Watson v Paper Industry Engineers Pty Ltd [1999] NSWSC 98 (26 February 1999)

Last Updated: 26 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: WATSON v PAPER INDUSTRY ENGINEERS PTY LTD [1999] NSWSC 98

CURRENT JURISDICTION: Common Law Division

FILE NUMBER(S): 12708 of 1991

HEARING DATE{S): 23 and 24 September 1998

JUDGMENT DATE: 26/02/1999

PARTIES:

Plaintiff - Janine WATSON

First Defendant - Paper Industry Engineers

Second Defendant - Amcor Limited

JUDGMENT OF: Hulme J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Plaintiff - R De Meyrick

First Defendant - F Tuscano

Second Defendant - R Bellamy

SOLICITORS:

Plaintiff - Masons

First Defendant - Vandervords

Second Defendant - Phillips Fox

CATCHWORDS:

Contract

Compromise of litigation

Inequality of bargaining power

Inability to protect own interests

ACTS CITED:

Contracts Review Act 1980 (NSW)

DECISION:

Dismiss the Notice of Motion of the Second Defendant filed on 24 September 1998

Declare void the contract of compromise made between the Plaintiff and the Second Defendant by their solicitors on or about 11 September 1996.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

NO: 12708 OF 1991

Friday, 26 February 1999.

HULME J

Janine WATSON -v- PAPER INDUSTRY ENGINEERS PTY LIMITED AND ANOR

JUDGMENT

1 HIS HONOUR: These Reasons are concerned with two motions - one by the Second Defendant filed on 24 September 1998 seeking:-

1. A declaration that on 11 September 1996 the Plaintiff and the Second Defendant agreed to compromise the proceedings commenced by the Plaintiff against, inter alia, the Second Defendant on terms:

1.1 that the Second Defendant would without admission of liability pay to the Plaintiff the sum of $5,000 in respect of its costs;

1.2 the Plaintiff would take such steps as it were required (sic) to discontinue the proceedings.

2. An order that the Plaintiff specifically perform the agreement referred to in paragraph 1.

3. An order that the Plaintiff have leave to discontinue these proceedings.

4. An order that the Plaintiff or its Attorneys or the registrar of this Court sign the Notice of Discontinuance annexed hereto and marked "A" or that the Plaintiff take such steps as are necessary to move the Court for leave to discontinue the proceedings pursuant to Part 21 of the Supreme Court Rules.

5. Such further or other order as this Court sees fit.

2 The second was filed by the Plaintiff on 3 July 1998 and seeks, inter alia:-

"1. A declaration that any agreement between the Plaintiff and the Second Defendant did not constitute an enforceable settlement because there was not finality of agreement and is void ab initio; and

2. In the alternative, if (which is denied) the Court finds that there is a binding agreement between the Plaintiff and the Second Defendant, a declaration that the Agreement is void and unenforceable pursuant to the Contracts Review Act 1980."

3 No objection was taken to either application proceeding by Notice of Motion.

4 The proceedings were commenced by Statement of Claim filed on 20 May 1991. In that document the Plaintiff claims damages under the Compensation to Relatives Act consequent on what is said to have been negligence on the part of one or both of the Defendants causing the death in November 1989 of her husband, said to have been an employee of the First Defendant. Defences and a Cross-Claim by the First Defendant against the Second Defendant were filed in 1991. An amended Cross-Claim was filed in December 1996. On 3 June 1991 an award in the sum of $167,000 was made in the Plaintiff's favour in the Compensation Court.

5 Proceedings in this Court moved at a slow pace. Although I do not suggest the fault was all on one side, Mr Mason, the Plaintiff's solicitor deposed that "The Plaintiff's reticence in providing instructions to me caused undue delay in the prosecution of the proceedings". Some time before 6 June 1994 Mr Mason served on the Defendants a draft Amended Statement of Claim seeking to include a claim for nervous shock suffered by the Plaintiff and seeking consent to its' filing. A second copy seems to have been served in August 1994 and, despite a reminder on 19 January 1995, no response other than a complaint that it had not been filed seems to have been received. There was correspondence, including complaints about delay, concerning the Part 33 Rule 8A particulars. On 16 May 1996 Mr Mason received a Notice of Motion filed by the Second Defendant seeking orders that the Plaintiff file those particulars. Mr Mason wrote to the Plaintiff on 21 May and 4 June seeking instructions.

