Ford & Anor v La Forrest & Ors [2001] QSC 261 (23 July 2001)

Last Updated: 26 July 2001

SUPREME COURT OF QUEENSLAND

CITATION:	Ford & Anor v La Forrest & Ors [2001] QSC 261
PARTIES:	JOHN FORD
	(first applicant)
	AND
	CONRAD INTERNATIONAL HOTELS CORPORATION (ACN 010 471 137)
	(second applicant)
	v
	ADELE LA FORREST
	(first respondent)
	AND
	DETECTIVE SERGEANT TREVOR NEWMAN
	(second respondent)
	AND
	DETECTIVE SERGEANT NOLAN WHITE
	(third respondent)
	AND
	STATE OF QUEENSLAND
	(fourth respondent)
FILE NO/S:	S4348/01
PARTIES:	STATE OF QUEENSLAND
	(first applicant)
	AND
	DETECTIVE SERGEANT NOLAN WHITE
	(second applicant)
	AND
	DETECTIVE SERGEANT TREVOR NEWMAN
	(third applicant)
	v
	ADELE LA FORREST
	(first respondent)
	AND
	JOHN FORD
	(second respondent)
	AND
	CONRAD INTERNATIONAL HOTELS CORPORATION (ACN 010 471 137)
	(third respondent)
FILE NO/S:	S4439/2001
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	23 July 2001
DELIVERED AT:	Brisbane
HEARING DATE:	16 July 2001
JUDGE:	Atkinson J
ORDER:	Declaration that Appeal No 3708/00 to Court of Appeal has been compromised.
	Order that Appeal No 3708/00 be permanently stayed on ground that it has been compromised.
CATCHWORDS:	PRACTICE - OFFERS TO SETTLE - COMPROMISE OF PROCEEDINGS - STAY OF PROCEEDINGS - whether proceedings have been compromised - whether proceedings should be permanently stayed CONTRACT - OFFER AND ACCEPTANCE - INTENTION TO BE BOUND - REPUDIATION - whether compromise agreement effected - whether parties intended terms of agreement to have binding effect on their own - whether words used amounted to unequivocal acceptance of offer Electronic Transactions Act 1999 (Cth) s 4, s 8(1) Bushwall Properties Ltd v Vortex Properties Ltd [1976] 1 WLR 591, considered Giblin v Duggan Full Court of Supreme Court of Queensland, No 3105 of 1980, 19 March 1981; Queensland Supreme Court Practice Decisions [7522], not followed Hillier v Sheather (1995) 36 NSWLR 414, considered Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353, considered Morris v FAI General Insurance Company Limited [1996] 1 Qd R 495, followed Newton, Bellamy & Wolfe v SGIO [1986] 1 Qd R 431, followed Ross T Smyth & Co v TD Bailey, Son & Co [1940] 3 All ER 60; (1940) 56 TLR 825, considered Thomas v Hollowell 20 Lll App 2d 288, considered Tomlin v Standard Telephones and Cables Ltd [1969] 1 WLR 1378, considered Van Bronkhorst v Safeco Corporation [1976] USCA9 45; 529 F 2d 943, considered
COUNSEL:	A.M Daubney QC for Applicants in matter 4348/01
	A.J Macsporran for Applicants in matter 4439/01
SOLICITORS:	Quinlan Miller & Treston for Applicants in matter 4348/01
	Crown Law for Applicants in matter 4439/01

Factual Background

[1] Adele La Forrest (now known as Adele Morrow) unsuccessfully sued the applicants, Conrad International Hotels Corporation, John Ford, Detective Sergeant White, Detective Sergeant Newman and the State of Queensland, in the District Court for personal injuries. On 31 March 2000, His Honour Judge Forde gave lengthy, detailed reasons for dismissing the action. Ms Morrow filed a Notice of Appeal in the Court of Appeal on 27 April 2000. Extensive submissions were filed by the parties to the appeal. There was prolonged disputation about a number of matters including the contents of the appeal book.

