Owners Strata Plan 43470 v Jameson & Associates Unit Services Pty Ltd

[2025] NSWSC 1028

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Owners Strata Plan 43470 v Jameson & Associates Unit Services Pty Ltd [2025] NSWSC 1028

Hearing dates:

9 September 2025

Date of orders:

9 September 2025

Decision date:

09 September 2025

Jurisdiction:

Common Law

Before:

McHugh JA

Decision:

(1) The amended summons is dismissed with costs.

(2) The notice of motion filed 2 June 2025 is dismissed.

Catchwords:

CIVIL PROCEDURE – Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 20.29 – offer of compromise – whether Magistrate applied subjective test of contractual formation – no error

APPEALS – Local Court Act 2007 (NSW), ss 39, 40, 41 – ground of appeal raised question of fact – no basis upon which to grant leave

Legislation Cited:

Local Court Act 2007 (NSW), ss 39, 40, 41

Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 20.29, 42.13, 42.13A

Cases Cited:

Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164

Ciszek v Enterprise Financial Solutions Pty Ltd [2010] NSWSC 1265

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24

Category:

Principal judgment

Parties:

Owners Strata Plan 43470 (Plaintiff)
Jameson & Associates Unit Services Pty Ltd (Defendant)

Representation:

Counsel:
J Sleight (Plaintiff)
M Forgács (Defendant)

Solicitors:
Neville Hourn + Borg Legal (Plaintiff)
JS Mueller & Co Lawyers (Defendant)

File Number(s):

2025/00184332

Publication restriction:

Nil.

 Decision under appeal 

Court or tribunal:

Local Court

Jurisdiction:

Civil

Date of Decision:

17 April 2025

Before:

Magistrate Atkinson

File Number(s):

2024/00394770

JUDGMENT

1. This proceeding arises out of the plaintiff’s claim in the General Division of the Local Court of New South Wales that it is entitled to judgment following the defendant’s alleged acceptance of an offer of compromise made pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

2. By an amended summons filed on 2 June 2025, the plaintiff seeks leave (if such is required) to appeal pursuant to ss 39 and/or 40 of the Local Court Act 2007 (NSW) from a decision of Atkinson LCM dismissing a notice of motion by which the plaintiff had sought judgment pursuant to UCPR, r 20.29(2) in the sum of $78,000 together with interest and costs pursuant to UCPR, r 42.13A(2).

3. Leave is required; the proposed appeal lacks merit; the summons should be dismissed.

The underlying claim in the Local Court

4. According to the pleadings in the Local Court, the defendant, which is also the defendant below, carries on a business of providing Strata management services for fee. On 18 September 2020 the plaintiff and the defendant entered into an agreement for the provision of Strata management services by the defendant. The plaintiff alleges that the defendant breached that agreement by, among other things, failing to notify the plaintiff of excess water usage alerts received from Sydney Water between November 2021 to November 2022, and by paying excessive water charges (it appears to be common ground that the plaintiff’s building had a hidden water leak). The plaintiff claims a liquidated sum, $97,666.48, said to be the difference between the excessive water charges and the usual water charges, less a credit received from Sydney Water and an insurance payment.

The communications between the parties

5. The substantive question in the proceedings at first instance was whether the defendant accepted the plaintiff’s offer of compromise, so as to reach a binding settlement, in the circumstances set out below. It is not suggested that there were any oral communications between the parties bearing on the question. Everything was in writing.

6. By email on 16 December 2024, the defendant by its solicitors sent the plaintiff’s solicitors an offer of compromise to resolve the dispute. The offer purported to be made in accordance with UCPR, r 20.26; it is not necessary to determine whether the offer complied with that rule. The terms of the offer were, in summary, that the parties enter a deed of settlement and release as follows: the plaintiff discontinue the proceedings with no order as to costs; the defendant pay the plaintiff the sum of $15,000 “as full and final settlement of the subject of the Proceedings”; the plaintiff release the defendant against all claims it has against the defendant; and each party pay its own costs of the proceedings.

7. The evidence does not disclose whether the plaintiff responded directly to that offer in terms.

8. In any event, by email on 5 February 2025, the plaintiff by its solicitors sent the defendant’s solicitors an offer of compromise (the Plaintiff’s Offer) engrossed in the Local Court, the operative part of which was as follows:

“The Plaintiff offers to compromise these proceedings on the following terms:

1. Judgment for the plaintiff in the sum of $78,000.00.

2. This offer remains open for 28 days.

This offer is made in accordance with Part 20 of the Uniform Civil Procedure Rules 2005.

