those net sale proceeds could involve your legal costs of the proceedings if the Gresford Road property sold prior to the Orchard Avenue property. Obviously the payment to our client of sale proceeds of both the sales is capped at $370,000.00. 2. The Gresford Road property would need to be put up for sale as soon as practicable. 3. To secure the judgment, our client would be provided with an unregistered mortgage secured by caveat over both properties. 4. Our client is prepared to provide for 3 months interest moratorium to afford an opportunity for the properties to sell. Thereafter interest would be payable on the balance outstanding at the post judgment rate prescribed by section 101 of the Civil Procedure Act. 5. If either property had not been sold and the judgment sum remained outstanding after the expiration of 6 months, the properties would need to be sold by auction. 6. Sales to be at arm's length and not less than market value. 7. Agreement to be reflected in settlement deed with Mrs T Lampion to be a party. If the matter is to resolve we would need to have settlement documentation in place for Wednesday in order that the hearing time allocated can be utilised in the Court giving consideration to an approval of the settlement."
5. The defendant's reply of 4 November 2014 was short, and to the point: "We refer to your telephone discussion with the writer this afternoon and confirm that our client accepts the proposal set out in your letter of 3 November 2014. In light of the above, tomorrow's hearing will not proceed, on the basis that the matter has settled. In the event that more time is required to finalise consent orders, the proposed deed of settlement and your affidavit, we suggest that the matter be held in the list or a short adjournment obtained until such time that those issues can be addressed. Please confirm your agreement with the above as a matter of urgency." (Emphasis given by letter writer)
6. The objective evidence demonstrates that, but for one exception (see below), the parties had agreed upon the settlement sum for all claims, and that the sole remaining issue was the putting in place of appropriate terms to enable the sale of properties in the defendant's name (as well as the property jointly held by the defendant and Mrs Tina Lampion), in a deed to be signed by the parties. It was only because one of those properties was jointly owned by the defendant's wife that she was proposed by the plaintiffs as a party to the deed, a term agreed to by the defendant without any revelation of Mrs Tina Lampion being in any way unable or unwilling to do so.
7. As already noted, there is no evidence from Mrs Tina Lampion that she is unable or unwilling to sign the deed, apart from one letter (see below) sent by her solicitors indicating she will sign a deed, but wants some "new" terms. Her solicitors' most recent letter (Exhibit 1), advising that she will not attend today, carefully stops short of making such a claim. It was open to her to attend court, just as it was open for the defendant to do so, and I accept counsel for the plaintiff's submission that I should make a Jones v Dunkel inference (Jones v Dunkel (1959) 101 CLR 298) in relation to their failure to attend.
8. I am satisfied that the remaining clauses are what Bergin CJ In Eq calls "machinery" clauses (Humphris-Clark v Lazaridis at [37]) for the sale of the properties, which counsel for the defendant effectively conceded, during submissions, was the case.
9. The sole exception to this is the reference to Mrs Tina Lampion being a party to the deed. Counsel for the defendant submits that his instructing solicitor did not act for her, in that (although not apparent from this letter) she was independently represented. His client accepted the offer on the precondition that Mrs Tina Lampion would be a party to the agreement. When she did not agree to sign the agreement, that meant that this condition could not be fulfilled, and the whole agreement fell apart.
10. The first problem for the defendant is that, as is noted above, there is no evidence that Mrs Tina Lampion has refused to sign the document. Not only has she failed to attend or provide evidence, but the correspondence attached to Mr Finney's affidavit (Exhibit B) can only be consistent with the 4 November 2014 letter from Conditsis Lawyers to CBD Law being sent on the basis that not only their client but Mrs Lampion both were prepared to sign a deed. For example, according to the letter of 19 November 2014 from Conditsis Lawyers to CBD Law, Mrs Tina Lampion's solicitors "have confirmed that Mrs Lampion is agreeable to her share of the net proceeds of the sale of the Orchard Avenue property being available for payment of the settlement sum, such that all of the net proceeds of that sale will be available, not just 50% of them", and looking forward to provision of the documents. On 2 December 2014 CBD Law replied, noting that Mrs Tina Lampion would cooperate in the sale and consented to the use of the whole of the proceeds, and enclosing the deed.
