Imhoff v Lotherington

[2010] QDC 82

DISTRICT COURT OF QUEENSLAND

CITATION:

Imhoff v Lotherington [2010] QDC 82

PARTIES:

Neil Raymond Imhoff
(Appellant)

v

Michelle Dianne Lotherington
(Respondent)

FILE NO/S:

D3609 of 2008

DIVISION:

Civil

PROCEEDING:

Appeal

ORIGINATING COURT:

District Court

DELIVERED ON:

12 March 2010

DELIVERED AT:

Brisbane

HEARING DATE:

8 March 2010

JUDGE:

Samios DCJ

ORDER:

Appeal allowed.  Set aside learned Magistrate’s orders made 25 November 2008.  Leave to the appellant to withdraw offer to settle.

CATCHWORDS:

Practice – Uniform Civil Procedure rules – rule 358(4) – offer to settle made by mistake – whether offer to settle could be accepted – whether proceedings had been settled – whether learned Magistrate should have refused to enter judgment when offer to settle sent by mistake.

Uniform Civil Procedure Rules, rule 358(4)

Bailey v Albion and Suncorp Metway Insurance Limited [2006] QDC 034

Gordon v Berowra Holdings Pty Ltd  (2005) NSWCA 27

Harvey v Phillips (1956) 95 CLR 235, 243

Rosniak v Government Insurance Officer (NSW) NSW Supreme Court SCNSW, Wood J, 4/10/90

Sheonandan Prasad Singh v Abdul Fateh Mohammad Reza [1935] 62 Ind App 196

Simpson and Simpson v Coastal Enterprises Pty Ltd [2005] QDC 015

COUNSEL:

Mr A Hoare for the Appellant

Mr Gerber for the Respondent

SOLICITORS:

John-Paul Mould for the Appellant

Caboolture Law for the Respondent

1. The appellant and the respondent were a de facto couple.  Their relationship came to an end.  They became parties to proceedings commenced in the Caboolture Magistrates Court to resolve their property interests.

1. This is an appeal from the learned Magistrate’s decision on 25 November 2008 who pursuant to s 358(4) of the UCPR entered judgment in the proceedings in terms of an offer to settle from the appellant to the respondent.

1. Generally speaking, the appeal is on the basis that the learned Magistrate should not have entered judgment on the offer to settle as the offer to settle was sent by the appellant’s solicitors to the respondent’s solicitors by mistake.

1. The issues in this appeal are:- (a) whether the offer to settle was capable of acceptance; (b) whether the matter had been settled; and (c) whether the learned Magistrate should have refused to enter judgment based on acceptance of the offer to settle.

1. The appellant’s solicitor Mr Mould swears that on 24 October 2008 he sent to the respondent’s solicitors by email a formal offer of settlement made pursuant to the UCPR. The offer remained open for 14 days. The respondent did not accept the offer.

1. However, on 24 November 2008 Mr Mould sent by email the same offer to the respondent’s solicitors.  The trial of the proceedings was to take place the next day on 25 November 2008.

1. Mr Mould says the offer of settlement sent on 24 November 2008 was sent by mistake.  The mistake occurred when the wrong Microsoft word document was attached to the email.  He says the email dated 24 October 2008 contained a macro that automatically re-populated the date (that is, updated the date) when opened.  Hence, the letter referred to in the respondent’s solicitor’s affidavit tendered at trial on 25 November 2008 was dated 25 November 2008. 

1. Mr Mould says he became aware of the mistake at approximately 8.50 am on the morning of the trial when the barrister for the respondent told him in an interview room attached to the court that he wished to discuss the offer of settlement sent the previous day.  After being shown a copy of the offer he had received, the appellant’s solicitor indicated to him that he had not intended to send that offer, that such offer had been made a month prior, had been sent by mistake without instructions, and was not to be repeated when it was first made.  He then showed the barrister for the respondent the actual email that was supposed to have been sent the previous day as well as the offer which was sent the previous month verifying with him the mistake.

1. The appellant’s solicitor says that at about 9.20 am he attended the callover before one of the Magistrates. 

1. I think it is fair from a reading of the transcript of what took place that the solicitor for the appellant tried to make application before that Magistrate to withdraw the offer which was permitted under the rules.  Because Mr Mould mentioned the parties were having some negotiations the Magistrate’s response was to let the parties go outside and continue their discussions.  Mr Mould repeated his statement about the rules allowing for withdrawal of the offer to settle, but the Magistrate’s response again was to let the parties see if they could resolve the matter and then the rules would be looked at.  The barrister for the respondent was present during these proceedings. 

