GORDON v BEROWRA HOLDINGS PTY LTD

PARTIES: Rodney John GORDON v BEROWRA HOLDINGS PTY LTD

Appellant: J Sexton SC/ P Regattieri COUNSEL: Respondent: M D Williams SC/ P Perry

Appellant: Peacocke Dickens & Price (Dubbo) SOLICITORS: Respondent: Lee & Lyons

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40826/03

MASON P SHELLER JA BEAZLEY JA

Monday 28 February 2005 Rodney John GORDON v BEROWRA HOLDINGS PTY LTD The appellant/plaintiff was injured in the course of his employment with the respondent/defendant. On 23 November 2001 the plaintiff commenced proceedings in the District Court less than two months after giving written notice of injury to the defendant. This was in contravention of s151C(1) of the Workers Compensation Act 1987, which provides that a person is not entitled to commence court proceedings against an employer liable to pay compensation under the Act until six months have elapsed since notice of injury was given to the employer. However, the defendant did not raise non-compliance with s151C in its defence and neither party advanced any evidence of awareness of the existence of s151C prior to 20 May 2003.

The defendant made an Offer of Compromise to the plaintiff on 6 May 2003, which complied with the procedural requirements of Part 19A District Court Rules. It was required to remain open for 28 days. On 20 May 2003, the defendant notified its wish to withdraw the offer and its reliance on s151C. On 21 May 2003, the plaintiff notified the defendant of acceptance of the Offer of Compromise. That same day, the defendant filed a motion seeking leave to withdraw the Offer and an order that proceedings be dismissed.

The primary judge, Woods ADCJ, held that s151C set a condition precedent of a procedural nature which barred a claimant from bringing proceedings unless and until s151C was met. Proceedings commenced in breach of s151C were void and acts done under such proceedings were likewise invalid. The Offer of Compromise, being part of the proceedings, was thus invalid and not available for acceptance in accordance with the Rules.

In the Court of Appeal, the plaintiff challenged the finding that the proceedings were a nullity for want of jurisdiction of the District Court. Further, the plaintiff submitted that the defendant had waived its right to raise a defence based on s151C. The parties also joined issue as to whether the defendant should have leave to withdraw the Offer.

HELD: Per Mason P (Sheller and Beazley JJA agreeing) allowing the appeal:

1. Although s151C(1) is a condition precedent of a procedural nature that must be satisfied before the commencement of proceedings, proceedings commenced in contravention of s151C(1) are not a nullity [34, 35]. The section was not found to reflect the requisite legislative intention that nullity be the consequence of non-compliance, per the principles stated in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 358 [42].
2. A defendant may waive its right to invoke s151C, or be estopped from relying on s151C [44-47]. However, it was unnecessary to decide whether this had happened in this case [53].
3. Leave to amend to raise s151C should be refused to the defendant. Leave to withdraw the Offer should also be refused [62].

ORDERS: Appeal upheld. Orders made by the primary judge to be set aside and replaced with entry of judgement for the plaintiff in the sum of $50 000 plus costs.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40826/03

MASON P SHELLER JA BEAZLEY JA

Rodney John GORDON v BEROWRA HOLDINGS PTY LTD JUDGMENT

1 MASON P: In this appeal, by leave previously granted, the appellant/plaintiff seeks the entry of judgment pursuant to the compromise of District Court proceedings by acceptance of an Offer of Settlement made under the Rules. He challenges the primary judge's refusal to enter judgment which stemmed from a conclusion that the proceedings were a nullity because they had been commenced in contravention of s151C of the Workers Compensation Act 1987 (the Act). 2 The plaintiff was injured in the course of his employment with the respondent/defendant on 2 October 2001. The defendant's insurer was notified the following day. A claim form giving written notice of injury was given to the defendant on 12 October 2001. The defendant admitted liability for compensation and commenced paying it.

