Velardo v Andonov
[2010] VSCA 38
•9 March 2010
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No S APCI 3862 of 2009
| AGOSTINO VELARDO and ANNA VELARDO | Applicants |
| v | |
| ILIJA ANDONOV | Respondent |
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| JUDGES | ASHLEY and MANDIE JJA and HABERSBERGER AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 19 February 2010 |
| DATE OF JUDGMENT | 9 March 2010 |
| MEDIUM NEUTRAL CITATION | [2010] VSCA 38 |
| JUDGMENT APPEALED FROM | [2009] VCAT 1922 (Vice President Judge Ross) |
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Appeal under s 148 Victorian Civil and Administrative tribunal Act 1998 (‘the Act’) – Offer of settlement – Whether the offer an offer which met description in s 112(1) of the Act – Whether offer validly accepted – Whether Tribunal has power under s 114(3) of the Act to grant permission to withdraw an offer after the offer has been accepted – Whether power to permit withdrawal nunc pro tunc – Circumstances justifying permission to withdraw offer.
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| Appearances: | Counsel | Solicitors |
| For the Applicants | Mr C R Hanson | Robert M Phelan & Co Pty |
| For the Respondent | Mr P W Lithgow | Ellinghaus Weill |
ASHLEY JA:
By summons filed 13 October 2009 the applicants, Agostino and Anna Velardo, seek leave to appeal under s 148(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (‘the Act’) against orders made by a Vice-President of the Victorian Civil and Administrative Tribunal (‘the Tribunal’) on 16 September 2009; and, if their application is granted, that their appeal be heard and allowed.
The Tribunal’s orders were as follows:
1Pursuant to s 114(3) the Tribunal gives permission, nunc pro tunc, for the Respondent’s offer of 29 April 2009 to be withdrawn, prior to its purported acceptance by the Applicants.
2Pursuant to s 124 of the Victorian Civil & Administrative Tribunal Act 1998, the Tribunal declares that there is no concluded agreement between the parties for the settlement of the proceeding.
3The applicant’s application for an order giving effect to the terms of the Respondent’s offer of 29 April 2009 pursuant to s 115(1) of the Victorian Civil & Administrative Tribunal Act 1998, is dismissed.
Circumstances
On 5 August 2008 the applicants commenced a proceeding at the Tribunal seeking damages of nearly $123,000 for alleged breaches of domestic building agreements made in November 2003.
There was a failed mediation in November 2008.
At a directions hearing in late January 2009 the matter was set down for hearing, on an estimate of ten days.
The solicitors for the respondent, Ilija Andonov, made a written offer of settlement on their client’s behalf in December 2008. A covering letter described it as an offer made under Division 4 of Part 8 of the Act.
That offer, it seems, was rejected.
By his solicitors’ letter dated 29 April 2009 the respondent made a further offer by to settle the claim. The letter was headed ‘without prejudice save as to costs’.
The letter said this in part:
Our client instructs that he will settle this matter by paying your clients the amount of $50,000 (‘the settlement sum’). The settlement sum would be paid by way of initial payment of $10,000 within 30 days of acceptance of offer and subsequently instalments (sic) of $5000 per month until the settlement sum is fully paid.
Then followed a good deal of argumentative material which was no doubt intended to persuade the reader of the adequacy of the offer.
The letter concluded this way:
In the circumstances and in the interest of avoiding further unnecessary cost and expense, our client makes this offer in accordance with principles encapsulated in the decisions of Calderbank v Calderbank [1975] 3 ALL ER 333 and Cutts v Head [1984] 1 ALL ER 597.
Should your client not accept this offer and your client is not awarded an amount greater than this settlement offer then this letter will be produced to the Tribunal in support of our client’s application that you (sic) client pay costs on a solicitor own client basis.
It was said for the respondent below that the applicants orally rejected the offer on 12 May 2009. But that alleged circumstance did not go into evidence before the Tribunal.
On the other hand, the fact that a counter-offer was made by letter on 13 May (but not the text of the letter) did go into evidence.
On 10 June the respondent’s solicitors faxed a letter to the applicants’ solicitor which advised that additional documents relating to the contractual arrangements between the parties had recently been discovered by their client. They provided copies of the additional documents.
