DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application for summary judgment in favour of the plaintiff against the first defendant. The action was started by a claim filed 24 December 2003 seeking repayment of moneys lent by the plaintiff to the defendants, or in the alternative damages for breach of contract or unjust enrichment.  The statement of claim alleged that the plaintiff agreed with the defendants to lend them $92,000 financed by a mortgage of her home, on the basis that the defendants would be responsible for making the repayments under the mortgage.  The plaintiff alleged the defendants refused to make further payments in March 2001, and that the plaintiff as a result fell into arrears under the mortgage, and that the amount payable by the defendants pursuant to the agreement or by way of damages was $157,500.

2. [2]
   By notice of intention to defend and defence filed 19 February 2004 the first defendant asserted that there was a partnership between her and the plaintiff to carry on a travel agency business, and that the amount of approximately $93,000 was the plaintiff’s contribution by way of loan capital to that business.  She said that the partnership was dissolved in March 2002 when the business ceased trading.  The first defendant denied that there was any liability to pay the plaintiff anything.  The second defendant filed a separate notice of intention to defend and defence;  for present purposes it is not necessary to consider it.

3. [3]
   By a reply filed 8 March 2004 the plaintiff denied that the loan was part of the partnership.  The plaintiff admitted that there was a partnership but alleged that it had been dissolved in January 2001, and that thereafter the defendants had carried on the business themselves.

4. [4]
   The application for summary judgment was filed on 22 March 2005.  It sought a decision without an oral hearing.  The affidavit in support bases the application on the enforcement of a settlement agreement alleged to have been made at a conference on 25 February 2005.  The settlement agreement therein deposed to was to the effect that certain payments would be made, by the first defendant to the plaintiff, and that a security over a motor vehicle would be given to secure these payments, and that in default of payment the first defendant would be liable to pay as a debt an amount fixed at $40,000, and the first defendant consented to judgment in the action for that amount. 

5. [5]
   It was said that the agreement was oral, and that the following day a document incorporating the agreement was sent by the plaintiff’s solicitor to the first defendant’s solicitor. On 4 March 2005 a letter was received in reply from the first defendant’s solicitor which enclosed an amended version of the document which had been forwarded.  The solicitor set out an explanation for this change and continued on the second page of the letter:  “We understand that this is an amendment to the agreement.”  The amendment proposed was in relation to the timing of a particular payment.

6. [6]
   In the event the plaintiff was not prepared to agree to the amendment to the agreement. The first defendant has now filed an affidavit in which she deposes to its having been her “understanding that I was not bound by any settlement negotiations which occurred on that day. It was, further, my understanding that I would be bound by an agreement once it had been reduced to writing and signed.” She said that following the settlement conference she spoke to her solicitor and proposed an alternative settlement to the one in paragraph 3 of the affidavit of the solicitor for the plaintiff.  She also swore that “I was not advised that any agreement reached at the without prejudice conference would be binding upon me.  It was my understanding that I would not be bound by an agreement until such time it was reduced to writing and signed by all parties.”  She also swore that she is not now in a financial position to perform the agreement alleged in the affidavit of the plaintiff’s solicitor “as I believed the plaintiff had decided not to abide by the agreement at all.” 

7. [7]
   There is no material from the first defendant objecting to the matter proceeding by way of an application without an oral hearing, as sought by the plaintiff, nor are there any submissions on behalf of the first defendant. On 27 April 2005 the application which was originally pending in the court at Beenleigh was transferred to Brisbane.

Analysis

8. [8]
   I accept that a settlement agreement can be enforced in the proceeding, including by an application for summary judgment. The question then is whether, in respect of the settlement agreement, the first defendant has no real prospect of successfully defending all or part of the plaintiff’s claim, and there is no need for a trial of the claim or part of the claim: r 293.

9. [9]
   The first defendant does not say in her affidavit that her solicitor at the time of the settlement agreement did not have authority to enter into a settlement agreement. The plaintiff’s solicitor has sworn that, after a face to face confrontation between the parties which became heated, the plaintiff and the first defendant kept separate in the office and the settlement negotiations were carried out by the solicitors. The first defendant’s evidence as to her understanding that she would not be bound by an oral agreement in relation to the settlement conference is of no consequence. That is not the situation in relation to a without prejudice conference, unless the parties agree that there will be no agreement between them unless and until the agreement is reduced to writing and signed by them.^[1]  Whether the intention of the parties is to postpone the creation of contractual relations until a formal contract is drawn up and executed is a matter depending upon the language the parties have used, or may be inferred from their conduct.^[2]  It does not depend on a private understanding on the part of one of the parties.

10. [10]
    The first defendant’s understanding as to the effect of an oral agreement at a settlement conference does not represent the true legal position, in the absence of some further agreement to that effect between the parties. It is therefore of no consequence. What is of significance about the first defendant’s affidavit is that it does not dispute that there was an oral agreement in the terms alleged by the plaintiff’s solicitor. Indeed, the reference to “any agreement reached” suggests that the first defendant has been careful not to dispute the existence of an oral agreement. Furthermore, the letter of 4 March 2005 from the solicitor who negotiated the agreement on behalf of the first defendant expressly acknowledged that what was proposed by him in that letter was an amendment to “the agreement”, which in the circumstances can only sensibly be a reference to the oral agreement deposed to by the plaintiff’s solicitor.

11. [11]
    In the absence of an agreement between the parties that there would be no binding agreement unless and until it was reduced to writing and signed, an oral agreement made is binding on them. That was clearly recognised by the then solicitor for the first defendant, who properly proposed an amendment to that agreement, evidently in accordance with his client’s instructions, but it remained a matter for the plaintiff whether or not to accept that amendment. The plaintiff did not do so, and was entitled not to do so.

12. [12]
    The plaintiff on the face of it is entitled to enforce the settlement agreement. There is no evidence of any repudiation of that agreement by the plaintiff, or any acceptance by the plaintiff of any repudiation by the first defendant, or of any abandonment of the agreement by the plaintiff. On the contrary, the plaintiff promptly rejected the proposed amendment to the agreement and, so far as the material before me discloses, has consistently sought to enforce the settlement agreement.

13. [13]
    The first defendant does not dispute that she has breached the settlement agreement, if it was binding on her. In those circumstances pursuant to the agreement it is appropriate to give judgment against her for part of the claim, namely $40,000, the amount payable in default under the settlement agreement. On the material before me, it is clear that that is the situation. I am satisfied that there is no need for a trial of the action.^[3]  Accordingly there will be judgment that the first defendant pay the plaintiff $40,000.  I order the first defendant to pay the plaintiff’s costs of and incidental to this application to be assessed.