Motion (1)(a) was a settlement reached between the parties on 4 February 2013?
10It is common ground that on 4 February 2013 at about mid-morning Mr Mohareb turned up at the offices of Inducta Engineering unannounced. He left between one to two hours later. Most of the contents of that conversation ate dispute. Towards the end of the conversation they agree certain things were done and subsequently on the same day they agree that they had a telephone conversation but the contents of that are in dispute. Finally, there is the exchange of emails, which speak for themselves.
11Mr Mohareb walked to Mr Jankulovski's office with the intention of trying to serve the notice of motion without necessarily having to show up in person in his office. He intended to drop it in Mr Jankulovski's letterbox, if there were any located at the entrance to the building on the street level, or on level 10. There is no mailbox for Inducta Engineering either at street level or on level 10 of that building. Inducta Engineering has a GPO Post Office box. However, at this time Inducta Engineering's court documents did not provide any address for service of documents.
12At the time Mr Mohareb entered the office of Inducta Engineering, three employees were working in the office. A plan of the layout of the offices is shown in Ex A. They were Marko Jankulovski, Dr Serra Cimilli Erkmen and (Joe) Zhou Wu. Marko Jankulovski is the son of Emil Jankulovski. They all provided affidavit evidence as to what occurred and were cross-examined. None of them heard the conversation. I will refer to their evidence later in this judgment.
13Mr Mohareb says (Aff, 12/2/13 [8]) that he entered the office and saw Mr Jankulovski sitting at his desk. Mr Mohareb walked up to him, Mr Jankulovski looked up and recognised Mr Mohareb. Mr Mohareb stated that he looked around the office, he looked at Dr Erkmen but he didn't get a response from her and that no-one asked him where he was going (T 33.17-19). Mr Mohareb indicated by gesture that he had a court document to serve and left it on Mr Jankulovski's desk. Mr Jankulovski denies Mr Mohareb's version and says (Aff, 8/3/13 [2.b]) that his desk and office are not visible from the office entrance and for Mr Mohareb to enter his office Mr Mohareb had to pass by two people working in the open plan area.
14Mr Jankulovski's version (Aff, 6/2/13 [5]) is that on Monday, 4 February 2013, Mr Mohareb appeared in person at the Inducta Engineering premises uninvited. Mr Mohareb just walked into his office and appeared in front of his desk. Mr Mohareb served him with a filed notice of motion with a hearing date of 8 February 2013, which is the same date for hearing of the notice of motion to strike out the amended statement of claim. He was taken by surprise and was shocked as Mr Mohareb appeared before him dressed in his shorts, while he was in the middle of his work. Mr Mohareb was standing in front of Mr Jankulovski's desk while Mr Jankulovski was seated. Mr Jankulovski says that when he saw Mr Mohareb, he felt anxious and embarrassed that he had to deal with Mr Mohareb in person (Aff, 8/3/2013 [8]).
15Mr Mohareb's version is that when he proceeded to turn back to leave the office in the same way he came in, Mr Jankulovski asked him to wait and not leave immediately. Mr Jankulovski asked him to come in for a second (Aff, 12/2/13 [9]).
16Mr Jankulovski denies these allegations and says that Mr Mohareb did not proceed to turn back to leave Inducta Engineering's office after Mr Mohareb had given him the document. He says that Mr Mohareb did not indicate in any way that he was leaving Inducta's premises and remained standing in front of his desk.
17Mr Mohareb's version is that Mr Jankulovski read through the document and as Mr Jankulovski did so, he (Mr Mohareb) did not see any signs of shock or outrage on him (Aff, 12/2/13 [10]). Mr Jankulovski says he did not read the document; he just looked at it for several moments. He realised it was some kind of court document. Mr Jankulovski says it was not possible for him to read several pages of text with Mr Mohareb standing in front of his desk (Aff, 8/3/13 [2.d]).
18Next Mr Mohareb says that Mr Jankulovski said, "And how do you propose to prove your allegation? I will be simply saying that the Costs Assessor has already examined this and did not find anything untoward." Mr Jankulovski denies having made this remark and says that he does not know the word "untoward" or its meaning. He denies any discussion about the document and says that it is a fabrication as he did not read the document, nor was he aware of its contents (Aff, 8/3/13 [2.d]). It is more probable than not that Mr Jankulovski did not read the contents of the document, as one would expect him to have reacted differently given its contents. The notice of motion alleges that the defendants and their barrister had fraudulently claimed costs they were not entitled to with the "express premeditated" intention of subverting the course of justice by using the costs order to intimidate Mr Mohareb into discontinuing proceedings and sought an order that all documents relating to the defendants' application for a costs assessment be referred to the police for investigation.
