Plaintiff v First Defendant

PRACTICE AND PROCEDURE - Summary enforcement on a compromise - Whether justice can be done by the giving of summary judgment - Whether a variation to the compromise proved - Whether sufficient explanation for delay given to justify the whole of the interest sought - Whether the summons should be adjourned to enable another proceeding to be instituted - Judgment given on the summons but limited as to the interest.

1 These reasons concern the summary enforcement jurisdiction of the Court, in particular whether a breach of terms that do not contain a provision that time is of the essence may be enforced by summons in the original proceeding. In the event that I am against them on this submission, the defendants oppose the giving of judgment on the summons on the basis of an alleged variation of the terms, and for other discretionary reasons.

2 These written reasons revise and elaborate oral reasons I gave on 14 March 2019. On that day, I ruled that the summons was not incompetent and I would give judgment for the plaintiff on the summons. I then heard the second and third defendants further in relation to the payment of interest, and the grant of a stay. As a result of those further submissions, I limited the judgment on interest and granted a fourteen day stay.

3 In this proceeding the plaintiff sought to recover by writ and statement of claim on a loan to the first defendant, guaranteed by the second and third defendants and secured by mortgage over two properties. At some point, the first defendant went into liquidation, and the proceeding continued against the second and third defendants. The proceeding was listed for trial to commence on 31 July 2017. On 20 July 2017 the Court was provided with proposed consent orders dated 18 July 2017 disposing of the proceeding, signed by the solicitors for the plaintiff and second defendant, and, apparently, by the third defendant personally. After confirming the consent of the third defendant to the proposed orders, on 25 July 2017 her Honour Justice Kennedy made consent orders in the terms proposed. Those orders ('Orders') provided as follows:

1. The proceeding is struck out with a right of reinstatement to the Plaintiff.

4 The parties sought those orders on the basis of a settlement agreement between the plaintiff and second and third defendants dated 12 July 2017 ('Terms').[1] The second and third defendants each had solicitors on the record at the time of the Terms and the Orders. Amongst other things, the Terms made provision for the payment of a compromised sum by the second and third defendants ('Settlement Sum') and set out a timetable for the payment of the Settlement Sum. Clauses 1, 2, 5, 7 and 8 of the Terms provide as follows:

1. Settlement Sum

Robertson and Mrs Robertson promise to pay Wang the sum of $600,000.00 (Settlement Sum). The obligation to pay under this agreement by Robertson and Mrs Robertson shall be jointly and severally.

2. Payment of Settlement Sum

(a) Robertson and Mrs Robertson will pay Wang the Settlement Sum by cheque or cheques made payable to Prudentia Legal, and delivered to Prudentia Legal at Level 4, 466-468 Little Lonsdale Street, Melbourne VIC 3000 as follows:

(i) $20,000 by 20 July 2017;

(ii) $180,000 by 1 January 2018;

(iii) $100,000 by 31 March 2018;

(iv) $100,000 by 30 June 2018; and

(v) the balance of the Settlement Sum in the sum of $200,000 by 1 January 2019.

5. Release by Robertson and Mrs Robertson of Wang

Upon payment of the Settlement Sum in accordance with clause 2, Robertson and Mrs Robertson release and forever discharge Wang from any claim, cost, damages, debt, expense, liability, loss, allegation, suit, action, demand, cause of action or proceeding of any kind and any and all liability whatsoever which Robertson and Mrs Robertson now have, at any time had, may have or but for this Agreement could or might have had against Wang in relation to or arising from:

(a) the Loan;

(b) the allegations, circumstances or matters recited in this Agreement or anything in any way related to them; and

(d) [sic] the subject matter and the allegations made in the Proceeding.

7. Absolute bar

This agreement may be pleaded and tendered by any party as an absolute bar and defence to any proceeding brought in breach of the terms of this Agreement.

8. Consequences of Default

In the event that Robertson or Mrs Robertson fail to pay the Settlement Sum in accordance with clause 2, Robertson and Mrs Robertson irrevocably consent to:

(a) the Proceeding being reinstated and judgment being entered against them in the Proceeding for:

(i) payment of $905,813.43 plus interest from 8 July 2017 at the penalty interest rate fixed by the Attorney General under section 2 of the Penalty Interest Rate Act 1983 and costs on a full indemnity basis; and

(ii) an order for possession of the property at 10 Delhi St, Mitcham, Vic, 3132, being the whole of the land described in Certificate of Title Volume 10603 Folio 202; and

(b) Wang producing this Agreement to the Court in the Proceeding as conclusive and irrevocable evidence of the consent of Robertson and Mrs Robertson to judgment being entered against them in the Proceeding and they agree not to defend or otherwise interfere with any application for judgment in the Proceeding; and

(c) an affidavit sworn by a solicitor engaged by Wang being sufficient and conclusive evidence of a failure by Robertson and Mrs Robertson to pay the Settlement Sum in accordance with clause 2 and the quantum of amount outstanding then owing by Robertson and Mrs Robertson to Wang pursuant to clause 2 and the quantum of indemnity legal costs incurred on behalf of Wang.