Proceedings in the District Court 3 On 23 November 2001 the plaintiff filed a Statement of Claim with accompanying Part 9 Statement (cf Pt 9 r27 of the District Court Rules (the Rules)). 4 The proceedings were commenced in contravention of s151C of the Act which, on 23 November 2001, provided: 151C(1) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer. (2) Despite subsection (1), the person is entitled to commence court proceedings against the employer if either of the following occurs: (a) the employer denies all liability in respect of the injury; (b) the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which liability is admitted. 5 Section 151C was inserted into the Act in 1989 as part of a new Part 5 - Common Law Remedies. This was a comprehensive set of provisions that restored the right to "common law" damages for workplace injuries, with some significant modifications (see generally Pye v Butterfield Cheese Factors Pty Ltd (1996) 39 NSWLR 425). The principal modifications involved the obligation to elect between a claim for common law damages and a claim for lump sum compensation, caps on damages for non-economic loss and some forms of economic loss, and thresholds before common law damages could be recovered. 6 It is not established why the plaintiff breached s151C(1). There is however no suggestion that the defendant had denied all liability to damages or had admitted only partial liability for damages in respect of the injury (cf sub-s (2)). One suspects that this may have been one of several actions commenced shortly before the introduction into Parliament of the Bill that became the Workers Compensation Legislation Further Amendment Act 2001. One part of that Act, commencing on the date of introduction, 27 November 2001, contained a substituted s151H, requiring evidence of permanent impairment of at least 15% before damages could be recovered. There are however no findings as to the plaintiff's state of mind on this or any other matter. No issue about this appears to have been raised in the District Court. 7 A Defence was filed in March 2002. No point was taken in relation to the plaintiff's non-compliance with s151C(1). 8 On 24 January 2003 the plaintiff filed an amended Part 9 Statement. The matter went to arbitration in Dubbo in February 2003 with the arbitrator making an award in favour of the plaintiff. The defendant applied for the re-hearing of the arbitrated action and it was listed for hearing before Judge Sorby in the sitting commencing on 12 May 2003. At some stage the hearing was fixed for 21 May 2003. 9 On 14 April 2003 the plaintiff made an Offer of Compromise pursuant to Pt 19A. Its details are unknown, but it was not accepted. 10 The critical Offer of Compromise was made by the defendant on 6 May 2003. It was signed by the defendant's solicitor and states: The Defendant offers to compromise this claim on the following terms:- 1. The Defendant to pay to the Plaintiff the sum of $50,000.00 plus costs as agreed or assessed; 2. This offer remains open for 28 days from the date of receipt; 3. This offer is made in accordance with Part 19A of the District Court Rules .

11 At about 5.30pm on Tuesday 20 May 2003, ie the evening before the date fixed for trial at Dubbo, counsel for the defendant telephoned the plaintiff's solicitor telling him that he had instructions from the defendant to withdraw the defendant's Offer of Compromise, to put on application to the Dubbo District Court in that regard, to seek an order that the proceedings were a nullity ab initio and to seek summary dismissal. Counsel referred the solicitor to s151C of the Act. 12 At this stage it was not open to the defendant to withdraw the offer without an order of the court (see Pt 19A r3(5) of the Rules set out below). 13 The following morning, 21 May, the plaintiff conferred with his solicitor and gave instructions to accept the Offer of Compromise. The solicitor sought to cover all bases, notifying acceptance to the defendant's solicitors (who were in Tamworth) by fax sent at 9.37am and received at 9.43am, by letter placed in the document exchange at 9.57am and by letter posted on 25 May 2003. 14 The parties obviously abandoned whatever steps they had taken in relation to the trial fixed to commence on 21 May 2003. 15 It is clear that the defendant's solicitor received actual notice of the acceptance of the Offer on 21 May. On that day she sent a letter to the plaintiff's solicitor acknowledging receipt of the "letter dated 21 May 2003 sent this morning by facsimile". The letter stated that the defendant regarded the offer purportedly accepted as not available for acceptance. Reference was made to the telephone call the previous evening in which the defendant's counsel notified "our intention to seek the necessary leave from the District Court… to withdraw our Offer of Compromise". 16 Later on 21 May the defendant filed a Notice of Motion seeking leave to withdraw its Offer of Compromise and an order that the proceedings be dismissed. It was served at about 6pm. 17 On 4 June 2003 an Amended Defence was filed pleading the contravention of s151C. This occurred without the requisite consent of the plaintiff or leave of the Court. Such leave was first sought on 21 August 2003. 18 Part 19A of the Rules contains a detailed regime in relation to offers of compromise, with particular reference to the costs consequences of non-acceptance. An offer is required to be prepared in accordance with a particular form and to bear a statement to the effect that it is made in accordance with Part 19A. The defendant's offer satisfied these procedural requirements. 19 Rule 3 regulates the time for making and accepting an offer. Subrules (3), (4), (5) and (7) provide: (3) An offer may be expressed to be limited as to the time it is open to be accepted but the time expressed shall not be less than 28 days after it is made. (4) An offeree may accept the offer by service notice of acceptance on the offeror before - (a) the expiration of the time specified in accordance with subrule (3) or, if no time is specified, the expiration of 28 days after the offer is made; or (b) the time prescribed by subrule (8) in respect of the claim to which the offer relates, whichever is sooner. (5) An offer shall not be withdrawn during the time it is open to be accepted, unless the Court otherwise orders. … (7) Where an offer is accepted under this rule, any party to the compromise may apply to the Court to enter judgment accordingly.