6 The Plaintiff deposed that she has no recollection of receiving the letter of 4 June or of reading its contents. She said:-

"I am not sure whether I opened it. Although I am told by my solicitors that subsequent to that letter I telephoned Mr Mason shortly thereafter and instructed him to discontinue the proceedings. (sic) I do not have a clear recollection of the conversations I had with my solicitor, although I do have a feeling that I did discuss with him the fact of the proceedings and expressed a desire not to be in court again. I am really not sure."

7 The following communications between the Plaintiff's solicitors, Messrs Phillips Fox and the solicitors for the Second Defendant then occurred. A letter of 7 June 1996 written by Mr Mason referred to an application which had been before the Court and adjourned and continued:-

"We would observe that it is our view that the Plaintiff would if she proceeded recover substantial amounts in respect of general damages for nervous shock as well as economic loss arising out of the death of her husband...

The nervous shock issue in our view is quite significant and appears to have deteriorated over the years... Our client is considering her position so far as proceeding with the proceedings and without prejudice should she decide to withdraw them, this would be on the basis that there is some agreement by one or both Respondents to pay her costs incurred and on each Defendant releasing her from any right of recovery in respect of moneys paid or received.

In the alternative we suggest she should proceed. We will write to you again shortly when we have the benefit of instructions and in the meantime we would ask you to obtain some instructions on this proposition generally and perhaps to discuss with the other Defendant the question of recovery and whether they would if there was any agreement on this point release our client from any obligation to reimburse moneys already received."

8 On 19 June Phillips Fox wrote to Mr Mason. So far as is relevant for present purposes, the letter said:-

"We are instructed, on a without prejudice basis, to offer a verdict in favour of our client on the basis that our client pay its own costs. Our client is not prepared to pay your client's costs.

In our opinion, your client is unlikely to recover damages exceeding the workers compensation amount of $167,000..."

9 Nothing on the topic of settlement seems to have occurred until 4 September apart from conversations in which Mr Mason informed Mr Glascott of Phillips Fox that he was having difficulty obtaining instructions. On 4 September there was discussion between the two. Mr Glascott's file note of the conversation is in these terms:-

"- we can offer $5,000 costs (final offer).

- Pl to discontinue.

- he is concerned Vanderfords (w/comp insurer's sol.) will get $.

- I don't think so - it's for costs, not damages.

- He'll contact client and get back to me."

10 Mr Glascott's recollection of the conversation, with which Mr Mason concurred was:-

Glascott: "I can offer $5,000 by way of costs for your client to discontinue the claim against our client. It is a final offer.

Mason: Won't the workers compensation insurer be entitled to that amount?

Glascott: I don't think so, it's for your costs, not damages."

11 On the following day, there was a further conversation in which Mr Mason said:-

"I am prepared to accept $7,500 to our costs. (sic)"

12 On the following day Mr Mason wrote referring to his telephone discussions with Mr Glascott and saying:-

"We confirm that in relation to the offer of resolution of this matter by payment of our costs, we have taken instructions from our client and are instructed to advise you that upon payment of our costs in the sum of $7,500.00 the proceedings will be discontinued. Should your client be in agreement, we will take the necessary steps to discontinue this action."

13 On 11 September there was a further conversation between Mr Mason and Mr Glascott and it is on this that the Second Defendant relies in its claim that there was an agreement to compromise. Mr Glascott's note is in these terms:-

"5.00 p.m. att. Bill Mason (tel).

- We offer $5,000 costs to

- discontinue;

- He accepts.