5 Clause 4 contains a release by the plaintiff on payment of the Settlement Sum in similar terms to clause 5.

6 By summons filed 7 January 2019 (mistakenly dated 7 January 2018) the plaintiff seeks that the proceeding be reinstated and judgment for debt be entered in his favour pursuant to clause 8 of the Terms. The plaintiff's case is that the second and third defendants have not made any payment to him pursuant to the Terms. The plaintiff does not seek the order for possession identified in clause 8(a)(ii) as that property has now been sold by its first mortgagee. The plaintiff has been informed by that first mortgagee that there is no amount remaining to satisfy its mortgage as second mortgagee. The second and third defendants (henceforth 'the defendants') do not dispute that they entered into the Terms or that they have not made any payment.

7 The defendants submit that the summons is incompetent because the Terms do not contain a clause that time is of the essence. They submit that the plaintiff is required to commence a fresh proceeding for breach of the Terms, which they would then defend on the basis of a variation. The plaintiff would be at liberty to seek summary judgment in that fresh proceeding if he contended that the defence had no real prospect of success.

8 As this submission was put for this first time in oral argument, I permitted the parties to provide authority by the close of business on 13 March 2019. Both have done so. Both rely on Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd ('Roberts').[2] The plaintiff submits that this case in fact supports his proposition that judgment can be sought on summons, rather than supporting the converse position advanced by the defendants.

9 In addition to Roberts, the defendants rely on an English decision, Green v Rozen,[3] a single judge decision of the Queen's Bench, and a single judge decision of this Court, Fraser v Elgen Tavern Pty Ltd and ors ('Elgen Tavern').[4]

10 The defendants submit that the times for payment in the Terms have been varied by agreement made between the second defendant, Mr Robertson, and an agent of the plaintiff, a Mr Barry Leong. They rely on Mr Robertson's affidavit in that regard, in which he deposes to a telephone conversation with Mr Leong on or about 30 January 2019. Mr Robertson's evidence is that Mr Leong told him that if he (Mr Robertson) produced to the plaintiff a copy of the signed contract of sale relating to his purchase of certain land and timber, and proof of payment of the deposit, then the plaintiff 'would postpone the upcoming court hearing in this proceeding to allow me to complete the transactions and achieve a financial outcome in resolution of his claims'.[5] Mr Robertson exhibits the email and documents he says that he sent in satisfaction of this request.

11 On the basis of this evidence, and should I be of the view that the summons is competent, the defendants seek an adjournment of the summons to a date after the settlement period for the purchase of the land and timber. Mr Robertson deposes elsewhere in his affidavit that the contract for sale is for $5,050,000 and that '(c)ontemporaneously, I made a contract for the sale of the timber for the price of AUD $5.9 million'.[6] The defendants' case appears to be that the difference would be sufficient to pay out the plaintiff.

12 The plaintiff denies that Mr Leong is his agent. He does concedes that Mr Leong informed him about Mr Robertson's 'involvement in a project being the NSW property' and that he has received emails from Mr Robertson, forwarded by Mr Leong, including the email that the Mr Robertson says was in satisfaction of the variation to the time for payment.[7] The plaintiff denies that he ever suggested or agreed to postpone the Court hearing to enable completion of these other transactions.

13 The defendants rely on the plaintiff's delay in enforcing the Terms. They also express concern that they will not be able to bring a proposed action against the plaintiff for negligence as second mortgagee in the protection of their rights in respect of the sale of the secured property if judgment is entered.

14 In relation to the first of these matters, the plaintiff relies on the explanation given by his solicitor. One part of that explanation is that the plaintiff waited until sale of the secured property by the first mortgagee, and that sale took some time. The solicitor deposes that it was not until November 2018 that the secured property was finally sold, and the first mortgagee then informed him that there was no balance after repayment of the debt due to the first mortgagee. The plaintiff then gave instructions in December 2018 to reinstate this proceeding, and seek judgment.

