Barbara Mergler v HP Mercantile Pty Limited [2006] NSWSC 179

New South Wales Supreme Court

CITATION : Barbara Mergler v HP Mercantile Pty Limited [2006] NSWSC 179

HEARING DATE(S) : 28 February 2006, 1 March 2006

JUDGMENT DATE : 24 March 2006

JUDGMENT OF : Bergin J

DECISION : Application dismissed.

CATCHWORDS : Application for specific performance of an agreement alleged to have been made at a meeting between the parties without the presence of their solicitors - whether binding agreement reached.

Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153 CASES CITED : Dare v Pulham (1982) 148 CLR 658 Geebung Investments Pty Limited v Varga Group Investments No 8 Pty Limited (1995) 7 BPR 14, 551 Masters v Cameron (1954) 91 CLR 353

PARTIES : Barbara Mergler (Plaintiff) HP Mercantile Pty Limited (Defendant)

FILE NUMBER(S) : SC 6225/04

COUNSEL : T D F Hughes (Plaintiff) T G Stitz (Defendant)

SOLICITORS : MBP Legal (Plaintiff) Versace McKenzie Lawyers (Defendant)

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BERGIN J

24 MARCH 2006

6225/04 BARBARA MERGLER v HP MERCANTILE PTY LIMITED JUDGMENT 1 The plaintiff, Barbara Colette Talbot Riordan Mergler, seeks an order for specific performance on an agreement alleged to have been reached with the defendant, HP Mercantile Pty Ltd, on 12 November 2004 purportedly settling District Court proceedings between the defendant (as plaintiff) and the plaintiff (as defendant).

District Court Proceedings 2 The District Court proceedings related to an investor loan agreement allegedly entered into between Tumut River Orchard Management Limited (in Liquidation) (TROM) and the plaintiff on 30 June 1997 (the Loan Agreement). The purpose of the Loan Agreement was to allow the plaintiff to purchase four allotments in a tax scheme known as the Harcourt Vines Project. The security held for the loan included a charge over the allotments financed by the loan. 3 The defendant, as plaintiff in the District Court, claimed it was the assignee of TROM's interests under the Loan Agreement and that the plaintiff, as the defendant in the District Court proceedings, had defaulted under the Loan Agreement. The District Court Statement of Liquidated Claim claimed $76,460 as the outstanding balance of the loan. Those proceedings were commenced on 30 May 2002. 4 On 11 July 2003 the defendant was ordered to lodge $20,000 with the District Court for security for costs. It was also ordered to pay the plaintiff's costs of that motion (the Costs Order). The plaintiff's solicitors forwarded a Tax Invoice to the defendant's solicitors in respect of those costs in the amount of $18,105.40. The defendant's solicitors suggested that the costs should be assessed at the conclusion of the proceedings. 5 In August 2004 there was a settlement conference attended by the plaintiff and her husband, Mr John Mergler, and a solicitor from MBP Legal, solicitors for the plaintiff. Also present at the meeting were Mr Ross Chapman, an agent of the defendant and Peter Ton, a solicitor for the defendant. The settlement negotiations were unsuccessful and, it appears, somewhat acrimonious. The District Court proceedings were set down for hearing on 22 November 2004 for three days. On 20 October 2004 the plaintiff filed a Notice of Motion seeking an order vacating the hearing and referring the matter to compulsory mediation. That Motion was unsuccessful and the plaintiff was ordered to pay the defendant costs of the Motion (the Mediation Motion Costs Order). 6 On 11 November 2004 the plaintiff's solicitors wrote to the defendant's solicitors, Versace McKenzie Lawyers, requesting a meeting to attempt to resolve the matter "in the absence of each party's legal advisors". The defendant's solicitors advised that Mr Ross Chapman, an agent of the defendant, would be available "up until 4pm" on Friday 12 November 2004. The defendant's solicitors also advised that if the plaintiff was unavailable to attend at that time Mr Chapman would be available on Monday afternoon, 15 November 2004 or Wednesday morning, 17 November 2004. 7 The meeting between the plaintiff and her husband and Mr Chapman occurred on 12 November 2004. The outcome of this litigation depends upon the findings in respect of the conversations that occurred at that meeting, which are the subject of analysis later in this judgment. On the one hand the plaintiff claims that a binding agreement was struck at 6pm that evening, and the other hand the defendant claims no such binding agreement was reached. 8 After the meeting correspondence ensued between the solicitors for the respective parties in respect of some Short Minutes of Order and a Deed of Release. Those communications broke down and these proceedings were commenced on Friday 19 November 2004 by Summons.