A compulsory conference[1] was held on 16 June 2009 before a Senior Member of the Tribunal. The functions of such a conference are set out in s 83(2):
[1]See ss 83-87 of the Act.
(a)to identify and clarify the nature of the issues in dispute in the proceeding;
(b) to promote a settlement of the proceeding;
(c)to identify the questions of fact and law to be decided by the Tribunal;
(d)to allow directions to be given concerning the conduct of the proceeding.
Before the conference began, counsel for the respondent said to counsel for the applicants words to the effect ‘All previous offers are withdrawn’. He did not say, so far as the material before the Court shows, that his client intended to seek the permission of the Tribunal to withdraw the offer.[2]
[2]See s 114(3).
The conference proceeded. During its course, and before the respondent’s solicitor had intimated any intention of seeking permission for his client to withdraw the offer of 29 April, the applicants’ solicitor gave to the solicitor for the respondent a handwritten document which purported to accept that offer. The document said this:
16/6/09
To: Ellinghaus Weill
Solicitor for Ilija Andonov
NOTICE OF ACCEPTANCE OF OFFER OF SETTLEMENT
Take notice that the Applicants Agostino Velardo and Anna Velardo hereby accept the offer made 23 April 2009 set out in your letter of that date.
This acceptance is given in accordance with Victorian Civil and Administrative Tribunal Act, s.114.
Robert M Phelan & Co Pty.
Solicitor for Applicants
In VCAT Proceeding
D538/2008
On 4 September the proceeding came on before the Vice President, apparently as a result of orders made by the Senior Member who had presided at the compulsory conference. The substantive question was whether the respondent’s offer had been validly accepted.
Before the Vice President, respondent’s counsel conceded that he had not sought the permission of the Tribunal to withdraw the offer before he advised the applicants’ counsel that he was doing so. It was his submission, however, that (1) the offer was not an offer within the meaning of the Act; (2) if that was wrong, the offer had been rejected – and rejection is not the same as making a counter-offer; (3) in any event, his client should be given effective leave to withdraw the offer notwithstanding its purported acceptance; and (4), the fact that an offer made under s 114(1) may have costs consequences under the Act – vide s 112 – does not mean that a Calderbank offer is of no relevance on the question of costs.
Applicants’ counsel conceded that if the respondent’s offer had not been an offer within the meaning of the Act then the withdrawal of offer had been effective. But he argued that the offer had not been of that character, contending that it conformed with the statutory description in ss 113-114. He pointed out that s 114(3) is not open-ended, because a party can specify a period (of not less than 14 days) for acceptance. He referred to s 114 (6) in the context of submitting that sections of the Act which deal with offers modify the common law position. He submitted also that no circumstances had been revealed which would justify the Tribunal permitting the offer to be withdrawn.
Legislation
The sections of the Act relating to settlement offers are within Division 8 of Part 4. That Division is headed ‘Costs’.
The prima facie position set up by s 109(1) is that ‘each party is to bear their own costs in the proceeding’. But that is ‘subject to this Division’.
Section 109(2) provides that -
At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party.
By s 109(3), the Tribunal may only make an order under subs (2) ‘only if satisfied that it is fair to do so, having regard to a number of specified matters. The last matter specified is a catch-all:
(e) any other matter the Tribunal considers relevant.
The particularly pertinent provisions of the Act which relate to offers read as follows:
112. Presumption of order for costs if settlement offer is rejected
(1) This section applies if -
(a)a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and
(b) the other party does not accept the offer within the time the offer is open; and
(c) the offer complies with sections 113 and 114; and
(d)in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.
(2)If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in subsection (1)(a) is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made.
(3)In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal -
(a) must take into account any costs it would have ordered on the date the offer was made; and
…
113. Provisions regarding settlement offers
(1) An offer may be made -
(a)with prejudice, meaning that any party may refer to the offer, or to any terms of the offer, at any time during the proceeding; or
(b)without prejudice, meaning that the Tribunal is not able to be told of the making of the offer until after it has made its orders in respect of the matters in dispute in the proceeding (other than orders in respect of costs).
(2)If an offer does not specify whether it is made with or without prejudice, it is to be treated as if it had been made without prejudice.
(3) A party may serve more than one offer.
(4)If an offer provides for the payment of money, the offer must specify when that money is to be paid.