1. Then Mr Mould says that at about 10.20am he was served with a sealed copy of an acceptance of the offer on the steps of the court.  Mr Mould attempted, by addressing the depositions clerk for the previous Magistrate, to have his application to withdraw reheard before that Magistrate but was told by his depositions clerk that his Honour was busy hearing other matters, and that the appellant’s solicitor’s matter was to be heard instead before Magistrate Barrett in the other courtroom in the complex. 

1. Then at approximately 2.30pm Mr Mould appeared before Magistrate Barrett and raised the issue with his Honour.

1. In my opinion, a fair reading of the transcript before Magistrate Barrett is that Mr Mould again sought to raise with the presiding Magistrate that the email had been sent by mistake, and that he did not have authority or instructions to make the offer and has not had those instructions since its expiry on 24 October.  He made submissions along the lines that his client was not bound because of the mistake and the offer was not capable of acceptance because of the mistake, and that the respondent’s counsel was seeking to take advantage of the situation.  Notwithstanding the submissions, the learned Magistrate took the view that as no leave to withdraw the offer had been granted or in fact applied for, and decided at the time the respondent accepted the appellant’s offer to settle, he found the respondent was entitled to regard the offer contained in the email of 24 November 2008 as a renewal of the previous offer to settle made on 24 October 2008, and he found that the matter was settled.  He therefore proceeded to enter judgment accordingly.

1. Mr Mould also says on 23 December 2008 he rendered a further account to the appellant for the further work performed on his behalf between 24 October 2008 and 25 November 2008 totalling $3,669.86 for this period.  

1. On the hearing of this appeal the appellant also relies upon an affidavit of a Mr Tom Rogers.  Neither Mr Mould nor Mr Rogers were cross-examined.  I take Mr Rogers’ affidavit as confirmation the email process could do what Mr Mould says it did, and that a mistake occurred and that the appellant’s solicitors did not intend to send the second offer to settle in the same terms as the previous offer to settle.

1. On the state of the evidence, I am satisfied the second offer to settle was sent by the appellant’s solicitors to the respondent by mistake.  Further, that the respondent’s solicitors were aware before acceptance of the offer to settle that the offer to settle had been sent to them by mistake.

1. The respondent submits the appeal sits on all fours with the decision in Simpson and Simpson v Coastal Enterprises Pty Ltd [2005] QDC 015.

1. In that case the defendant’s solicitor made a formal offer under the rules that mistakenly excluded an amount for stock when the instructions to the defendant’s solicitor were to include the value of stock.  After the offer was made the defendant’s solicitor in a telephone call to the plaintiff’s solicitor stated that his client wished to withdraw the offer.  The plaintiff’s solicitor stated that he could not withdraw the offer without leave.  The plaintiff’s solicitor then waited five days before accepting the offer in order to give the defendant’s solicitor an opportunity to apply for leave to withdraw his offer.  On the twelfth day after the offer was made the plaintiff accepted the offer.

1. Dodds J in that case said:

“It seems to me it is not now to the point that as Reeve (the defendant’s solicitor) deposed, the amount in the part 5 offer was an error on the part of his office.  Had an application been made promptly to the court on this basis, the discretion to permit the offer to be withdrawn will almost certainly have been exercised.  Rosniak v Government Insurance Officer (NSW) NSW Supreme Court Wood J, 4 October 1990.  Nor is it now to the point that Rowell (the plaintiff’s solicitor) may have been told by Reeve on 14 October that the offer intended there be an additional amount being the value of the stock at settlement.  Rowell waited for five clear days before acting on his instructions to accept the offer.  It seems to me he was entitled to proceed on the basis that no matter what Reeve had said to him on the telephone, if the court had not given leave to withdraw the offer the offer may be accepted. 

Decision
(17)

The offer was open for acceptance.  Having been accepted, the claim and counterclaim is at an end.  The plaintiffs may, if necessary, take steps to formalise the offer by judgment.”

1. In my opinion, Simpson and Simpson v Coastal Enterprises Pty Ltd and the present case are distinguishable.  In Simpson and Simpson v Coastal Enterprises Pty Ltd the plaintiff’s solicitor waited five days before accepting the offer in order to give the defendant’s solicitor an opportunity to apply for leave to withdraw the offer.  In the present case, the solicitors for the respondent did not give the appellant’s solicitor any time to withdraw the offer and filed a written acceptance of the offer to settle knowing it had been sent to the respondent by mistake. 