- I say don't think $5,000 costs creates liability in Pl. to 1st def (w/comp. Insurer).

- We to prepare Notice of Discontinuance/Terms of Settlement."

14 Mr Glascott's account of the conversation, with which there was no disagreement and on which he was not challenged, was in similar terms.

15 Nothing seems then to have happened until a letter of 17 October 1996 from Mr Mason. In it he wrote:-

"We refer to previous correspondence and our telephone discussions with Simon Glascott and agreement reached that this matter would be settled on the basis of your client paying the costs of this firm in the sum of $5,000.

You will appreciate that Part 21 of the Rules allow discontinuance only by consent of the Defendants with the leave of the Court. We envisage that it may be necessary to move the Court as the First Defendant may not consent to the withdrawal of the matter.

There would also appear to be a difficulty in the Court giving leave on terms in accordance with Part 21 Rule 4 in that a Plaintiff cannot apply to discontinue with an order for costs against the Defendant.

We would therefore appreciate your advice as to this matter. We will forward a Notice of Discontinuance to the First Defendant to see if they will consent or whether an application for leave needs to be made."

16 On 14 November Mr Glascott responded:-

"We refer to your letter of 17 October 1996. We confirm settlement of your client's claim on the basis that your client discontinue the proceedings on the basis that our client pays costs in the sum of $5,000.

As you are aware, the First Defendant has advised that it does not consent to the proceedings being discontinued. That would not disentitle our respective clients finalising their differences as agreed.

We look forward to receipt of your application for discontinuance of your client's claim."

17 On 22 November there was a further conversation:-

"Mr Mason: I am concerned whether we can obtain leave ot discontinue if Vandervords won't consent. The court probably can't order costs in our favour if we are discontinuing.

Me: I don't think there is any problem for the court to allow costs to your client if it is aware your client does not want to continue. The Court can make any costs order it likes on a discontinuance especially if it is by consent. The Other Defendant can still run its Cross Claim against us.

Mr Mason: Alright, I'll prepare the Notice of Motion."

18 It is unnecessary to detail the subsequent argumentative correspondence.

19 It would seem that during the time Mr Mason was negotiating with Mr Glascott, there was no communication with the solicitors for the First Defendant. On 17 October 1996 Mr Mason wrote to the solicitors for the First Defendant. In terms which were not calculated to enhance his bargaining position Mr Mason advised that "(the Plaintiff) has determined that she wishes this matter to be discontinued" and asked Vandervords to "seek instructions as to whether you would be prepared to pay the balance of our costs in this matter in the further sum of $5,000 and consent to the discontinuance in order that our client might put this matter behind her." Vandervords replied that their client did not consent. In the proceedings before me its counsel pointed out that it had taken no part in the negotiations and submitted that at best, so far as the First Defendant is concerned, granting the Second Defendant's application should be on terms that all of the First Defendant's costs were paid and, at worst, there would be no order as to the First Defendant's costs. As an exercise of discretion by the Court will or may be involved, it should be recorded that the First Defendant limited its submissions and did not argue that the orders sought by the Second Defendant, having the effect that the proceedings were discontinued against both Defendants, should not be made.

20 I turn then to the situation of the Plaintiff herself. She was examined in August 1993 by a psychiatrist, Dr Shand. In a report in evidence before me Dr Shand records a history that the Plaintiff:-

"has pathological anxiety and issues the usual instructions and safety precautions. She gets shaky with panic and diarrhoea, e.g. if her husband is late home by half an hour. When driving she has blank periods and can't recall phases of a trip which make her feel dangerous on the road. To a question she said that depression suddenly comes about every six months and lasting up to a month. She wants to cry and gets bitchy and irritable. She wants to do nothing and sometimes gives up."