114.Provisions concerning the acceptance of settlement offers
(1)An offer must be open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute, or until the expiry of a specified period after the offer is made, whichever is the shorter period.
(2) The minimum period that can be specified is 14 days.
(3)An offer cannot be withdrawn while it is open for acceptance without the permission of the Tribunal.
(4)In deciding whether to give permission, the Tribunal may examine the offer, even if it was made without prejudice.
…
(6)A party can only accept an offer by giving the party who made it a signed notice of acceptance.
(7) A party may accept an offer even though it has made a counter-offer.
The Tribunal’s decision
The Vice President stated, as was admittedly the situation, that at common law the respondent’s offer was unable to be accepted on 16 June 2009. It had been withdrawn.[3]
[3]And, though he did not mention it, it had been the subject of a counter-offer, that involving rejection of the offer.
Having referred to relevant provisions of the Act, he stated –
It follows from the terms of ss 112 – 114 that an offer will be a settlement offer for the purpose of the statutory regime if it has the following characteristics:
Øit is given by a party to a proceeding (other than a review proceeding) to another party (s 112(1));
Øit is an offer in writing to settle the proceeding (s 112(1));
Øif the offer provides for the payment of money it must specify when that money is to be paid (s 113(4)); and
Øit is open for acceptance until, either,
· immediately before the Tribunal makes its orders on the matters in dispute; or
· until the expiry of a specified period after the offer is made (the minimum period that can be specified is 14 days),
whichever is the shorter period (s 114(1) and (2)).
The Vice President concluded that ‘the statutory scheme is not an exclusive code as to the means whereby offers of compromise may be made in respect of a Tribunal proceeding’. Offers outside ss 112-114 were ‘simply offers to settle on the terms contained in the offer itself’.
Whilst accepting that a settlement offer might be made which was not an offer within ss 112-114, the learned Vice President importantly concluded that -
settlement offers which comply with the requirements of these provisions should be regarded as falling within the scope of the statutory scheme. Such an approach promotes certainty and fairness, consistent with the Tribunal’s obligations under s 97.
The Vice President rejected the submission for the respondent that the offer was outside the scope of the statutory regime.
Then he turned to the question of permission to withdraw. Upon that question, he held that there is power to permit withdrawal of an offer, even after it has been accepted. He said this:
… acceptance of the Velardos’ position would render s 114(3) nugatory. If the offeree opposed the withdraw of the offer then he or she could simply accept the offer (in accordance with s 114(6)) before the Tribunal had the opportunity to determine the application to withdraw the offer. Such acceptance would (on the submission of counsel for the Velardos) rob the Tribunal of power to permit the withdrawal of the offer. Such an outcome cannot have been intended.
With respect to the argument for the applicants that withdrawal after an offer has been accepted could only be given in ‘special circumstances’, the Vice President concluded that ‘the Tribunal should permit the withdrawal of an offer where it is in the interests of justice to do so’. In the instant case, fairness supported permitting the respondent to withdraw the offer as at a time immediately before the compulsory conference commenced. It was pertinent that - (1) as at 16 June 2009 the offer had been open for acceptance for over six weeks; (2) the offer had been met with a counter-offer; and (3) respondent’s counsel had told applicants’ counsel before the conference began that all previous offers were withdrawn.
For the reasons which he stated, the Vice President dismissed what he treated as being an application by the applicants for an order giving effect to the terms of the respondent’s offer.
The application for leave to appeal and the appeal
The applicants draft notice of appeal identifies the following question of law:
1)Does s.114 Victorian Civil and Administrative Tribunal Act 1998 operate so as to allow the Victorian Civil and Administrative Tribunal, in the absence of matters such as fraud or mistake, to give permission to withdraw an offer in writing to settle a proceeding after written acceptance of the offer?
2)If question 1 is answered in the affirmative, does s.114 Victorian Civil and Administrative Tribunal Act 1998 require an applicant, in the absence of matters such as fraud or mistake, to demonstrate to the Victorian Civil and Administrative Tribunal a sufficient change in circumstances to make it just that the applicant have the opportunity to withdraw the offer?
3)If question 2 is answered in the affirmative, was there evidence before the Victorian Civil and Administrative Tribunal in the application heard 4 September 2009 in proceeding number D538/2009 upon which the Victorian Civil & Administrative Tribunal could reasonably come to the conclusion that the Respondent had demonstrated a sufficient change in circumstances to make it just that the Respondent have the opportunity to withdraw the written offer to settle that proceeding made 29 April 2009?