15 The solicitor also deposes that in late July 2017, i.e. shortly after the Terms were signed and the first instalment was due and not paid, enquiries were made of Mr Robertson's solicitor, which were met with excuses and requests for extension. He deposes further that 'throughout 2018' Mr Robertson has contacted the plaintiff directly 'through a middle person named Barry' with promises of payment on the basis that he was awaiting payment from other transactions to repay the plaintiff.[8]

16 In relation to the second matter, the plaintiff submits that the entry of judgment in this proceeding would not be a bar to a fresh proceeding in relation to events that arose after the signing of the Terms.

17 I do not consider that the defendants are correct in their assertion that the summons is incompetent i.e. that the Terms can only be enforced by a fresh proceeding. In my view, the authorities establish that the Court has power to give judgment in this summary fashion on a compromise where satisfied that it is just to do so. It is not essential that the compromise contain a provision that time is of the essence. The Court may decline to exercise that jurisdiction in an appropriate case and require a fresh proceeding.

18 A convenient starting point as to the circumstances in which judgment may be sought in a proceeding for breach of a compromise of the proceeding is contained in that portion of the joint judgment of Lowe and O'Bryan JJ in Roberts, which forms the headnote to the case. As noted, both parties rely on this case for their competing submissions. The relevant portion of their judgment is as follows:

Both on principle and in accordance with Victorian authorities we have no doubt that in certain simple cases an agreement for the compromise of an action may be enforced on a motion for judgment in the action itself in accordance with the agreed terms. If the action itself is still on foot, not having been stayed or discontinued or struck out or its normal progress otherwise interrupted; and if the claim in the action is for payment of a sum of money for one of the common counts, such as work and labour done, and the compromise is upon terms that the defendant pay to the plaintiff an agreed amount at an agreed date in full settlement of the plaintiff's claim in the action, and with an agreement by the defendant that in default of payment the plaintiff may enter judgment for that amount and that the defendant will consent to such judgment, we entertain no doubt that this Court has jurisdiction on motion in the action to direct that judgment be entered for the agreed sum if the defendant makes default in payment-even if at that stage the defendant is, contrary to her agreement, no longer a consenting party.[9]

19 The first of these requirements, as stated in that extract, is that the action be still on foot. In that case, the proceeding was still on foot. In this, the proceeding was struck out by consent but with a right of reinstatement. The right of reinstatement appears in the Terms, the proposed consent orders, and the Orders as made. The defendants submit that this is all to nought if reinstatement as a matter of law is not permitted, which is to essentially restate their proposition that a fresh proceeding is required. I consider the reservation of a right to reinstate to be sufficient to satisfy this first requirement. Lowe and O'Bryan JJ noted that they did not seek to exhaustively set out the circumstances in which judgment on application in the proceeding might be appropriate.[10] In the event that that became necessary in another case, they noted that the judgment of their fellow judge, Smith J, 'cannot fail to be of great assistance'. Indeed, subsequent decisions by the Court of Appeal that I will discuss in a moment have relied on, and endorsed, the longer judgment of Smith J.

20 In his concurring judgment, Smith J expressly recognised that judgment on motion in the action (as the terminology was then) may be appropriate notwithstanding that the proceeding has been stayed or struck out. He noted that 'if the action has been stayed or struck out, then it is necessary that the stay should be lifted, or the action reinstated as an action for trial, before the agreement is enforced on motion in the action.'[11]

21 Each of the other requirements specified by Lowe and O'Bryan JJ are here satisfied as follows:

(i) The claim in the action is for payment of a sum of money for one of the common counts - the claim in this proceeding was for payment of a guaranteed debt on default in repayment of a loan.

(ii) The compromise is on terms that the defendant pay to the plaintiff an agreed amount at an agreed date in full settlement of the plaintiff's claim in the action - clauses 1, 2 and 4 of the Terms satisfy this requirement. The requirement is that the times for payment be stipulated, not that time be of the essence.

(iii) An agreement by the defendant that in default of payment the plaintiff may enter judgment for that amount and the defendant will consent to such judgment - clause 8 satisfies this requirement.

22 Thus the plaintiff's application, once the proceeding is reinstated, falls squarely within even the limited circumstances to which Lowe and O'Bryan JJ confined themselves.

23 It is plain from Roberts that it is no longer possible in Victoria to rely on Green v Rozen. In that English case Slade J held that judgment could not be entered in the proceeding for breach of terms of settlement as the original cause of action had been superseded by the new agreement between the parties comprised by those terms. He held that the court's jurisdiction in respect of the original proceeding had ended, and a fresh proceeding alleging breach of the terms was required. However, in Victoria the Full Supreme Court in Roberts and the Court of Appeal in subsequent decisions have not followed Green v Rozen. Indeed, it was precisely because of Green v Rozen that the Full Supreme Court in Roberts invited the parties to address it on the jurisdiction to enter judgment for breach of a compromise in the original action.[12] As noted above, the Full Court held that in an appropriate case, the Court has that jurisdiction and declined to follow Green v Rozen.