The Plaintiff reserves the right to tender a copy of this offer of compromise to the court on the question of costs.”

9. It might be noted that UCPR, r 42.13A applies where an offer of compromise is made under r 20.26 with respect to a plaintiff’s claim: see r 42.13. The effect of r 42.13A(2) is that where the offer (a) has been accepted; (b) did not make provision for costs in respect of the claim; and (c) proposed judgment in favour of the plaintiff, “the plaintiff is entitled to an order against the defendant for the plaintiff’s costs in respect of the claim, assessed on the ordinary basis up to the time when the offer was made.”

10. The defendant did not accept that offer. Instead, its solicitors responded by email with a further offer on 11 February 2025. That offer was in materially similar terms to the defendant’s first offer, but the settlement sum increased to “$39,000.00 as full and final settlement of the subject of the Proceedings”.

11. The plaintiff’s solicitors replied by email on the same day, 11 February 2025, declining to make a counteroffer. This email made clear that the Plaintiff’s Offer remained open: “Our client’s offer of compromise made 5 February 2025 for judgment in the sum of $78,000 was reasonable and should be accepted.”

12. On 18 February 2025, the defendant’s solicitors sent what was described as “our client’s final UCPR Offer of Compromise”. This was again in materially similar terms to the defendant’s earlier offers, but increased the settlement sum to “$44,000.00 as full and final settlement of the subject of the Proceedings”.

13. The plaintiff’s solicitors responded to that offer the following day, 19 February 2025, as follows: “We are not instructed to accept your client’s offer and note that our offer dated 5 February 2025 remains open for acceptance should your client wish to resolve the dispute without a final hearing.”

14. On 27 February 2025, the defendant’s solicitors sent an email replying to the plaintiff’s solicitors’ original email of 5 February 2025 (which had attached the Plaintiff’s Offer). The defendant’s solicitors’ email, which also attached a copy of the Plaintiff’s Offer, contained the following (the Defendant’s Alleged Acceptance):

“We refer to the above matter and your attached Offer of Compromise dated 5 February 2025.

We are instructed that our client agrees to accept your Offer of Compromise dated 5 February 2025 as full and final settlement of this matter.

We are instructed that the settlement between our clients shall be recorded by way of a confidential deed of settlement and release. Accordingly, please provide us with a draft copy of the deed of settlement and release for us to review as soon as possible.”

(Emphasis supplied.)

15. Later on 27 February 2025, the plaintiff’s solicitors sent an email to the defendant’s solicitors:

1. noting that the defendant had accepted the Plaintiff’s Offer;

2. stating that the Plaintiff’s Offer “provides that the proceedings are determined by judgment in our client’s favour. It follows that a deed of settlement is not required”;

3. stating that that r 42.13A(2) “provides that our client is entitled to a costs order”.

16. That email also attached a draft minute of Consent Judgment which included the following:

“BY CONSENT, THE COURT ORDERS THAT:

1   Judgment for the plaintiff in the sum of $78,000.00.

2   That the defendant pay the plaintiff’s costs as agreed or assessed up to 5 February 2025.”

17. The defendant’s solicitors responded by email the next day, 28 February 2025, asserting that no binding agreement had been reached and giving reasons.

18. The plaintiff did not agree.

The decision at first instance

19. Rule 20.29(2) provides that if the defendant, being a party to an accepted offer, fails to comply with the terms of the offer, the plaintiff is entitled to such judgment or order as is appropriate to give effect to the terms of the accepted offer. The plaintiff filed a notice of motion in the Local Court seeking judgment pursuant to UCPR, r 20.29(2) in the sum of $78,000, interest and costs pursuant to UCPR, r 42.13A(2).

20. Atkinson LCM dismissed the motion in a judgment given ex tempore. As her Honour said, referring to the material annexed to the affidavits before her, “it is this documentation which is key in the decision that I have to make today.” Her Honour then referred to the correspondence mentioned above, including quoting and/or paraphrasing the whole of the operative part of the Plaintiff’s Offer as well as the three paragraphs in the Defendant’s Alleged Acceptance quoted above. Her Honour’s reasons included the following:

“What is important in this case is there has been quite a history between the parties and what has been the defendant’s position throughout as it has increased its offers is that each party would pay its own costs and that the matter would be dealt with by way of a deed to reflect the agreement between the parties. When one looks at the email that was sent on 27 February, there is an indication that the offer of compromise is accepted but there is also the paragraph that maintains what has been maintained throughout, that the settlement is to be recorded by way of a confidential deed of settlement and release. And there was a request that the draft copy of the deed of settlement and release be provided for review and this is when the email that I read out earlier about it not being necessary, was sent.

