Franklin v Grima

[1999] NSWSC 682

Reported Decision: [1999] 29 MVR 567

New South Wales

Supreme Court

CITATION:	Franklin v Grima [1999] NSWSC 682
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	ED 1459/99
HEARING DATE(S):	18 June 1999
JUDGMENT DATE:	18 June 1999
PARTIES :	Jasmin Franklin v Rita Grima
JUDGMENT OF:	Davies AJ at 1

COUNSEL :	Plaintiff - K. Pierce Defendant - J.E. Robson
SOLICITORS:	Plaintiff - Abbott Tout Defendant - Napier Keen
CATCHWORDS:	Disputed agreement to settle; motor vehicle accident
ACTS CITED:	Health & Other Services (Compensation) Act 1995 Motor Accidents Act 1988
CASES CITED:	Ballas v Theophilos (1957) 98 CLR 193
DECISION:	Application dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
1459/99
DAVIES AJ
Friday, 18 June 1999

JASMIN FRANKLIN v RITA GRIMA
JUDGMENT

1    HIS HONOUR: This matter arose out of a personal injuries claim which the defendant, Rita Grima, made against the plaintiff Jasmin Franklin. 2    On 29 May 1997, Napier Keen, solicitors for Grima, wrote to the claims officer of CIC Insurance Ltd, who was handling the matter on behalf of Jasmin Franklin offering to settle the claim for $41,000. In the letter, a number of heads of damage were set out including expenditure to Hornsby Physiotherapy and to the Health Insurance Commission. 3    Thereafter correspondence passed, questions were asked, and then, on 16 September 1997, CIC Insurance wrote a letter advising that it was prepared to offer $20,500 in full and final settlement. On 15 October 1997 Napier Keen wrote to say that it rejected the offer and did not have instructions to reduce its offer below $41,000. On 20 November 1997, CIC Insurance wrote making an offer of settlement of $34,500 in full settlement. On a subsequent date, in a letter which was headed "without prejudice", a sum of $4000 was offered in respect of costs. 4    On 25 November 1997 Napier Keen wrote to say,

"We acknowledge your correspondence of 20 November 1997 and am instructed to reject your offer and maintain our offer to you which was contained in our correspondence to you dated 29 May 1997."

5    One can see then that there had been somewhat of a flurry of correspondence in September, October and November with respect to settlement. Nothing occurred thereafter until 4 February 1998 when the claims officer, who handled the matter at CIC Insurance, Ms Danica Kolicic, rang Napier Keen and asked to speak to the person handling the relevant file. It appears that she was put through to a Mr Napier. 6    Ms Kolicic has no independent recollection of the terms of the conversation but she made a note on the relevant file that, on 4 February 1998, she made a phone call to the solicitor and “Advised we accept this offer”. Mr Napier has sworn an affidavit. Apparently he is not able to be here today and lives somewhere near Taree. His affidavit states in paragraph 3 that he has no recollection of the exact exchange of words with Ms Kolicic but that he recorded in a contemporaneous note that she had telephoned. The note is not in evidence. 7    The evidence therefore of the terms of the conversation is slight. Neither Mr Napier nor Ms Kolicic can recall the terms of the conversation and the only notes of the matter do not coincide, Ms Kolicic having a note that she advised that the matter was settled and Mr Napier merely noting that she had phoned. One would expect that, if Ms Kolicic had said in that conversation that the matter was settled, Mr Napier would have made a note of that point. 8    On the same day, 4 February 1998, Ms Kolicic wrote to Napier Keen a letter which stated:

"We are prepared to offer your client $41,000.00 in full and final settlement of the claim pursuant to her rights under the Motor Accidents Act, 1988. This offer is exclusive of all NSW Public Hospital and Ambulance accounts and is subject to the following inclusions:"

A number of out of pocket expenses were then set out. They do not coincide with the out-of-pockets listed in Napier Keen's letter of 29 May 1997. The letter went on to say:
"Accordingly, please find enclosed a Release & Indemnity for execution by your client and return to this office so that payment may proceed."

The letter then went on to say that CIC Insurance intended to make an advance payment of $4100 to the Health Insurance Commission and that the Commonwealth could retain some or all of the payment if moneys were repayable under the provisions of the Health & Other Services (Compensation) Act 1995 but that, if such amounts were greater than the amount of the advance payment, then the claimant would be liable to pay the difference to the Commonwealth. The release included a statement that the sum of $41,000 was accepted in full satisfaction of the claim and an agreement to indemnify CIC Insurance against any claims made under the provisions of the Motor Accidents Act 1988 in respect of injuries sustained by the claimant in the accident.

