Plaintiff v Defendants

3 The reinstatement application was filed on 10 February 2022. It was common ground that by that time the caveats had been removed, one of the properties had been sold and the plaintiff had applied for his costs to be taxed by the Costs Court. The Costs Court proceeding is on hold awaiting the outcome of Ms Courtney's reinstatement application.

4 The plaintiff opposed Ms Courtney's reinstatement application. The second defendant did not participate in the hearing of Ms Courtney's application.

5 For the reasons that follow, I have refused Ms Courtney's reinstatement application.

Material and evidence relied upon by the parties

6 Ms Courtney, in addition to her oral evidence, relied upon her affidavits sworn 23 January 2022, 10 February 2022, 16 March 2022 and 19 April 2022.

7 The plaintiff, in addition to the oral evidence of Ms Grech and Mr Efron relied on three affidavits affirmed by Srishti Mahant, the plaintiff's solicitor, affirmed 24 March 2022, 22 April 2022 and 15 July 2022 respectively.

8 Ms Courtney's evidence was that she was aware that the proceeding involved the plaintiff's application to remove caveats she had lodged over the South Yarra and Lorne properties. She agreed that she had retained Mr Efron as her solicitor for the proceeding and that he remained her solicitor until October 2021 when Ms Courtney terminated his retainer.

9 Ms Courtney said that up until January 2022 she believed the proceeding was still on foot and that her caveats remained in place. She said that in late December 2021, at which time she understood her belongings remained in the South Yarra and Lorne properties, she saw her wedding dress and wedding band in shops in South Yarra and Windsor, Victoria respectively. This discovery caused Ms Courtney to contact the Court to enquire into the proceeding and in January 2022 she was provided with a copy of the Court's order of 29 January 2021.

10 Ms Courtney's evidence was that she had not instructed Mr Efron to consent to the removal of the caveats. She said that while Mr Efron had given her legal advice that the caveats were not maintainable, Ms Courtney did not accept that advice and instructed Mr Efron 'to leave the caveats on'.

11 Ms Courtney said that she was not aware that the proceeding had been listed for hearing commencing 1 February 2021. Her evidence was that the only contact she had with her lawyers between late January 2021 and January 2022 was when she informed Mr Efron on 3 October 2021 that she was terminating his retainer and requested that he file a notice of ceasing to act. Ms Courtney said that during the entirety of that time she believed the caveats were still in place and was unaware of the Court's orders of 29 January 2021.

12 Under cross-examination Ms Courtney's evidence was that:

(a) from the time she withdrew her instructions from Mr Efron she did not engage another lawyer to act for her, did not take any steps in the proceeding herself and did not make any inquiries of the Court as to the status of the proceeding until January 2022;

(b) from mid-January 2021 Mr Efron's advice to her was that the caveat over the South Yarra property was not maintainable and that the caveat over the Lorne property was only 'arguably enforceable';

(c) she disputed that emails sent to her from Mr Efron's assistant, Ms Grech, were sent on Mr Efron's behalf;

(d) she did not know that Mr Efron would not continue to act for her in the proceeding if she wished to maintain the caveats and that he was unable to find a barrister prepared to go to court to argue that Ms Courtney had a caveatable interest in the South Yarra property, notwithstanding an email from Ms Grech dated 27 January 2021 to this effect;

(e) she did not send an email to Mr Efron dated 27 January 2021 stating, 'Graeme if you believe its (sic) in my best interest to remove [the South Yarra] caveat then do so, I myself disagree, Regards Kathy Courtney';

(f) she did receive an email from Mr Efron on 27 Janaury 2021 at 1:50 pm confirming her instructions to remove the caveat from the South Yarra property;

(g) she did not attend a meeting with Mr Efron at his office on 29 January 2021 at which she gave Mr Efron instructions to enter into the consent orders to remove all three caveats as ultimately made by the Court on 29 January 2021;