[2] On 22 February 2001, Quinlan Miller & Treston, solicitors for Conrad International Hotels Corporation and Mr Ford, wrote to Ms Morrow making an offer to settle the matter in the following terms:

"... our client is minded to finalise this matter in an effort to avoid incurring further expense which may, or may not be recoverable from you. In that regard, our client is willing to make a commercial offer of settlement without any admission of liability. We therefore advise that the first and second respondents hereby offer to bear their own costs of this action (including the trial) incurred to date in exchange for your immediate discontinuance of the appeal against the first and second respondents and your signing a Discharge in their favour.

This offer is made on a without prejudice basis and is open for acceptance for a period of seven (7) days only. We advise that this will be our clients' only offer of settlement in this matter and should you reject this offer, we are instructed to proceed with the defence of the Appeal and vigorously pursue recovery from you of any costs incurred in doing so, as well as the costs of trial."

[3] On 26 February 2001, the Crown Solicitor, who acted on behalf of the State of Queensland, Detective Sergeant Nolan White and Detective Sergeant Trevor Newman, sent a letter by facsimile transmission to Ms Morrow making a similar offer of settlement:

"I advise that my clients are prepared to offer to settle this matter on the basis that each party walk away bearing their own costs. This means that you agree to discontinue the Appeal in respect of this matter and agree to bear your own costs of the action at first instance and the Appeal proceedings to date and my clients, the Third, Fourth and Fifth Defendants, will do likewise that is, agree to the discontinuing of the Appeal and bear their own costs incurred in respect to this matter at first instance and on Appeal to date.

Please note that this offer will remain open until 4pm Friday 2 March 2001 after which time it will lapse."

The offers were, as was submitted, clear and unambiguous.

[4] On 22 February 2001, Ms Morrow replied to Quinlan Miller & Treston's offer with a counter offer:

"I believe that your client is responsible for causing injury to me and I would be prepared to accept the sum of $50,000 in full and final settlement of this matter, with each party to bear its own costs."

That offer was rejected by Quinlan Miller & Treston by letter of the same date.

[5] On 26 February 2001, Ms Morrow also sent a counter offer by letter to the Crown Solicitor:

"I refer to the above matter and advise that I would be willing to accept the sum of $50,000 in full and final settlement of this matter with each party to agree to bear their own costs although I believe the quantum is likely to be in excess of this sum."

Later on the same day, Ms Morrow sent another letter to the Crown Solicitor saying that the offer was on a "once only basis". On 27 February 2001, the Crown Solicitor rejected Ms Morrow's offer.

[6] However on 1 March 2001, within the time for which the applicants' offers were expressed to be open, Ms Morrow communicated with both Quinlan Miller & Treston and the Crown Solicitor in response to the offers of settlement made on 22 February and 26 February respectively. Those offers had not been withdrawn. With regard to the offer of settlement from Quinlan Miller & Treston, Ms Morrow sent a response by e-mail which said:

"I refer to your client's offer of settlement dated 22 February 2001, whereby you indicate that your client is offering to to [sic] bear their own costs of this action (including the trial) incurred to date in exchange for my immediately discontinuing of the Appeal against the first and second respondents and signing a Discharge in their favour.

I advise that I am prepared to accept this offer and await the receipt of your discharge in this regard."

[7] Ms Morrow's response to the Crown Solicitor was sent by facsimile transmission which read:

"I refer to your offer of settlement dated 26 February and advise that I accept the terms of the offer that each party bear their own costs in relation to both the trial and the Appeal if I agree to discontinue the Appeal."

This response was an unequivocal acceptance of the offer that had been made by the Crown Solicitor on 26 February 2001.

[8] The Crown Solicitor sent Ms Morrow an acknowledgment of her acceptance of the settlement offer and enclosed a Deed of Discharge for execution. Quinlan Miller & Treston also confirmed by e-mail, dated 1 March 2001, that they had received Ms Morrow's e-mail and confirmed that she had accepted their clients' offer of 22 February 2001. Quinlan Miller & Treston sent a Discharge and Notice of Discontinuance to Ms Morrow. The terms of the deeds were unexceptionable. They are fuller and more precise but not different in effect.

