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[2018] VSC 723
Supreme Court of Victoria
2018-12-07
CROFT J
Original judgment source is linked above.
The application of the Deed of Settlement as precluding defences and claims of the kind now before the Court has also been considered in other court decisions.[131]
131 More recently in Bendigo and Adelaide Bank Ltd v Lonergan,[132] ABL Custodian Services Pty Ltd v Freer,[133] Bendigo and Adelaide Bank Ltd v Haque[134] and Bendigo and Adelaide Bank Ltd v Laszcuk,[135] this Court considered the application of the Deed of Settlement as precluding the defences and claims of the kind advanced by Burkett in this proceeding.
132 Finally, the Bank Parties make reference to the five points raised by Burkett in relation to the Deed of Settlement and why it is that it has no application in these proceedings.[136] It is to the Bank Parties' submissions on these points to which I now turn.
133 As to the first point, Burkett's primary submission concerns the principle of estoppel by deed. Burkett seeks to rely upon the established principle referred to in Carpenter v Buller[137] that a party to an instrument cannot be estopped in an action by the other party to the instrument in an action not founded upon it, but rather wholly collateral to it. There are, the Bank Parties submit, three answers to this submission.
134 The first is that the contention misconstrues how the Deed of Settlement is relied upon by the Bank Parties. The principle referred to in Carpenter v Buller is directed to holding a party to an agreed state of facts so far as regards the particular transaction or events, the subject of the agreement.[138] It is for this reason that Carpenter v Buller and the majority of the authorities referred to by Burkett deal with an estoppel by deed being founded upon facts referred to in recitals to the relevant instruments. In this case, rather than being a fact stated in any recital, cl 4.1.4 of the Deed of Settlement is an express, unequivocal and operative part of the instrument and is relied upon by the Bank Parties as a reason why Burkett cannot challenge his liability.
135 The second is that the proceedings are not "collateral" to the Deed of Settlement in any relevant sense. Again, the situation is to be distinguished from the cases referred to in Burkett's submissions. Rather, the Deed of Settlement provided what was effectively an express bar to Burkett challenging the loans and that express bar is relied upon by the Bank Parties. Given the nature of the Deed of Settlement, the Bank Parties could not have brought a proceeding "on the deed" as was available in other decisions relied upon by Burkett.[139]
136 The third is that, aside from estoppel by deed, Burkett ignores what was said in Clarke[140] in relation to the application of an issue estoppel, Anshun estoppel and abuse of process. Having regard to the Court's consideration (at [132]) and the Deed of Settlement which the Court approved, the defence raised by Burkett to the claim must be regarded as an abuse of the Court's process and is subject to a relevant estoppel.
137 As to the second point, Burkett's contention that there is no provision in the Deed of Settlement by which he agreed not to raise the defences in answer to the Bank Parties' claims is plainly wrong. Clause 4.1.4 is the provision which provided an acknowledgment and admission as to the validity and enforceability of the Loan Deeds. The effect and scope of this clause was addressed in Lonergan.[141]
138 As to Burkett's third point, this ignores what the Court of Appeal (and other courts) have said of this submission, including specifically in relation to the Deed of Settlement.
139 In Pekell,[142] it was stated by the Court of Appeal:
It would be highly surprising if pt 4A precluded parties to a group proceeding from resolving the common claims between them on terms which also bring finality to other issues outstanding between those parties or, in the case of a plaintiff, the group members that plaintiff represents. Full releases of all outstanding claims, whether at issue in the relevant proceedings or not, are not uncommon. The respondent's submission, if correct, would impose a remarkable constraint on those negotiating settlements of group proceedings.
[Emphasis added by Bank Parties]
140 As to Burkett's fourth point, that the admission in the Deed of Settlement in cl. 4.1.4 that the Loan Deeds were valid and enforceable, does not "take the inquiry very far", the Bank Parties say that the basis of this submission appears to be that because the enforceability of Loan Deeds are legal questions, the admissions contained therein are of no material value. However, the Bank Parties observe that the two authorities relied upon by Burkett in support of this contention do not concern admissions contained in agreements. In Grey v Australian Motorists & General Insurance Co Pty Ltd,[146] the Court was concerned with an attempt to procure an admission from a witness (which was refused by the trial judge). In Abigroup Contracts Pty Ltd v ABB Service Pty Ltd,[147] the Court was concerned with the admissibility of admissions contained in communications between parties to a contract for the purpose of establishing whether the contract was binding. Thus it is contended that these cases have no relevance to the matter before the Court which concerns an express and operative clause contained in a deed of settlement.