The Court heard submissions on the leave application and the prospective appeal at the same time. It stated at the outset that it would decide the question of leave and, if necessary, the fate of the appeal, after hearing full argument.
Did the offer meet the description in s 112 of the Act?
The questions of law framed by the applicants presuppose the correctness, denied by the respondent, of the Tribunal’s conclusion that the respondent’s offer of 29 April was an offer which met the description in s 112(1) of the Act. If the Tribunal had concluded to the contrary, there would have been the same substantive result. There can be no objection to the respondent to an appeal such as this seeking to maintain the orders made below on a basis different to that relied upon by the Tribunal, at least if the basis sought to be relied upon was agitated below, and at least if the issue raised involves a question of law.[4] The situation is not akin to that which has often enough arisen, in a variety of statutory contexts, where the appellant has sought to rely upon an argument not ventilated at first instance. A respondent’s successful reliance on an argument raised but rejected below is likely to mean, even though the appellant makes good a ground or grounds of appeal, that the Court will affirm the order made below.[5]
[4]See my observations in Secretary, Department of Justice v Osland [2007] VSCA 96, [111]); and compare, to an extent, my later observations in Dover Beach Pty Ltd v Geftine Pty Ltd (2008) 21 VR 442, [37]. See also Bulasa Pty Ltd v Baytown Properties Pty Ltd [2003] 20 VAR 189 (Gillard J), and the obverse situation discussed in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd& anor (2008) 19 VR 422, 434 [41] and by me in Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6 [80].
[5]See s 148(7)(a).
In this case, the Court invited the parties to first address the question whether the offer was one which met the description in s 112(1). Counsel for the applicants took up the challenge. He presented a well-constructed argument, the thrust of which was that - (1) an offer falls within s 112(1), which by paragraph (c) requires compliance with ss 113-114, so long as it contains the elements there set out; (2) it matters not that an offer is described as a Calderbank offer. Section 112(2) can work satisfactorily in such a case; (3) the requirement in s 114(1) that ‘an offer must be open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute’ – unless a period for acceptance is specified – does not mean that, absent specification of a shorter period, the offeror must state that the offer is open for acceptance until immediately before the Tribunal makes its orders. If a shorter period is specified, the effect of s 114(1) is that the offer will have that character. Had it been a requirement that the first alternative be stated, s 114(1) would have said so. Sections 113-114 identify matters where specification is mandatory. The first alternative set out in s 114(1) is not one of them.
Counsel for the respondent submitted that the offer was not one which complied with ss 112-114. His arguments were essentially those which he advanced below. They were noted by the Vice President as being – (1) that in form the offer invoked the common law - by its reference to Calderbank, and by its failure to invoke the Act or any particular sections thereof; and (2) that the offer did not prescribe a time limit for acceptance.
The question whether the offer met the description in s 112(1) begins with the antecedent question whether the Act admits of an offer being made which can be relevant to costs although it is not an offer meeting that description. In my respectful opinion, the Vice President was correct to answer that question ‘yes’. Applicants’ counsel, I should add, did not contend to the contrary.
Two matters point in favour of that conclusion. The first is s 109(2) and (3)(e) in combination.[6] The second is the fact that the costs consequences provided for by s 112(3) apply only if, inter alia, the offer complies with ss 113-114. Those costs consequences are, as will be seen, in several respects idiosyncratic. In terms, the language of s 112(1) leaves open the prospect that an offer of some other kind might attract different consequences.
[6]The Tribunal, in a number of instances, has treated an offer outside ss 112-114 as being relevant to the application of s 109(2)(e). See Pizer, Victorian Administrative Law, 1-2166.
So, did the offer of 29 April meet the requirements stated by s 112(1)(c)? In my opinion, it did not do so. The following considerations are pertinent.
First, although s 114 is concerned, according to its heading, with acceptance of settlement offers, sub-ss (1) and (2) set out requirements of an offer itself. The point is emphasised by s 112(1)(c), which speaks of an offer complying with ss 113 and 114.