9    The issue is whether the matter was settled by what occurred on 4 February 1998. Napier Keen on 5 February 1998 said that instructions would be obtained and they later rejected the offer. Some time thereafter CIC claimed that the matter had been settled on 4 February 1998. 10    In my view, the offer of 29 May 1997 and repeated on 25 November 1997 by Napier Keen was no longer open for acceptance by 4 February 1998. I consider that more than a reasonable time for its acceptance had elapsed. The offer was repeated in November after a flurry of written communications, when the parties were not far apart. I would have expected that that offer, if it was to be accepted, would have been accepted promptly. It seems to me that by not accepting the offer promptly, and not replying to it in any way, CIC indicated that it was not accepting it. 11    If needed, reference to the principles of reasonable time be found in Ballas v Theophilos (1957) 98 CLR 193, particularly in the judgment of Williams J at 191 where his Honour said:

"In the absence of any specific time, there is an implication that an option to purchase must be exercised within a reasonable time. What is a reasonable time depends on the circumstances of the particular case."

His Honour went on to discuss the authorities.

12    In my opinion offers made in the course of personal injury claims should be accepted promptly, if they are to be accepted. What necessarily occurs in personal injury claims is that circumstances change. As time goes by, legal costs are incurred, medical reports are obtained, and the perception of the case on both sides alters. In my view, to allow two months to pass was to reject the claim, as a reasonable time had elapsed. 13    That leads me to the question of what happened on 4 February 1998. It seems to me to be unreliable to act upon the note which Ms Kolicic made of the telephone conversation. That note not only appears inconsistent with what Mr Napier recorded in his contemporaneous note, but it is inconsistent with what Ms Kolicic did on the day. The letter of 4 February 1998 did not confirm a settlement reached in a telephone conversation. Without referring to the telephone conversation, Ms Kolicic made an offer, an offer which, in the terms of the letter, if it was to be accepted, should be accepted by execution of the Release and Indemnity. 14    It seems to me, that even if Napier Keen’s offer was still open on 4 February, what was done on that day was not sufficient to amount to an acceptance of that offer. 15    In A Treatise on the Contract of Sale by R J Pothier - and I do not have to hand his general work on contractual obligations - the author makes the point which was so influential on English law that a contract requires a meeting of minds and an expression on the part of the parties which amounts to a binding agreement to contract. Thus, under our law, there must be offer and acceptance. Something must be done which, looked at objectively, was an offer, and something must be done on the other side which, again looked at objectively, was an acceptance. The offer and the acceptance must coincide in their terms. 16    In paragraph 32 Pothier put the point, which was not always accepted in English law, that there may be acceptance of offers by written communication:

"... the consent may be manifested not only between those who are present together; but also between those who are at a distance from each other, by means of letters, or through the intervention of an agent, per epistolam, and per nuntium ..."

17    In paragraph 33, the author discusses an interesting illustration which shows the importance of there being, not merely a meeting of minds, but an expression which shows that the parties are bound when the acceptance is communicated:

"The doctors have agitated the question, whether a discourse, in which one of the parties says, 'I am willing to sell you such a thing for such a price' and the other answers 'I am willing to pay the price', constitutes a perfect contract of sale."

18    In my opinion the letter of 4 February 1998, which was expressed as an offer, cannot be treated as acceptance of the written offer earlier made back in February because it did not use terms of acceptance but those of offer. One could not tell from it, when it was communicated, that each of the parties was then and there bound by a contract. It left itself open for acceptance. 19    The other point about the letter, of course, as Mr Robson of counsel for the defendant has submitted, is that it was in terms different from the offer of 29 May 1997. Although the terms were not much different, the items set out in the CIC Insurance letter were different from those in Napier Keen’s offer and could not necessarily be said to be those which the law would imply in any agreement between the parties. Thus, even if the letter of 4 February 1998 has been expressed as an acceptance, it could not have been determined, by looking at the offer and at the acceptance, that the parties were ad idem. 20    For those various reasons, I am of the view that the matter was not settled on 4 February 1998. I think the letter written did not settle the matter and I am not satisfied, on the balance of probabilities, that there was an oral conversation in which an agreement to settle was arrived at. 21    Accordingly, the application to the Court will be dismissed with costs.

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Last Modified: 07/07/1999