(h) she did not receive an email from Ms Grech on 11 March 2021 at 3:19 pm forwarding an email from the plaintiff's solicitor together with a copy of the plaintiff's solicitor's tax invoice and the Court's order of 29 January 2021;

(i) she was unaware of her liability to pay the plaintiff's costs of the proceeding because as far as she was aware the caveats were still in place;

(j) she did not send the email from her email account to Ms Grech on 11 March 2021 at 4:11 pm saying, "No" and that the email was created by the plaintiff's solicitor;

(k) she did not recall the email from Mr Efron's assistant dated 19 March 2021 seeking her instructions on how to respond to the plaintiff's solicitor's advice that in the absence of any agreement on costs the plaintiff would apply to have his costs taxed;

(l) she did not recall and did not receive Mr Efron's letter dated 1 April 2021 in which he confirmed that pursuant to Ms Courtney's instructions he executed the consent orders which the Court made on 29 January 2021;

(m) she did not receive an email from Mr Efron's assistant on 29 April 2021 attaching a copy of updated orders, correcting the Court's original order of 29 January 2021;

(n) she did not receive another email from Mr Efron's assistant on 29 April 2021 at 4:20 pm resending the email of 1 April 2021 which attached Mr Efron's letter of that date;

(o) she did not send the email from her email account to Mr Efron on 28 October 2021 at 7:06 pm instructing Mr Efron to reinstate all caveats over the South Yarra and Lorne properties; and

(p) she did not receive the email from Mr Efron's assistant on 29 October 2021 informing her that pursuant to her instructions consent orders had been made by the Court on 29 January 2021 and attaching Mr Efron's letter of 1 April 2021.

13 Mr Efron's evidence was that Ms Courtney had difficulty accepting his legal advice. He said that prior to receiving Ms Courtney's instructions on 27 January 2021 to remove the caveat from the South Yarra property, Ms Courtney repeatedly made clear that she did not accept that the caveat was legally unsustainable. Mr Efron said that on receiving Ms Courtney's instructions he wrote to the plaintiff's legal representative on the same day informing them of Ms Courtney's instructions to withdraw the caveat over the South Yarra property and proposing to maintain one of the caveats over the Lorne property. Mr Efron made a further offer to the plaintiff on 28 January 2021. The plaintiff's legal representative provided a counter-offer on 29 January 2021. Mr Efron's evidence was that he obtained instructions on the counter-offer from Ms Courtney who was present in his office on that day. He recalled providing Ms Courtney with advice that the second caveat over the Lorne property was unsustainable because it relied on a document that was not able to be verified. He also advised her that if she did not agree to the removal of the caveats over the Lorne property she risked the Court making an indemnity costs order against her. He said Ms Courtney instructed him to agree to the plaintiff's proposed consent orders that all three caveats be removed.

14 Mr Efron said that after the Court made the orders on 29 January 2021 he could not recall when he next communicated with Ms Courtney or provided her with a copy of the orders authenticated by the Court. He said that his practice was chaotic in February and March 2021 due to his own ill health and the death of his employee solicitor. He also recalled that Ms Courtney had surgery around February or March 2021. Mr Efron recalled being told by his assistant that Ms Courtney's response to the plaintiff's request that she pay his costs was 'No'.

15 Mr Efron said that he ceased acting for Ms Courtney after he refused to comply with her request of 28 October 2021 to reinstate the caveats. He said that he caused the notice to cease acting to be filed in February 2022 in response to Ms Courtney's request that he withdraw so that she could issue an application in the proceeding.

16 In cross-examination Mr Efron was asked whether he kept any file notes of Ms Courtney's instructions, given his evidence that she frequently argued with him and did not accept his advice. Mr Efron's evidence was that he had been a solicitor for over 40 years and was not very good at keeping file notes. He agreed that in hindsight it may have been beneficial to prepare file notes but noted that much of Ms Courtney's instructions appeared from her emails to him.