Second, I respectfully disagree with the conclusion of the learned Vice President that s 114(1) does not require – if no shorter period is specified – that the offer state that it is open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute.[7] So to construe the subsection is to treat it as saying that where an offer does not specify a shorter period, the offer is deemed to be open up to the time of making final orders. But that is not what the subsection says.
[7]The Vice President referred, in support of this conclusion, to observations by a Member of the Tribunal in Amos v Moutidis (2004) 21 VAR 39 [21]-[22]. There, the Member said that, the offer having not stated a period during which it was open, it was ‘reasonable to assume’ that it remained open until withdrawn or otherwise until immediately before the Tribunal made its orders. The proposition, so stated, is not persuasive of what is a matter of statutory construction.
It is true that provision is made for the specification of various matters by ss 113 and 114. It is true also that a shorter period under s 114(1) is required to be specified, whereas there is no requirement of specification of the longer period. So there is force to the argument that the difference in language means that a deeming does occur in the latter case. Even so, I am not persuaded that such is the proper construction of the subsection. The construction of s 114(1) which I prefer is compatible with a jurisdiction where, often enough, parties are not represented. So construed, an offeree, without needing to read and understand the Act, would know from the offer itself whether it was open for acceptance up to the time of final disposition, or else for some specified shorter period. That consideration is not the less if - let it be assumed - it is unnecessary for an offer to state the matters set out in s 114(3), (5) or (6). All that would mean is that s 114 is in some respects arguably deficient.
Third, I do not accept the proposition that the proper construction of ss 112-114 is that whether an offer meets the statutory description is to be determined only by reference to whether, within the offer, there is enough to show compliance with ss 113-114. It needs to be borne in mind that the purpose of a s 112(1) offer is to attract the costs consequences mentioned in s 112(2). If those consequences are remote from the costs consequences which a particular offer is seeking achieve, it is, I think, a powerful indication that, on objective analysis, the offer is not one which meets the statutory description – even if there is otherwise enough in the offer to literally satisfy ss 113-114.
Fourth, an offer’s self description could not be determinative whether the offer was one meeting the s 112(1) description. Analogously, the law is littered with situations in which the parties’ description of a legal relationship may be demonstrated not to accord with its true character. So, although the offer was in name a Calderbank offer, and although I would infer that the offeror intended to make an offer of that kind,[8] those circumstances could not be decisive.
[8]So much can be inferred from a comparison of the terms of the offer and the terms of an earlier offer made by the respondent.
In the present case, however, consideration of the terms of the offer show that it was not an offer meeting the s 112(1) description. Thus:
(1)The offer was not only in name, but also in substance, a Calderbank offer. A key feature of such an offer is that it is not an offer to which offer of compromise provisions – whether imposed by statute or rules of court – apply;
(2)The offer foreshadowed an application for solicitor and own client costs. Such an order is the frequent, but by no means the inevitable, concomitant of a successful Calderbank offer.[9] Section 112(2) creates, on the other hand, a prima facie entitlement to payment of ‘all costs’ in favour of a successful offeror. Ordinarily, it appears, costs would be assessed in such a case on
a party and party basis - although the Tribunal would be empowered to allow costs on a more favourable basis.[10]
(3)There was another distinct contrast between the remedy sought by the respondent and the situation under the Act. The respondent offered an ‘all in’ amount. But under s 112(3)(a) the Tribunal, in considering whether its orders are more favourable to the offeree than the offer, ‘must take into account any costs it would have ordered on the date the offer was made’. It is well-understandable that an offeror, as it did here, would seek to avoid the uncertainty of such a speculative exercise.[11]
[9]See the observations of Nettle JA in Berrigan Shire Council v Ballerini [2006] VSCA 65 [33], further to what this Court said in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435.
[10]Pacific Indemnity Underwriting Agency Pty Ltd v Maclaw No 651 Pty Ltd (2005) 13 VR 483, 496-497 [33] (Ormiston JA), 518 [91]-[92] (Nettle JA) and 522 [111]] (Hansen AJA), citing Re Adelphi Hotel (Brighton) Ltd [1953] 1 WLR 955, 961. See also DH v NS (Court of Appeal, 10 June 2005, unreported, Chernov JA and Byrne AJA).
