ROGER GORDON CLARKE And Anor V DIANNE FAYE TAYLOR CA CA132/02

ROGER GORDON CLARKE And Anor V DIANNE FAYE TAYLOR CA CA132/02 4 June 2003IN THE COURT OF APPEAL OF NEW ZEALAND CA132/02BETWEEN ROGER GORDON CLARKE First Appellant AND ROGER GORDON CLARKE AND MALCOLM JOHN LUSBY Second Appellant AND DIANNE FAYE TAYLOR Respondent Hearing: 19 May 2003 Coram: Gault P Robertson J Baragwanath J Appearances: P J Dale for Appellants J R F Fardell QC for Respondent Judgment: 4 June 2003JUDGMENT OF THE COURT DELIVERED BY ROBERTSON J[1] This is an appeal from a decision Doogue J delivered in the High Court at Auckland on 6 June 2002 on a Rule 418 hearing. [2] The sole issue in the High Court, and before us, is whether the appellants established accord and satisfaction between the parties arising from the discontinuance of a previous proceeding CP330-SD99. [3] The first appellant and the respondent both lived together and were involved in business activities in concert over a number of years. They ceased to cohabit in 1997.[4] Proceedings were commenced in August 1999 seeking an order that a constructive trust existed in respect of identified property and/or indicating the rights of the respondent under a Property Sharing Agreement. There was an amended statement of claim filed in October 1999 but the causes of action remained the same. [5] A notice of discontinuance was filed in April 2000. [6] The present proceedings were issued in October 2001 seeking substantially the same relief on the same basis as had been the case in the 1999 proceedings. [7] On 11 October 2001 an interlocutory application "to strike out and for dismissal of that statement of claim" was filed. [8] There was an initial Notice of Opposition filed in October 2001 and then an amended Notice in November which provided:1 The facts to which the first defendant deposes in his affidavit in support of the defendants' application to strike out this proceeding ("the defendants' application") do not establish that the parties agreed to settle outstanding property issues between them. 2 In these circumstances, there is no accord and satisfaction, as alleged, or at all, on an objective assessment of the facts upon which the defendants rely in support of the defendants' application. 3 Consequently, there is no abuse of process, as the earlier proceeding was neither settled nor determined. 4 There are outstanding property issues to be resolved between the plaintiff and the first defendant and as between the plaintiff and the second defendants, which need to go on trial.[9] In February 2002 a hearing on that application was commenced. Shortly into the hearing, agreement was reached that the outstanding issue should be determined by way of s418 of the High Court Rules. The parties agreed that the question for determination was:Is there a binding accord and satisfaction between the parties in relation to proceeding CP330-SD99.[10] The matter was adjourned and timetabled for that hearing. It was held on 30 May 2002.[11] The Judge in the High Court heard some evidence for and on behalf of the appellants. The appeal is argued on the basis of uncontested facts. [12] It is alleged that the trial Judge erred in three particular findings, namely when he held:(a) The Defendants' case stands or falls in respect of the settlement of the subject matter – of the earlier proceedings upon whether an accord and satisfaction was reached as a result of the Defendants' offer contained in the proposal of 27 April 2002, confirmed by counsel's letter of 28 April 2000 and the Plaintiff counsel's letter to the Court and forwarded to the Defendants' counsel combined with the filing of the notice of discontinuance. (b) To the extent that the evidence of the First Defendant and his counsel conflicts with the contemporaneous documentation, in my view the contemporaneous documentation must be preferred, notwithstanding that it arose in circumstances putting pressures on those involved. (c) I can see no possible basis for concluding on an objective interpretation of the evidence and contemporaneous documents that there was an accord and satisfaction in respect of the disputes the subject matter of the earlier proceeding.[13] On 27 April 2000, the first appellant and the respondent had attended a mediation at the end of which Mr Clarke signed a handwritten proposal in the following form:The mediation which took place on 27 April 00 was left unresolved at 2.15pm and on the basis that Dianne Taylor had left instructions with her counsel to forthwith file a notice of discontinuance of proceedings filed in the High Court at Auckland under CP300.SD99. It was agreed for the purpose of attempting to resolve a number of outstanding issues to: 1 Roger Clarke will leave open his mediation offer of $170K (50K in one month, 50K in six months, 70K in twelve months) for a period of one month provided the discontinuance is filed under legal power of attorney by 4pm Friday 28 April and Mr Clarke will not pursue a claim of costs under the discontinuance. 