Jennings v Jennings

This is an application by the plaintiff for specific performance of a settlement agreement said to have been reached on 1 June 2015. The application arises in the context of proceedings which were commenced between the plaintiff and the defendant in 2013. The underlying facts reveal an exceedingly unpleasant relationship between the plaintiff and the defendant. He is the plaintiff’s adult son.

In 1973 the plaintiff and her late ex‑husband purchased certain property at Greystanes. In 1996 the plaintiff's ex‑husband died. And since December 2007 the plaintiff has been the primary carer for her brother, who lives with her in the Greystanes property. Her daughter Christine also lives with her in that property. The statement of claim alleges that since 1986 the defendant has suffered addiction to body building drugs such as anabolic steroids, marijuana and methamphetamine; represented that he suffered the effects of schizophrenia and depression; and made numerous violent threats to the plaintiff.

In 2009 a number of events occurred which led to the transfer of the Greystanes property from the plaintiff to the defendant. The plaintiff alleges that the transfer was made to the defendant as a result of threats made by him. She seeks to set aside the transfer to the defendant. On 1 June 2015 the plaintiff, the defendant and their legal representatives attended a court supervised mediation. It started at 9am and concluded about 1 or 2pm. The plaintiff was represented by Mr Casimatis of counsel and by Ms Linda Needham, her solicitor. The defendant had two male legal representatives. One was Mr Herbert Weller of Herbert Weller solicitors and the other was said to be a barrister whose name no one can recall.

During the mediation a number of offers and counter offers were made. The defendant's offer contained the following elements. He proposed that the property be put half into his name and half into Christine’s name. He suggested that the plaintiff should be able to remain in the property for the rest of her life. He added that the property could be rented so that money can be used if needed to go to a nursing home. He also proposed that he should not be able to borrow against the house.

The plaintiff was prepared to accept the proposal that the property be put in the names of her son and daughter, with her having a life tenancy, subject to the qualification that in the event that she goes into an aged care facility, the home could be rented. She also proposed that the defendant pay her $100,000. This was said to be part of the promised consideration of $390,000 for the original transfer of the land to the defendant, which was apparently never paid. The defendant's response to this proposal was to reject the offer to pay $100,000. He then made a counter offer, with the property to be sold and split 50:50 with the plaintiff.

The proposals and counter proposals included this exchange, of which the evidence was uncontradicted:

There was then a period of approximately 30 minutes when both the legal representatives of the defendant left the room, before returning. Mr Casimatis then said to them, ‘We are instructed to reject that offer, and make a counter offer that the property be put under the defendant and Christine's names; that she has life tenancy; that the home be rented out in the event she goes into an aged care facility; and that the defendant pay her $20,000.’

The two legal representatives of the defendant then left the room again and returned approximately 30 minutes later. One of them said to Mr Casimatis, ‘We accept that offer. Can you record this agreement in the deed of release and we will execute it today.’

Neither said anything to the effect that there would be no binding agreement until the parties had executed a deed of release. As I mentioned, the legal representatives of the defendant included Mr Weller and a barrister. There was no evidence from either of them. Mr Weller was in court during the hearing. There was no attempt by the defendant to contradict the evidence which I have set out and summarised above.

Mr Casimatis then went back to his chambers and drafted a deed of release. When he returned, the legal representatives of the defendant took it to another room in the Court. After they had had time to consider the draft deed, they returned and one of them said to Mr Casimatis, ‘We want some amendments.’ They handed over a copy of the draft deed which had been marked in pen. The amendments which were marked on the deed contained no indication of any difficulty or objection with any of the substantive provisions of it. They were grammatical and insubstantial, other than the suggestion that all reference to the solicitor, who was apparently the subject of a cross‑claim, should be removed. Mr Casimatis agreed to make the amendments proposed by the defendant's legal representatives.

The lawyers then parted company. Mr Weller said, as he was leaving the Court, ‘Once you’ve made those changes, could you please send me the amended draft for my client to execute.’ At 2.31pm on 1 June, the plaintiff’s solicitor sent an email to Mr Weller in which she said:

The plaintiff’s solicitor then attached a draft deed of release and annexed consent orders which she said she believed recorded the agreement between the parties. She also added, ‘We would appreciate if you could let us know if your client is content with the terms as a matter of urgency, so that we can finalise the matter before the next directions hearing on 12 June.’

On 9 June, Ms Needham sent a follow-up email to Mr Weller asking for his response to her email sent on 1 June after the conclusion of the mediation. On 11 June she received a reply from a solicitor employed by Mr Weller, who said:

There are a number of things to note about this email. First, there was no contention that there was no agreement. And second, the only amendments suggested were said to be ‘a few minor amendments’. On 23 June, Mr Weller sent a letter setting out the ‘minor amendments’ adverted to in the previous email. They were entirely inconsequential and consisted only of formatting and grammatical suggestions. There was no statement or hint of any suggestion that there was not a binding agreement between the parties.

On 12 June the proceedings were stood over by the Court to 13 July, apparently to allow for the defendant’s execution of the deed of release. On 10 July, a solicitor in the employ of Mr Weller wrote to say that he was sick for a week and that ‘the client has an appointment to see Mr Weller on Monday to execute the deed’. (emphasis added) Once again, there was no dispute, no hint and no suggestion of any disagreement about the parties’ agreement.

On 17 July, Mr Weller wrote to say that he was unable to obtain Mr Jennings’ instructions to execute the deed. This was the first indication of some hesitation by the defendant or his legal representatives. On 20 August, Mr Mitry, the plaintiff’s solicitor for whom Ms Needham worked, wrote to the defendant’s solicitor to say:

From that point, it seems that the defendant had decided to renege on the agreement made through his legal representatives on 1 June and subsequently recorded in the deed of release which contained the various minor amendments proposed by his solicitor Mr Weller.

