Pursuant to s114(3) of the Victorian Civil and Administrative Tribunal Act 1997 the Respondent is given leave to withdraw its offer of compromise effective 10 June 2003

1. At the commencement of the hearing Mr Rowland of Counsel on behalf of the respondent requested the permission of the Tribunal for the respondent to withdraw its 'without prejudice' offer made in accordance with the provisions of ss113 and 114 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") on 30 May 2003. This application was first made by letter sent by facsimile to the Tribunal Registry on 10 June 2003, a copy of which was sent to the applicant's solicitors on the same day. It is helpful to set out the substantive parts of that letter:

"We refer to the above proceedings and confirm a 'without prejudice' offer was sent to the applicant on 30 May 2003. The offer was open for acceptance by the applicant until 13 June 2003. To date, the applicant has not accepted the offer. The matter is listed for hearing on 20 June 2003.

The respondent now wishes to withdraw its 'without prejudice' offer effective from today's date.

In accordance with sections 112, 113 and 114 of the Victorian Civil and Administrative Tribunal Act we require and hereby request the Tribunal's permission to now withdraw the 'without prejudice' offer.

Further to our discussion with staff at the Tribunal on 6 June 2003 we confirm your advice that the matter need not be listed for a separate application for this purpose.

We further confirm your advice to us that the Deputy President would be unwilling to list the matter for directions to deal with this issue prior to the hearing but that the matter could be dealt with, if necessary, on the morning of the hearing by a different Tribunal member (which will save the unnecessary duplication of costs)."

2. A copy of this letter was sent to the solicitors for the applicant on the same day also by facsimile under cover of the following letter:

"We refer to our 'without prejudice' offer served upon both you and your client on 30 May 2003.

That offer is hereby withdrawn and no longer open for acceptance by your client.

For your information we enclose a copy of our letter to VCAT with respect to the Tribunal's permission to withdraw the offer.

Should a formal application be necessary it will be heard on the morning of the hearing"

3. The applicant subsequently purported to accept the offer between 4 and 5 p.m. on 13 June 2003 although they had not acknowledged receipt of the offer nor the letter advising them that it had been withdrawn.

4. Mr Rowland submitted that, notwithstanding the applicant had purportedly accepted the offer, permission should be granted to the respondent to withdraw it, and, that in any event the applicant had not accepted the offer within the 14 days it was open, which time he submitted should be counted in 24 hour periods from the time of service of the offer. This submission in relation to time is rejected. Section 141 of the VCAT Act contemplates receipt of service of documents as occurring on a business day, and I am satisfied that any acceptance of an offer made under ss112 and 113 of the Act must be received by the close of business on the last business day on which it is open for acceptance - in this case by the close of business on 13 June 2003.

5. In seeking permission to withdraw the offer, Mr Rowland referred me to the decision of Palmer J in Scanruby P/L v Caltex Petroleum P/L and Anor [2001] NSWSC 411 ("Scanruby") as authority for the granting of permission to withdraw an offer of compromise even where it has been accepted. Under Pt 22 r.3 (5) of the New South Wales Supreme Court Rules an offer cannot be withdrawn during the time it is open to acceptance unless the Court orders otherwise. This rule is in substantially the same terms as s114(3) of the VCAT Act which provides that "an offer cannot be withdrawn while it is open for acceptance without the permission of the Tribunal'.

6. In Scanruby an offer of compromise was delivered to the defendants on 18 April 2001 and was open for acceptance within 28 days i.e. by 17 May 2001. Additional documents which had not previously been discovered by the defendants were produced to the plaintiff on the second day of the trial which commenced on 23 April 2001. The information in these documents was held to be relevant and significant. The plaintiff's solicitors wrote to the defendant's solicitors withdrawing all offers of compromise in 26 April 2001 - without first seeking the permission of the Court. The offer was subsequently accepted by the defendant and the plaintiff sought permission to withdraw its offer.

7. At paragraph 12 Palmer J refers to the decision in Young v Combe (unrep SCNSW 29 July 1993):

"Hodgson J (as he then was) held that before the Court will grant leave under Pt. 22 r.3(6) to withdraw an offer of compromise, it is necessary for the applicant to demonstrate that there has been a sufficient change in circumstances since the offer was made to make it just that the applicant be permitted to withdraw the offer. Significant new evidence coming to light after the offer has been made was, his Honour held, a sufficient change in circumstances to warrant leave being granted."

8. Notwithstanding that the offer was withdrawn by the plaintiffs in Scanruby without first seeking permission from the Court, Palmer J held:

"In my view, the Rules of Court are to be applied so as to promote justice as between the parties, not to frustrate it. Rule 3(6) does not expressly require that leave be obtained prior to the withdrawal, and there is no justification for construing the Rule in that way."

and again he refers to the decision in Young v Combe at p.8

"The requirement in Pt 22 r.3 for an order permitting withdrawal of an offer, and for... leave to withdrawn an acceptance, contemplates that some application has to be made to theCourt which, on ordinary principles, would have to be served on the other party, and which would normally involve some time passing before the application was actually heard by the Court. The rules do not seem to be inconsistent with an application for such an order, or for leave, being served together with a statement to the effect that the offer or acceptance, as the case may be is withdrawn subject to obtaining leave of the Court ot do so nun pro tunc. ..."

9. In this case the respondent become aware for the first time on 5 June that the premises, the subject of this proceeding, were being offered for lease with a stated floor area of 278 sqm (the dispute in this proceeding concerning the measurement and description of the lettable area of the subject premises). This information was made known to the respondent after being discovered by the Valuer in the course of preparing his report. Mr Lawson of Lawson Real Estate gave evidence that this information had been available on promotional material and their web site for some time. Mr Newton of Counsel submitted on behalf of the applicant that as such information had been in the public domain for some time, it must be regarded as being common knowledge and therefore the respondent must have known about this. I am not persuaded by this submission and accept that the offer of compromise would not have been made had this information been known to the respondent at the time.

10. I am satisfied that the information the respondent became aware of on 5 June 2003 was significant. Further, unlike in Scanruby the respondent wrote to the applicant, before the offer was accepted, advising of its withdrawal, and further that it was seeking permission from the Tribunal for its withdrawal. In such circumstances the applicant was clearly on notice

11. In my view, in the interests of justice it would be unreasonable not to grant the respondent permission to withdraw its offer, effective 10 June 2003, particularly in light of its letter of that date to the applicant and orders will be made accordingly.