Christine Dencio v Zuezdan Zivanovic [1991] ACTSC 90; (1991) 105 FLR 117 (24 October 1991)

SUPREME COURT OF THE ACT

CHRISTINE DENCIO v. ZUEZDAN ZIVANOVIC
S.C. No. 845 of 1987
Contracts - Practice
[1991] ACTSC 90; (1991) 105 FLR 117

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Contracts - offer and acceptance - offer to settle negligence claim - lapse of offer after reasonable time - whether purported acceptance occurred after offer had lapsed - no new issue of principle.

Practice - motions - notice of motion seeking summary judgment on basis of alleged settlement agreement - whether procedure appropriate - no new issue of principle.

Collingridge v. Niesmann (1920) 37 WN (N.S.W.) 224 at 226

Ballas v. Theophilos (No. 2) [1957] HCA 90; (1957) 98 CLR 193 at 199

HEARING

CANBERRA
24:10:1991

Counsel for the plaintiff: Mr I. Nash

Solicitors for the plaintiff: J. Pappas

Counsel for the defendant: Mr G. Stretton

Solicitors for the defendant: Crossin Power and Haslem

ORDER

The application be dismissed.

DECISION

This is an application by way of notice of motion made in an action for personal injuries. The action is listed for hearing before the Master on 28 October next. The applicant defendant seeks the following orders:
"1. A declaration that the offer made by the plaintiff

to the defendant on 28 September 1990 in the sum of
$20,000.00 plus costs in the sum of $3,000.00 was validly
accepted by the defendant on 6 August 1991.
2. That judgment be entered for the plaintiff against
the defendant in the sum of $20,000.00 together with costs
agreed at $3,000.00.

2. The writ was issued and statement of claim filed as long ago as 17 July 1987. It took nearly two years for a defence to be filed on 21 June 1989. The plaintiff's present solicitors filed a notice of change of solicitor on 13 March 1990.

3. On 28 September 1990 the plaintiff's solicitor, Mr Pappas, telephoned the defendant's solicitor, Mr Maclachlan, and made an offer to settle the plaintiff's case. There is a conflict about the exact words which were used. I do not think it is necessary to determine exactly what they were. Each solicitor, I am sure, made a bona fide effort to record briefly what was said and, acting upon that record, to recollect some twelve months later what each said to the other.

4. The record made by Mr Pappas is as follows:

"Said I want 20,000.00 + costs (not exceeding $3,000) -
referred him to the earlier correspondence going back to his
offer of 1988. He said he wd look at it and get back to me
asap - may not be today"

5. The note made by Mr Maclachlan is as follows:

"Jack Pappas tel. Said his client would accept $20,000
plus costs. I asked what costs incl. He said $3,000.00."

6. In my view, this was an oral offer on the part of Mr Pappas to settle the plaintiff's claim for $20,000 together with costs assessed there and then at $3,000. It was not an offer to settle for $20,000 together with whatever the costs might be at the time acceptance of the offer might be communicated by the defendant. Indeed it was not argued by either side that the offer bore this latter construction.

7. There was no attempt on behalf of the defendant to accept the plaintiff's offer until 6 August 1991 when the defendant's solicitors wrote a letter in the following terms:

"We refer to your client's offer to settle this matter
in the sum of $20,000.00 plus costs of $3,000.00.
We have instructions to accept that offer.
We shall be sending you Order 42 documents under
separate cover."

8. The defendant now submits that there is a valid contract to compromise the plaintiff's claim constituted by the oral offer of 28 September 1990 and the written acceptance of 6 August 1991. The plaintiff submits that the offer lapsed before the defendant purported to accept it.

9. It is necessary to set out the history of the events between the time of the offer and the purported acceptance.

10. On 2 October the defendant's solicitors wrote to the plaintiff's solicitors confirming that there had been a telephone conversation between them on 28 September 1990 and indicating that the defendant's solicitors had sought their client's instructions.

11. On 25 October 1990 the plaintiff's solicitors wrote to the defendant's solicitors enclosing a certificate of readiness for signature. The certificate of readiness was duly signed and returned by the defendant's solicitors on 14 November 1990.

12. On 30 April 1991 Mr Thomas of the plaintiff's solicitors' office telephoned Mr Maclachlan in order to ascertain whether the defendant was prepared to admit liability. Mr Maclachlan said that he would obtain instructions. There is no evidence of the obtaining or communicating of any such instructions.

13. On 13 June 1991 the plaintiff's solicitors caused a statement of particulars of the plaintiff's injuries, disabilities, out-of-pocket expenses and economic loss to be served upon the defendant's solicitors according to the usual practice prior to trial.

