SWV Pty Ltd v Spiroc Pty Ltd - [2006] NSWSC 668

Reported Decision:
201 FLR 238

New South Wales

Supreme Court

CITATION: SWV Pty Ltd v Spiroc Pty Ltd [2006] NSWSC 668

HEARING DATE(S): 22/06/06

JUDGMENT DATE :
4 July 2006

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Notice of motion dismissed with costs

CATCHWORDS: CONTRACTS - offer and acceptance - informal offer of compromise made in writing sought response "as soon as possible in writing by return" - whether offer specified time limit for acceptance - whether acceptance made within time limited by offer - EVIDENCE - admissibility - communications between parties in dispute in connection with attempt to negotiate settlement of dispute - proceeding in which question of making agreement to settle the dispute is in issue - whether exception in such proceedings to rule that evidence not be adduced of such communications applies only to immediate offer to settle and events following it - WORDS AND PHRASES - "by return" - "as soon as possible"

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.232, 233
Evidence Act 1995, ss.131(1), 131(2)(f)
Uniform Civil Procedure Rules 2005, rule 20.26

CASES CITED: Abriel v Australian Guarantee Corporation [1999] FCA 50
Benchmark Certification Pty Ltd v Standards Australia International Ltd (2004) 212 ALR 464
Bowes v Chaleyer (1923) 32 CLR 159
Brown v Commissioner of Taxation (2001) 187 ALR 714
Connex Group Australia Pty Ltd v Butt [2004] NSWSC 673
Finlayson v Campbell (NSWSC, Young J, 4 September 1997)
Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306
Jacobson v Ballina Shire Council [2006] NSWLEC 114
KC v Shiley Incorporated (unreported, FCA, Tamberlin J, 11 July 1997)
Lahoud v Lahoud [2006] NSWSC 126
Lang v Carroll (2004) 188 IR 58
McVeigh v Bell [2002] ANZ ConvR 9
Mercator Property Consultants Pty Ltd v Sumampow [2000] WASC 157
Pacific Aviation Pty Ltd v Bradley (unreported, NSWSC, Wood J, 7 November 1985)
Rivkin Financial Services Ltd v Sofcom Ltd (2004) 51 ACSR 486
Tinn v Hoffmann & Co (1873) 29 LT 271
Tomlin v Standard Telephones and Cables Ltd [1969] 3 All ER 201
Vines v Djordjevitch (1955) 91 CLR 512

PARTIES: SWV Pty Limited - Plaintiff
Spiroc Pty Limited - First Defendant
Contact Centres Holdings Pty Limited - Second Defendant
Susanne Katherine Crabbe - Third Defendant
Peter Stewart Thomson - Fourth Defendant

FILE NUMBER(S): SC 1448/06

COUNSEL: Mr J.A.C. Potts - First, Third and Fourth Defendants
Mr P.D. Doyle-Gray - Second Defendant

SOLICITORS: Clayton Utz - First, Third and Fourth Defendants
Price & Company - Second Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY, 4 JULY 2006

1448/06 SWV PTY LIMITED v SPIROC PTY LIMITED & 3 ORS

JUDGMENT

The proceedings

1 These proceedings were commenced by originating process filed on 15 February 2006 by which the plaintiff, relying on ss.232 and 233 of the Corporations Act 2001 (Cth), sought as against the first, second and fourth defendants, an order that those defendants purchase 188 shares in Contact Centres Australia…

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: [2006] NSWSC 668
Decision Date: 4 July 2006

CaseChat Overview and Summary

SWV Pty Ltd initiated legal proceedings against Spiroc Pty Ltd in the Federal Court of Australia, seeking a determination on the validity of a compromise offer. The crux of the dispute was whether an informal written offer, which requested a response "as soon as possible in writing by return," constituted a time-bound acceptance offer. SWV argued that Spiroc had failed to accept the offer within the specified timeframe, whereas Spiroc contended that the phrase "by return" did not impose a strict time constraint.

The court needed to address two main legal issues. Firstly, it had to interpret the phrase "by return" and determine if it set a definitive time limit for acceptance. Secondly, the court had to decide if communications between the parties, regarding the negotiation of a settlement, were admissible in the proceedings. This hinged on whether the exception to the rule against adducing evidence of such communications applied only to the immediate offer to settle and subsequent events.

The court ruled that the phrase "by return" did not establish a strict time limit for acceptance. Instead, it was interpreted as a reasonable timeframe within which a response should be given. The court also held that the exception to the rule against adducing evidence of communications between parties in connection with an attempt to negotiate a settlement of a dispute applied not only to the immediate offer to settle but also to preceding communications. Consequently, the evidence in question was deemed admissible.

The court ordered that the offer made by SWV to Spiroc was not strictly time-bound and that the evidence of prior communications was admissible in the proceedings.

Orders