11. It was only on 10 December 2014, in response to that letter, that Conditsis Lawyers advised that Mrs Tina Lampion was "not agreeable" to that deed and that her solicitors had provided "a new proposal that their client was prepared to agree to" because of asserted real estate market changes in the Singleton area. In other words, Mrs Tina Lampion was prepared to agree to a settlement, but wanted "new" (i.e. better) terms. Alternatively, the solicitors for the defendant provided a revised deed which excluded Mrs Tina Lampion as a party.
12. None of this is the language of refusal; this is the language of a party to an agreement seeking a better deal than that which had previously been agreed to. Additionally, the delay in raising these issues is unexplained; Mr de Meyrick described the concerns of the defendant as "disingenuous", particularly as the signature of Mrs Lampion is not an essential prerequisite of the transaction, but to make the putting in place of the relevant sale orders for the property of which she was a joint tenant easier.
13. Finally, I am satisfied that there is evidence Mrs Lampion played a role in the bringing about of the settlement on the day of the hearing. I am satisfied that the parties had made a central and undeniable compromise to avoid the distress of court proceedings where these tragic events would be the subject of evidence and cross-examination, and that Mrs Tina Lampion was an active participant in that settlement. As Mrs Linda Lampion says in her email of 8 December 2014: "Tina has two properties solely in her name. Macquarie St has two rental properties on it so she will be well looked after. She proposed the deal and offered the terms; I just wanted to go to court. I am not unreasonable, I am a single mum with 7 kids whose husband killed himself because of these people and is struggling to survive."
14. I am satisfied from this evidence that Mrs Tina Lampion both played an active part (including acting in the interests of the defendant) in proposing the transaction as Mrs Linda Lampion states. I also consider that she was an active and consenting party to the acceptance of the agreement on 4 November 2014 as evidenced by the terms of the letter from the solicitors for the defendant of that date.
15. All of the relevant factors - the clear language of offer and acceptance and the subsequent correspondence, the absence of any evidence that Mrs Lampion is not prepared to sign a deed, the absence of any evidence from the defendants and the conduct of Mrs Tina Lampion in participating in the settlement discussions - point to the agreement between the parties as belonging to the first category in Masters v Cameron.
16. An additional factor, in relation to the conduct of the parties, is the repeated assurances given to this court by those representing the defendant that these proceedings had settled. In Humphris-Clark v Lazaridis Bergin CJ in Eq notes at [38]: "[38] The conduct of the parties in having the court note that the matter was settled, rather than informing the court that the matter was settled in principle, and in abandoning the trial, is conduct that evidences an intention to be immediately bound by their agreement. The agreement reached as documented in Ms Nicolle's letter of 14 August 2009 recorded the agreement to the terms of the Consent Orders finalising the litigation, the amount to be paid to the defendant and the agreement that the parties "will enter into a Deed of Release". Having regard to the issues between the parties in the District Court proceedings and the discussions between Mr Downing and Mr Lawson, I am satisfied that when the parties used the expression "enter into a Deed of Release" they understood and intended that they would sign a Deed providing: (a) for the payment of the agreed amount to the defendant: and (b) releasing the plaintiff from all claims arising out of or relating to the matters the subject of litigation. This was not an agreement to agree at some time in the future referred to by the High Court in Booker. There were no further matters to be agreed. All that had to occur was that the Deed had to be prepared consistently with the agreement. The defendant is entitled to require the plaintiff to remove any provisions of the Deed that go beyond such a release."
17. The evidence in these proceedings is considerably stronger; not only was the trial judge told that the matter was settled, but the proceedings were referred to the Infant Settlement List to have the portion of the settlement relating to Elise approved, not once, but on three occasions, in circumstances where the court was never told that the proceedings had not settled.
18. The sole exception to the parties' agreement was their mutual acknowledgement that the portion of the agreement for the payment of damages to Elise, and that portion of the discontinuance relating to her share of the Compensation to Relatives Act claim (Holland by next friend Holland v The Minister for Health [2001] WADC 215) required the approval of the court by reason of ss 75 - 77 Civil Procedure Act 2005 (NSW). Both parties agreed that the terms of the agreement were conditional upon this occurring. It may be, in those circumstances, that the agreement may not be capable of falling within the first category of Masters v Cameron.