The defendants maintain that there has been no meeting of minds when the correspondence as a whole is considered and also what was actually said on 27 February. I note that the plaintiff disagrees with this position and argues that the offer was complete and was accepted and there should be no departure from the position of the rules. I am not persuaded that that narrow view should be adopted. When one looks at the full exchange of correspondence between the parties it is quite clear that the defendants were looking to have certain matters resolved by way of a deed. It is unfortunate that the defendants did not do what they had been doing to date where they attached a document that set matters out in full.

But in my view when one considers matters on the balance of probabilities, which is the standard to be applied, I am satisfied that there was no meeting of the minds given the inclusion of the additional paragraph in the email. If it had been pure and simply an acceptance of an offer made under the r 20.26, in my view if that is what the defendants had intended, there would not have been the additional paragraph in the email.

I am satisfied that there was no meeting of the minds between the parties in terms of offer and acceptance and I am not satisfied that there was an agreement to compromise the proceedings in accordance with the rules. The parties were still at odds in terms of what the final agreement would look like and for these reasons I am not satisfied that the plaintiff is entitled to the relief it has sought and I dismiss the notice of motion.”

21. The gist of her Honour’s reasoning was that there must be a correspondence between the terms of the offer and the terms of the acceptance, which was absent in this case. Her Honour acknowledged the defendant’s solicitors’ reference to accepting the offer. But other terms of the Defendant’s Alleged Acceptance conflicted with the terms of the Plaintiff’s Offer and thus qualified the purported acceptance. Her Honour particularly focused on the reference to a “confidential deed of settlement and release”. Her Honour’s reasoning was plainly enough (and to some extent implicitly, given that the reasons were delivered ex tempore) as follows.

1. The Plaintiff’s Offer was relevantly on terms (a) that there be judgment for the plaintiff (in the sum of $78,000), and (b) that there be a costs order in the plaintiff’s favour (which was the effect of making the offer “in accordance with Part 20 of the Uniform Civil Procedure Rules 2005”).

2. As to the first matter, the Defendant’s Alleged Acceptance was on terms that there be a “confidential” deed of settlement and “release”. Each of those features was inconsistent with the entry of judgment in favour of the plaintiff.

3. As to the second matter, the defendant’s consistent position that each party pay its own costs (reflected in the words “as full and final settlement” in the Defendant’s Alleged Acceptance) was inconsistent with a costs order in favour of the plaintiff. The settlement would not be “final” if there remained a process of assessment of costs to be carried out.

22. Her Honour also ordered that costs should follow the event, namely, the dismissal of the notice of motion.

The summons in this Court

23. Section 39(1) of the Local Court Act provides that a party to proceedings before the Local Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, “but only on a question of law.”

24. Section 40(1) provides that a party to proceedings in the General Division “who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court.”

25. There is no ground of appeal available on a pure question of fact.

26. Moreover, s 40(2) provides as follows:

A party to proceedings before the Court sitting in its General Division who is dissatisfied with any of the following judgments or orders of the Court may appeal to the Supreme Court, but only by leave of the Supreme Court—

(a)   an interlocutory judgment or order,

(b)   a judgment or order made with the consent of the parties,

(c)   an order as to costs.

27. It has been held that the s 40(2) leave requirement applies whenever the judgment or order under appeal is interlocutory, even if the appeal is “on a question of law”. See, e.g., Ciszek v Enterprise Financial Solutions Pty Ltd [2010] NSWSC 1265 at [10] per Schmidt J.

28. The plaintiff accepted in this Court that applying the conventional test, namely, whether the judgment or order as made finally disposes of the rights of the parties, Atkinson LCM’s order dismissing the notice of motion is an interlocutory order, and that accordingly leave to appeal is required.

29. Although there are no rigid rules as to when leave to appeal will be granted, ordinarily it is appropriate to grant leave “only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable”: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164. The plaintiff submitted that there are policy reasons in favour of enforcing accepted offers of compromise which put a case such as the present in a different category from other appeals from interlocutory judgments or orders. It was submitted that the concern about granting leave to interfere with case management or procedural decisions at first instance does not apply in this case. So much may be accepted. But even in respect of decisions which finally dispose of the rights of the parties, leave will not generally be granted where the error alleged is no more than arguable.