17 Mr Efron was asked about Ms Courtney's email of 27 January 2021 in which she gave instructions to remove the caveat from the South Yarra property. He said that at the time he received it, having spent months advising Ms Courtney that the caveat was not legally sustainable, he thought Ms Courtney was having a 'moment of clarity'. He said he did not notice anything about the tone of the email being different from other emails from Ms Courtney.

18 Mr Efron denied that he executed the consent orders without instructions from Ms Courtney because at 27 January 2021 he had not prepared for the hearing on 1 February 2021.

19 Ms Grech is Mr Efron's administrative assistant. Ms Grech assists Mr Efron in his day to day management of files, including sending emails on his behalf and attending to filing of documents in Court. Ms Grech gave evidence that she usually took instructions from Mr Efron over the telephone which might include him dictating the terms of an email or letter that he wanted her to prepare. Ms Grech said her role did not involve providing legal advice.

20 Ms Grech said that she recalled Ms Courtney and was involved in the settlement of this proceeding. Ms Grech's evidence was that on Ms Courtney's instructions, a letter of offer was sent to the plaintiff on 27 January 2021 and a further letter of offer on 28 January 2021. Ms Grech recalled Mr Efron inviting Ms Courtney into the office to discuss a counteroffer that he had received from the plaintiff. Ms Grech confirmed that Mr Efron's diary showed a meeting with Ms Courtney on 29 January 2021. Ms Grech recalled Ms Courtney's attendance at the office although Ms Grech did not sit in the meeting. Indeed, Ms Grech's evidence was that she never sat in conferences between Mr Efron and his clients.

21 In relation to the filing of a notice of ceasing to act in February 2022, Ms Grech said that Ms Courtney contacted her by telephone and requested Mr Efron prepare her files for collection and file a notice of ceasing to act in all proceedings in which Efron & Associates acted for Ms Courtney.

22 Ms Courtney's legal representative's primary submission was that Mr Efron simply had no authority to enter into the consent order that resolved this proceeding. He submitted that, even if the Court did not accept Ms Courtney's evidence that she did not send the email of 27 January 2021 in which she gave instructions to Mr Efron to agree to removal of the caveat from the South Yarra property, Ms Courtney did not instruct Mr Efron to remove the caveats from the Lorne property. In these circumstances Mr Efron acted without express authority and, according to Ms Courtney's legal representative, without ostensible authority.

23 Ms Courtney's legal representative submitted that Harvey v Phillips (Harvey)[1] is authority that a court has power to overturn consent orders. He also sought to rely on two cases of the Supreme Court of New South Wales. The first was Dr Ghosh v Baycorp Collections PDL Aust Pty Ltd (Ghosh)[2] in which the Supreme Court of New South Wales set aside consent orders on the basis that they were entered into contrary to the instructions of the plaintiff, even though the lack of actual authority was not known to the defendant. In that case Schmidt J was satisfied that an irregularity had been established and that justice required that the Court exercise its discretion to set aside the consent orders.[3] The second was Gavan v FSS Trustee Corporation (Gavan)[4] where the judge set aside an order made by consent after finding on the evidence that the plaintiff was not properly apprised of the ramifications of the consent order and the defendant was not aware of any lack of authority to enter into the consent order. In that case the plaintiff's solicitor gave evidence that the plaintiff had not provided informed consent to the relevant order.

24 Finally, Ms Courtney's legal representative submitted that the prejudice to the plaintiff if the Court reinstated the proceeding would be minimal. I understood him to in fact be submitting that the prejudice to the plaintiff would be minimal if the caveats were reinstated. According to Ms Courtney's legal representative this is because one of the properties is still held by the estate and the other has been transferred to a related party, being the other party in a dispute with Ms Courtney over the Will the subject of the estate of which the plaintiff is executor.

25 The plaintiff submitted that there is no current proceeding involving a dispute over the Will the subject of the estate and that there would be significant prejudice to third parties if the proceeding and the caveats were reinstated.