[11]The costs regime which the Act establishes, including s 112(3), seems likely to produce difficulties in the formulation of offers. See, for instance, Dover Beach Pty Ltd & anor v Geftine Pty Ltd (2008) 21 VR 442, [108]-[127].
I accept that the construction which I would place on s 112(1) might produce uncertainty, in a particular case, whether an offer was one to which provisions such as s 114(3)(4) and (7) applied. Such uncertainty would be capable of affecting both offeror and offeree. It seems to me, however, that so long as the considerations to which I have referred are borne in mind, any area of uncertainty should be small.
What if the offer had been one meeting the description in s 112(1) of the Act?
My conclusion that the offer was not one meeting the description in s 112(1) of the Act means, as I said earlier, that the Tribunal’s order should be affirmed. Strictly, it is then unnecessary to deal with the basis upon which the Vice President decided the matter. But for sake of completeness I will say a little about the issues which would have required answers if my conclusion had been to the contrary.
Power to permit withdrawal nunc pro tunc?
The Vice President exercised what, apparently in the absence of argument, he took to be a power which he possessed to permit the respondent to withdraw its offer at a time prior to the offer being accepted. He described what he did as permitting the respondent ‘to withdraw the Offer nunc pro tunc (now for then)’.
The question whether the Vice President had the power which he assumed was not fully argued in this Court. With that caveat, for a number of reasons I doubt that he had such a power. Thus: (1) the power has been conceived as one residing in the inherent power or jurisdiction of superior courts;[12] (2) only rarely, where the power exists, has it been used ‘to alter the substantive rights of parties but only to overcome procedural irregularities and difficulties’;[13] (3) use of such an order to effect changes in substantive rights and obligations imposed by statute will be impermissible unless clearly authorised by the statute;[14] (4) the Tribunal is a creature of statute. It has no inherent power or jurisdiction. Its powers are limited to those specifically conferred, and whatever is necessarily incidental thereto; (5) with respect to permitting an offeror to withdraw an offer of settlement, the Tribunal’s power is conferred by s 114(3). That power must be considered in the unusual context created by the words of the subsection and also sub-s (7). To read s 114(3) as giving rise to an incidental power to grant a permission backdated in time would be to permit the destruction of a concluded bargain; (6) the Tribunal’s specific power to correct mistakes in an order does not assist a conclusion that it has power to make an order (or grant permission) nunc pro tunc. It addresses a quite different situation. The same may be said of the power conferred by s 126 although, just possibly, if the opening words of sub-s (2) were satisfied, sub-s (2)(b) might be relevant; (7) the reasons for decision of O’Bryan J (with whom Murphy and McDonald JJ agreed) in H W Wilson Pty Ltd v Pitman[15] suggest, in the context of an offer made under rules of court, that there is no power to make an order nunc pro tunc permitting withdrawal after an offer has been accepted; (8) the New South Wales case of Scanruby Pty Ltd v Caltex Petroleum Pty Ltd[16] was an instance of a superior court exercising a power to make an order nunc pro tunc. It casts no light on the capacity of the Tribunal to make such an order. The most that can be said is that the order made in Scanruby should be taken to suggest – contrary to H W Wilson – that an order such as was there made addresses a matter of procedure; (9) the New South Wales case of Young v Combe[17] involved distinctly different circumstances to those presently involved. Of this, more later.
[12]See, for instance, Hartley Poynton Ltd v Ali (2005) 11 VR 568, 607 [76] (Ormiston JA).
[13]Ibid 606 [73].
[14]David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265. Compare Emanuele v Australian Securities Commission (1997) 188 CLR 114.
[15]Full Court, (Unreported, 6 December 1990).
[16][2001] NSWSC 411.
[17](Unreported, Hodgson J, 29 July 1993).
Power to make an order under s 114(3) affecting a concluded agreement?
Then a question arises whether s 114(3) would authorise a grant of permission after an offer had been accepted – not an attempted backdating of permission, but rather permission operating to dismantle the agreement constituted by offer and acceptance. Whilst to construe the subsection in that way would be a means of avoiding the apparent absurdity that an offer could be accepted in the period between notification being given of an application to withdraw and the application being determined, it would be a far-reaching step so to construe the provision. Further, although H W Wilson was factually complicated – the correct order having been made below for the wrong reason, and thus the appeal being incompetent – what O’Bryan J said implies that an offer under the rules could be accepted so long as it remained open, and despite foreshadowed application for leave to withdraw it. Such a position would be neither more nor less absurd than that which would exist if s 114(3) was similarly construed. The situation is not necessarily any different because of s 114(7), which is somewhat like r 26.03 (6) of Chapter 1 of the Rules, and Pt 22 R3(7) of the New South Wales rules of court considered by Hodgson J in Young v Combe.