[9] Ms Morrow said she found the deeds forwarded by the Crown Solicitor and Quinlan Miller & Treston unacceptable. She has rejected their contentions that a compromise had been effected and has refused to sign a notice of agreement to dismiss the appeal which would have the effect of informing the Court of Appeal of the settlement of the matter.

Application

[10] The respondents to the appeal, who are the applicants in these matters, have accordingly applied for a declaration that the appeal filed by Ms Morrow in the Court of Appeal has been compromised among the parties and an order that the appeal be forever stayed on that ground. All parties filed and read affidavits and written submissions in this application. Much of the affidavit material filed by Ms Morrow was, as was submitted, irrelevant to the determination of the matter raised by the application. Nevertheless, I have given careful consideration to all the matters raised by her. She is apparently a solicitor admitted to practice in Victoria but appeared on her own behalf as respondent to the applications.

[11] Ms Morrow, in her oral and written submissions, has raised a number of arguments as to why she says there has been no compromise. With regard to the offers of settlement by both the Crown Solicitor and Quinlan Miller & Treston, Ms Morrow submits, inter alia, that the terms of agreement reached were not intended to have binding effect on their own; that the conduct of the solicitors was oppressive and intimidatory; and that there is evidence of duress, undue influence and unconscionability. With regard to the offer of settlement by Quinlan Miller & Treston specifically, Ms Morrow submits that the actual terms of the discharge are unsatisfactory; that acceptance by e-mail is not capable of creating contractual relations; and that the words used by her in the e-mail fall short of an unequivocal acceptance of the offer.

Existence of Compromise Agreement

[12] Ms Morrow has submitted that there was no binding agreement to compromise as the circumstances fall into the third category of cases referred to in Masters v Cameron:[1]

"Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then carry it in to execution ...

Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own..."

When the correspondence in this case is examined, however, it can be seen that the agreement with Quinlan Miller & Treston is an example of the second type of case, i.e. the parties agreed upon the terms of their bargain and intended no departure from or addition to those terms, express or implied, but the applicants made performance conditional upon the execution of the discharge. In such a case the parties are immediately bound by the contract. Ms Morrow bound herself to an obligation to discontinue the appeal and to sign a discharge in favour of the parties for whom Quinlan Miller & Treston acted.

[13] In relation to the agreement with the Crown Solicitor, no mention was made of a formal contract. If it is implied, as I think it should be, that the parties proposed to have the terms of their bargain restated in a formal contract such as a Deed of Discharge, then the terms of the correspondence show it to be an example of the first type of case, i.e. one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of the terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.

[14] When Ms Morrow refused to discontinue the appeal and sign a discharge she was in breach of her obligations under the agreements she had made.

[15] Ms Morrow submitted that repudiation of a contract should not be lightly found or inferred,[2] however in this case her repudiation was explicit and has not been lightly found. On the contrary, there is a general public policy in favour of enforcing compromise and settlement agreements when such agreements have been made. Settlements reduce legal expense and save time for the court and the parties.[3] Such agreements are commonly made orally or by correspondence with the terms then being reduced to writing or formalised in a Deed of Discharge.

[16] In relation to the Deed of Discharge sent to Ms Morrow by Quinlan Miller & Treston for signature, objection is taken on the basis that it contained a clause whereby the settlement was made without an admission of liability by the applicants. Yet the offer which she said she was prepared to accept was explicitly made "without any admission of liability", so this objection is without substance.

[17] Ms Morrow has further alleged in respect of both matters that the conduct of the solicitors was oppressive and intimidatory but there is no evidence that their behaviour could be properly so characterised. In her written submissions, she raised duress, undue influence, and unconscionability but again there is no evidence to support any such allegations. Ms Morrow has been under psychiatric care but does not assert that she did not have capacity to make the contract.

