Lahoud & Anor v Lahoud & Ors [2005] NSWSC 509

New South Wales Supreme Court

CITATION : Lahoud & Anor v Lahoud & Ors [2005] NSWSC 509

HEARING DATE(S) : 17-20 and 23-25 May, 2005

JUDGMENT DATE : 30 May 2005

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Judgment for Plaintiffs; Cross Claim dismissed.

CATCHWORDS : CONTRACT - ORAL TERMS - Formal agreement executed by the parties - whether an oral collateral contract made - question of fact - no question of principle.

LEGISLATION CITED : Conveyancing Act 1919 (NSW) - s.54A

Joseph Lahoud - First Plaintiff/First Cross Defendant Joseph Lahoud & Associates Pty Ltd - Second Plaintiff/Second Cross Defendant PARTIES : Victor Lahoud - First Defendant/First Cross Claimant Castle Constructions Pty Ltd - Second Defendant/Second Cross Claimant Solidare Pty Ltd - Third Defendant/Third Cross Defendant

FILE NUMBER(S) : SC 3606/01

S.D. Epstein SC, D. Knoll - Plaintiffs/Cross Defendants COUNSEL : R.J. Weber SC, L.V. Gyles - Defendants/Cross Claimants

Baron & Associates - Plaintiffs/Cross Defendants SOLICITORS : Aitken McLachlan Thorpe - Defendants/Cross Claimants

LOWER COURT JURISDICTION :

Introduction

1 The principal contestants in this litigation are Victor Lahoud and his younger brother, Joseph. For the sake of convenient reference and without intending any disrespect, I will refer to the members of the Lahoud family by their first names. 2 Victor and Joseph engaged in a number of substantial real estate developments over several years. Victor is a real estate developer and Joseph is an architect. They fell into dispute and Joseph and his company commenced proceedings against Victor and his companies in the Industrial Relations Commission of New South Wales. 3 The proceedings were compromised and Terms of Settlement were signed by the parties and their respective senior counsel on 6 February 2001. Under the Terms of Settlement Victor and his companies agreed to pay and transfer to Joseph money and property exceeding $1.5M in value. Victor has paid $570,000 to Joseph but he refuses to perform the rest of the Terms of Settlement. Joseph sues for specific performance and damages. 4 By his Cross Claim, Victor seeks to set aside the Terms of Settlement because he says it was procured by trickery. He says that Joseph promised, as a precondition of the settlement, to hand over to him their deceased father's watch and to share with him the expenses of looking after their disabled brother, Riad. He says that these terms were not included in the Terms of Settlement signed by the parties because he and his brother agreed that they were private family matters and that it was not appropriate to include them in a document prepared by lawyers. 5 Although Victor primarily seeks to have the Terms of Settlement set aside, his secondary claim, made by an amendment to his Cross Claim during the course of the hearing, is for specific performance of what he says is a collateral agreement to the Terms of Settlement, namely, the agreement by Joseph to deliver the watch and to share the cost of Riad's care. In the alternative to specific performance of the collateral contract, Victor seeks damages for breach of contract. 6 Victor's position, as stated at the commencement of the hearing, is that he does not object to anything in the Terms of Settlement and he is willing to perform the agreement therein contained, subject only to performance by Joseph of what he says is the whole of the agreement reached between them, that is, the agreement including the private arrangement. 7 Joseph denies that there was any agreement between himself and Victor as to delivery of the watch and care of Riad; he denies that anything said on those subjects prior to the execution of the Terms of Settlement was a binding agreement and says further that if there was any such agreement it is unenforceable under s.54A Conveyancing Act 1919 (NSW) for want of writing. 8 Accordingly, the factual and legal focus of the case is on Victor's Cross Claim. If the Cross Claim fails on the facts, Victor has no defence to Joseph's claim for specific performance of the Terms of Settlement. However, if Victor establishes the facts upon which he relies for the collateral agreement, questions arise as to the consequences in law. 9 The dispute about enforcement of the Terms of Settlement has generated proceedings in the Industrial Relations Commission to set them aside and two sets of proceedings in this Court. An enormous volume of affidavit and documentary evidence has been deployed; it has taken some four years for the case to come to trial; the hearing was listed for ten days; boxes of documents were intended to be tendered. However, resolution of the dispute depends entirely upon what was said between Victor and Joseph in three fairly short conversations on 5 February 2001. No one else was present at these conversations; there is no contemporary note or memorandum of what was said. 10 Prior to execution of the Terms of Settlement, Victor said something to his legal advisers about his private discussions with Joseph. Those statements are the only evidence which may be capable of corroborating Victor's account of what was said between the brothers in their private conversations. I will return to that evidence shortly. However, notwithstanding what I will call the corroborating evidence, the fact remains that the determination of this case depends essentially on whether I accept Victor's account of what was said in the three conversations on 5 February 2001, or whether I accept Joseph's account. Family background