21 Dr Shand diagnosed the Plaintiff as:-

"still suffering from a bereavement reaction with neurotic features. She is unable to let go of her dead husband and does not want to. In a somewhat extraordinary fashion she has managed to combine this with a second satisfactory marriage and she is trying to get pregnant. ... Symptoms include pathological anxiety with particular focus on her current husband and intermittent depression with tension and irritability. She consults a counsellor now and then but has no need of any other treatment. Residual disorder is fairly mild and she is getting on with her life in a satisfactory fashion. In keeping with this she showed no signs of clinical nervous disorder at interview even if she was tearful on occasions about losing her husband. I would regard the symptoms she still has as attributable to the death of her first husband."

22 A letter from Phillips Fox of 6 June 1994 records that a copy of this report had been served on that firm.

23 The Plaintiff was also examined by Dr Westmore on 11 June 1988. He prepared a lengthy and then two supplementary reports and was called before me. His evidence includes:-

"Mrs Watson is suffering from a pathological grief reaction which is characterised by a number of different features including anxiety and depression. ... I think her condition is such that she would have great difficulty in providing you with instructions, mainly because she is so avoidant in terms of addressing communications from your office.

Mrs Watson suffers pathological avoidance with regard to the issues relating to the death of her first husband and the subsequent legal matters. She has anxiety and depression when these issues are raised, this affects her capacity to attend and concentrate, to remember relevant details and subsequently to be able to instruct her solicitors in and appropriate way. ... While there is no indication that this woman cannot manage her affairs in a general sense, it is my view that she cannot manage her affairs in relation to the current proceedings."

24 Dr Westmore's supplementary report of 7 July 1998 should be set out in full:-

"Following our further conversation on 7 July 1998, I note in your original letter of referral, on page 3 at point 3, you asked me my opinion as to whether Mrs Watson had the capacity to provide instructions to settle the matter after receipt of your letter in June 1996.

It is very difficult to make specific comments about a particular day or month so long ago, however, it is my view that this woman has suffered a pathological grief reaction which commenced from the time of her husband's death and remains in place today.

She is not able at this time, in my view, to provide you with instructions due to her psychiatric incapacity and on the balance of probability she was not able to provide you with instructions in June 1996. It is most unlikely she would have been any different at that time than she is today, indeed, she is likely to have been worse."

25 In oral evidence he said that the Plaintiff if provided with proper advice was able to make a decision in the litigation but "I think the concern psychiatrically is whether ... the death of her first husband... influences in an inappropriate way decisions that she might make regarding a legal case associated with the death of her first husband" and "I think she has a pathological avoidance of this issue and evidence in her lifestyle that she has avoided dealing with the death of her first husband."

26 Asked to explain his use of the term "pathological", Dr Westmore said "I mean not normal, not usual. A better way is probably not healthy. I think the history from her is that for example she still has her first husband's clothing after some 10 years after his death and that psychiatrically and psychologically is fairly disturbing behaviour." He said the Plaintiff was dealing with the death of her first husband in a pathological, unhealthy abnormal way. He said he had a concern "whether she can really, at the moment as she is, apply her mind in a sensible way to the issues relating to the death of her first husband" and "she might wish to prematurely close her case and that would be a classic behaviour associated with this condition, wanting to get rid of it, lock it away, get it out of her life, and not really deal with the difficulty of the litigation, difficulty of having to deal with the memory of her husband, circumstances of his death, memory of her experience at and around the time he died, because that's the way she is dealing with it, she has pushed it out of her level of consciousness and from a psychological perspective one of the dangers is that she will want to preclude, inappropriately, prematurely, simply to get rid of pain or avoid dealing with pain associated with the memory."

27 Except insofar as Dr Westmore's remarks seem to constitute an expression of opinion on the Plaintiff's legal capacity - a matter which involves legal tests which I am not satisfied Dr Westmore correctly understands - I accept his evidence.