[18] Ms Morrow also raised an argument in relation to the offer of settlement by Quinlan Miller & Treston that an acceptance by e-mail could not be verified and was not capable of creating contractual relations. However, she has herself confirmed in her affidavit material that she sent the e-mail on 1 March 2001. E-mail was a common form of communication by her with Quinlan Miller & Treston. Further an acceptance by e-mail is capable of creating legal relations.[4]

Unequivocal acceptance of offer of settlement

[19] In addition to the submissions already canvassed, Ms Morrow argues that there was no compromise between herself and the parties on whose behalf Quinlan Miller & Treston act because she did not unequivocally accept the offer. She relies on her use of the words in her e-mail dated 1 March 2001, "I advise that I am prepared to accept this offer", as showing that she did not accept the offer but was rather prepared to consider their offer.

[20] The question that arises for decision is whether the words by the respondent that she was prepared to accept the offer constituted an acceptance of the offer in this case. The solicitors clearly treated it as such. It was submitted on their behalf that Ms Morrow's e-mail was in fact an offer which was then accepted by the solicitors but in my view, by her e-mail, Ms Morrow accepted the offer made by the solicitors.

[21] The question of whether such words give rise to the acceptance of an offer has arisen in this jurisdiction in the context of a claim by a plaintiff that liability has been accepted and a subsequent denial of liability by the defendant. Accordingly, it has arisen both in the context of contract and estoppel. The difficulty for the applicants in this case arises from an unreported decision of the Full Court of the Supreme Court in 1981, Giblin v Duggan,[5] where the words "we ... are prepared to accept liability" were construed not to be an acceptance of an offer.

[22] In that case the solicitors for the proposed plaintiff wrote to the solicitors for the insurance company as follows:

"We have been instructed that unless we receive some indication that the third party is prepared to admit liability and is further prepared to compensate our client for the damage he has suffered, we are to institute proceedings against the third party."

To this letter the second defendant replied in the following terms:

"We acknowledge receipt of your correspondence ... We have investigated this matter and are prepared to accept liability on behalf of our insured driver. Please submit the relevant medical report to our office to enable us to give consideration to an offer for quantum."

Lucas J held that no contract was created by this correspondence. His Honour said:

" ... I think the question that requires decision is whether the correspondence which is set out in the defence or in the demurrer is sufficient to constitute a contract between the plaintiff and the second defendant. In my opinion, it is not. It is to my mind merely a statement of intention to accept liability on behalf of the driver and a request for the details which might enable the insurance company to make an offer to the plaintiff. It is not couched in the language of contract and indeed it seems to me from its terms to be quite inconsistent with the idea that a concluded contract came into existence on the sending of the letter."

[23] In contrast to that were the terms of the correspondence in a case decided by the Full Court of the Supreme Court in 1985, Newton, Bellamy & Wolfe v SGIO.[6] In that case, the respondent's solicitors wrote in the following terms:

"I refer to my letter ... and request you to now forward to me, details of your client's claim.

It is confirmed that liability is not an issue."

[24] Negotiations, as the court found, then proceeded slowly until the expiration of the period of limitation. A writ issued and the consequential statement of claim was met with a plea that the claim was statute barred. The respondent commenced a fresh action seeking a declaration that the correspondence constituted an agreement for the admission of liability. The argument was whether or not the words constituted merely an indication of an intention on the part of their client rather than a contract or a representation giving rise to an estoppel. Andrews ACJ and Derrington J held that the words constituted an agreement. MacPherson J (as his Honour then was) agreed and considered that the court in Giblin v Duggan was plainly not intending to lay down as a general proposition that statements of the kind in question were never capable of founding an enforceable agreement or contract.[7]

[25] These decisions were considered by the Court of Appeal in Morris  v FAI General Insurance Company Limited.[8] Pincus and Davies JJA considered[9] the distinction between Giblin v Duggan and Newton, Bellamy & Wolfe. Their Honours held:

"In Giblin v Duggan the claim was based in contract and it was held that a letter, written by an insurer responding to a threat of proceedings, did not conclude a contract. The former letter asked for an indication that the insurer was prepared to admit liability and was prepared to compensate the plaintiff. The insurer's reply stated that:

`We have investigated this matter and are prepared to accept liability on behalf of our insured driver. Please submit the relevant medical report to our office to enable us to give consideration to an offer for quantum.'

That was held to be `merely a statement of intention to accept liability' and not to be consistent with the existence of a concluded contract.

