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Dysart Timbers Ltd v Nielsen

Dysart Timbers Ltd v Nielsen

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IN THE SUPREME COURT OF NEW ZEALAND
SC 54/2008
[2009] NZSC 43
BETWEENRODERICK WILLIAM NIELSEN

Appellant

ANDDYSART TIMBERS LIMITED

Respondent

Hearing:10 March 2009

Court:Elias CJ, Blanchard, Tipping, McGrath and Wilson JJ
Counsel:S P Bryers for Appellant

F Godinet for Respondent

Judgment:15 May 2009

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellant is to pay the respondent costs in the sum of $15,000.00 plus usual disbursements to be fixed by the Registrar if necessary.

REASONS

Para No

Elias CJ and Blanchard J  [1]
Tipping and Wilson JJ  [12]
McGrath J  [43]

ELIAS CJ AND BLANCHARD J
(Given by Blanchard J)
[1]       We have had the advantage of reading in draft the reasons of Tipping J and McGrath J. We respectfully prefer the legal analysis of Tipping J.
[2]       It is open to someone who makes an offer to stipulate the circumstances in which it will lapse. If the offeror does not do so expressly, it may nonetheless be apparent to an objective observer that the offer was made on the basis of the existence of certain circumstances.
[3]       It is not, of course, every change in circumstances which will cause the offer to lapse, i.e. make it no longer open for acceptance. A rule as wide as that would be productive of great uncertainty for offerees and, indeed, for offerors. Case law, as Tipping J demonstrates, has always required a change which an objective observer will see as very considerable in its consequences for the offeror.
[4]       We are of the view that, in the absence of an express term in the offer, the level of change of circumstance which is required for it to lapse is that of a fundamental change, which may occur all at once or by gradual development. An offeree cannot reasonably expect to accept an offer if the basis on which it was made has fundamentally changed. Furthermore, because it was possible for the offeror to specify the events in which the offer would lapse and, normally, to revoke the offer at any time without having to give a reason, in determining what must be taken to be, or amount to, a fundamental change the Court should give less weight to the occurrence of any event which an offeror must have had in contemplation when making the offer, and about which the offeror chose to be silent. That silence when the offer was made, or when it could have been revoked, may indicate that the offeror did not regard such a matter as fundamental to the continuance of the offer.
[5]       We do not adopt the contractual construction approach which McGrath J suggests. We consider that the analogy with a bilateral relationship is likely to distract attention from the real task of the Court, which is to examine the unilateral action of the making of the offer against the circumstances in which it was made. It is the objective intention of the…

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: [2009] NZSC 43
Decision Date: 15 May 2009

CaseChat Overview and Summary

The Supreme Court of New Zealand considered an appeal by Roderick William Nielsen against a decision that a settlement offer made by him had been accepted by Dysart Timbers Ltd, leading to a binding contract. Nielsen argued that the offer had lapsed before acceptance due to a supervening event – the Supreme Court granting leave for an appeal against a previous Court of Appeal judgment. The Court of Appeal had ruled that the offer remained open for acceptance despite the grant of leave. The legal issue was whether the offer had lapsed due to a fundamental change in circumstances. The Supreme Court found that an offer may lapse if there is a fundamental change in circumstances, but this must be objectively assessed. In this case, the grant of leave did not represent a fundamental change; Nielsen had anticipated the possibility of a decision on the leave application and had not specified any conditions for the offer's lapse. The appeal was dismissed, and Nielsen was ordered to pay costs to Dysart.

Orders