141 Rather, the Deed of Settlement was entered into by the Plaintiffs on Burkett's behalf as a group member. Each party to the Deed of Settlement acknowledged that it did so "fully and voluntarily on the basis of its own information and investigation" (see cl 17.1). Moreover, cl 17.1.2 provided that each party acknowledged that:
it is aware that it, its legal advisers or other agents or advisers may discover facts different from or in addition to the facts it now knows or believes to be true with respect to the subject matter of this Deed.
The suggestion that Burkett should be considered in a different light as he is not a "direct signatory" to the Deed of Settlement and is bound by it "only by operation of law pursuant to s 33V(1)" ignores the statutory force behind Part 4A of the Supreme Court Act.[148]
142 Burkett's final (fifth) point is that it is of significance that there is no acknowledgment of Burkett's liability to pay in the Deed of Settlement, whereas there is such an acknowledgement in relation to other specific plaintiffs (i.e. the Javelin Borrowers). This submission is also untenable, it having been effectively addressed and disposed of by the Court of Appeal in Byrne.[149]
143 In my view, the position contended for by the Bank Parties in relation to this issue is correct, for the reasons they advanced and otherwise as I have indicated; both in these reasons and in other decisions with respect to the operation and effect of the Deed of Settlement.[150] As contended by the Bank Parties, it is quite clear that the validity of the Loan Deeds was a critical and central issue in the group proceedings and that despite any infelicities in drafting in the Deed of Settlement its terms properly construed as a commercial document in the usual way prevent the raising of the defences Burkett now seeks to raise. Moreover, it might be observed that outside the context of group proceedings it is clear that a settlement inter partes might well, and effectively, resolve all issues between parties, including those going to the validity of an agreement of any kind.
144 For the preceding reasons, the Plaintiffs are entitled to judgment in their favour in the Bank Proceedings, and the Burkett Proceedings will be dismissed.
145 I reserve the question of costs and will hear the parties further on this issue.
[3] Affidavits of Stephen Flamer-Smith of 29 March 2017; 20 July 2017; 13 September 2017; 15 June 2018 and 20 June 2018.
[4] Affidavit of Jack Thomas Frantz (25 June 2018).
[5] Transcript (19 June 2018), 29, referring to Defendant's Objections to Evidence.
[6] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 619-40.
[7] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 643-54.
[8] Burkett's Outline of Closing Submissions (31 July 2018), [11] (omitting paragraph (5) as it related to the guaranteed obligations of DSP Group).
[9] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 1-108.
[10] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 90. Page number references are to the page number of the exhibit, rather than to the page numbers used internally in the document which has been exhibited (the page numbers of the PDS are 2 less than the page numbers of the exhibit).
[11] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 91-2.
[12] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 92.
[13] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 92-3.
[14] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 92.
[15] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 94.
[16] See Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 100, 104.
[17] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 101.
[18] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 641-2.
[19] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017), 619-40.
[20] Transcript (26 June 2018), 83-4, 107-8.
[21] Plaintiff's Closing Outline (15 August 2018), [8]-[11].
[22] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 177-424.
[23] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 158; cf. Affidavit of Stephen Flamer-Smith (29 March 2017), [14], [61].
[25] See Further Amended Statement of Claim (13 April 2017), [30(a)], [34]; Affidavit of Stephen Flamer-Smith (29 March 2017), [58].
[26] Burkett's Outline of Opening Submissions (16 June 2018), [37]-[44], especially [44].
[27] [2018] NSWSC 383; particularly with reference to [86], [89], [92] and [101]-[106].
[28] Plaintiff's Closing Outline (15 August 2018), [58]-[60].
[29] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 177-424.
[30] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 172-3.
[31] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 172-3.
[32] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 176A-C.