14. On 19 June 1991 the plaintiff's solicitors wrote to the defendant's solicitors again requesting advice whether the defendant was prepared to admit liability. On the same day medical reports were served upon the defendant's solicitors accompanied by a formal letter.

15. On 24 July 1991 the defendant's solicitors wrote to the plaintiff's solicitors with certain criticisms of the particulars supplied and indicating that they would object to a date being fixed for hearing at the listing hearing until proper particulars were supplied.

16. On 6 August 1991, as already indicated, the defendant's solicitors wrote to the plaintiff's solicitors purporting to accept the offer of 28 September 1990. This letter was apparently received by the plaintiff's solicitors on the same day, for on that day Mr Thomas telephoned the defendant's solicitors enquiring about when the alleged offer had been made. On being told that the offer had been made on 28 September 1990, Mr Thomas said that he would have to get instructions because the offer had perhaps lapsed. Mr Maclachlan replied that he had only received instructions the day before. There was a certain amount of acrimonious correspondence thereafter to which no further reference is necessary.

17. The issue at this stage is simple. The plaintiff says that the offer of 28 September 1990 has lapsed, the defendant says that it was still on foot at the time communication of its acceptance was made on 6 August 1991.

18. It is incontrovertible, in my opinion, that the general principle of law to be applied in this case was stated by Harvey J., as he then was, in Collingridge v. Niesmann (1920) 37 WN (NSW) 224 at 226 thus:

"It is a general principle of law that an offer not
otherwise limited must be accepted within a reasonable time:
see Meynell v. Surtee (1855) 25 LJ. Ch at p 260 and
Ramsgate Hotel Co. v. Montefiore (1866) LR 1 Ex 109)."

19. That principle and that statement were expressly approved in the High Court in the judgment of Williams J. in Ballas v. Theophilos (No.2) [1957] HCA 90; (1957) 98 CLR 193 at 199. The principle was also accepted implicitly by the other members of the High Court in their several judgments.

20. The question then in the present case is whether the purported acceptance by the defendant's solicitors of the offer made on behalf of the plaintiff nearly a year previously was made within a reasonable time. I think that it clearly was not. Most importantly, the offer was made at a time when the plaintiff's solicitor was prepared to assess his costs at the sum of $3,000. That was prior to the signing of the certificate of readiness, and prior to all those steps which were required to be taken subsequently in order to get the matter ready for the listing hearing. I have no idea exactly what steps were taken, but it is, I would hope, well accepted amongst solicitors in the Australian Capital Territory that the listing hearing is an important stage in the preparation of a Supreme Court action and that prior to the listing hearing the parties and their representatives should have prepared the case to the stage of preparation where they know exactly what the issues are and each solicitor knows something of the strengths and weaknesses of his or her client's case. This is essential if the purposes of the listing hearing are to be achieved. A proper estimate of length of the trial is necessary, the availability of witnesses needs to be known, and there should be a genuine attempt in the interest of the clients to settle the case if at all possible. In other words, although the evidence in this particular case is somewhat scanty on the subject, I am prepared to draw the inference with very little difficulty that by the time of the communication of the purported acceptance on 6 August 1991, the plaintiff's costs had increased substantially from what they had been at the time of the offer nearly a year before.

21. Bearing in mind that there was an implied term in the offer that it was to be accepted within a reasonable time, I have little difficulty in reaching the further conclusion that as the plaintiff's costs had increased substantially by 6 August 1991, the offer to settle the case on the part of the plaintiff on the basis that the payment by the defendant of the plaintiff's costs be restricted to $3,000 meant that the time for acceptance within a reasonable period had long since passed. In other words, the offer had lapsed. It is not necessary to decide exactly when it lapsed. It had certainly lapsed by 6 August 1991.

22. In principle then, the applicant defendant is unable to make out the case it seeks to make out on the notice of motion. Before dismissing the application, however, I think it desirable to state that the procedure which the defendant followed in taking up the notice of motion is at least questionable. What should have been done was that there should have been an application to amend the defence in the action itself, followed by an application to strike out the plaintiff's claim. Whilst it may be that in practical terms the application by notice of motion to seek a declaration that there was a valid acceptance by the defendant of the plaintiff's offer was an appropriate procedure to adopt, there can be no justification for the further order sought, namely that judgment be entered for the plaintiff for the sum allegedly agreed upon. The procedure for summary judgment is laid down in the Supreme Court Rules and this application clearly falls outside the scope of the Rules.

23. The application is dismissed and unless the parties wish to be heard I propose to order the applicant defendant to pay the respondent plaintiff's costs. As noted, the action is listed to proceed before the Master on 28 October 1991.