19. Accordingly, if I have erred in finding that the agreement fell within the first category of Masters v Cameron, then I would hold that it falls within what Bergin CJ in Eq (as confirmed on appeal) regarded as a "fourth class", namely that the parties were expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms. The unusual circumstances of portions of this agreement having to be approved by the court by reason of Elise's age meant that both parties would agree to the court taking a supervisory role in relation to the transaction. Balla DCJ, in the orders that her Honour made, indicated as much. However, this additional provision would be the only reason for this agreement falling within this special and additional category.
20. The defendant's alternative submission was as to the form of relief sought. Counsel for the defendant submitted that all I should do was to make an order for judgment in the agreed sum, rather than orders pursuant to s 73. As I am satisfied that the defendant and Mrs Tina Lampion did in fact agree to the specific settlement offer set out in the letter of 3 November 2014 as accepted in the letter of 4 November 2014, I decline to make that order.

Orders

1. By reason of this being an ex tempore judgment, and given in circumstances where time was limited, I provided the parties with draft orders for their consideration, and have made orders as set out below after having had confirmation that these are the orders that the parties agree flow from my findings of fact. I note the parties will need to seek further orders in the Supreme Court in relation to the caveats on the properties, and that these orders may well require revision or replacement in the course of any such applications.
2. I have additionally continued the asset freezing orders made by Elkaim SC DCJ.

Orders

1. In relation to Linda Lampion v David Lampion (2013/210386): Motion (re settlement) (1) Note that the plaintiff will bring an application in the Supreme Court for relief in accordance with prayer 2(c) of the notices of motion in 2013/210388 and 2013/210386, and that the defendant agrees that the plaintiff is not estopped from doing so. (2) Pursuant to s 73 Civil Procedure Act 2005 (NSW), make orders in accordance with paragraphs 1, 2(a) and 2(b) of the notice of motion. (3) Defendant pay plaintiff's costs of the notice of motion, including costs incurred from 18 November 2014. Motion (freezing orders) (1) Orders of Elkaim DCJ dated 19 December 2014 continued until further order, with liberty to apply on 2 days notice. Other orders (1) Matter stood over part heard to Wednesday 11 February 2015 at 2:00pm, for the making of further orders including freezing orders.
2. In relation to Elise Lampion by tutor Linda Lampion v David Lampion (2013/210388): Motion (re settlement) (1) Note that the plaintiff will bring an application in the Supreme Court for relief in accordance with prayer 2(c) of the notices of motion in 2013/210388 and 2013/210386, and that the defendant agrees that the plaintiff is not estopped from doing so. (2) Pursuant to s 73 Civil Procedure Act 2005 (NSW), make orders in accordance with paragraphs 1, 2(a) and 2(b) of the notice of motion. (3) Defendant pay plaintiff's costs of the notice of motion, including costs incurred from 18 November 2014. Motion (freezing orders) (1) Orders of Elkaim DCJ dated 19 December 2014 continued until further order, with liberty to apply on 2 days notice. Infant approval orders Pursuant to ss 75-77 Civil Procedure Act 2005 (NSW), approve the settlement set out in the parties' correspondence of 3 and 4 November 2014 filed in court today (as attached to the affidavit of Mr John Hamish Giles Finney sworn 18 December 2014) and make orders as follows: (1) Judgment for the plaintiff for the sum in paragraph 2(a) of the plaintiff's notice of motion (namely $200,000 together with interest thereon from 4 February 2015 in accordance with section 101 of the Civil Procedure Act 2005 (NSW)). (2) Costs in accordance with paragraph 2(b) (namely each party pay its own costs of the proceedings, noting there is no solicitor/client component between the plaintiff and her solicitor - see page 4 of the Affidavit of Linda Lampion sworn 19 November 2014). (3) The settlement sum referred to in order (1) above is to be paid direct to the NSW Trustee & Guardian for investment until the plaintiff's 18th birthday. Other orders (1) Matter stood over part heard to Wednesday 11 February 2015 at 2:00pm, for the making of further orders including freezing orders.
3. In relation to Linda Lampion v David Lampion (2013/210391): (1) Pursuant to ss 75-77 Civil Procedure Act 2005 (NSW), approve the settlement by discontinuance of the proceedings insofar as they concern the minor child Elise Lampion or any other minor child. (2) Proceedings discontinued with each party to pay his/her own costs. (3) Defendant pay plaintiff's costs of notice of motion including costs incurred from 18 November 2014.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 March 2015