19At this time Mr Jankulovski says that he felt obliged to talk in a friendly manner and negotiate settlement of the defamation claim instantly because the defamation case has been before the Supreme Court for more than one year. So far he had spent more than $20,000 defending the action (Aff, 6/2/13 [9]). During the conversation, which lasted over one hour, Mr Mohareb shouted at him on a few occasions. Dr Erkmen, Mr Wu and Marko Jankulovski were working in the open area of the office and all heard Mr Mohareb raising his voice even though the door to Mr Jankulovski's office was closed.
20During this conversation, Mr Jankulovski says that Mr Mohareb said, "I read carefully the transcript of the last year hearing, and I found evidence that you were lying." To Mr Jankulovski this was a subtle but clear threat, and he felt very intimidated, bullied and felt that it was a better option to settle under any terms. Mr Mohareb also said, "I paid substantial amount of money to settle another court case because of you and your barrister. If it was not for you I would have never paid that money." (Aff, 6/2/13 [12])
21Mr Mohareb says that he then said, "I don't believe that it is the costs assessor's job to satisfy himself if the work was done by Ms Dulhunty or, as I am alleging, by someone else. Furthermore, an important component of the evidence I'm relying upon is contained in the transcript of the hearing of the 4 May 2012" (Aff, 12/2/13 [11]). Mr Mohareb says that Mr Jankulovski then replied, "Look, I think this has been going on for too long now and is costing both of us too much and I believe it's time for us to resolve it, between us, once and for all". Mr Mohareb replied "Well, you've said that several times - four offers of settlement to be precise - before and every time we discuss a possible settlement and actually reach an agreement you turn around and change your mind and renege on what was agreed. For this reason I should actually be recording or filming this conversation." (Aff, 12/2/13 [12]) Mr Jankulovski denies that this discussion took place (Aff, 8/3/13 [2.e]).
22It is common ground that the following conversation then took place. Mr Mohareb says that Mr Jankulovski replied "I know, I know... but this time I really would like to resolve it once and for all. Look, to prove it to you I will give you right now without reservation on my part two licences to all of Inducta Engineering software." While saying this Mr Jankulovski turned to his computer, connected the first of the two licence dongles to his computer, brought up the list of all the Inducta Engineering software on his computer screen and ticked all the boxes next to each of the Inducta Engineering software and authorised all the licences to the connected dongle. He then repeated this whole process for the second licence dongle (Aff, 12/2/13 [13]). Next, he connected a USB storage device to his computer and transferred to it copies of each of the Inducta Engineering programs. He then handed Mr Mohareb the two dongles and the USB saying: "Here it is, this is all yours now. And this is just for starters and to prove to you my goodwill. So what do you think?" Mr Mohareb says this did not come as any surprise to him because it had already been part of previous written offers of settlement which Mr Jankulovski had proposed. Mr Jankulovski does not recall asking Mr Mohareb what he thought (Aff, 8/3/13 [2.f]).
23Mr Mohareb says that he then replied to Mr Jankulovski by saying, "Any 'fair-dinkum' settlement should not have any restriction on the resumption of the provision of technical support to the Inducta Engineering software." He said this because, except for the very first offer (out of a total of four offers in all before this conversation) for settlement, the subsequent two offers had excluded any resumption of the provision of technical support to the Inducta Engineering software. In addition a specific clause forbade him from making any contact with anyone at Inducta Engineering (Aff, 12/2/13 [16]).
