Gorrick v Santisi & Anor [2010] FMCA 2 (4 February 2010)

Last Updated: 9 February 2010

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GORRICK v SANTISI & ANOR

[2010] FMCA 2

PRACTICE AND PROCEDURE – Whether proceedings were settled between the parties – whether the proceedings should be struck out for want of prosecution. CONTRACT – Whether the parties had reached a contractual bargain or whether the bargain was dependent upon the signing of a deed of release considered.

Australian Human Rights Commission Act 1986 (Cth) Federal Magistrates Court Rules 2001 (Cth)

AON Risk Services Australia Limited v Australian National University [2009] HCA 27 Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd & Ors (1986) 40 NSWLR 622 Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353

Applicant:

FIONA GORRICK

First Respondent:

FRANK SANTISI

Second Respondent:

EAST COAST PROPERTY PTY LTD

File Number:

SYG 1746 of 2008

Judgment of:

Driver FM

Hearing date:

9 December 2009

Delivered at:

Sydney

Delivered on:

4 February 2010

REPRESENTATION

Counsel for the Applicant:

Mr D Blackah

Counsel for the Respondents:

Mr J Pearce

Solicitors for the Respondents:

Turner Freeman

INTERLOCUTORY ORDERS

(1) The Application in a Case filed on 9 December 2009 is dismissed.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY

SYG 1746 of 2008

FIONA GORRICK

Applicant

And

FRANK SANTISI

First Respondent

EAST COAST PROPERTY PTY LTD

Second Respondent

REASONS FOR JUDGMENT

Introduction and background

1. On 8 July 2008 Fiona Gorrick filed an application in this Court under the Australian Human Rights Commission Act 1986 (Cth). The application was opposed in a response filed on 27 August 2008. I made procedural orders for the conduct of the application on 29 July 2008 but the timetable was not adhered to. On 25 November 2008 I ordered that the matter be referred for mediation before a registrar of the Court, pursuant to Part 27 of the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”). I also made orders for the filing of further affidavit material by Ms Gorrick and ordered that she pay the respondents’ costs and disbursements thrown away by reason of the Court attendance on that day, fixed in the sum of $205.
2. On 9 January 2009 the respondents filed an Application in a Case seeking that the principal application be struck out for want of prosecution. The application was supported by the affidavit of Sian Patricia Ryan made on 9 January 2009. Ms Gorrick filed a further affidavit on 21 January 2009 but her evidence was not complete. On 11 February 2009 I ordered her to pay the respondents’ costs of and incidental to the Application in a Case, fixed in the sum of $2,000. I also ordered that, subject to Ms Gorrick’s evidence being filed by the close of business on 12 February 2009, the Application in a Case would not be heard.
3. The parties pursued negotiations in the following months. On 4 September 2009 Ms Gorrick’s solicitor filed a Notice of Withdrawal as a Lawyer in accordance with the Federal Magistrates Court Rules. On 10 September 2009, having heard from the parties, I gave Ms Gorrick leave to file a Notice of Discontinuance on the understanding that the parties were very close to a settlement.
4. The respondents assert that the principal application was settled, although Ms Gorrick has declined to formalise the settlement by executing a deed of settlement. The parties are now before me on an Application in a Case filed by the respondents seeking to enforce the alleged settlement.

The evidence and submissions

5. The present Application in a Case is supported by three affidavits by Ms Ryan made on 9 January 2009, 11 November 2009 and 4 December 2009, as well as the affidavit of Daniel O’Sullivan made on 11 November 2009. The respondents contend that the evidence presented (which was not contested, in the sense that none of the deponents were required for cross-examination and no controverting evidence was submitted) establishes that there was an agreement between the parties for the settlement of the proceedings in accordance with the terms of a deed of settlement which had been submitted to Ms Gorrick for signature, but which she did not sign. Alternatively, the respondents submit that Ms Gorrick has been dilatory in pursuing the proceedings and they should be struck out for want of prosecution.
6. Counsel for Ms Gorrick submits that she suffers from mental problems which were well known to the respondents and which put her in a vulnerable position, as well as creating difficulties for her former solicitors in obtaining instructions. He submits that Ms Gorrick’s solicitors had only ostensible authority to negotiate on her behalf and that her former solicitor conducted the negotiations on the basis that he would need to obtain instructions from Ms Gorrick. He submits that the interests of justice require that Ms Gorrick have the opportunity to now pursue her proceedings for relief against discrimination. He further submits that there is no impediment to the Court setting a hearing date for the proceedings and that Ms Gorrick is ready to proceed with a hearing.

