Offer mistakenly made by ‘macro’ re-populating the date

Imhoff v Lotherington [2010] QDC 82

 

An offer was renewed by mistake when the wrong letter was attached to an email the day before the trial. The attachment was a previously expired offer, however the ‘macro’ in the letter re-populated the date on the offer when printed.

The magistrate ultimately entered judgment on the offer. His Honour Samios on appeal from the magistrate’s decision considered the circumstances when an offer made by mistake can be withdrawn and distinguished Simpson v Coastal Enterprises Pty Ltd [2005] QDC 015:

[17] The respondent submits the appeal sits on all fours with the decision in Simpson and Simpson v Coastal Enterprises Pty Ltd [2005] QDC 015.

[18] In that case the defendant’s solicitor made a formal offer under the rules that mistakenly excluded an amount for stock when the instructions to the defendant’s solicitor were to include the value of stock. After the offer was made the defendant’s solicitor in a telephone call to the plaintiff’s solicitor stated that his client wished to withdraw the offer. The plaintiff’s solicitor stated that he could not withdraw the offer without leave. The plaintiff’s solicitor then waited five days before accepting the offer in order to give the defendant’s solicitor an opportunity to apply for leave to withdraw his offer. On the twelfth day after the offer was made the plaintiff accepted the offer.

[20] In my opinion, Simpson and Simpson v Coastal Enterprises Pty Ltd and the present case are distinguishable. In Simpson and Simpson v Coastal Enterprises Pty Ltd the plaintiff’s solicitor waited five days before accepting the offer in order to give the defendant’s solicitor an opportunity to apply for leave to withdraw the offer. In the present case, the solicitors for the respondent did not give the appellant’s solicitor any time to withdraw the offer and filed a written acceptance of the offer to settle knowing it had been sent to the respondent by mistake.

[21] In Bailey v Albion and Suncorp Metway Insurance Limited [2006] QDC 034 Robin DCJ gave leave to a plaintiff to withdraw an offer to settle. It was clear on the material before Robin DCJ that the plaintiff’s solicitor had made an error and the plaintiff would be disadvantaged if the offer was accepted. Consequently, the application proceeded ex parte and the offer was withdrawn. I take this case as an illustration that there is a discretion to be exercised and as Woods J did in Rosniak referred to in the decision of Simpson and Simpson v Coastline Enterprises Pty Ltd leave will be given almost as a matter of course where a mistake is demonstrated.

[22] In Harvey v Phillips (1956) 95 CLR 235 the High Court referred to the various circumstances that may arise for the court to exercise its discretion to set aside a compromise or intercept formal judgment. In the course of doing so, at p 243 the court referred to what Lord Atkin said in Sheonandan Prasad Singh v Abdul Fateh Mohammad Reza [1935] 62 Ind App 196 and said: “In the first instance the authority is an actual authority implied from the employment as counsel. It may, however, be withdrawn or limited by the client; in such a case the actual authority is destroyed or restricted, and the other party if in ignorance of the limitation could only rely upon ostensible authority. In this particular class of contract, however, the possibility of successfully alleging ostensible authority has been much restricted by the authorities such as Neale v Gordon Lennox … and Shephard v Robinson, which make it plain that if in fact counsel has had his authority withdrawn or restricted the courts will not feel bound to enforce a compromise made by him contrary to the restriction, even though the lack of actual authority is not known to the other party … It is said that this power of the courts is to be exercised as a matter of discretion when in the circumstances of the case to allow the compromise to stand would involve injustice in view of the restriction on counsel’s authority … but in the case of a compromise which is made within the actual as well as apparent authority of counsel a court does not appear to possess a discretion to rescind it or set it aside. The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.”

[23] Further in that judgment the High Court approved of the dictum of Lindley LJ to the effect that he did not have the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual. To his mind, the only question was whether the agreement on which the consent order was based can be invalidated or not. If that agreement could not be invalidated the consent order was good.

[24] Rule 358(4) of the UCPR provides that if an offer to settle is accepted the court may incorporate any of its conditions into a judgment.

[25] In the present matter it was known to the respondent’s solicitors that the offer to settle was sent by mistake. From what Mr Mould said to the respondent’s barrister in the interview room attached to the court and from what Mr Mould said to the Magistrate, the only conclusion the respondent’s solicitors could come to was that Mr Mould did not have authority for the offer to settle and it was sent by mistake.

 [26] In this matter in my opinion, the learned Magistrate’s discretion was not exercised as it should have been. Rather the view was taken that as there had been an acceptance the matter was settled. The learned Magistrate did not turn his mind to the circumstances in which the matter was said to have been settled which included knowledge on the part of the respondent’s solicitors that the offer to settle was sent to them by mistake, and it was an offer to settle for which the appellant’s solicitor had no instructions or authority. Further, since the offer of 24 October 2008 the appellant may have incurred further costs. The evidence on this appeal shows more costs were incurred by the appellant after 24 October 2008.

[27] Therefore, I find the second offer to settle was not one that could be accepted because the respondent’s solicitors knew it was sent by mistake, and even if it could be accepted the agreement upon which it was based should not have been enforced by the learned Magistrate entering judgment pursuant to the rule because that involved an injustice in the circumstances.

[28] I was referred by counsel for the respondent to the New South Wales Court of Appeal decision of Gordon v Berowra Holdings Pty Ltd (2005) NSWCA 27 where at paragraph 56 it was held that leave to withdraw an offer under the rules (even after acceptance) could be granted for good reason, including mistake or other circumstance making it just that the offer be allowed to be withdrawn.

[29] I do not consider in the circumstances there was any injustice to the respondent not to enter judgment. The learned Magistrate should have given the appellant leave to withdraw the offer.

[30] Therefore, I allow the appeal. I set aside the orders made by the learned Magistrate on 25 November 2008. I give leave to the appellant to withdraw the offer to settle. I will hear the parties on the question of costs.

Brisbane Barrister – David Cormack

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