24Mr Mohareb says that he made it clear to Mr Jankulovski that, as far as he was concerned, the resumption of technical support had to be part of any offer of settlement which would be acceptable to him. To this Mr Jankulovski replied: "That is fine with me." (Aff, 12/2/13 [17])
25It is Mr Mohareb's view that during the course of their discussion, Mr Jankulovski was conciliatory and displayed true regret for what had happened and that he (Mr Mohareb) was completely disarmed and won over in sympathy with his attitude. And for this reasons he said, "Emil, I truly appreciate your attitude and everything you're saying, but at this late stage of our dispute it is inevitable that a settlement will have to include a certain amount of monetary compensation. But because of your conciliatory attitude and the true regret you've expressed today - which has brought me right down from my highly strung feelings - I am only asking for the amount which this dispute has cost me so far, even though it was my intention to claim much more during the course of the court proceedings." (Aff, 12/2/13 [18])
26To this Mr Jankulovski then asked Mr Mohareb to tell him how much he was seeking in terms of monetary compensation. Mr Mohareb said, "$20,000". Mr Jankulovski replied, "I'll pay it, even though I'm not happy about it, but I'll do it because this has been going on for too long and costing all of us too much in terms of time, money and distress." While saying this Mr Jankulovski took out his chequebook, wrote a cheque, signed it and handed it over to Mr Mohareb (Aff, 12/2/13 [19]). It is clear that Mr Jankulovski did write a cheque in the sum of $20,000 and gave it to Mr Mohareb.
27According to Mr Mohareb, Mr Jankulovski then said, "I think we've agreed on everything now including the letter of retraction and apology which we discussed previously. Can you please take care of drafting the Settlement Agreement as we have just discussed and email me a copy so that I can send it back to you in time for you to take it to court for next Friday hearing. I'd like you to file it with the court and have this matter terminated once and for all." (Aff, 12/2/13 [20])
28Mr Jankulovski says (Aff, 6/2/13 [10]) that in spite of his legal advisers' assurance that he has a good case, he had been losing faith in the legal system and in that particular moment when he saw Mr Mohareb towering over his desk he felt very pessimistic. Mr Jankulovski thought that Mr Mohareb would continue this case indefinitely, and make him spend much more money and time, and potentially harm or even destroy his business. He admitted that he was eager to use this situation to finalise the litigation before the Supreme Court by reaching some sort of settlement. He was also afraid that this situation might escalate and get out of control so, therefore, he tried to lead the conversation in a very friendly manner as he believed that Mr Mohareb wanted to and was going to settle in good faith (Aff, 6/2/13 [11]).
29Mr Jankulovski says that in giving Mr Mohareb the software and a cheque for a substantial amount of money, he acted against his better judgment as he was led to believe that they had settled the defamation case against him, even though he had nothing in writing by Mr Mohareb to confirm the settlement. Mr Jankulovski felt fearful and says that he was coerced, intimidated and was led to believe that he had no option but to pay the money, provide Mr Mohareb with the computer products Inducta Engineering sells and he verbally undertook to be in a good business relationship with Mr Mohareb (Aff, 6/2/13 [20]).
30Mr Mohareb's version (Aff, 12/2/13 [21]) of the conversation concluding their discussion on 4 February 2013 is in dispute. Mr Mohareb says that he then said to Mr Jankulovski, "Are you saying that you'd like me to do all this on my own? Are you sure you don't want to have someone present on your behalf in court as well?" Mr Jankulovski replied "What for? This matter has already cost me too much. It's time for us to put it to rest. You go to court on Friday and take care of finalising this matter once and for all on both our behalf." On this he shook hands with Mr Jankulovski and left his office with the firm belief that they had both shook hands to seal an agreement, which was acceptable to both of them. Mr Jankulovski denies this conversation but admits the shaking of hands. Mr Jankulovski says that the handshake did not did not seal any agreement, it was only a gesture of good will, showing willingness to try to settle the dispute (Aff, 8/3/13 [2.g]). Mr Mohareb then left the office.
31Dr Erkmen, Zhou (Joe) Wu and Marko Jankulovski were all in the office when Mr Mohareb was in Mr Jankulovski's office. They were all cross examined and I accept their evidence as being truthful. They all heard Mr Mohareb shouting or raising his voice then he would quieten down. Then he would once again raise his voice and then quieten down. This occurred several times.
32When Mr Mohareb left his office, Mr Jankulovski informed his legal advisers of the settlement with Mr Mohareb. He was advised that Mr Mohareb had acted unethically and had forced him into an unfavourable settlement (Aff, 6/2/13 [21]). Mr Jankulovski's wife is acting as his solicitor.
33On the same day, at about 3:30 pm, Mr Mohareb says he received a call from Mr Jankulovski on his mobile phone. It is not in dispute that Mr Jankulovski made a telephone call to Mr Mohareb later that afternoon but the contents of conversation is in dispute (Aff, 12/2/13 [22]).