28 The Plaintiff herself gave evidence. There was no attempt to have her repeat the history given to either of the psychiatrists but in the circumstances of the case, I draw no inference adverse to her from this. In light of Section 60 of the Evidence Act, I am satisfied there is a sufficient foundation for me to accept the conclusions drawn by those doctors. Reference may however usefully be made to one passage in the Plaintiff's affidavit which I am disposed to accept. The Plaintiff said:-

"On the occasions that I had contact with my solicitor Mr Mason on the telephone or if he would ring or leave a message for me to call, it would cause great emotional disturbance and bring back many memories and I would have great difficulty in returning his telephone calls and would sometimes take up to a week to build up to telephoning my solicitor or would not telephone him. If my solicitor sent me a letter on many occasions I would not open the letter for two or three days because of my distress, or sometimes never open it. On each of these occasions I would become extremely emotional, have bouts of crying and it would make it all as if it was happening over and over again."

29 Giving evidence was obviously difficult for the Plaintiff. I accept her when she said that she "just wanted it all over and done with" because it was just too upsetting. I understand the "it" to have been the litigation. I accept also that this was because dealing with it brought back memories of when her first husband was killed and that this used to make her sick, at times for days.

30 I accept also her solicitor's evidence to the effect that he had considerable difficulty in obtaining information or instructions from the Plaintiff. I accept his evidence that in conversation on 7 June 1996 he informed the Plaintiff that the Second Defendant was asserting the Plaintiff would not recover if she proceeded more than had been recovered in the Compensation Court proceedings, that his view she stood to recover substantially more and would advise her to continue and that the Plaintiff said to him she was afraid of giving evidence again, she didn't know what to do but knew she did not want to go back to court. I also accept that he raised the possibility of the case being settled for a moderate amount representing costs and on terms of receiving indemnities in respect of payments previously received. He asked the Plaintiff whether she wished such a letter written and was told "Yes, I'll leave it to you."

31 Mr Mason's evidence that he told the Plaintiff that she would recover substantially more is supported by a file note and, as I have said, I accept it. It should be recorded however that on 21 May 1996 he had written to the Plaintiff in terms:-

"... on our instructions it would appear that there will be substantial difficulty on quantum of damages and a likelihood the amount recovered in common law proceedings in the Supreme Court would be less than that obtained before the Workers Compensation Court.

... In those circumstances it must be now decided whether the proceedings continue and perhaps the best method of resolution of the matter would be to put an offer of settlement to Amcor Limited solicitors Phillips Fox that the matter be settled on the basis of costs only thereby relieving any liability you have to us in respect of costs and finalising the matter once and for all."

32 Part 21 of the Rules relevantly provides that a Plaintiff may discontinue with the consent of all other parties or with the leave of the court. Between June and 25 October 1996, Rule 4 of Part 21 which was repealed on 25 October provided that the Court could give leave on terms.

33 The first question with which it is appropriate to deal is whether the communications between the solicitors for the Plaintiff and the First Defendant were calculated to constitute a contract between those parties compromising the dispute between them.

34 In my view they were. Although in the letter of 7 June, Mr Mason indicated clearly that any compromise he was contemplating would involve all three parties. The subsequent correspondence and discussions between Mr Mason and Phillips Fox are in terms indicative of a two, and not three, party agreement. The number of instances of this is sufficient to prevent one concluding that these negotiations were all under the aegis of the letter of 7 June and that any agreement reached was conditional on the third party to the litigation concurring. In particular do the references to the possibility of any moneys paid by Phillips Fox's client being payable by the Plaintiff to the First Defendant lead to this conclusion. Whatever the First Defendant's rights in this regard arising under the terms of the Workers Compensation legislation, those rights were, as is obvious to anyone practising in personal injury claims in this Court, susceptible of variation or defeat by a suitably arranged settlement of the proceedings in this Court and the terms of the conversations of 4 and 11 September are only consistent with there being no agreement with the First Defendant concerning the matter.

35 It was urged on behalf of the Plaintiff that any agreement with the Second Defendant was conditional upon the First Defendant becoming a party to it or the Plaintiff making some other arrangement with the First Defendant. However, in light of the terms of the correspondence and discussions which I have set out above, this argument is untenable.