20 Rule 5 permits an accepted offer to be withdrawn with the leave of the court. This provision and r3(5) set out above show that the classical principles dealing with offer and acceptance of contracts under the general law have been modified significantly. An offer may not be withdrawn unilaterally during the 28 days or more that it is expressed to remain open for acceptance. 21 Senior counsel for the plaintiff also acknowledged in this Court that the defendant's capacity to nullify any settlement by obtaining leave to withdraw the Offer itself is not precluded by the plaintiff's prior acceptance of that Offer on 21 May 2003. 22 The defendant's Notice of Motion filed on 21 May 2003 came on for hearing before Sir Robert Woods ADCJ on 21 August 2003. The defendant applied for leave to withdraw its Offer of Compromise and for summary dismissal of the proceedings for non-compliance with s151C. 23 The parties relied upon affidavits from their respective solicitors and a legal secretary in the firm of the plaintiff's solicitor. These affidavits established the primary facts as I have recorded them above. 24 Neither party advanced any evidence as to his or its state of awareness as to the existence or particular impact of s151C prior to 20 May 2003. 25 The defendant submitted to his Honour that the proceedings were a nullity because they were commenced before the six month period from when notice of injury was given to the employer. Since the District Court was an inferior court of record, all steps taken in the proceedings were said to be of no legal effect, including the steps purportedly taken in accordance with Pt 19A. 26 The plaintiff submitted that the proceedings were not a nullity. Nor was it appropriate for leave to be granted to withdraw the Offer which was, in any event, accepted before any effective withdrawal was communicated. The point was taken that there was no evidence suggesting that the defendant or its solicitor had been mistaken concerning s151C or anything else when the decision was taken to offer to settle for $50,000. 27 Both counsel cited Dandashli v Dandashli (1996) CA unrep, 16 December 1996 and Sydney Ports Corporation v Collins (2003) 56 NSWLR 232 as to the impact of non-compliance with s151C. Each side sought to draw support for its position from this common pool of authority. 28 In his reserved judgment, the primary judge held that s151C set a condition precedent of a procedural nature which had to be satisfied prior to the commencement of proceedings. He referred inter alia to the statement in Sydney Ports Corporation at 243[65] where Giles JA said that: … the worker is barred from immediately bringing proceedings against the employer, and must wait for six months, unless the employer denies all liability in respect of the injury or the employer admits partial liability but the worker is dissatisfied with the extent to which liability is admitted.

29 His Honour observed that there was no provision in the Act for leave to seek orders validating or otherwise allowing for the condition precedent to be varied by the analogy of allowing an extension of time or for an order nunc pro tunc. He continued: "Therefore, such a proceeding must be a nullity or void"

He cited National Mutual Fire Insurance Co Ltd v The Commonwealth of Australia [1981] 1 NSWLR 400 at 408 (Glass JA) and Howard v Boddington (1877) 2 PD 203 at 210. 30 It followed, he held, that all acts done under the proceeding were likewise invalid. The Offer of Compromise was clearly made within the provisions of the Rules. Accordingly, the settlement could not be upheld by application of the normal rules of contract. It was: bound up with the relevance and status of the initial proceedings. These proceedings have been issued on contravention of the statute, and there being no provision for leave to allow for a deeming in accordance with the section, nor there being any other discretion in this Court, then the proceedings are a nullity, and everything done following the issue of these proceedings must be a nullity. Therefore these proceedings should be dismissed and the offer of compromise being part of the proceedings has no validity and can be withdrawn. 31 The judge then addressed costs. He decided to make no order as to costs on the basis that it was not until May 2003 that the parties "became aware of the true status of the proceedings" despite having "in the previous year or so having acted on the basis they were properly on foot".