In a subsequent decision on rather similar facts, Newton, Bellamy & Wolfe v State Government Insurance Office (Queensland),^[[10]^] Giblin v Duggan was distinguished and it was held that an insurer's letter which said, "It is confirmed that liability is not in issue", made an agreement. MacPherson J (as his Honour then was), in discussing the distinction between Newton, Bellamy & Wolfe on the one hand and Giblin on the other remarked:

`In the court below the learned judge considered that the decision in Giblin v Duggan turned on the use in that case of the expression "are prepared to accept" as indicating on the part of the defendant something less than finality in the intention to put a firm offer. With respect, that is in my opinion the correct view of the ratio in that case. The point is, it must be considered, a fine one' (440)

We agree that the distinction between the two cases seems fine, but would respectfully doubt whether Giblin, treated as resting on the basis mentioned in Newton, Bellamy & Wolfe, can be correct. In the context in which it was written, namely that of a response to a demand for an indication that the insurer "is prepared to admit liability and is further prepared to compensate our client for the damage he has suffered", the statement that the insurer was prepared to accept liability would not, to the ordinary recipient, imply that the insurer wished to give further consideration to the question of liability, or otherwise reserve its position about liability."

[26] The President agreed[11] that the phrase used by the defendant that it was "prepared to accept" did not convey an intention to accept liability with an implicit reservation but rather conveyed that liability was accepted. However, since the decision in Morris v FAI General Insurance Company Limited was based on estoppel rather than contract, the court found it unnecessary to overrule the decision in Giblin.

[27] The reasoning of the Court of Appeal is, with respect, compelling. A similar view was taken by the Court of Appeal in England in Tomlin v Standard Telephones and Cables Ltd,[12] where the court held that a letter from the plaintiff's solicitor which said that his client had instructed him to say "that he will agree to settle his case on a 50/50 basis" constituted a concluded agreement on the basis of 50/50 liability.

[28] It is necessary to look at the course of negotiations to consider whether there is an offer that has been accepted.[13] The words, "I am prepared to accept", may constitute an offer which may be accepted. For example, in her letter of 22 February 2001 to Quinlan Miller & Treston, Ms Morrow said, "I would be prepared to accept the sum of $50,000 in full and final settlement of this matter". This was an offer capable of being accepted. There had been no prior offer by the other party in those terms. On the other hand, such words may constitute the acceptance of an offer which had previously been made, as they did in her e-mail of 1 March 2001 to the offer made on 22 February 2001. No reservation was expressed nor should be implied. The appellant, in her e-mail of 1 March 2001, accepted the offer to compromise the action. Consideration passed between the parties which was the promise to forbear from pursuing the appeal in return for the respondents to the appeal not insisting on payment of their costs.

Conclusion

[29] In my view, it follows that the action between Ms Morrow and the applicants has been compromised. Accordingly, there should be a permanent stay of the appeals between Ms Morrow, Mr Ford, Conrad International Hotels Corporation, Detective Sergeant Trevor Newman, Detective Sergeant Nolan White and the State of Queensland.

[1] [1954] HCA 72; (1954) 91 CLR 353 at 360 - 361

[2] Ross T Smyth & Co v TD Bailey, Son & Co [1940] 3 All ER 60; (1940) 56 TLR 825

[3] Hillier v Sheather (1995) 36 NSWLR 414 at 421; Van Bronkhorst v Safeco Corporation [1976] USCA9 45; 529 F 2d 943; Thomas v Hollowell 20 Ill App 2d 288

[4] See Electronic Transactions Act 1999 (Cth) s 4, s 8(1)

[5] Full Court of the Supreme Court of Queensland, No 3105 of 1980, 19 March 1981; Queensland Supreme Court Practice Decisions [7522]

[6] [1986] 1 Qd R 431

[7] (supra) at 440

[8] [1996] 1 Qd R 495

[9] (supra) at 499

[10] (supra)

[11] (supra) at 497

[12] [1969] 1 WLR 1378 at 1382 per Danckwerts LJ

[13] Bushwall Properties Ltd v Vortex Properties Ltd [1976] 1 WLR 591