It may be, on the other hand, that a distinction could legitimately be drawn between two situations, that is: (1) acceptance after an offer had been withdrawn and the offeree had been put on notice that the offeror intended to apply for permission to withdraw it; and (2) acceptance after an offer had been withdrawn but without any such intimation having been given. The former situation arose in Young v Combe. That was a matter heard and determined in a superior court, and it involved the application of a rule of court. Accepting those differences, Hodgson J stated that
… it seems to me that what has been accepted is an offer which is itself subject to being withdrawn, if the Court gives leave when the application comes to be heard.
In those circumstances, his Honour held, the withdrawal of offer remained open for consideration under the rules equivalent of s 114(3).
If his Honour’s conclusion could be transposed to the Tribunal context, I add, it would not have aided the respondent. The conduct of his legal advisers fell into the second category which I have just mentioned.
Grounds for interference
Assuming that the Tribunal did have power to unmake a concluded agreement, a question would arise as to the circumstances in which it might do so. The Vice President rejected the submission for the applicants that the respondent must show ‘special circumstances’. Rather, he held, the Tribunal should permit an offer to be withdrawn where it would be ‘in the interests of justice to do so’. He referred to and relied upon a passage in the reasons for judgment of Palmer J in Scanruby. He also called in aid s 97 of the Act, and ‘fairness’. Such formulations enabled grant of permission where the offeree had opportunistically accepted an offer after oral notice of withdrawal had been given but before the permission of the Tribunal had been sought.
The correct answer to the problem is not an easy one. Fortunately, in a sense, it does not have to be given now. I would only say the following.
I consider it clear enough that the special circumstances test would be too narrow to meet the situation which arose here. That test focuses upon whether there has been some significant, or ‘sufficient’, change in the circumstances which gave rise to the offer;[18] and so would not treat as decisive an offeree’s simply opportunistic conduct in accepting an offer of which notice of withdrawal had been given (as contrasted with discovery of fraudulent conduct on the part of the offeree).
[18]The applicants relied upon Cumper v Pothecary [1941] 2 KB 58, 70 (Goddard LJ, for the Court); and a series of New South Wales authorities – Young v Combe (Unreported, Hodgson J, 29 July 1993), Scanruby Pty Ltd v Caltex Petroleum Pty Ltd [2001] NSWSC 411, and Hardy Bros v Hardy Bros [2008] NSWSC 1220, [11] (McDougall J) – which have held that the court’s discretion under rules of court to permit a party to withdraw an offer during the period which it is open for acceptance depends upon the offeror demonstrating ‘a sufficient change in circumstances’.
There is a serious question whether, if in a particular case s 114(3) is invoked, there should be any different outcome.
First, the provision itself approximates rules of court where the special circumstances test does apply. It is a test that has been applied in a multiplicity of jurisdictions.
Second, the passage in the reasons for judgment of Palmer J in Scanruby upon which the Tribunal relied had to do with whether an offeror should be granted leave to withdraw an offer after it had been accepted. His Honour had earlier specifically applied the ’sufficient change in circumstances’ test, and held that it had been satisfied.[19]
[19]Scanruby, ibid [12]-[14].
Third, to conclude that a different test should apply would imply, quite wrongly, that the Tribunal, by contrast with the courts, has a duty to act fairly. Moreover, the aspirational directive in s 97 of the Act, and the procedures set out in s 98, are not at all dissimilar to provisions referable to other many other statutory tribunals. Presumably, the argument would have to run that these tribunals also, by contrast with the courts, have a duty to act fairly. Legal theory is opposed to such
a proposition.
Order
I would grant the application for leave to appeal. I would allow the appeal, only so as to set aside paragraph 1 of the orders made below, and to renumber orders 2 and 3. Otherwise, I would affirm the orders made below.
MANDIE JA:
I agree with Ashley JA.
HABERSBERGER AJA
I also agree with Ashley JA.
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