Were the District Court proceedings a nullity? 32 In this Court the plaintiff challenged the central finding that the proceedings were an incurable nullity in the sense that the District Court lacked jurisdiction to address them other than by dismissal for want of jurisdiction. The proceedings were an action falling within the civil jurisdiction of the District Court that had been duly invoked by the filing and service of the statement of claim. If necessary, it was further submitted that the defendant had waived its right to raise a defence based on s151C by its own participation in the proceedings prior to the point being raised on 20 May 2003. 33 The defendant supported the primary judge, arguing that s151C is a condition precedent of a procedural nature that must be satisfied before the commencement of proceedings. Proceedings commenced in contravention, at least in an inferior court, are a nullity or void. 34 The defendant is correct in the first submission, but not in the second. 35 Parliament's command to the plaintiff was clear in the circumstances. Since s151C(2) did not apply on the facts, the plaintiff was not entitled to commence the proceedings until six months had elapsed from service of notice of injury on the employer. 36 Many cases have described provisions of this nature as a condition precedent of a procedural nature that must be satisfied prior to the commencement of proceedings. The earliest is Dandashli v Dandashli (1996) CA unrep, 16 December 1996, dealing with s52(1A)(b) of the Motor Accidents Act 1988. Others to like effect are Hill v Bolt (1992) 28 NSWLR 329 (Motor Accidents Act 1988, s48), Baker v Rothmans of Pall Mall (Australia) Ltd (1999) 18 NSWCCR 374 (Workers Compensation Act 1987, s106E), Emad Trolley Pty Ltd v Shigar (2003) 57 NSWLR 636 at 648[70]-[86] (Motor Accidents Act 1988, s108). These cases have all recognised that the purpose of such provisions is to promote settlement before commencement of court proceedings. 37 Sydney Ports Corporation is directly in point, dealing with s151C. The Court ordered the summary dismissal of proceedings in the District Court after determining that s151C(2) was not engaged in the particular circumstances. Giles JA (at 243) inferred from s151C(2) that the objective of the prohibition is to require the worker to seek damages by negotiation rather than litigation in the first instance. 38 One finds strong language used at times to describe the status of proceedings commenced in breach of these provisions. For instance, in Emad at 648[70], McColl JA spoke of an "absolute prohibition … apparent from [the section's] mandatory terms". See also Baker at 380[20] per Giles JA. 39 A defendant faced with a clear breach may move for summary dismissal. The court has no power to excuse non-compliance or to grant leave for the proceedings to continue. Most of the cases referred to above involved clear cases with no suggestion of waiver on the defendant's part. In many of them the only issue was whether the facts fell within the exceptional categories provided in s151C(2) and its counterparts. 40 It is, however, fallacious to conclude that proceedings in breach have failed to engage the jurisdiction of the court, or are a nullity. The remarks of Glass JA in National Mutual Fire, referred to by the primary judge and relied on in this Court by the defendant, recognise that an additional inquiry must always be made. This is whether one can discern from the legislative scheme an intention that invalidity or nullity will be the consequence of non-compliance with a prohibition, however clearly it is expressed. Glass JA observed that the word "mandatory" can be used in differing senses. 41 The principles discussed by Glass JA have subsequently been stated authoritatively by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 358 at 388[91]-[93]. McHugh, Gummow, Kirby and Hayne JJ at [95] described "mandatory" and "directory" as: ... classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is valid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute". (footnotes omitted) 42 By these criteria, s151C(1) is not a provision that spells incurable voidness upon non-compliant proceedings. It is a provision that applies to proceedings in the Supreme Court and the District Court (cf Electricity Commission of New South Wales v Yates (1991) 30 NSWLR 351 at 356). The language of excess of jurisdiction is not used. On the contrary, jurisdiction to deal with employment injury cases is vested in the District Court (and the Supreme Court) and there is nothing in the language or context of s151C to suggest that the issues it raises is taken out of that dispensation. The two subsections state factual matters that may call for curial resolution in the course of the proceedings themselves and that are apt for such resolution in the Court in which the proceedings are commenced. The facts relevant to attracting s151C(1) will not appear on the face of the documents in the court record, nor necessarily be pleaded in the statement of claim. The facts relevant to s151C(2) may need close examination before it is seen whether or not the section applies. 43 Where Parliament confers jurisdiction upon courts constituted by persons with formal legal qualifications this tends towards the conclusion that they are armed with jurisdiction to decide all necessary factual and legal issues, subject to appellate rights (if any). There is a strong interpretative presumption against a statute making a court's jurisdiction dependent upon a jurisdictional fact (see Uniting Church in Australia Property Trust (NSW) v Industrial Relations Commission of NSW in Court Session & Anor [2004] NSWCA 183 at [53] and authorities there cited). 44 A conclusion of jurisdictional nullity would remove any basis for finding that a defendant has waived the right to take the objection. It follows that, if the defendant is correct in its submission, it would not matter that it had knowingly refrained from raising the point (by motion for dismissal or defence) while using the interlocutory processes of the court, including those directed at settlement itself. Presumably even a final judgment by consent or judicial decision would have to be set aside when the point was eventually taken. It is impossible to infer that this would have been Parliament's intent when a defendant is able to protect itself and to ensure the purpose of the Rule is given effect by taking the point in a timely manner in a normal manner. 45 In fact, there is authority recognising that waiver is possible (Dandashli, Hill at 337, Vockins at 195[8]), Deng v GMS Fulfilment Services Ltd (2003) 25 NSWCCR 446. Cf also Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406-7, 423, 471-3, 482, 497 and Whiteford v Commonwealth of Australia (1995) 38 NSWLR 100. 46 Statutory rights are not necessarily jurisdictional, and unless jurisdictional, are themselves capable of waiver unless the statute was enacted for some public interest wider than that of the private parties (see generally Admiralty Commissioners v Valverda (Owners) [1938] AC 173 at 185, Brown v The Queen (1986) 160 CLR 171 at 178, 208). In one sense, provisions such as 151C serve the public interest of encouraging dispute resolution without litigation. But they operate in the context of the adversary system in which parties not subject to disability are free to make their own forensic decisions. Subsection (2) of s151C confirms that the section is of this nature. 47 I see no reason in public policy why a defendant should be prevented from waiving the right to insist on compliance with a requirement that a plaintiff provide information designed to promote settlement discussion, thereby bringing forward litigation that both parties may wish to have commenced sooner rather than later. They may wish to do so if only so to engage the now-universal rules of court that themselves promote dispute resolution by providing a structured regime for dealing with offers of settlement. To adapt the remarks of Lord Reid in Kammins Ballrooms (at 860): The Act contains nothing to indicate that contracting out is forbidden: on the contrary the parties are encouraged at every stage to come to an agreement.

