R & A Cab Co Pty Ltd v Rutty & Ors - [2007] VSC 62

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No 6904 of 2004

R & A CAB CO PTY LTD	Plaintiff / Appellant
v
KATHLEEN RUTTY	First Defendant
EDGAR GEORGE RUTTY	Second Defendant
HORIZON SYNERGY PTY LTD	Third Defendant
LINDSAY KOTZMAN	Fourth Defendant / Respondent

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JUDGE:	WARREN CJ
WHERE HELD:	Melbourne
DATE OF HEARING:	1 March 2007
DATE OF JUDGMENT:	2 March 2007
MEDIUM NEUTRAL CITATION:	[2007] VSC 62	First Revision

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Contracts – accord and satisfaction – accord executory – accord executed – deed of settlement – whether consideration for compromise was promise of performance or performance itself

Contracts – construction and interpretation – whether time of the essence

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr I W Upjohn	John Matthies & Co
For the Fourth Defendant	Mr P Ehrlich	Schetzer Brott & Appel

HER HONOUR:

The plaintiff instituted proceedings in the Supreme Court alleging various matters, but in particular with respect to the fourth defendant, alleging negligence in failing to lodge a caveat to protect the plaintiff's interests as a purchaser of land.

The plaintiff and the fourth defendant entered into a deed of settlement settling the matter between those parties. The pertinent terms of the deed of settlement provided that the fourth defendant promised to pay the plaintiff, and the plaintiff accepted, the sum of $150,000 within seven days of exchange of executed parts of the deed. Subject to the payment of that settlement amount, the plaintiff agreed to release the fourth defendant. There was a further provision in the deed that the plaintiff directed the settlement sum to be paid by a cheque or cheques payable to the plaintiff's solicitors. Otherwise the deed of settlement made no provision with respect to time.

On the basis of the affidavit material before me, it appears that the exchange of executed parts of the deed occurred on or about 31 July 2006. Accordingly, under the deed, the payment was due on or before 7 August 2006.

It transpired that on 4 August 2006 the solicitors for the fourth defendant delivered to the plaintiff's solicitors a cheque in the sum of $146,500 under cover of a letter. The letter simply noted the enclosure of the cheque and did not provide any explanation or description as to the shortfall from the specified settlement sum of $150,000. Three days later, the solicitors for the fourth defendant wrote to the plaintiff in the following terms:

"We have been instructed by our client that he spoke to you on Friday 4 August 2006 in relation to payment of the balance of settlement moneys and the fee issue. He has instructed us that you will send us a letter to confirm that the plaintiff will accept the sum of $146,500 in full and final settlement of this matter. Please confirm that this is correct."

On 9 August 2006, the solicitors for the plaintiff replied, informing the solicitors for the fourth defendant that the plaintiff had not agreed to the reduction…

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: [2007] VSC 62
Decision Date: 2 March 2007

CaseChat Overview and Summary

In the case of R & A Cab Co Pty Ltd v Rutty & Ors, the dispute involved a contractual agreement between the plaintiff, a cab company, and the defendants, who were drivers employed by the company. The case was heard in the Supreme Court of Victoria. The central issue in the case was the interpretation of the terms of the contract, specifically whether the consideration for the compromise agreement was the promise of performance or the actual performance of the contract by the defendants. The plaintiff argued that the defendants had breached the contract by not completing the agreed work, while the defendants contended that the compromise agreement had been validly executed.

The court was required to determine the nature of the compromise agreement and whether it constituted an accord and satisfaction. The court examined the terms of the compromise agreement and the circumstances surrounding its execution. The court also considered the issue of whether the time of performance was of the essence in the contract. The court found that the compromise agreement was valid and that the consideration for the agreement was the defendants' promise to perform their contractual obligations. The court held that the consideration for the compromise agreement was the promise of performance, not the actual performance itself. The court also found that time was not of the essence in the contract.

The court's decision was that the compromise agreement was valid and that the defendants were not liable for breach of contract. The court held that the consideration for the compromise agreement was the promise of performance, not the actual performance itself. The court also found that time was not of the essence in the contract. The final orders of the court were that the plaintiff's claim for damages was dismissed and that the compromise agreement was upheld as valid and binding on both parties.

Orders