30. The plaintiff thus faces two hurdles. First, it must establish that its appeal is “on a question of law” or “involves a question of mixed law and fact”. Secondly, it requires leave.

31. The grounds of appeal in the plaintiff’s amended summons are as follows.

“1   The magistrate erred in law in applying a subjective test to determine whether the offer of compromise has been accepted and, in particular, holding that there need to be ‘meeting of minds’ for the offer to be accepted.

2   The magistrate ought to have been applied an objective test in determining whether the offer of compromise had been accepted irrespective of the intention of the parties.

3 The magistrate erred in law in the application of UCPR 29.26 and 42.13A(2) in that the plaintiff was on acceptance of the offer of compromise entitled to an order against defendant in respect of the plaintiff’s costs assessed on an ordinary basis up until the time when the offer was made.”

32. It may be accepted that an appeal on Grounds 1 and 2 taken together amounts to an appeal “on a question of law”, namely, whether the question of acceptance of a contractual offer so as to give rise to a binding agreement is to be determined objectively or subjectively. However, there is no substance to these grounds. No error “on a question of law” is made out. Her Honour plainly applied an objective test of contractual formation. Indeed, the only material before the court was documentary. It consisted of written communications between the parties, all of which were available for use under the objective theory of contract. No submission was made to her Honour that she should apply a subjective test. To the contrary, counsel expressly submitted to her Honour that the question was “the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances”: Tcpt, 10 April 2025, 7.36-8.

33. Her Honour’s reference to a “meeting of the minds” was entirely conventional. That phrase is commonly used to describe what a reasonable person in the parties’ shoes would understand as to whether an offer had been accepted. Her Honour’s statement, “If it had been pure and simply an acceptance of an offer made under the r 20.26, in my view if that is what the defendants had intended, there would not have been the additional paragraph in the email”, is again in its context clearly to be understood as a reference to the defendant’s intention as objectively ascertained. So too is the reference to the defendants “looking to have certain matters resolved by way of a deed”. There was no material before her Honour going to the defendant’s subjective state of mind beyond that which was available for use under the objective theory of contract.

34. Much of the argument before me was directed to the question whether her Honour erred in failing to find that the Defendant’s Alleged Acceptance constituted an acceptance of the Plaintiff’s Offer, so as to form a binding contract. That is a question of fact. It does not amount to an appeal on a question of law, or even an appeal involving a question of mixed law and fact. But the plaintiff argued that her Honour’s failure to conclude that the parties had reached agreement was clearly wrong, such that it was explicable only on the basis that her Honour must have applied a subjective test, which would be an error of law. (I pause to note that the plaintiff did not attempt to argue that on the evidence before the Local Court there was only one legally available conclusion, such that her Honour’s failure to find that the parties had reached agreement amounted to an error of law.) None of the submissions made in this Court in support of the proposition that her Honour’s finding was clearly wrong should be accepted. To the contrary, largely for the reasons given by her Honour as explained above, her Honour’s finding was correct.

32. First, the plaintiff submitted that the words “our client agrees to accept your Offer of Compromise dated 5 February 2025” constituted a clear acceptance of the offer, and that the reference to entering a “confidential deed of settlement and release” in the following paragraph was no more than a proposal as to the manner of effecting the settlement which had already been reached. The effect of that reading would be to treat one part of the communication as more important than the rest. That is not a fair reading of the communication as a whole. Read as a whole, the communication insists on terms of the settlement that are inconsistent with the Plaintiff’s Offer.

33. As to the words, “as full and final settlement of this matter”, the plaintiff submitted that the fact that the costs order to be made under the UCPR regime would have to be assessed was consistent with the settlement being “final”, at least in the sense of being “certain”. That was because the alleged contract would provide a mechanism by which to determine the amount payable (i.e., formal costs assessment), and that mechanism was sufficiently certain for there to be a validly formed contract. It was submitted that the liabilities would then be defined and ascertainable. But the point is not that the contract would lack certainty in a technical sense. It is that an alleged acceptance contemplating “full and final settlement” conveyed that the sum of $78,000 (being the amount identified in the Plaintiff’s Offer) was to be the full value of the settlement, and that the settlement was to be final in the sense that there would be no further step to take.

34. The plaintiff relied on the fact that the Plaintiff’s Offer was expressed to be made under Part 20 of the UCPR. The plaintiff argued that the defendant should be taken to understand the effect of the operation of those rules, including the costs consequences of acceptance. That is undoubtedly so in this case where the defendant’s own offers referred to r 20.26 of the UCPR. But the point assists the defendant. It emphasises the disconformity between the Plaintiff’s Offer (which if accepted would necessarily entail an adverse costs order under the UCPR), and the Defendant’s Alleged Acceptance (which contemplated that the sum of $78,000 would be in full and final settlement of the claims).