[33] Exhibits SFS-2 and SFS-3 to the Affidavit of Stephen Flamer-Smith (15 June 2018).
[34] Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 175-6.
[35] As pleaded in Further Amended Statement of Claim (13 April 2017), [46].
[37] See Further Amended Statement of Claim (13 April 2017), [43]-[46].
[38] Affidavit of Stephen Flamer-Smith (15 June 2018), [11], [13].
[40] Affidavit of Stephen Flamer-Smith (15 June 2018), [11] and in oral evidence, Transcript (26 June 2018), 65, 72.
[41] Further Amended Statement of Claim (13 April 2017), [7(a)], [16], [30(a)], [34]; Affidavit of Stephen Flamer-Smith (29 March 2017), [13], [58]; Bank Parties' Chronology.
[42] Further Amended Statement of Claim (13 April 2017), [46]; a case which was verified by Mr Flamer-Smith, see Affidavit of Stephen Flamer-Smith (29 March 2017), [63]-[64]; Transcript (26 June 2018), 71.
[43] Affidavit of Stephen Flamer-Smith (29 March 2017), [18]-[21], [63]-[65].
[45] Affidavit of Stephen Flamer-Smith (29 March 2017), [21], see also, [65].
[47] Affidavit of Stephen Flamer-Smith (29 March 2017), [18].
[48] Definition of "Purchaser" in Clause 1.2 of the LSSD: see Exhibit SFS-1 to the Affidavit of Stephen Flamer-Smith (29 March 2017) at 210.
[49] See Transcript (26 June 2018), 71.
[50] See Transcript (26 June 2018), 75-6.
[51] Affidavit of Stephen Flamer-Smith (15 June 2018), [5], [11], [14].
[53] Further and Amended Statement of Claim (13 April 2017), [43]-[46] (verified by Mr Flamer-Smith).
[55] Transcript (26 June 2018), 63-4, 69.
[57] Further and Amended Statement of Claim (13 April 2017), [28]-[29].
[58] Amended Defence (10 July 2017), [21].
[59] Further and Amended Statement of Claim (13 April 2017), [32].
[60] MYT Engineering Pty Ltd v Mulcon Pty Ltd [1999] HCA 24; (1999) 195 CLR 636 at 643 [9]; citing Harrison v Jackson [1797] EngR 415; (1797) 7 TR 207 [101 ER 935]; Berkeley v Hardy [1826] EngR 905; (1826) 5 B & C 355 [108 ER 132]; see also, Lift Capital Partners Pty Ltd (in liq) v Merrill Lynch International [2009] NSWSC 7; (2009) 73 NSWLR 404 at 412 [37] and the authorities there cited.
[62] Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [25]-[27].
[63] Scook v Premier Building Solutions Pty Ltd [2003] WASCA 263; (2003) 28 WAR 124 at 132 [22].
[65] Netglory Pty Ltd v Caratti [2013] WASC 364, [101].
[66] Netglory Pty Ltd v Caratti [2013] WASC 364, [165].
[67] Netglory Pty Ltd v Caratti [2013] WASC 364, [102].
[68] Netglory Pty Ltd v Caratti [2013] WASC 364, [171]-[172].
[69] Scook v Premier Building Solutions Pty Ltd [2003] WASCA 263; (2003) 28 WAR 124 at 132 [23].
[70] Scook v Premier Building Solutions Pty Ltd [2003] WASCA 263; (2003) 28 WAR 124 at 133 [25].
[71] Beesly v Hallwood Estates Ltd [1961] Ch 105 at 121; Scook v Premier Building Solutions Pty Ltd [2003] WASCA 263; (2003) 28 WAR 124 at 134 [29] citing Kingston v Ambrian Investment Co Ltd [1975] 1 All ER 120 at 125; and see Young J in Lewis v Nortex [2001] NSWSC 511; (2001) 10 BPR 19,035, [48]; and see P W Young, A F Cahill and G D Newton, Conveyancing Service New South Wales (LexisNexis Butterworths, Loose-leaf), [30700.20].
[73] (1991) 3 WAR 235 at 254.
[74] Meredith Projects Pty Ltd v Fletcher Construction Australia Ltd [2000] NSWSC 493, [125].
