Vita Pacific Limited v Heather - [2000] TASSC 158

[2000] TASSC 158

CITATION: Vita Pacific Limited & Anor v Heather [2000] TASSC 158

PARTIES:  VITA PACIFIC LIMITED
  GIO GENERAL LIMITED
  v

HEATHER, Eileen Glynis

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 47/2000
DELIVERED ON:  9 November 2000
DELIVERED AT:  Hobart
HEARING DATES:  12 October 2000
JUDGMENT OF:  Underwood J

CATCHWORDS:

Contract - General contractual principles - Construction and interpretation of contracts - Implied terms - Business efficacy - Whether term implied into a contract made by acceptance of an offer of compromise.

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, applied.
Rules of Court 1965, O24A.
Aust Dig Contract [105]

Contract - General contractual principles - Construction and interpretation of contracts - Custom and usage - Implication by custom and commercial usage - Whether term implied into a contract made by acceptance of an offer of compromise.

Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226, applied.
Rules of Court 1965, O24A.
Aust Dig Contract [114]

REPRESENTATION:

Counsel:
             Appellants:  P A Griffits
             Respondent:  L K Mackey
Solicitors:
             Appellants:  Griffits & Jackson
             Respondent:  Jennings Elliott

Judgment Number: [2000] TASSC 158
Number of Paragraphs: 25

Serial No 158/2000
File No LCA 47/2000

VITA PACIFIC LIMITED and GIO GENERAL LIMITED v
EILEEN GLYNIS HEATHER

REASONS FOR JUDGMENT UNDERWOOD J

9 November 2000

The circumstances that give rise to this appeal from a determination of the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") are most unusual.

On 5 July 1993, the respondent suffered an injury that arose out of and in the course of her employment with the first named appellant. I interpose that the second named appellant is the insurer of the first named appellant and as the interests of the latter are identical to those of the former, it is convenient to simply refer to the first named appellant as "the appellant" in these reasons for judgment. Liability under the Workers Rehabilitation and Compensation Act 1988 ("the Act") was not disputed and weekly payments were made. In November 1994, the respondent commenced proceedings in this Court against the appellant claiming damages for negligence arising out of the incident which caused the respondent's compensable injury.

On 7 May 1996, the trial of the action commenced before Zeeman J. On 1 May 1996, the appellant served on the respondent an offer of compromise. This offer complied with the provisions of the Rules of Court 1965, O24A in all respects, save that it did not include a statement, as required by O24A, r3(b)(iv), that the offer was served in accordance with O24A. The day before the trial commenced, the respondent served an offer of compromise on the appellant. Neither side accepted the offer made to it and the trial proceeded to a conclusion.

On 15 May 1996, judgment was reserved. On the same day, the respondent…

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: [2000] TASSC 158
Decision Date: 9 November 2000

CaseChat Overview and Summary

The Supreme Court of Tasmania was asked to determine whether a settlement offer made under the Rules of Court 1965, O24A, could be amended by the Full Court to include a term that was not expressly stated in the original offer. The offer was made in the context of a personal injury claim and included a settlement amount and costs. The respondent argued that the offer should have included a reference to her entitlements under the Workers Rehabilitation and Compensation Act 1988. The appellant contended that such a term should be implied either as a matter of law or by custom. The court held that the Full Court had the power to amend the offer, but that there was no basis to imply a term into the offer. The court found that the offer was a formal written document made in accordance with the Rules of Court and that the observations made by members of the High Court in cases where there is no formal written contract, had no application to the circumstances of this case. The court also found that there was no evidence of a custom that would justify the implication of a term into the offer.

The court further held that the acceptance of an offer of compromise did not create a contract into which terms could be implied. However, the court noted that the Rules of Court, O24A, prescribed certain requirements for the making of an offer of compromise, such an offer is nonetheless an offer at common law which, if accepted, becomes a contract at common law. A failure to satisfy the terms of the contract will be a breach of contract, actionable at law.

The court dismissed the appeal and found that the order made by the Tribunal was the correct one in the circumstances. The court also noted that this case demonstrates a clear need to amend the Act, s133, to include acceptance of an offer of compromise within the scope of its terms. The procedure of offers of compromise was introduced into the Rules of Court by Statutory Rule 146/1995, without consequential amendment to the Act.

In conclusion, the court found that the Full Court had the power to amend the offer, but that there was no basis to imply a term into the offer. The court also held that the acceptance of an offer of compromise did not create a contract into which terms could be implied, but that an offer of compromise is nonetheless an offer at common law which, if accepted, becomes a contract at common law. The court dismissed the appeal and found that the order made by the Tribunal was the correct one in the circumstances.

Orders