24 In his lengthy examination of the power, Smith J in Roberts acknowledged that there are instances when the jurisdiction should not be exercised. He stated:

In deciding whether justice can be done under the summary procedure the Court, of course, needs to consider a variety of matters involving questions of degree. These, I think, must include the extent to which extraneous matters are involved, how substantial are the questions to be determined, to what extent questions of credibility are likely to arise, and whether pleadings and discovery may be desirable.[13]

25 Roberts has been approved and applied on multiple occasions since, significantly by the Court of Appeal. In Seachange Management Pty Ltd v Pital Business Pty Ltd ('Seachange')[14] after examination of the authorities, commencing with the judgment of Smith J in Roberts, Maxwell P and Nettle JA (as he then was) concluded:

In summary, therefore, the net effect of the authorities to this point seems to be that, although the power summarily to enforce a compromise is discretionary and is wider now than once was the case, it is not to be invoked unless the court is 'clearly satisfied that justice can be done'; and whether justice can be done is a question of degree. Consistently with the equitable origins of the power, one must weigh among other competing considerations the extent to which enforcement would involve extraneous matters, how substantial the questions to be determined as a precursor to enforcement may be, and procedural considerations like the desirability of pleadings and discovery and substantial cross-examination.[15]

26 In that case, the trial judge had held that justice could be done by summary enforcement i.e. without pleadings, further discovery or oral evidence, because the issues raised were questions of law capable of being dealt with under a summary procedure. The Court of Appeal held that the trial judge did not err in reaching that conclusion on the material before him, and would have upheld the exercise of the summary jurisdiction had the appellant's case not changed on appeal. There is no suggestion in the judgment that the terms there in question contained a provision that time was of the essence.

27 In a subsequent case, Barratt v Rees,[16] the Court of Appeal arguably went further, in declining to interfere with the exercise of the summary jurisdiction notwithstanding disputed questions of fact. The Court again considered the judgment of Smith J in Roberts, quoting the portion of his judgment I quote above, and noted the portion quoted above from Seachange. In that case, a trial judge gave judgment for the defendants, by application on summons in a probate proceeding, on a compromise between the parties to the proceeding. The appellant plaintiff argued on appeal that the trial judge should have required that the defendants commence a fresh proceeding to enforce the compromise, which the plaintiff would defend on the basis of a unilateral mistake. The plaintiff's case was that she had not complied with the terms of the compromise because she mistakenly believed that certain valuable items were still within the estate when she signed the terms, when in fact (so she contended) the defendants had already and unlawfully removed them. She submitted that the summary procedure was inappropriate in view of her defence to enforcement, and that if the compromise was enforced she would be prevented by the releases contained within it from pursuing a claim for return of the items against the defendants. The defendants denied the allegation of unlawful removal and argued that the trial judge was entitled to conclude, as she did, that there was no reasonable basis for the alleged belief.

28 The Court of Appeal noted that 'ordinarily' evidence before the trial judge that the deceased had been in possession of valuable assets which could not be located after his death, and that persons had removed items from his home after his death, would require a trial and the opportunity for cross-examination. However, the Court held that the trial judge was entitled on the basis of established matters, being the history of the proceeding and the plaintiff's conduct in seeking to be appointed administrator, to conclude that the plaintiff did not believe the items were part of the estate.

29 Barratt v Rees is thus an illustration that the summary procedure may be utilised notwithstanding a dispute on the facts. It is also noteworthy, although this is not a matter of much comment in the judgment itself, that summary enforcement of a compromise was upheld although the compromise in that case did not include provision for the entry of judgment in default. Nor did it contain any provision that time was of the essence in payment of the agreed amount. A circumstance to which the Court did give weight was that the defendants had already implemented their side of the bargain established by the compromise.

30 The defendants rely on Elgen Tavern,[17] a decision of Murphy J, formerly of this Court. In that case, a claim in negligence was settled on terms that stipulated payment by a certain date. The terms contained a provision that time was of the essence. The defendants tendered payment shortly after the expiration of this period, and the plaintiff then claimed that because payment had not been made by the due date the defendants had repudiated the agreement and so he was entitled to return to his original claim. The defendants sought to enforce the settlement by application in the proceeding.