See also Lord Diplock at 881. 48 The defendant's invocation of In re Pritchard [1963] Ch 502 does not avail it in the face of these principles and this strong body of directly applicable local caselaw. Pritchard concerned a type of process filed at a registry unauthorised to receive it according to the prevailing Rules of Court. A divided English Court of Appeal held the proceedings to be a nullity due to the presence of what was held to be a fundamental defect in issuing the proceedings (see esp Upjohn LJ at 423-4). Danckwerts LJ described the originating summons filed in the district registry in breach of the rules as having "no more application to the matter to be decided than a dog licence" (at 527). Lord Denning MR strongly dissented. The facts of Pritchard and the other cases cited by the defendant (Marshall v D G Sundin & Co Pty Ltd (1990) 16 NSWLR 463, Darrington v Calbeck (1918) 20 NSWLR 212) are completely removed from the present situation. 49 I therefore conclude that s151C(1) does not erect a jurisdictional preclusion. Rather, it arms a defendant faced with contravening proceedings with power to move for summary dismissal and/or plead a defence invoking the provision. A defendant's failure to take either step means that the plaintiff and the court need not trouble with the matter. 50 If there is no question of the defendant having waived the right to invoke the section and/or acted in such a way as to preclude reliance through the principles of estoppel by representation, then it will be appropriate for the defendant to seek summary dismissal. In that event, the order will issue because the proceedings are doomed to fail, not because the court lacks jurisdiction. Unless and until the proceedings have been dismissed, the parties will be able to invoke the interlocutory processes of the court and the rules as to settlement offers. 51 A defendant's mere failure to raise the point at the earliest opportunity will not amount to waiver or generate an estoppel (see generally Verwayen). The normal principles governing amendment apply to this as to other defences that are not pleaded at the earliest opportunity (see generally Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146). 52 A defence raising non-compliance with the section should be permitted unless the facts show that it is doomed to failure because of an unarguable riposte invoking waiver and/or estoppel. If the plaintiff's position is only arguable then waiver and/or estoppel should be pleaded in a Reply and these and other issues should normally go to trial in the ordinary course. 53 It is unnecessary to decide whether the defendant had waived its right to take the point by May 2003, or estopped itself from invoking s151C(1). The plaintiff did not press for a finding or inference to the effect that the defendant recognised the impact of s151C to the instant proceedings before 20 May 2003 at least so long as the defendant reciprocated by not arguing that the plaintiff deliberately jumped the gun on 23 November 2001. It is common ground that neither side took such a point in the District Court nor advanced evidence directed to it. 54 The defendant had undoubtedly taken numerous steps in furtherance of the litigation. As the judge recorded in his reasons on costs, both parties had acted for over a year on the basis that the proceedings were properly on foot. It is unlikely that the defendant's solicitor and insurer would have been ignorant of s151C and its arguable that this knowledge was sufficient to constitute waiver when coupled with the positive acts performed on the defendant's behalf. But the issue was left entirely unexplored at first instance and (for reasons that follow) it is unnecessary to take the matter any further in this Court. 55 What is clear is that no defence or motion was filed raising s151C before the plaintiff duly accepted the Offer that was bound to remain open for acceptance under the Rules. That step was part and parcel of proceedings that were unaffected by any taint of nullity or voidness. The question becomes whether the Court should permit the defendant to resile from its Offer, in exercise of the power under rr3(7) and 5 to decline entry of judgment. The primary judge did not have to consider this issue

