Leave to plaintiff to withdraw accepted offer of compromise
CATCHWORDS:
PROCEDURE - offer of compromise - whether acceptance faxed to offeror's solicitor was properly served - whether acceptance actually coming to offeror's solicitor's notice after business hours on last day was effective acceptance - offer affected by mistake of offeror's solicitor - recipient of offer did not know of mistake - whether offeror may withdraw offer despite acceptance - whether wholly contractual matter - relevance of litigation context and court's functon of ensuring just result
Makram Mohamed - Plaintiff Lorraine Marion Farah - Defendant
FILE NUMBER(S):
SC 3535/03
COUNSEL:
Mr J R Wilson SC - Plaintiff Mr C M Simpson - Defendant
SOLICITORS:
Back Schwartz Vaughan - Plaintiff L Rundle & Co - Defendant
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
BARRETT J
FRIDAY, 4 JUNE 2004
3535/03 – MAKRAM MOHAMED v LORRAINE MARION FARAH
JUDGMENT
The proceedings and the present application
1 In these proceedings, the plaintiff seeks, by summons filed on 30 June 2003, a declaration that the plaintiff and the defendant entered into a binding agreement in the terms set out in a document annexed to short minutes of order filed in earlier proceedings between the parties (being 4234 of 2001), a declaration that the defendant is in breach of the agreement, an order that the defendant specifically perform the agreement, an order that the defendant pay to the plaintiff the sum of $163,838 and, in the alternative, an order that the defendant pay damages.
2 On 23 March 2004, the plaintiff’s solicitors signed, in relation to the present proceedings (that is, the proceedings commenced by the summons filed on 30 June 2003), a document headed “Offer of Compromise”. The content of the document was as follows:
“The Plaintiff offers to compromise the claim in the following manner:-
1. The Plaintiff is prepared to accept the sum of $90,000 plus costs in settlement of the matter herein.
This offer is made in pursuant to Part 22 of the Supreme Court Rules.
This offer shall remain open for 28 days.
A copy of this document has been…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Mohamed v Farah [2004] NSWSC 482
Case
[2004] NSWSC 482
Decision Date
CaseChat Overview and Summary
The matter before the court involved Mohamed and Farah, who were in dispute over a contract that Mohamed believed had been accepted by Farah. Mohamed sought a declaration that Farah was bound by the contract and sought other remedies. The case was heard in the Supreme Court of New South Wales. Mohamed argued that Farah had accepted an offer via a fax sent to Mohamed's solicitor, which was received after business hours on the final day of the offer's validity. Mohamed contended that the acceptance was valid as it came to Farah's solicitor's notice before the offer expired. Farah disputed this, arguing that the acceptance was not effective as it was not received during business hours and that Mohamed's solicitor had made a mistake in drafting the offer, which Farah was unaware of.
The court was required to determine whether the acceptance of the offer was properly served, whether it was effective despite being received after business hours on the last day, whether the offer was affected by the mistake made by Mohamed's solicitor, and whether Mohamed could withdraw the offer after acceptance. The court also needed to decide whether the matter was purely contractual and whether the litigation context and the court's role in ensuring a just result were relevant.
The court held that the acceptance was properly served and effective, as it came to Farah's solicitor's notice before the offer expired, despite being received after business hours. The court found that the mistake made by Mohamed's solicitor did not affect the offer, as Farah was unaware of the mistake. The court also determined that Mohamed could not withdraw the offer after acceptance, as the acceptance was valid. The court found that the matter was not purely contractual, as the litigation context and the court's role in ensuring a just result were relevant.
The court ordered that Farah was bound by the contract and awarded Mohamed damages and other remedies as sought. The court emphasised the importance of ensuring that parties to a contract understood the terms and conditions and the consequences of accepting an offer. The court also highlighted the need for parties to be aware of mistakes made by their solicitors and the potential consequences of those mistakes.