[75] Dean v Lloyd (1991) 3 WAR 235 at 252.
[76] Dean v Lloyd (1991) 3 WAR 235 at 251.
[77] Brendan Edgeworth and Peter Butt, Butt's Land Law (Thomson Reuters, 7th ed, 2017) at [12.350]. Cited with approval in 400 George Street (Qld) Pty Ltd v BG International Ltd [2012] 2 Qd R 302 at 311-2 [10].
[78] 400 George Street (Qld) Pty Ltd v BG International Ltd [2012] 2 Qd R 302 at 316 [33].
[79] Meredith Projects Pty Ltd v Fletcher Construction Australia Ltd [2000] NSWSC 493, [130].
[80] See also Brown v Tavern Operator Pty Ltd [2018] NSWSC 1290, [479] (Ward CJ in Eq).
[81] Dean v Lloyd (1990) 3 WAR 235 at 252; referred to with apparent approval by the Full Court of the Supreme Court of South Australia in Gibbons v Pozzan [2007] SASC 99; (2007) 209 FLR 233 at 238-9 [31]-[33].
[82] (1867) LR 2 HL 296 at 312; referred to with apparent approval in Segboer v AJ Richardson Properties [2012] NSWCA 253, [55]-[56].
[83] [2012] 2 Qd R 302 at 317-8 [39].
[84] Burkett's Outline of Closing Submissions (31 July 2018), [89]-[92].
[85] Burkett's Outline of Closing Submissions (31 July 2018), [96].
[87] [2018] VSC 558, [50].
[88] Goodman v J Eban Ltd [1954] 1 QB 550 at 555.
[89] See UK Law Commission, Electronic Commerce: Formal Requirements in Commercial Transactions (December 2001), [3.26].
[90] Goodman v J Eban Ltd [1954] 1 QB 550 at 557; Re a Debtor (No 2021 of 1995) [1996] 2 All ER 345 at 351.
[91] See also Bendigo and Adelaide Bank Ltd v Laszczuk [2018] VSC 388, [44]-[45]; Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 588, [44]-[55].
[97] Referring to Webster Investments Pty Ltd v North Star Developments Pty Ltd (2016) 52 VR 610 at 633 [45] and the authority there cited.
[98] [2018] NSWSC 383, [39]-[47].
[99] [2018] NSWSC 383, [105].
[101] See Further Amended Statement of Claim (13 April 2017), [31].
[102] Burkett's Outline of Closing Submissions (31 July 2018), [105].
[103] Burkett's Outline of Closing Submissions (31 July 2018), [107].
[104] Further Amended Statement of Claim (13 April 2017), [41]-[42].
[105] Referring to Pavey v Paul [1987] HCA 5; (1987) 162 CLR 221 at 256-7.
[107] See, for instance, Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635 at 665 [85]-[86], citing Pavey v Paul [1987] HCA 5; (1987) 162 CLR 221 at 256-7.
[109] Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 516, citing with approval the decision in David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353.
[110] See Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 515; Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 at 256-7.
[111] [1985] HCA 78; (1985) 160 CLR 583 at 619-20.
[112] Burkett's Outline of Closing Submissions (31 July 2018), [116]-[123].
[114] See Clarke (as Trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (Receivers and Managers Appointed) (in liquidation) [2014] VSC 516.
[115] Further Amended Statement of Claim (13 April 2017), [55].
[116] [1841] EngR 552; (1841) 8 M & W 209; 151 ER 1013 at 1014-5.
[117] McCathie v McCathie [1971] NZLR 58; Re Patrick Corporation Ltd and The Companies Act [1981] 2 NSWLR 328 at 332-3; Offshore Oil NL v Southern Cross Exploration NL (1985) 3 NSWLR 337 at 341-5; Shanemist Pty Ltd v Denmac Nominees Pty Ltd [2003] QSC 373, [26]-[30]; Australia and New Zealand Banking Group Ltd v Bragg (No 3) [2017] NSWSC 208, [81]-[82].
[118] [2013] WASC 364, [255]-[259].