31 It may be that Elgen Tavern is the source of the defendants' submission that the terms must contain a provision that time is of the essence to be enforceable by summons in the proceeding. As noted, the terms in that case did contain such a provision, and action was taken in the original proceeding to enforce them. There is, however, nothing in the case to suggest that a provision that time is of the essence is critical to the utilisation of the summary procedure. Indeed, as the judge noted, the right of the defendants to make application in the proceeding for performance of the settlement i.e. to invoke the Roberts procedure was not even argued before him.[18] The case cannot then be authority for the proposition that a time is of the essence provision is a pre-requisite for the summary procedure.

32 In fact, to the extent the trial judge made comment on the summary procedure, his observations suggest that, had the issue been argued, he may have regarded the summary procedure as not appropriate, but for reasons distinct from the presence or absence of a time is of the essence provision. He noted that Roberts turned on a settlement that contained an express provision entitling the plaintiff to move for judgment on breach i.e. precisely the situation here, but which did not form part of the terms before him. Further, he noted that the terms before him introduced undertakings on the part of the plaintiff's solicitor, who was not a party to the action, and so the agreement may be one that was not suitable for summary enforcement.[19]

33 In the absence of argument on the appropriateness of the summary procedure, Murphy J heard the notices of motion for enforcement, and dismissed them, on their merits. He held that the settlement agreement did not constitute a discharge by the plaintiff of the defendants from the cause of action in the proceeding, with the result that the plaintiff could sue only on the settlement for breach of its terms. This was because, on construction of the agreement, the release of the defendants was only to become effective on payment of the sum within the stipulated time, and not on the mere promise to pay it. Murphy J held that the stipulation as to time was a condition of the agreement,[20] and this reinforced him in his view that it was payment, not the mere promise to pay, that the plaintiff agreed to accept in full settlement of his claim.[21] It also meant that the plaintiff was entitled to, and had accepted, the defendants' repudiation of the terms, with the result that the action remained on foot and the plaintiff was entitled to pursue it.[22]

34 In short, Elgen Tavern is not authority for the proposition that a time of the essence provision is necessary for the utilisation of summary enforcement. That proposition is not supported by any other authority to which I have been directed, and is inconsistent with the analysis of Smith J in Roberts, which has been followed in subsequent Court of Appeal decisions. I conclude that the Court has power to give judgment for the plaintiff on summons in the original proceeding.

35 The issue then becomes whether justice can be done by exercising this jurisdiction, given the matters raised by the defendants, in particular the disputed variation.

36 Judgment can only be given on the Terms if they remain the agreement between the parties. The defendants assert that the Terms have been varied by an agreement reached between the second defendant and a Mr Barry Leong, as agent for the plaintiff. The defendants assert that this variation was arrived at in the course of a telephone conversation between Mr Leong and the second defendant on or about 30 January 2019, and completed by the supply by the second defendant of certain requested documents to Mr Leong by email on that day.

37 This alleged variation thus depends on establishing that Mr Leong was the agent for the plaintiff. It also requires, as a matter of contract law, certainty of terms i.e. that the terms of the offer are sufficiently certain and were accepted.

38 The plaintiff denies that Mr Leong is his agent. He says that he did not give him authority to act on his behalf.[23] He does concede, however, that he received emails from the second defendant forwarded to him by Mr Leong, and at least one of the documents that the second defendant says was requested by the plaintiff, which he then emailed to Mr Leong, being the contract of sale for his purchase of the NSW property. Further, the plaintiff refers to emails forwarded to him by Mr Leong from the second defendant 'at times' and in the plural i.e. possibly over a period of time, not just in late January 2019, and not limited to the email that the second defendant says completed the variation. The plaintiff does say that '(m)ost of these emails would be sent to me unilaterally from Leong and not upon my request',[24] but he does not explain the capacity in which Mr Leong did this, if not as his agent. The absence of an alternative explanation for Mr Leong's role, and the repeated exercise of forwarding emails from the second defendant, lend weight to the defendants' contention that Mr Leong was at least apparently authorised to act as the plaintiff's agent.

39 The solicitor for the plaintiff, Mr Zhu, refers, on instructions, to the second defendant contacting the plaintiff directly 'throughout 2018', 'through a middle person named Barry' in which communications the second defendant 'continuously' made promises of payment.[25] This also lends support to the defendants' proposition that Mr Leong had at least the ostensible authority of the plaintiff to discuss payment.

40 If this were the only respect in which the defendants' case for a variation was not established on the evidence before me, I would decline to exercise the summary jurisdiction. I do not consider that the question of agency can be properly determined on the evidence before me. If the variation was otherwise established, or even substantially established, I would consider that a fresh proceeding was required, in which the parties' respective contentions could be pleaded, discovery ordered and evidence subject to cross examination given, including evidence from Mr Leong.