1. In Bailey v Albion and Suncorp Metway Insurance Limited [2006] QDC 034 Robin DCJ gave leave to a plaintiff to withdraw an offer to settle. It was clear on the material before Robin DCJ that the plaintiff’s solicitor had made an error and the plaintiff would be disadvantaged if the offer was accepted. Consequently, the application proceeded ex parte and the offer was withdrawn.  I take this case as an illustration that there is a discretion to be exercised and as Woods J did in Rosniak referred to in the decision of Simpson and Simpson v Coastline Enterprises Pty Ltd leave will be given almost as a matter of course where a mistake is demonstrated. 

1. In Harvey v Phillips (1956) 95 CLR 235 the High Court referred to the various circumstances that may arise for the court to exercise its discretion to set aside a compromise or intercept formal judgment. In the course of doing so, at p 243 the court referred to what Lord Atkin said in Sheonandan Prasad Singh v Abdul Fateh Mohammad Reza [1935] 62 Ind App 196 and said:

“In the first instance the authority is an actual authority implied from the employment as counsel.  It may, however, be withdrawn or limited by the client; in such a case the actual authority is destroyed or restricted, and the other party if in ignorance of the limitation could only rely upon ostensible authority.  In this particular class of contract, however, the possibility of successfully alleging ostensible authority has been much restricted by the authorities such as Neale v Gordon Lennox … and Shephard v Robinson, which make it plain that if in fact counsel has had his authority withdrawn or restricted the courts will not feel bound to enforce a compromise made by him contrary to the restriction, even though the lack of actual authority is not known to the other party … It is said that this power of the courts is to be exercised as a matter of discretion when in the circumstances of the case to allow the compromise to stand would involve injustice in view of the restriction on counsel’s authority … but in the case of a compromise which is made within the actual as well as apparent authority of counsel a court does not appear to possess a discretion to rescind it or set it aside.  The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.”

1. Further in that judgment the High Court approved of the dictum of Lindley LJ to the effect that he did not have the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual.  To his mind, the only question was whether the agreement on which the consent order was based can be invalidated or not.  If that agreement could not be invalidated the consent order was good.

1. Rule 358(4) of the UCPR provides that if an offer to settle is accepted the court may incorporate any of its conditions into a judgment.

1. In the present matter it was known to the respondent’s solicitors that the offer to settle was sent by mistake.  From what Mr Mould said to the respondent’s barrister in the interview room attached to the court and from what Mr Mould said to the Magistrate, the only conclusion the respondent’s solicitors could come to was that Mr Mould did not have authority for the offer to settle and it was sent by mistake. 

1. In this matter in my opinion, the learned Magistrate’s discretion was not exercised as it should have been.   Rather the view was taken that as there had been an acceptance the matter was settled.  The learned Magistrate did not turn his mind to the circumstances in which the matter was said to have been settled which included knowledge on the part of the respondent’s solicitors that the offer to settle was sent to them by mistake, and it was an offer to settle for which the appellant’s solicitor had no instructions or authority.  Further, since the offer of 24 October 2008 the appellant may have incurred further costs.  The evidence on this appeal shows more costs were incurred by the appellant after 24 October 2008.

1. Therefore, I find the second offer to settle was not one that could be accepted because the respondent’s solicitors knew it was sent by mistake, and even if it could be accepted the agreement upon which it was based should not have been enforced by the learned Magistrate entering judgment pursuant to the rule because that involved an injustice in the circumstances. 

1. I was referred by counsel for the respondent to the New South Wales Court of Appeal decision of Gordon v Berowra Holdings Pty Ltd (2005) NSWCA 27 where at paragraph 56 it was held that leave to withdraw an offer under the rules (even after acceptance) could be granted for good reason, including mistake or other circumstance making it just that the offer be allowed to be withdrawn.

1. I do not consider in the circumstances there was any injustice to the respondent not to enter judgment.  The learned Magistrate should have given the appellant leave to withdraw the offer.

1. Therefore, I allow the appeal.  I set aside the orders made by the learned Magistrate on 25 November 2008.  I give leave to the appellant to withdraw the offer to settle.  I will hear the parties on the question of costs.