[119] Karam v ANZ Banking Group Ltd [2001] NSWSC 709, [406] and the authorities there cited, including Grant v John Grant & Sons Pty Ltd [1954] HCA 23; (1954) 91 CLR 112 at 125 (where Dixon CJ, Fullagar, Kitto and Taylor JJ referred with approval to the statement from Story in Equity Jurisprudence that, "the court restrains the instrument to the purposes of the bargain and confines the release to the right intended to be released or extinguished").
[120] Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 at 676.
[121] [2004] NSWCA 181, [63].
[124] See Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd [2017] VSCA 51; (2017) 118 ACSR 592 at 606-9 [49]-[59], 611-3 [74]-[79].
[125] Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd [2017] VSCA 51; (2017) 118 ACSR 592 at 609 [59].
[126] Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214, [5]-[6].
[128] Clarke (as Trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (Receivers and Managers Appointed) (in liquidation) [2014] VSC 516, [132].
[129] See Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd [2017] VSCA 51; (2017) 118 ACSR 592 at 606-9 [49]-[59].
[130] Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214, [31]-[32], [35], [37], [56].
[131] See Bendigo and Adelaide Bank Ltd v Gaedtke [2017] QDC 202; ABL Custodian Services Pty Ltd v Kunz [2016] SADC 145, [172].
[138] See Offshore Oil NL v Southern Cross Exploration NL (1985) 3 NSWLR 337 at 342.
[139] See e.g. Australia and New Zealand Banking Group Ltd v Bragg (No 3) [2017] NSWSC 208, [78], [80].
[140] Clarke (as Trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (Receivers and Managers Appointed) (in liquidation) [2014] VSC 516, [126]-[132].
[141] Bendigo and Adelaide Bank Ltd v Lonergan [2018] VSC 357, [31].
[142] Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd [2017] VSCA 51; (2017) 118 ACSR 592 at 608 [57].
[143] [2011] FCA 541, [26].
[144] Clarke (as Trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (Receivers and Managers Appointed) (in liquidation) [2014] VSC 516, [101].
[145] Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214, [32], [58]-[59].
[146] [1976] 1 NSWLR 669 at 676.
[147] [2004] NSWCA 181, [63].
[148] Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd [2017] VSCA 51; (2017) 118 ACSR 592 at 606-9 [49]-[59].
[149] Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214, [38]; see also Bendigo and Adelaide Bank Ltd v Lonergan [2018] VSC 357, [30]-[31].
Burkett
Bendigo and Adelaide Bank Ltd
COURTS AND JUDICIAL SYSTEM - Consequences of being a group member - Clarke (as Trustee of the Clarke Family Trust) v Great Southern Finance Pty Ltd (Receivers and Managers Appointed) (in liquidation) [2014] VSC 516 - Byrne v Javelin Asset Management Pty Ltd [2016] VSCA 214 - Bendigo and Adelaide Bank Ltd v Pekell Delaire Holdings Pty Ltd (2017) 118 ACSR 592; [2017] VSCA 51 - Timbercorp Finance Pty Ltd (in liq) v Collins (2016) 259 CLR 212.
DEEDS AND OTHER INSTRUMENTS - AGENCY - Whether application form for managed investment scheme purporting to confer a power of attorney was executed as a deed - Requirement that deed be delivered persists - Whether deed delivered - Application form a deed but not delivered - Relevant power of attorney not granted - Dean v Lloyd (1990) 3 WAR 235 - 400 George Street (Qld) Pty Ltd v BG International Ltd [2012] NSWCA 253 - Netglory Pty Ltd v Caratti [2013] WASC 364 - Powers of Attorney Act 2003 (NSW) ss 7, 8 - Conveyancing Act 1919 (NSW) s 38.
(2016) 259 CLR 212
(1990) 3 WAR 235
(2012) 246 CLR 498
(1999) 195 CLR 636
(2009) 73 NSWLR 404
(2003) 28 WAR 124
(1985) 2 NSWLR 361
(1991) 3 WAR 235
(2007) 209 FLR 233
(2016) 52 VR 610
(1987) 162 CLR 221
(2008) 232 CLR 635
(1992) 175 CLR 353
(1985) 160 CLR 583
(1985) 3 NSWLR 337
(1954) 91 CLR 112