41 For the purpose of assessing other elements of the defendants' case on variation, I assume that Mr Leong was at least apparently authorised to act as agent for the plaintiff. I consider that justice can be done in relation to the defendants' assertion of variation, leaving aside the question of agency, on the evidence before me. This is because the defendants must show that the terms of the alleged variation were sufficiently certain to constitute a variation to the Terms. This is not a matter that requires further investigation, because on the second defendant's evidence, the terms of the variation are entirely within his knowledge, and so capable of being deposed to in this application. My conclusion is that on the evidence before me the defendants have not established the alleged variation, even assuming Mr Leong to have been the plaintiff's agent. It is on that basis that their case fails.

42 The second defendant deposes that Mr Leong was aware of his involvement in other property transactions that, on completion, could generate funds to repay the plaintiff by way of email communication with him 'in or about November 2018'.[26] He exhibits one such email, dated 6 November 2018, to Mr Leong headed 'Update' in which he states that he has sold 'the timber' and 'my lawyer will (on the second defendant's return from China) contact Mr Wang to arrange the final settlement'.[27] The times for payment under the Terms had all expired, and I accept the plaintiff's submission that this email does not in itself constitute an offer to vary them.

43 The next emails from the second defendant to Mr Leong that the second defendant exhibits are dated 23 January 2019, i.e. after the issue and service of the summons on 7 January 2019. The first, sent at 3.11pm, asks Mr Leong to tell the plaintiff that the second defendant has 'concluded the sale' of certain timber; that the timber will be sent by ship to China in March and 'I will receive the cleared funds to be able to repay Mr Wang'.[28] I accept the plaintiff's submission that this does not constitute any offer to the plaintiff or even any express request to delay enforcement. The second, sent at 5.54pm on that day, states in the opening line 'copy of executed contract' (although no such attachment to this email is exhibited) and says that 'Wang can call Jerry if he needs proof, more than the contract'. Again, this email does not set out the terms of any proposed variation or time period for delay in enforcement.

44 The second defendant does not in fact rely on these emails to show a variation. He says that the variation was formed by an offer from Mr Leong, for the plaintiff, made when Mr Leong rang him on or about 30 January 2019. The offer was in these terms:

if the second defendant provided a copy of the signed contract of sale 'pertaining to the purchase of the New South Wales rural property and the timber' and proof of payment of 'any amount towards the deposit on the purchase of the rural property and the timber' Wang would then 'postpone the upcoming court hearing in this proceeding to allow me to complete the transactions and achieve a financial outcome in resolution of his claims' (emphasis added).[29]

45 The second defendant says that he then sent to Mr Leong an email attaching a copy of the trust account receipt evidencing payment of '$305,000 towards the purchase of the rural property and the timber' (emphasis added), together with a copy of the executed front page of the 'contract of sale'. His counsel identifies the email he exhibits dated 30 January 2019 sent at 1.17pm as this email. The second defendant deposes that '(i)n doing this, I had satisfied all the plaintiff's requests, as advised by him through his agent Leong, to facilitate the adjournment of the hearing of this Summons to a date after the 120 day settlement period set out in the contract of sale for the purchase of the rural property and the timber' (emphasis added).[30]

46 I accept the plaintiff's submissions that the defendants have failed to prove a variation established in this way. First, the plaintiff denies making or agreeing to any such offer, and deposes that it would be illogical to do so.[31] As to the denial of any such offer, or agreement, the plaintiff's case is more probable than that of the defendants, in my view, because it seems highly unlikely that the plaintiff would offer, or agree to, a variation made in such an informal way given the care with which the Terms were drawn. The Terms were drawn by a solicitor; they are in writing; they contain explicit provisions as to the time for payment and action on default; and the default provisions are drawn with the intention of excluding any opposition to enforcement. Amongst other things, the defendants gave their irrevocable consent to the entry of judgment on default and their irrevocable promise not to defend the entry of such judgment. One would expect that any variation to the Terms would be similarly carefully considered and drawn, and at least be in writing, and this alleged variation is not.

47 Secondly, I accept that on the evidence before me, it seems commercially improbable that the plaintiff would make this offer, or agree to it. There is no evidence to show why the plaintiff, already entitled under the Terms to judgment, would agree to delay that entitlement because the defendant had committed himself to expend funds elsewhere, when those funds could otherwise be used to meet the plaintiff's entitlement at least in part. It is not impossible that there could have been some commercial advantage, but there is no evidence to that effect.

