Project Gas Services Pty Ltd v Leaseplus Operations Pty Ltd - [2017] VSCA 55

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0034

PROJECT GAS SERVICES PTY LTD	Applicant
v
LEASEPLUS OPERATIONS PTY LTD	Respondent

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JUDGES:	TATE, FERGUSON and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	20 October 2016
DATE OF JUDGMENT:	20 March 2017
MEDIUM NEUTRAL CITATION:	[2017] VSCA 55
JUDGMENT APPEALED FROM:	Leaseplus Operations Pty Ltd v Project Gas Services Pty Ltd (Unreported, County Court of Victoria, Judge McNamara, 3 March 2016)

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CONTRACTS – Applicant made offer of compromise shortly before trial – Respondent abandoned liquidated damages claim after making additional discovery and expert accountant giving evidence – Applicant sought (but was refused) leave to withdraw offer – No sufficient change of circumstances – Applicant took risk offer might be accepted during trial – Not unjust to hold applicant to offer – Each case depends on its own facts – County Court Civil Procedure Rules 2015 Order 26 – Scanruby Pty Ltd v Caltex Petroleum Pty Ltd [2001] NSWSC 411 applied; H W Wilson Pty Ltd v Pitman (Unreported, Full Court (Murphy, O’Bryan and McDonald JJ, 6 December 1990) considered; Gaskins v British Aluminium Co [1976] 1 QB 524; Proetta v Times Newspapers Ltd [1991] 1 WLR 337 distinguished – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the applicant	Mr D Christie with Ms GM Douglas	Russell Kennedy
For the respondent	Mr PB Murdoch QC with Dr AP Trichhardt	Francis Abourizk Lightowlers

TATE JA
FERGUSON JA
McLEISH JA:

Introduction and summary

The respondent, Leaseplus Operations Pty Ltd (‘Leaseplus’) sued the applicant, Project Gas Services Pty Ltd (‘Project Gas Services’), in the County Court. Shortly before the trial began, Project Gas Services made an offer of compromise. While the offer remained open and after the trial had started, Leaseplus discovered further documents and abandoned one of its claims, and the expert accountant called by it began to give evidence. Project Gas Services sought leave to withdraw its offer of compromise on the basis that there had been a sufficient change in circumstances since it made its offer to make it just for leave to be granted. A judge refused that application.

Project Gas Services seeks leave to appeal. If leave is granted, it seeks an order that the appeal be allowed and that the judge’s orders be set aside and replaced with an order that it is granted leave to withdraw its offer of compromise.

For the reasons which follow, we would grant leave to appeal but would dismiss the appeal. In short compass, there is no discernible error on the part of the judge in the exercise of the discretion. In the circumstances of this case, it is not unjust to hold Project Gas Services to its offer.

The facts

On 16 July 2012, Project Gas Services entered into a master lease agreement with Leaseplus for the supply of specialist four-wheel drive vehicles. About two years later, Project Gas Services served a notice of termination because it no longer required the leased vehicles.

Leaseplus subsequently…

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

Case: [2017] VSCA 55
Decision Date: 20 March 2017

CaseChat Overview and Summary

In the case of Project Gas Services Pty Ltd v Leaseplus Operations Pty Ltd, the plaintiff, Project Gas Services, made an offer of compromise to the defendant, Leaseplus Operations, shortly before the trial. The dispute centred around the terms of a contract and the obligations of the parties involved. The case was heard in the County Court of Victoria.

The primary legal issue the court had to decide was whether Project Gas Services should be allowed to withdraw its offer of compromise, which Leaseplus Operations had not accepted. The court needed to consider whether there had been a sufficient change in circumstances to justify the withdrawal of the offer, particularly since Leaseplus Operations had abandoned its claim for liquidated damages after making additional discoveries and receiving expert testimony. The court also had to determine if it would be unjust to hold Project Gas Services to the offer.

The court found that there was no sufficient change in circumstances that would warrant allowing Project Gas Services to withdraw its offer. The court reasoned that by making the offer shortly before the trial, Project Gas Services had taken the risk that it might be accepted during the proceedings. The court held that it was not unjust to hold Project Gas Services to the offer, as each case depended on its own unique facts. The court applied the principles from County Court Civil Procedure Rules 2015, Order 26, and referred to precedents such as Scanruby Pty Ltd v Caltex Petroleum Pty Ltd and H W Wilson Pty Ltd v Pitman, while distinguishing Gaskins v British Aluminium Co and Proetta v Times Newspapers Ltd. Ultimately, the appeal was dismissed, and the court upheld the decision not to allow the withdrawal of the compromise offer.

Orders