26 Ms Courtney's reinstatement application was said to be made under the Court's inherent jurisdiction to set aside orders or the Civil Procedure Act 2010 (Vic) (CPA). Ms Courtney's legal representative did not identify any particular section of the CPA nor elaborate further on how the CPA assisted Ms Courtney's case. In these circumstances it appeared that this aspect of Ms Courtney's case was abandoned and I will not address it further.

27 The Court may, if it is satisfied of the consent of the parties who are to be bound, give judgment or make an order in terms agreed by the parties: r 59.07(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules). Where a party is not in attendance, the Court may accept a document signed by the solicitor on the record for that party: r 59.07(2) of the Rules.

28 The starting position is that a court order, regularly made and entered cannot be recalled. This rule rests on the principle of finality in litigation. The rule is subject to a number of exceptions in addition to exceptions derived from statutory provisions like those contained in the Rules that allow the amendment of orders to correct clerical mistakes or the setting aside of default judgments.[5]

29 One such exception is the principle stated in Harvey:[6]

The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.

30 That principle is said to arise from the statement of the Court in Huddersfield Banking Co Ltd v Henry Lister & Sons Ltd[7] to the effect that a consent order can be impeached not only on the grounds of fraud but also on any grounds which invalidate the agreement it expresses.

31 Ms Courtney's legal representative submitted that Harvey is authority that a court has power to overturn consent orders. This submission overstated the effect of that authority. In my view, Harvey is authority for the proposition that a consent order representing a compromise between the parties may be set aside if a ground exists to render a simple contract void or voidable or to entitle the party to equitable relief. Such a ground would exist in cases involving fraud, illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.

32 I accept the plaintiff's submission that Ghosh is not applicable to this case on the basis that it involved the application of s 73 of the Civil Procedure Act 2005 (NSW) and r 36.15 of the Uniform Civil Procedure Rules 2005 (NSW). These provisions allow the court to determine questions about compromises and settlements and to set aside a court order if it was made irregularly, illegally or against good faith. Neither provision has a corresponding provision in the CPA or the Rules. The same is true of Gavan which was decided on the basis that it was an application under r 36.15.[8] In addition Ghosh was decided on the basis of uncontested evidence that Dr Ghosh did not provide instructions to enter into the consent orders. Gavan was decided on the basis of the plaintiff's solicitor's evidence that the plaintiff did not give informed consent to the order. Those cases involved very different circumstances to this case.

33 A question arises whether, if the Court accepts Ms Courtney's case that Mr Efron signed the consent orders on her behalf without instructions, that would render the compromise between the plaintiff and Ms Courtney voidable or void. Ms Courtney's submission was that Mr Efron did not have her instructions to agree to the consent orders. She did not go so far as to submit, in terms, that the consent orders had been entered into by fraud or mistake.

34 At the time the consent orders were agreed, Mr Efron had the ostensible authority of Ms Courtney and the plaintiff could not have been aware of any issues surrounding that authority. I accept the plaintiff's counsel's submission that the question of whether Mr Efron acted beyond his authority is a matter between Ms Courtney and Mr Efron and does not form a basis, without more, upon which this Court should set aside the consent orders.

35 Even if I am wrong and Mr Efron's absence of authority would form a basis for setting aside the consent order, I am not satisfied that Mr Efron did not have Ms Courtney's authority to enter into the consent orders.

36 Ms Courtney's explanations that she: did not send the email of 27 January 2021 providing instructions to withdraw the caveat over the South Yarra property; did not provide instructions to Mr Efron to enter into consent orders to resolve the proceeding at his office on 29 January 2021; did not receive various emails from Mr Efron's office informing her the proceeding had been resolved and providing the Court's order of 29 January 2021; and only became aware that the proceeding was resolved following her inquiries of the Prothonotary in January 2022 are inherently implausible and contrary to the documentary evidence and the evidence of the other witnesses. I am unable to accept Ms Courtney's version of events.