48 Thirdly, and this alone is sufficient in my view, the terms of the alleged variation are not shown to be sufficiently certain. The alleged oral offer refers to one contract of sale, apparently for both the land and the timber. Yet in his email to Mr Leong dated 30 January 2019, which the second defendant says was in acceptance of the plaintiff's offer of a variation or postponement, he sets out two purchase sums - one for the timber (for $2M) and one for the land ($3.05M). This reflects his evidence in his affidavit that the total acquisition cost for land and timber was $5,050,000.[32] Next, the alleged offer required Robertson to provide evidence of payment of any amount towards the deposit on the purchase of the land and the timber. In his email in alleged acceptance of this offer, Robertson only attached proof of payment of the deposit for the land, and no proof of payment towards purchase of the timber, if that was the subject of a separate purchase sum. It is not shown in the defendants' case how payment of the deposit on the land also constituted payment of a sum towards the purchase of the timber, if, as the email suggests, there were separate purchase sums for each.

49 Finally, there are significant evidentiary gaps in the defendants' case on this alleged variation. First, the defendants' case is that they would pay the plaintiff from the difference between the purchase price of the property and timber, and the sale price of the timber. The second defendant deposes that he exhibits a contract for the sale of the timber. In fact, no such contract is exhibited. Thus the only evidence as to a potential profit from which the plaintiff would be paid is the second defendant's assertions, in his affidavit, and in his emails of 6 November 2018 and 23 January 2019 to Mr Leong, to that effect. Next, those emails do not set out the settlement period for the purchase of the timber, if it was, as the emails may suggest, the subject of a discrete contract. Even if the settlement period for the purchase of the land is shown in the exhibited front page of the contract to be 120 days (and the copy exhibited is too blurred to allow this to be ascertained) it is not shown that the settlement period for the purchase of the timber was this same period.

50 Lastly, the purchaser of the land is not the second defendant, but a company Rubmatsca Pty Ltd. If this company is owned and controlled by the second defendant, which is what the defendants assert, then it would have been a simple matter to produce a company search to show that. No such search is in evidence.

51 For these reasons, I do not consider that the defendants have proved the alleged variation, even if Mr Leong had the apparent authority to act for the plaintiff.

52 The defendants rely on two further matters in support of their application to adjourn the summons.

53 It is plain that the plaintiff has delayed taking enforcement action. The first instalment of the Settlement Sum was due on 20 July 2017. It was not paid, and nor were any of the subsequent instalments, due on 1 January 2018, 31 March 2018 and 30 June 2018. It was not, however, until December 2018, i.e. almost six months after the final instalment was due, that the plaintiff gave instructions to commence enforcement. The summons was filed on 7 January 2019, nearly 18 months after the defendants were in default. The Terms provide for interest at the penalty interest rate from the date of the Terms on default, which has been substantially higher than the rates of at least bank interest during this period.

54 The plaintiff, by way of affidavit of his solicitor, has provided some explanation for that delay.[33] The defendants first take issue with the admissibility of that evidence. I do not think the evidence is inadmissible. Mr Zhu prefaces his evidence on delay by saying that it is given on his 'understanding and belief as the solicitor for the Plaintiff and from the Plaintiff's instruction'. Some of the explanation he then sets out relates to steps he himself took, or communications he received. That is first hand evidence and plainly admissible. To the extent that the explanation for delay relates to communications to the plaintiff directly, Mr Zhu's evidence about it is expressed to be on information and belief by way of instructions, and in any event is supported to some degree by the second defendant's own evidence.

55 However, I do not consider that the explanation for the delay is entirely satisfactory. There is, in my view, sufficient explanation for the delay in the period after 20 July 2017 to notification to Mr Zhu on 27 October 2017 that the auction of the secured property by the first mortgagee had been unsuccessful. Mr Zhu's affidavit sets out a number of steps taken during this period, and it was not unreasonable for the plaintiff to delay enforcement action, which would come at cost, until after any benefit from sale of the secured property was received. This is particularly so given that the first default in July 2017 was in relatively small sum. A period of a month after notice that no proceeds from the sale of the secured property would be immediately available to him to enable the plaintiff to consider what action to take is also reasonable. I also take into account that the initial delay from July 2017 was said to be at the request of the second defendant, and this is supported by the email dated 30 July 2017 exhibited to the second defendant's affidavit.

56 The explanation for delay in 2018 is scant, however. The evidence as to the plaintiff's consideration of enforcement in 2018, after substantial instalments were due on 1 January 2018 ($180,000), 31 March 2018 ($100,000) and 30 June 2018 ($100,000) is very general. The solicitor deposes that 'updates were sought from the solicitor for the first mortgagee (of the secured property) in 2018'[34] and that 'throughout 2018'[35] the second defendant contacted the plaintiff directly through a 'middle person named Barry' and made promises to pay, after being himself being paid for other projects. There is no evidence as to when the 'updates' were sought, what the solicitor was told, and why this was considered sufficient to delay enforcement. Similarly, there is no specificity as to when the second defendant contacted the plaintiff to seek delay. The evidence in the defendants' case exhibits emails to this effect only from November 2018.