35. It follows that the plaintiff’s argument that her Honour’s finding on the facts was clearly wrong, and only explicable on the basis that she must have applied a subjective test, should be rejected.

36. It should be noted that, for the reasons given above, the question whether, upon the application of the correct test, an agreement was reached is not an issue arising directly under the grounds of appeal. The parties proceeded on the footing that the answer to that question would be one for remitter to the Local Court pursuant to s 41(1)(c). However, the likely answer to that question is relevant to the question whether to grant leave, because it goes to the utility of any appeal.

37. The plaintiff also complains that her Honour referred to communications before and after 5 February 2025 (the date of the Plaintiff’s Offer) and before 27 February 2025 (the date of the Defendant’s Alleged Acceptance). The complaint is again without substance. First, her Honour referred to that material on the basis that it was part of the circumstances in which the defendant’s intention was to be objectively ascertained — not as evidence of subjective intention.

38. Secondly, under the objective theory, it was legitimate to do so in determining whether a reasonable person in the plaintiff’s shoes would understand the Defendant’s Alleged Acceptance as accepting the Plaintiff’s Offer. The earlier offers provided context in which to understand what was contemplated by the Defendant’s Alleged Acceptance. The plaintiff relied on the well-known passage in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; [1982] HCA 24 at 352 where Mason J said:

“… Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable.”

42. That passage was directed to the use to which such material may legitimately be put when interpreting the meaning of a contract that has been formed; it was not directed to the anterior question whether a contract has been formed at all. In any event, the passage begs the question of the use to which the material is sought to be put. It does not establish the proposition which the plaintiff requires, namely, that the reference to the defendant’s offers demonstrates that her Honour applied a subjective test of contractual formation.

43. Thirdly, even if under the objective theory the only material that could be taken into account for the purpose of determining whether agreement had been reached consisted of the Plaintiff’s Offer and the Defendant’s Alleged Acceptance, for the reasons given above, on remitter to the Local Court pursuant to s 41(1)(c) of the Local Court Act the same result would likely follow on the evidence: that there was a lack of correspondence between the offer and the claimed acceptance.

44. Grounds 1 and 2 raise a question of law: whether her Honour applied the correct (objective) test of contractual formation. However, for the reasons given above, if leave to appeal were granted with respect to Grounds 1 and 2, the appeal would be dismissed. Even if the appeal succeeded on the ground that her Honour had applied the wrong test, on the application of the correct test, the finding on remitter would be the same, such that the appeal would lack utility. Those grounds do not otherwise display any quality that would attract a grant of leave. Leave should be refused

45. Ground 3 does not raise a pure question of law; it complains of Atkinson LCM’s application of the law (the operation of the UCPR regime) to the facts. On its face, that involves a mixed question of law and fact. But the error which this ground asserts takes as its premise a fact which is not established, namely, that there had been “acceptance of the offer of compromise”. To the extent that Ground 3 should be understood (despite its terms) as challenging her Honour’s finding of fact that the defendant did not accept the Plaintiff’s Offer, that would be an appeal on a question of fact, not one involving mixed law and fact. No such appeal lies to this Court. In any event, even if an appeal on a pure question of fact lay to this Court (or even if the implicit challenge to her Honour’s finding of fact were treated as bound up in a ground of appeal involving a mixed question of law and fact), for the reasons given above, the appeal would be dismissed. Her Honour did not err in finding that no agreement was reached.

46. In the absence of the finding upon which Ground 3 is premised, there is no basis upon which to grant leave to appeal. Even if there were a basis on which to grant leave to appeal to challenge her Honour’s finding, the appeal would be dismissed on its merits.

Conclusion and orders

47. Leave to appeal should be refused.

48. The defendant filed a notice of motion on 2 June 2025 seeking an order that the appeal be dismissed as incompetent. As the plaintiff filed the amended summons seeking leave to appeal (also on 2 June 2025), the question of competency falls away and the notice of motion should be dismissed.

49. The order of the Court is:

1. The amended summons is dismissed with costs.

2. The notice of motion filed 2 June 2025 is dismissed.

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Amendments

10 September 2025 - Underlining removed in [39]. Order 2 added (see [48]).

Decision last updated: 10 September 2025