36 Although the reference to indemnities in Mr Mason's remarks just prior to the Plaintiff saying "Yes, I'll leave it to you" referred to in paragraph 30 above make it doubtful whether he had the Plaintiff's actual authority to make a two party agreement with the Second Defendant, there can be no doubt that, subject to any matters flowing from any incapacity the Plaintiff may have had, he had ostensible authority from the Plaintiff to effect the agreement he did.

37 The test for capacity to contract is "the capacity to understand the nature of the transaction when it is explained" - Gibbons v Wright [1954] HCA 17; (1953-1954) 91 CLR 423 at 438. This seems to me to be an appropriate test by which to judge the Plaintiff's capacity to instruct Mr Mason, at least so far as entering into the transaction in issue in these proceedings. Notwithstanding the evidence of Dr Westmore I remain unpersuaded that the Plaintiff lacked that capacity in 1996. Indeed, I think the probabilities are that she had the requisite capacity to understand.

38 In any event there is no evidence to suggest any incapacity which the Plaintiff had to contract was known to Phillips Fox or the Second Defendant. Such knowledge is essential if the contract is to be regarded as unenforceable under the general law - Gibbons v Wright (supra).

39 On behalf of the Plaintiff it was also submitted that if a contract did come into existence it was unjust and should be set aside pursuant to the terms of the Contracts Review Act, 1980 (NSW). It was submitted that I should conclude that the Second Defendant was aware of the potential value of the claim and, implicitly, that it was worth considerably more than the Plaintiff received - a factor regarded as important in, for example, Baltic Shipping Company v Dillon (1991) 22 NSWLR 1. However there was no attempt made to have, as it were, a preliminary run of the Compensation to Relatives claim nor to establish by evidence that the Plaintiff is likely, or may well, recover more than would be repayable to the First Defendant. Nor is there any evidence of what medical or other information the Second Defendant or its solicitors had concerning the Plaintiff's condition beyond the report of Dr Shand. The terms of that report by no means make it certain that the Plaintiff would recover a substantial verdict in the nervous shock claim she desired to pursue and thus I am not prepared to conclude that the Second Defendant probably believed that the settlement arrived at was unduly favourable to it and unfavourable to the Plaintiff. In those circumstances, and given the limits of the evidence which was before me, it is unnecessary and I think not appropriate that I attempt to value the Plaintiff's claim.

40 In determining whether a contract is unjust, Section 9 of the Contracts Review Act requires the Court to have regard to all the circumstances of the case and to a number of specific matters referred to in sub-section 9(2). Among the circumstances which are relevant is the desirability of parties being held to agreements into which they have voluntarily entered. Furthermore, the compromise of litigation is something which the courts encourage and there are significant disadvantages not only for a party whose compromise may be set aside but for the public if such compromises come to be treated as but provisional. The continuation of litigation has disadvantages for all litigants including the Plaintiff and the fact that the contract I have held to exist was entered into with the benefit of legal advice operates against any suggestion that the contract was unjust.

41 Most of the matters to which sub-section 9(2) of Act requires that the court have regard do not argue in favour of the Plaintiff's claim under that Act. However, two do. In light of Dr Westmore's reports and evidence and my assessment of the Plaintiff, I am satisfied that notwithstanding the Plaintiff was being advised by her solicitor, there was a material, and I would say substantial, inequality in bargaining power between the Plaintiff and the Second Defendant. On the same grounds I am also satisfied that the Plaintiff was not reasonably able to protect her own interests.

42 I would also conclude that the Second Defendant through Phillips Fox had some notice of the first of these matters. They had notice of the matters referred to in the report of Dr Shand, including the diagnosis of pathological anxiety and neurotic features although there is nothing in the report to suggest that the Plaintiff suffered disability in her response to, or conduct of, the litigation. The letter of 7 June from Mr Mason is not as clearly expressed as it might have been but the statement that "the nervous shock issue ... is quite significant and appears to have deteriorated" and was "very evident" is a statement that the Plaintiff's condition was worse. When attention is also had to Mr Mason's expressed view that the Plaintiff would, if she proceeded, recover substantial amounts and to the observation that (nevertheless) the Plaintiff was considering withdrawing, in effect, with only her costs paid, it seems to me that the letter gave notice to the Second Defendant that there was some weakness in the Plaintiff's bargaining power (not attributable to weakness in her case) and ability to protect her own interests.