57 On balance, I do not consider the absence of complete explanation for delay prior to the issue of this summons to be a reason to further delay the giving of judgment, particularly as the defendants' case confirms that some at least of this delay was at the request of the second defendant. In other words, the defendants have already been given the benefit of some delay at their request. However, I do accept the defendants' submission that it would not be just to award the plaintiff interest for the whole of the period of default. I will allow interest pursuant to the Terms until a month after notification to the plaintiff that the secured property had not sold at auction i.e. to 27 November 2017.

58 The second matter relied upon by the defendants to seek further time is their assertion that they wish to take action against the plaintiff for his alleged failure to properly protect their interests in respect of the sale of the secured property by the first mortgagee. Counsel for the defendants did not spell out in detail why such action would be prevented if judgment were entered now on the Terms, but it seems the concern may be that judgment, or perhaps that the Terms themselves by way of the release on payment of the Settlement Sum, would prevent a further proceeding.

59 I do not think that either concern is shown to be well founded. The attempted sale of the secured property at auction on 7 October 2017, and its eventual sale by private treaty in November 2018, both arose after the date of the Terms. Any failure by the plaintiff to observe a duty to the defendants in respect of either of those events, or anything in between them, would thus not be caught by judgment on the Terms. In this analysis, I consider the date of the Terms to be the relevant date, not the date of this judgment. On this analysis, an Anshun estoppel would not apply, and no res judicata or issue estoppel could arise, as the issues in such a negligence action do not arise on this summons.

60 If I am wrong in that analysis, and it is the date of this judgment that would determine whether an Anshun estoppel would arise, the defendants have been at liberty to bring the proposed proceeding since November 2018 (the sale of the secured property), and have not done so, despite being on notice of this application since January 2019. It would not be an appropriate exercise of discretion to afford them further time now, when there is no evidence that such an action is imminent.

61 If the concern is that the defendants would be prevented from commencing such an action by virtue of the release in the Terms, once judgment is entered on the Terms, then the first question would be whether that release even comes into play. It is expressed to come into force 'upon payment of the Settlement Sum'. Judgment in default of payment of the Settlement Sum would not, at first blush, seem to be 'upon payment of the Settlement Sum'. This question was not argued before me, however, so I do not express a concluded view. Even if the release were to come into force by means of the giving of judgment in default, then it is expressed to be limited to claims that the defendants 'now have, at any time had, may have or but for (the Terms) could or might have had'. In other words, claims existing as at the date of the Terms. The mutual releases did not extend to potential future claims, as one sometimes sees.

62 For these reasons, I conclude that the Court has jurisdiction to give judgment in a summary way on the Terms, and that it is just to do so, subject to the limitation of the interest. The sum proposed by the plaintiff for its indemnity costs pursuant to clause 8 of the Terms is not opposed.

63 The defendants seek a 60 day stay, or in the alternative a 30 day stay, but there is no evidence to support such a stay and I refuse it for that reason. I allow a 14 day stay only from the date of the orders (not from the date of these written reasons) being the period within which any appeal is required to be instituted.

[1] Exhibit AZ-1 to the affidavit of Andrew Zhu, sworn 24 December 2019.

[2] [1956] VicLawRp 86; [1956] VLR 555 ('Roberts').

[3] [1955] 1 WLR 741.

[4] [1982] VicRp 38; [1982] VR 398 ('Elgen Tavern').

[5] Affidavit of Dale Howard Robertson, sworn 22 February 2019, 4 [15] ('Robertson Affidavit').

[7] Affidavit of Weidong Wang, affirmed 4 March 2019, 3 [9] ('Wang Affidavit').

[8] Affidavit of Service of Andrew Zhu, sworn 31 January 2019, 2 [5] ('Affidavit of Service').

[14] [2009] VSCA 139; (2009) 23 VR 396 ('Seachange').

[16] [2014] VSCA 327.

[25] Affidavit of Service (n 8), 2 [5(g)].

[26] Robertson Affidavit (n 5), 4 [14].

[27] Exhibit DH-2 to the Robertson Affidavit (n 5).

[29] Robertson Affidavit (n 5), 4 [15].

[32] Robertson Affidavit (n 5), 3 [12].

[33] Affidavit of Service (n 8), 2 [5].