2 This proposal is made to give Dianne Taylor a period to reflect further on the offer and to obtain a resolution of the outstanding issues including Business Travel Ltd. 3 Upon discontinuance of the proceedings all documents the subject of discovery will be forthwith returned to Mr Clarke.[14] On 28 April, Mr Clarke's then counsel (Mr Corry) wrote to Ms Taylor's then counsel (Mr Lendrum) and said:Would you be good enough to fax me a copy of the handwritten and signed proposal left with you yesterday afternoon. Please confirm also that the notice of discontinuance of the proceedings has been filed and in that regard I record that the discontinuance is on the basis of a full and final and unequivocal withdrawal of Mrs Taylor's claims against Mr Clarke and the trustees of the Water Treatments Trust, and encompasses a settlement on the basis that the discontinuance is in consideration for Mr Clarke and the trustees not claiming costs on the discontinuance. The proposal left with you yesterday was effectively a good faith gesture on Mr Clarke's part to allow your client to take advantage of the offer which was on the table when she decided to abandon the mediation process. No doubt, the proposal will be given to her and I would be grateful if you would let me know as soon as possible if indeed Mrs Taylor accepts it. If she does not, then there are still a large number of matters to be resolved, not the least of which is the issue of Business Travel Ltd. Could I please hear from you today in any event.[15] On the same day (although it is not known whether before or after receipt of the letter from Mr Corry), Mr Lendrum took two steps. First, he wrote a letter to the High Court at Auckland enclosing the Notice of Discontinuance of the proceedings and including a letter with a paragraph which said:Would you please ensure that this Notice of Discontinuance is placed upon the Court file in advance of the Master's Conference scheduled for Friday, 5 May 2000 at 11.45am. It is anticipated that this notice will resulting that Conference being taken out of the list. I make that comment because all matters involving these proceedings between the parties have been resolved pursuant to an interim agreement reached between them on 27 April 2000.[16] He also wrote to Mr Corry enclosing a copy of the Notice of Discontinuance and a copy of the letter to the Court. [17] It is common ground that Mr Lendrum did not specifically rebut any of the assertions in Mr Corry's letter. Ms Taylor never communicated an acceptance of the offer of $170,000 and no payment was ever made to her. [18] The appellants case is not that there was a settlement in terms of the handwritten note by agreement to pay $170,000 if called upon, but rather that the issues between them were finally and completely disposed of through Ms Taylor'sfiling the notice of discontinuance and Mr Clarke's agreeing not to pursue her for costs on the proceedings which had been discontinued. [19] The applicable law is non-controversial. The appellant (as the applicant in the High Court) had the burden under Rule 418 of demonstrating on the balance of probabilities there was a concluded settlement. [20] At the heart of Mr Dale's submission is reliance upon the evidence in the first affidavit of Mr Clarke, who was not called by Ms Taylor's counsel for cross- examination, when he said at para 7:As a result of further discussions between our respective counsel it was agreed between the Plaintiff and myself that the Plaintiff would withdraw all claims against myself and the trustees and discontinue the proceedings in return for which I would forgo my claim for costs on the discontinuance and I would furthermore leave on the table a cash offer to be accepted by the Plaintiff should she wish.[21] Mr Dale further contends that the clear thrust of this is confirmed in para 14 of the brief of evidence of Mr Corry (upon which he was not challenged) that:I informed Mr Lendrum that notwithstanding Ms Taylor's stated intend, Mr Clarke was nevertheless prepared to leave the offer which was on the table open for a month and would not claim costs on the discontinuance if Ms Taylor confirmed that all issues encompassed in CP 330/5099 were at an end.[22] A concession was made at trial by counsel for the appellant which the Judge noted in the following terms:There is no evidence of any clear oral agreement between the parties that all matters in dispute between them were settled in consideration of the defendants waiving costs on the discontinuance of the earlier proceeding. The defendants' counsel acknowledged that he was relying upon the plaintiff's counsel's letter as evidence of the settlement.