37 I have reached this view for the following reasons. First, noting that the caveat removal application was listed for hearing on 1 February 2021, Ms Courtney had no explanation for whether the hearing proceeded and if not, what circumstances led to the hearing not proceeding. Nor was she able to plausibly explain, if the hearing did not proceed: why no orders were made; why the plaintiff did not continue to press for the caveats to be removed; or why no other steps were involved in the proceeding for the remainder of 2021.

38 Second, Ms Courtney offered no explanation for her decision to terminate Mr Efron's retainer in October 2021. It is far more plausible that she terminated the retainer when Mr Efron refused to reinstate the caveats at her request.

39 Third, Ms Courtney could not explain, if she thought the proceeding was still on foot, why she took no action in the proceeding after October 2021. She did not file an appearance. She did not ask Mr Efron for the file and she did not contact the Court to ask when the proceeding was next before the Court. Nor did she seek to retain another solicitor. This inaction is consistent with knowledge that the proceeding was no longer on foot.

40 Fourth, Ms Courtney's relied upon the difference in tone and language in the email of 27 January 2021 as proof that she did not write the email which instructed Mr Efron to agree to remove the caveat over the South Yarra property. I did not detect a marked difference in language or tone from Ms Courtney's other email communications. Additionally, there was no evidence before the Court of any other person having access to Ms Courtney's email address. Other than a bald denial, Ms Courtney offered no explanation about how the email might have come to be written in the days before the hearing of the proceeding when her lawyer was seeking her instructions.

41 Fifth, Ms Grech's evidence that Ms Courtney attended Mr Efron's office on 29 January 2021 was consistent with the evidence of Mr Efron's diary for that day. It was also consistent with Mr Efron's evidence that Ms Courtney attended and provided him with instructions to remove all three caveats on 29 January 2021. Ms Grech's evidence was not seriously challenged and I accept it. The corollary of this is that I do not accept that Ms Courtney did not attend Mr Efron's office on 29 January 2021. Given the timing of this attendance, along with the evidence of the negotiations over the preceding days between the parties about the terms of the consent orders and the impending hearing, I find Mr Efron's evidence that Ms Courtney provided instructions to agree to withdraw all three caveats inherently plausible. In my view Mr Efron's evidence that he advised Ms Courtney of the problems with her case and the risk of an adverse indemnity costs order form a plausible explanation for Ms Courtney's instructions.

42 Finally, Ms Courtney's explanation for events was not supported by the documentary evidence. That evidence supports a finding that consent was reached, minute of consent signed, orders made and that Ms Courtney took no further steps because she was aware of those matters. It is simply implausible that Ms Courtney did not receive multiple emails sent to her email address from her lawyers confirming her instructions and informing her of the orders made by the Court. In circumstances where no alternative explanation was seriously offered, it was equally implausible that Ms Courtney did not send the email of 27 January 2021 providing instructions to withdraw the caveat over the South Yarra property or the email of 28 October 2021 requesting Mr Efron to reinstate the caveat over that property.

43 For the reasons given above, Ms Courtney's reinstatement application is refused. I will ask the parties to confer on the question of costs. If the parties are unable to reach agreement on costs by 16 January 2023, the matter will be relisted.

GLEN ANDREW REED (AS EXECUTOR OF ESTATE OF DAVID GRAEME COURTNEY)

KATHLEEN MARY COURTNEY (ALSO KNOWN AS KATHY MARY COURTNEY)

[1] [1956] HCA 27; (1956) 95 CLR 235 (Harvey).

[2] [2014] NSWSC 1727.

[4] [2019] NSWSC 667, [104] per Ward CJ in Eq (Gavan).

[5] Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529, 538 per Gibbs J.

[7] [1895] UKLawRpCh 64; [1895] 2 Ch 273 per Lindley LJ.