43 One factor that merits specific mention is the fact that the agreement reached directed no attention to the position of the First Defendant. In light of the terms of the letter of 7 June and, one may add, the logic of any desire the Plaintiff may have had to be out of the litigation, it is difficult to avoid the conclusion that the making of an agreement with only the Second Defendant was a mistake. It left the Plaintiff exposed either to continue the action (which rather defeated the object of the negotiations) or at the mercy of the First Defendant or the Court so far as the First Defendant's costs were concerned. It is, I think, clearly to be inferred that this was never intended by the Plaintiff or her solicitor.

44 Although I suspect Mr Glascott must have been pleasantly surprised that Mr Mason did not complicate the settlement discussions by insisting on the involvement of the First Defendant, on the question of whether the contract was unjust, I am not disposed to give the matter referred to in the preceding paragraph any weight.

45 However the two matters to which I have referred earlier can not be so regarded. Their weight is such that in my view, notwithstanding the factors which argue to the contrary and, in particular, that there was no conduct on the part of the First Defendant which can be criticised, the contract of compromise was unjust. I am also of the view that, for the purpose of avoiding as far as practical an unjust result, I should make an order declaring the contract void.

46 In this regard, although I do not need to rely on the matter, it is also appropriate to record that that, subject to one qualification, setting aside the contract but restores the parties to rights and obligations which they had prior to the compromise being entered into and which were laid down by law as presumably a fair consequence of the death of the Plaintiff's husband and subsequent events. The qualification is that since the compromise, any right the Plaintiff had to pursue a claim for nervous shock has presumably become barred by the Limitation Act unless the Plaintiff succeeds in obtaining orders from the Court which may avoid this result. (The question of whether the Plaintiff should be allowed to amend her Statement of Claim was raised during the hearing before me but stood over.)

47 As an alternative basis for the relief she sought, it was urged on the Plaintiff's behalf that, quite independently of the Contracts Review Act, the Court had a discretion whether to hold the Plaintiff to any contract of compromise found. Reliance was placed on the decision of Finlay J in Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528. Whether the Court's discretion is as wide as some of the remarks in that case suggest is something I do not need to decide. In Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235 at 242-3 it was said that "...where the assistance of the court is sought or invoked to carry a compromise into effect which otherwise could not be enforced by the party relying on it ... the assistance may be refused on grounds not necessarily sufficient to invalidate a simple contract" and those words are wide enough to allow the court to refuse the Second Defendant at least much of the relief it seeks here. However, in light of the conclusion at which I have arrived concerning the Contracts Review Act it is unnecessary to pursue this aspect further.

48 Although the Second Defendant has established the existence of the agreement referred to in the first prayer of its Notice of Motion, it follows from what I have said that there is no utility in making a declaration to that effect. The appropriate orders to be made on the Notices of Motion are:-

(a) Dismiss the Notice of Motion of the Second Defendant filed on

24 September 1998.

(b) Declare void the contract of compromise made between the Plaintiff and the Second Defendant by their solicitors on or about 11 September 1996.

51 The question of costs was not argued. The cause for the issues which have arisen argues that the Plaintiff should pay at least the Second Defendant's costs. On the other hand the ultimate decision was one the Second Defendant fought and lost. I will afford the parties an opportunity to debate the matter.

52 As indicated above, there remains for consideration the question of the amendment which the Plaintiff seeks to make to the Statement of Claim. Having regard to the history of the proceedings, they should not be allowed to resume their leisurely pace. I will hear argument on the question of amendment in the near future.

LAST UPDATED: 26/02/1999