Should judgment be entered in accordance with the accepted Offer? 56 It was accepted 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 (see Lewis v Combell Constructions Pty Limited (1989) 18 NSWLR 528, Rosniak v GIO SC unrep, Wood J, 4 October 1990, Young v Combe SC unrep, Hodgson J, 29 July 1993, Scanruby Pty Ltd v Caltex Petroleum Pty Limited [2001] NSWSC 411). 57 The defendant submitted that both parties had proceeded under a misapprehension as to the "validity" of the proceedings until 20 May 2003 when the defendant realised its mistake. In one sense this repeats the nullity argument that I have rejected, but the point being pressed is that the parties are not shown to have realised the right to raise s151C(1) as an impediment until 20 May 2003. 58 It is true that the plaintiff did not lead evidence or press the submission that would enable the court to infer that the defendant, its solicitor or insurer had knowledge with reference to the application of s151C to the present case before 20 May 2003. 59 However, it is equally the position that the defendant offered no evidence in the District Court to suggest that it had acted under any misapprehension about the law or mistake about the facts touching the application of s151C. The plaintiff had in no way contributed to the defendant's state of mind or its conduct in this regard. 60 The Offer of Compromise made by the defendant on 6 May 2003 represented what it considered at the time to be a fair compromise of the litigation. The Rules gave the plaintiff 28 days within which to consider acceptance, absent an order permitting withdrawal (cf r3(5)). Nothing happened during the currency of the Offer except the defendant realising the application of s151C to the particular case and signalling its intention to move the court for leave to withdraw the Offer. At all material times the Defence stood unamended, without invocation of s151C. This is not the sort of new situation considered in any of the earlier cases or within the principles they expound. 61 At best for the defendant, it belatedly realised the possibility of raising a statutory defence that was only a knockout blow if the plaintiff failed ultimately to establish waiver. The point is hardly meritorious when it is recalled that the whole purpose of s151C is to enable a defendant to consider its settlement options before litigation. The defendant had had well over a year, including the arbitration, to assess its prospects. The fact that it made the Offer indicates its ability to do so. 62 The defendant needed leave to amend to raise the s151C point. Such leave should be refused (cf Verwayen at 456, 464-5). I would also refuse leave to withdraw the Offer.

Disposition 63 Section 75A(10) of the Supreme Court Act, read with r3(7) of the District Court Rules, is the basis of the plaintiff's application in this Court for the entry of judgment in accordance with the accepted Offer of Compromise. 64 The appeal should be upheld. The orders made by the primary judge on 27 August 2003 should be set aside and in lieu thereof the Court should direct entry of judgment for the plaintiff in the sum of $50,000 plus costs, such judgment to take effect from 21 May 2003. The respondent should pay the appellant's costs in the Court of Appeal and have, if qualified, a certificate under the Suitor's Fund Act 1951. 65 SHELLER JA: I agree with Mason P. 66 BEAZLEY JA: I agree with Mason P. **********

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