[23] Mr Dale now argues that, notwithstanding this properly made concession (because it was never the appellant's case that an agreement was concluded in the mediation), the inevitable conclusion to be drawn from the documentary evidence when considered alongside the correspondence of Mr Lendrum as counsel for the respondent and the available testimony, was that the offer which was on the table had been accepted.[24] Justice Doogue was not persuaded that there had been accord and satisfaction and nor are we. [25] The contention of Mr Clarke (referred to in para 20 above) might standing alone, in the absence of challenge or cross-examination, have satisfied his onus of establishing both accord and the terms on which satisfaction would occur. But, in a second affidavit, Mr Clarke adopted the evidence contained in the affidavit of his counsel. He must be taken as subjecting his initial account to the modifications arising from his counsel's evidence, including cross-examination. Therefore the critical material is what is contained in that evidence and in the documents. [26] It is common ground that, after Ms Taylor left the mediation venue having indicated that she intended to discontinue, there was a discussion between counsel as a result of which Mr Lendrum asked Mr Corry to put a proposal in writing. That is the document referred to in para 8. [27] That document recites that the mediation was left unresolved. [28] There is a degree of imprecision about the document. Everyone now agrees that there had been no oral agreement either before or after Mr Clarke's written proposal. The proposal had two components. First, the leaving of the $170,000 payment on the table for a month to give Ms Taylor time to think about it and to obtain resolution of the outstanding issues including business travel. Secondly, that the initial component was conditional on (1) a discontinuance of the proceeding being filed by 4pm on 28 April, Mr Clarke not pursuing costs in respect of the discontinuance and on (2) agreement that documents which had been discovered be returned to Mr Clarke. [29] On 28 April there were the two letters and as noted above no indication as to the timing thereof, although counsel agreed that Mr Corry's was probably received by Mr Lendrum before he wrote his. Mr Corry's letter (referred to in para 14) has two paragraphs each of which must be given substance and meaning. Mr Dale's submissions before us concentrated very heavily on the first paragraph but he appears to overlook the clear meaning and purport of the second paragraph.[30] In his evidence, Mr Corry said that this letter "reflected the understanding between Mr Lendrum and himself that the filing of the discontinuance was intended to be an end to Ms Taylor's claim and a conclusion to the litigation." [31] Mr Corry subsequently said "my understanding that the claims had been settled was confirmed by the letter to the Court, that is Mr Lendrum's letter." This was a conclusory assertion on his part and appears to overlook the second paragraph of his own letter where he speaks of a large number of matters to be resolved. [32] In our judgment all that was finally concluded between the parties was that the existing proceedings would be discontinued and if it were done by 4pm on 28 April Ms Taylor would not be pursued for costs. [33] An objective reading of the rest of the material is that Ms Taylor was being given a month to decide whether to pick up the $170,000 in settlement of all outstanding issues. [34] The parties did not agree that filing the discontinuance would constitute settlement of the subject matter of the proceedings, as to which Ms Taylor was to have "a period to reflect further on the matter". [35] In short, the parties' agreement was about the proceedings and did not extend to a conclusion of the dispute between them. [36] Mr Fardell's decision not to call any evidence to rebut the testimony which was presented ran the risk that Mr Clark's para 7 standing by itself could have been seen as taking this case "beyond mere equilibrium" (see Gibbs v Rea [1998] AC 786, 799). But the simple position taken in that paragraph could not stand against an analysis of Mr Corry's evidence which Mr Clarke had elected to adopt. For the reasons we have given we are satisfied that, on the whole of the evidence, the appellant's onus was not met. [37] The appeal is accordingly dismissed with costs to the respondent in the sum of $5,000 together with disbursement as fixed by the Registrar.Solicitors: Grove Darlow, Auckland, for the Appellants Simon Palmer, Auckland, for the Respondent