In Howe v Connell (unreported; Supreme Court of NSW, Young J, 25 September 1997), Young J (as he then was) made this observation:

I do not suggest that there is a general rule. Each case will depend on its own facts. But it is reasonable to say that the approach described by Young J is one which often applies. This is all the more so in this case, where the agreement has arisen out of a Court supervised mediation at which the parties were represented by lawyers and which was attended with a degree of formality and structure. The purpose of the mediation was to bring about a concluded agreement between the parties.

The principles which govern the determination of an issue as to the formation of a contract in circumstances such as this were summarised comprehensively in Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 at [64] – [69]:

In this case the facts which I have described suggest that this is a case where the fourth category identified by McClelland CJ in Eq is applicable. The evidence supports the conclusion that the objective intention of the parties was that they would be bound immediately and exclusively by the terms which they had agreed, while expecting to make a further contract in substitution for the first, containing by consent additional terms. That is precisely what happened until the defendant had a change of heart.

The sequence of events (including those after 1 June 2015), the uncontradicted evidence of the conversations, the absence of any suggestion of unwillingness to be bound, the absence of hesitation by the defendant, the willing agreement of the defendant’s solicitors to embrace the draft deed of release and to make only inconsequential suggestions for amendments relating to grammatical and formatting matters, and the apparent reasonableness of the compromise between the plaintiff and the defendant, all indicate that they intended to be bound immediately by the essential obligations of their agreement. They proposed to substitute their agreement with a written document containing by consent additional terms, which would be executed by the defendant as soon as possible. This would have happened until the deliberate and regrettable decision of the defendant, approximately six weeks later, to renege on the agreement that had been made.

I have referred to the fact that there was no evidence from the defendant’s legal representatives. It goes without saying that there was no evidence from the defendant. I should add there was no cross‑examination by his counsel of the deponents of the affidavits read in support of the plaintiff’s case. In the absence of evidence from the defendant or any of his legal representatives, I am unwilling to draw any inferences favourable to the defendant which are inconsistent with the inferences that otherwise emerge out of the proved facts.

I do not think that anything turns on the fact that cl 3.1 of the draft deed, which appears to have been unhesitatingly agreed to without qualification, provided for the defendant to transfer to Christine 50% of the title to the property as tenants in common ‘within 14 days of this deed’. The defendant’s counsel submitted that this was an indication that the parties did not intend to be immediately bound. I do not think so. It merely indicated that they intended that that obligation would operate 14 days after the execution of the deed, which was in turn contemplated by their immediately binding agreement made on 1 June.

The defendant’s counsel also addressed submissions to the effect that the involvement of the plaintiff’s daughter Christine in some way added a fatal complication to the defendant’s application for specific performance. I do not think so. Christine was named in the draft deed but was specifically excluded from the definition of ‘Party’. She undertook no obligation under the draft deed and was merely the recipient of a benefit. That benefit was the defendant’s obligation to transfer to her 50% of the title to the property and to indemnify her for stamp duty payable in connection with the conveyance. Because Christine was excluded from the definition of the parties to the deed, she did not undertake the obligations set out in cl 6, if that matters.

The defendant’s counsel also pointed to the fact that the proceedings continued from July onwards and that a hearing date was fixed and left open. But this is neutral. It is entirely consistent with the plaintiff’s legal representatives adopting the course that it was prudent to keep the pressure on the defendant. I do not construe that fact as indicating that there was no intention to be immediately bound by the agreement reached on 1 June.

I do not think that this is a case within the third category of Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72. It is not one where, on the facts of this case, the objective intention of the parties was not to make a concluded bargain at all, unless and until they executed a formal contract. This was a domestic arrangement in which it appears that all parties at the mediation had a genuine willingness to resolve the proceedings. As I said, both parties were represented by legal representatives and they appear to have done their best at the mediation to bring about a conclusion to the litigation. They did so in a manner to which both parties should be taken to have agreed, subject only to recording their agreement in a written deed of release which would be substituted for their original agreement made at the mediation, and would contain by consent additional terms.

I should not leave these reasons without mentioning that the uncontradicted evidence of Christine Jennings was that she was prepared to sign any document that is required to effect the transfer of 50% of the title to the property to herself. She lives with her mother on a disability pension and is supported by her. There is no reason to think that her involvement in the settlement agreement represents any complication whatsoever. The agreement was made between the plaintiff and the defendant. Among other things it obliged the defendant to transfer 50% of the property to Christine Jennings.

In addition, I should mention Section 54A of the Conveyancing Act 1919 (NSW). The defendant did not rely on it. Even if he did, it would not have availed him on the particular facts of this case, for the reasons explained in Ciaglia v Ciaglia (2010) 269 ALR 175; [2010] NSWSC 341 at [64] – [85] and Last v Rosenfeld [1972] 2 NSWLR 923 at 927-8. See also Baloglow v Koustantinidis (2001) 11 BPR 20,721; [2001] NSWCA 0451 at [160].

I have already ordered that the plaintiff should pay the defendant's costs thrown away by the adjournment of the hearing of her notice of motion yesterday morning. This resulted in delay in finalising her application. The plaintiff is however entitled to all of the costs incurred by her in connection with the hearing of the notice of motion and the amended notice of motion, other than those costs which were thrown away or wasted by reason of yesterday's adjournment. The assessor will determine how much that represents.

The cross‑defendant appeared by its solicitor. I had earlier specifically informed the cross‑defendant that he need not attend if it chose to do so. Having chosen to attend but not participate, or contribute in any meaningful way, I do not think the cross‑defendant should have his costs. I therefore make no order for the costs of the cross‑defendant on the hearing of the amended notice of motion.

The orders I therefore make are as follows: