Benton v Noye [1990] NTSC 21; 101 FLR 18 (23 July 1990)

COURT IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA Asche C.J.(1) CWDS Practice and Procedure - R.26.03(3) Supreme Court Rules - whether document headed "Offer to Compromise" can be said to comply with the requirements of O.26 when offer is expressed to be open for less than 14 days - whether it is a mere irregularity which can be cured HRNG DARWIN #DATE 23:7:1990 Counsel for Plaintiff: G. Hiley QC Solicitors for Plaintiff: Cridlands Counsel for Second Defendant: J. Reeves Solicitors for Second Defendant: Solicitor for NT JUDGE1 The second defendant on 25 October 1988 served on the plaintiff a document headed "Offer to compromise" and purporting to be in compliance with Rule 26.02(3). In fact, it did contain the requirements that it was in writing and prepared in accordance with Rules 27.02 to 27.04 inclusive and contained a statement to the effect that it was served in accordance with Part 4 of Order 26. Perhaps I could clarify that by saying that the important factor that Mr Reeves relied on was that it was in substantial compliance with Rule 26.02(3). The last paragraph, however, contained this statement: "This offer to compromise is open to be accepted at any time prior to 10am on the first day of the trial." 2. The trial commenced at 10.08am on 26 October 1988. At that time the plaintiff had not accepted the offer. At no time thereafter did the plaintiff accept or purport to accept the offer. No further offer to compromise was made by the second defendant. Ultimately the plaintiff was awarded judgment against the second defendant for a sum considerably less than that offered in the document. 3. The plaintiff submits that the document, whatever other signification it may have, which may be a matter for further argument, was not an offer to compromise within the meaning of the rules. Mr Hiley, QC for the plaintiff, relies on the terms of Rule 26.03(3): "An offer of compromise may be expressed to be limited as to the time the offer is open to be accepted after service on the party to whom it is made but the time expressed shall not be earlier than 14 days after that service." 4. He submits that the last paragraph of the document really does not comply with that rule since it limits the time within which the offer is open to be accepted. Mr Reeves for the second defendant submits that the last paragraph of the document is of no effect, and that, having received a document otherwise in accordance with the rules, the plaintiff was entitled, indeed bound, to disregard that last paragraph, and treat the offer as remaining open for not less than 14 days, there being no other time expressed. See Rule 26.03(1). Alternatively he submits that the last paragraph is a mere irregularity which can be cured. 5. Furthermore, he submits that the plaintiff at no time took objection to the form of the notice. 6. On this issue I am convinced that the plaintiff's submission is clearly correct. 7. Rule 26.03(3) is perfectly clear. The words "the time expressed shall not be earlier than 14 days after that service" are unambiguous, particularly in the choice of the word "shall" rather than "may". There is not here an irregularity which can be cured. 8. The second defendant has endeavoured to limit the operation of the notice to a time inside that which can be allowed. It is not for the plaintiff to accept a document which contradicts the terms of the order on the basis that those terms override anything else said in the document. The second defendant must comply with what is plainly stated in the rule. If it deliberately limits the document to something not within the scope of the rule, then it is not delivering a notice of compromise within the meaning of the rules. It has every right to deliver any document which it wishes, in the nature of an offer to settle, but if it wishes to rely upon the rules as to the effect of a notice to compromise, it cannot approbate and reprobate. 9. As it stands, this document seems no more than a without prejudice offer, limited in time, which lapses on the expiry of a time limited. In simple contractual terms, an offer to compromise is, as it is stated, an offer; and, failing a counter offer, it is to be accepted in its terms. Where the offer plainly says that it is to lapse after a certain time, then the offer ceases after that certain time. It seems to ask far too much of the plaintiff and demand far too much prescience from him to ask him to interpret the document in the terms of Rule 26.03 notwithstanding the unambiguous contradiction of those terms contained in the document itself. 10. Nor is this an irregularity. It is, as I say, an offer in particular terms one of which involves a time period after which the offer lapses. Nor can it be put, in my view, that the plaintiff waived any irregularity or misstatement in the document. The plaintiff was entitled to regard the document on its form and to accept that, if the offer was not accepted within the time specified, then the offer had lapsed. It was not for the plaintiff to seek further interpretation or to bind itself by silence to any suggested waiver. 11. It seems to be plain therefore that the document is not an offer to compromise within the meaning of the rules. What other significance it may have is a matter for further argument.