Consideration

7. The respondents assert that the settlement dealings between the parties establish a binding contract between them which they now seek to enforce. They rely on the decision of the Supreme Court of New South Wales in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd & Ors (1986) 40 NSWLR 622. At page 627 in that case McLelland J said:
   • There was a binding contract, if, and only if, by the exchange of letters the parties mutually communicated their respective assents to being legally bound by terms capable of having contractual effect: see the discussions in Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 PBR 9251 at 9254ff and Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309. In the last-mentioned case Mahoney JA (at 326) identified three questions which it is often useful to consider in such a context as the present, namely “... did the parties arrive at a consensus?; (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?”
8. The respondents also rely upon the decision of the High Court in Masters v Cameron (1954) 91 CLR 353. In that case at page 360, Dixon CJ, McTiernan and Kitto JJ said:
   • Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.
9. In my view, this case falls into the third category of cases identified in Masters & Anor v Cameron. The evidence discloses that, following the failure of the mediation, the solicitors for the parties conducted direct negotiations with a view to settling the proceedings and reached a general understanding that the proceedings should be settled on the basis of a deed of release, which was prepared by the respondents’ solicitors and submitted to the solicitor for Ms Gorrick. In an email dated 19 August 2009 the then solicitor for Ms Gorrick indicated that he expected that the matter would be settled in accordance with the deed. He stated that he had sent it to his client for signature and asked that it be returned in seven days. On 16 August 2009 in a further email the solicitor stated that he was trying to get instructions. On 27 August 2009 the solicitor for the respondents emailed the then solicitor for Ms Gorrick stating that the offer of settlement in accordance with the deed would remain open for “a further seven days from today after which it may lapse in its entirety”.
10. By letter dated 16 September 2009, following the withdrawal of her solicitor, the solicitors for the respondents wrote directly to Ms Gorrick making a further offer of settlement in accordance with the deed of release. The penultimate paragraph of that letter reads:
    • We put you on notice, that should we not receive the deeds of release signed by you within a period of seven (7) days of the date of this correspondence the offer will lapse in its entirety. Furthermore, should we not receive any communication from you prior to the Mention on 27 October 2009, we will take steps to have your matter set aside pursuant to the Rules of the Federal [Magistrates] Court of Australia.
11. In my view, the position of the respondents was that it was a condition precedent to the settlement of the proceedings that the deed of release be executed by Ms Gorrick, so that they could obtain the protection against further proceedings which the deed provided. Ms Gorrick’s solicitor at no time gave any undertaking that Ms Gorrick would execute the deed. His position was that he thought she should do so and he may well have given advice to that effect (I do not know) but Ms Gorrick, because of her mental difficulties, was a challenging client and the solicitor proceeded on the basis that he was negotiating subject to instructions. In the event, Ms Gorrick declined to sign the deed. The respondents did not, at the time of the withdrawal of her former solicitor, seek to enforce the asserted contract. Rather, they re-opened negotiations directly with Ms Gorrick, on the basis of the proposed deed. If there was a concluded agreement, they would not have needed to do so. The offer made directly to Ms Gorrick was clearly based upon the condition that she would sign the deed. She would not. In my view, these dealings between the parties do not establish a contract at law or an enforceable agreement in equity.
12. Neither do I think that the proceedings should be stayed or struck out on the basis of a want of prosecution. I am not assisted by the decision of the High Court in AON Risk Services Australia Limited v Australian National University [2009] HCA 27 upon which the respondents rely, as that case dealt with a procedural issue of amendments. Ms Gorrick does not seek to amend her application or statement of claim and tells the Court that all of her evidence has been filed and she is ready for a hearing. It is true that nearly a year and a half has passed since her application was filed and that procedural orders for the filing of material were not complied with in a timely fashion. However, order 2 that I made on 11 February 2009 stated:
    • Subject to the applicant’s evidence being filed by the close of business on 12 February 2009, the application in a case not be heard.

That order was complied with. Ms Gorrick filed all of her evidence by the due date and the consequence is that the Application in a Case filed on 9 January 2009 was not heard. It should not be resurrected in the present Application in a Case. The parties were engaged in bona fide negotiations for settlement since February last year. Regrettably, they have been unable to reach agreement. More recently, Ms Gorrick has had to deal with the present Application in a Case. That having now been disposed of, there is no impediment to the hearing of the proceedings, subject to appropriate orders for the filing of material by the respondents.

13. I will order that the Application in a Case be dismissed and make further orders leading to the hearing of the principal application.
14. I will hear the parties as to costs.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 4 February 2010