IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION
Case No. B10443550
MORGAN CONSULTING PTY LTD
Plaintiff
v
GEOFF HANNAN GROUP PTY LTD
Defendant
---
MAGISTRATE:
P. LAURITSEN
WHERE HELD:
MELBOURNE
DATE OF HEARING:
6 DECEMBER 2011
DATE OF DECISION:
12 DECEMBER 2011
CASE MAY BE CITED AS:
MORGAN CONSULTING v GEOFF HANNAN GROUP
REASONS FOR DECISION
--Catchwords: Magistrates’ Court General Civil Procedure Rules 2010, rr 47.04, 47.05 –
application made by the defendant for the separate hearing of a question in the proceeding
– offer made to settle the claim on behalf of the plaintiff – whether the plaintiff’s claim was
compromised – rejection of the plaintiff’s offer due to the defendant’s subsequent request
for costs.
--APPEARANCES:
Counsel
Solicitors
For the Plaintiff
Coopers Lawyers
For the Defendant
Pointon Partners
!Undefined Bookmark, I
HIS HONOUR:
1
This is the first time I have dealt with an application under rr 47.04 and 47.05
of the Magistrates’ Court General Civil Procedure Rules 2010. It raises a
simple question – whether the plaintiff’s claim has been compromised. The
circumstances are straightforward.
Circumstances
2
The plaintiff issued its complaint on 17 February 2011. It sought $15,107.40.
After a pre-hearing conference, the complaint was listed for trial on 13
October.
3
On 30 September, the plaintiff’s solicitor, Daniel Peters (Peters), faxed a letter
to the defendant’s solicitor, Andrew Cox (Cox), saying in part:
“We advise that our client has instructed us that they wish to settle this
matter on the basis that both parties walk away and bear their own
costs. [Please] find enclosed Consent Orders to the affect. [If] you
agree to these terms, please execute and return them to our office as
soon as possible so we may file with the court. [Should] you wish to
discuss this further, or do not accept these terms, please do not
hesitate to contact our office.”
4
The proposed consent orders read:
1.
2.
3.
5
That the Plaintiff’s claim be struck out.
The parties mutually agree to abandon any rights, entitlements
or liabilities arising from this action.
No order as to costs.
Cox contacted his client and then phoned Peters. There was some dispute as
to what was said. Both made affidavits and gave oral evidence. I am satisfied
Cox said it was appropriate for the plaintiff to make some contribution to the
defendant’s costs. Shortly after that conversation, Peters rang Cox back
asking how much. Cox said the defendant’s costs would tax out at more than
$4,000 but an offer of $2,000 was likely to be accepted.
6
Peters did not respond until, on 7 October, he wrote to Cox. He did not
mention their earlier conversations, but said:
“We advise that at the hearing of this matter an application will be
VMC
1
DECISION
made to file a reply to the Defendant’s Notice of Defence as set out
below.”
7
After referring to paragraphs 3 and 4 of the notice of defence, Peters then set
out the allegation that a Grant Lawrence was acting or apparently acting as
the defendant’s agent and provided some particulars. He concluded the letter
by saying – “Should you require an adjournment to add Grant Lawrence as a
third party to the proceeding, please advise accordingly.”
8
Cox reacted promptly. After attempting to contact Peters, he signed the
proposed consent orders and returned them with a brief letter:
“We refer to your letter of 30 September 2011. Our client accepts the
offer set out therein and we attach signed consent orders as provided.
[Please] confirm when such orders have been filed with the court.”
9
Four days later, Peters replied, saying:
“We advise that offer extended to your client on 30 September 2011
had become unavailable prior to your acceptance on 7 October 2011,
due to your counteroffer/request of costs to be paid to the Defendant.”
Relevant principles
10
This proceeding raises the question of rejection of an offer – did the defendant
reject the plaintiff’s offer?
11
To accept an offer, the offeree must unreservedly assent to the exact terms
proposed by the offeror. A rejection of an offer is a definite statement that it is
the offeree’s intention not to accept the offer. Rejection terminates an offer so
that it cannot afterwards be accepted. However 1 :
“A rejected offer could remain operative if it were repeated, or
otherwise revived, or if in the circumstances it should for some other
reason be treated, despite its rejection, as remaining on foot, available
for acceptance, or for adoption as the basis of mutual assent
manifested by conduct.”
12
A counteroffer is an offer. It is a clear statement of the terms by which the
person making the offer is prepared to be bound 2 . A counteroffer impliedly
rejects an earlier offer 3 . A request for information is not a counteroffer or
1
Brambles Holdings Ltd v Bathurst CC (2001) 53 NSWLR 153 at [80] per Heydon JA.
Cheshire and Fifoot’s Law of Contract, 9th Aust. Ed. At [3.13].
3
Hyde v Wrench (1840) 3 Beav 334 at 337 per Lord Langdale MR.
2
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2
DECISION
outright rejection of the offer 4 ; nor is a suggestion 5 .
Discussion
13
To the plaintiff’s offer, the defendant made plain its rejection. It did so by
saying that it should receive costs and then by putting a figure on them. This
amounts to a definite statement of rejection. Afterwards, the plaintiff said or
did nothing indicating that the offer remained open after its rejection.
14
Objectively, the defendant did not hold the offer in abeyance while exploring
the possibility of better terms. Cox’s language is too definite 6 . Initially, the
defendant rejected the offer but it did not counteroffer. Cox’s replies do not
amount to a counteroffer for it is not an offer to say “an offer of $2,000 was
likely to be accepted”. Rather than offering to accept $2,000, Cox invited an
offer of that amount, which the defendant could accept or reject. It was an
invitation to treat.
Conclusion
15
The defendant sought a positive answer to the question:
Has this proceeding been settled by the plaintiff’s offer dated 30
September 2011 and the defendant’s fax transmission dated 7 October
2011?
16
I would give a negative answer.
17
I will reserve the question of costs. Each party may re-list this summons
before me to determine that question.
4
Stevenson, v McLean (1880) 5 QBD 346.
Gibson v Manchester CC [1979] 1 WLR 294 at 302 per Lord Edmund-Davies – exploration of the possibility
of reducing the asking price on a house if the vendor did not repair the house’s paths. See also Corbin on
Contracts, vol 1 at section 93 – “If I doubled the amount, I suppose you would make the price lower”.
6
The dividing line between offer and no offer can sometimes hard to draw. Gibson v Manchester CC is an
example. Geoffrey Lane LJ thought Gibson’s comments about the paths was a counteroffer ([1978] 2 All ER
583 at 593], while, Lord Edmund Davies did not (at 302).
5
VMC
3
DECISION