Professional Health Partners Pty Ltd v Spiers, Helen Gilmore

Court:Full Supreme Court
Docket Number:575/2009
Judge:Evans J, Porter J, Wood J
Judgment Date:15 Apr 2010
Jurisdiction:Tasmania

[2010] TASFC 1

[2009]TASSC 46

SUPREME COURT OF TASMANIA (FULL COURT)

Evans, Porter and Wood JJ

575/2009

Professional Health Partners Pty Ltd
and
Spiers, Helen Gilmore
Spiers, Andrew Glen
Spizbiz Pty Ltd

Heather v Vita Pacific Ltd [1999] TASSC 17 ; Woods v Gandini (unreported) BC9901627, Supreme Court of Queensland, 15 April 1999, referred to.

Aust Dig Procedure [673]

Magistrates Court (Civil Division) Rules 1998 (Tas), r32.

Owners of the Cargo of the ‘Kronprinz’ v Owners of the ‘Kronprinz’ (the ‘Ardandhu’) (1887) 12 App Cas 256 ; Fox v The Star Newspaper Company Ltd [1900] AC 19; Moon v Dickinson (1890) 63 LT 766; B and J Engineering v Darcozy (1984) 57 ALR 240, referred to.

Aust Dig Procedure [615]

Procedure — Costs — Agreement as to costs — Acceptance of offer of compromise — Whether condition that action be discontinued required service of notice of discontinuance — Ambiguity in agreement construed against party which had control of its terms.

Procedure — Costs — Practice matters — Form, effect and settling of order — Whether entry of order that action be discontinued constitutes filing and service of notice of discontinuance.

REASONS FOR JUDGMENT
FULL COURT
Evans J
1

The outcome of this appeal turns on the construction to be given to an agreement constituted by an offer of compromise made in a proceeding in the Magistrates Court (Civil Division) and the acceptance of that offer.

2

The offer of compromise was relevantly as follows:

‘The Magistrates Court of Tasmania

Civil Division

Form 11

OFFER OF COMPROMISE

ACTION No B60042/07

At MAGISTRATES COURT

CLAIMANT: PROFESSIONAL HEALTH PARTNERS PTY LTD

FIRST NAMED DEFENDANT: HELEN GILMORE SPIERS

SECOND NAMED DEFENDANT: ANDREW GLEN SPIERS

THIRD NAMED DEFENDANT: SPIZBIZ PTY LTD

To: The Claimant

TAKE NOTICE that the First and Second named Defendants offer the sum of Five thousand dollars ($5,000.00) together with costs to be agreed or taxed in full and final settlement of the Claimant's claim to the Claimant in this action.

The amount stated does not include an amount in respect of costs.

This Offer is subject to the following conditions:

  1. 1 That the Claimant discontinue any claim action, suit or demand against the Third named Defendant, Spizbiz Pty Ltd, relating to the matters referred to in the Action B07 60042.

  2. 2 The offer remains open until 14 January 2008.

Dated: 17 December 2007 Signed:

Filed by or on behalf ofThe Defendants, whose address for the service of documents is:

Bartletts Barristers and Solicitors

…’

3

In the hope of reducing confusion in these reasons, I will refer to the parties as they are described in the documents that constitute their agreement, rather than as they are described in the title to this appeal.

4

The offer was accepted by a letter from the claimant's solicitors to the defendants' solicitors, dated 14 January 2008, which, omitting formalities, was as follows:

‘Dear Sir,

RE:PROFESSIONAL HEALTH PARTNERS PTY LTD v HELEN SPIERS, ANDREW SPIERS AND SPIZBIz PTY LTD

We are instructed that our client will accept the Offer of Compromise dated 17 December 2007.

Could you please prepare a Deed of Release in relation to the matter.

We will forward our clients Bill of Costs shortly.

Yours faithfully,

McGRATH & CO’

5

It is to be noted that the footer to the offer of compromise stated that it was filed on behalf of the defendants. It has been accepted by all concerned that the offer of compromise was made on behalf of all of the defendants and that it was accepted by the claimant as such.

6

On one reading of the letter accepting the offer, the acceptance was equivocal as it requested a deed of release. That request was not complied with or pursued, and since the letter of acceptance, the parties have proceeded on the basis that they were bound by the agreement constituted by the acceptance of the offer of compromise, albeit that they are not in accord about what that agreement means. This is demonstrated by correspondence between the solicitors for the parties that followed the acceptance of the offer. In purported furtherance of the agreement, the solicitors for the claimant requested the solicitors for the defendants to sign an application for the following consent orders:

‘The Court Orders that:

1 Judgment be entered for the Claimant against the First and Second Named Defendants for the sum of $5,000.00 together with costs to be agreed or taxed.

2 The Claimant discontinue the claim against the Third Named Defendant with no orders as to costs.’

7

The solicitors for the defendants responded to that request by altering order 2 to read as follows:

‘2 The Claimant discontinue the claim against the Third Named Defendant and the Claimant pay the costs of the Third Defendant to be agreed or taxed.’

8

This disagreement between the parties' solicitors about the payment of the third defendant's costs of the action was not resolved, and culminated in the solicitors for the claimant writing to the Registrar of the Court advising as follows:

‘This matter settled pursuant to an Offer of Compromise filed by the Defendants on the 17th of December 2007 and accepted by the plaintiff by letter dated 14 January 2008. Copies of which are enclosed.

Pursuant to Rule 91 could you please file theenclosed Judgment.’

9

TheMagistrates Court (Civil Division) Rules 1998 (‘the Rules’), r91, provides:

‘(1) A party may file and serve a judgment in the terms of an accepted offer of compromise.

(2) A party may request a registrar to enter judgment in the terms of the accepted offer and the registrar is to enter it accordingly.’

10

Consistent with the request of the solicitors for the claimant, the Registrar entered the judgment sought. Omitting formal parts, it was entered in the following terms:

‘The Judgment of the court is that:

  1. 1 The First Named Defendant and the Second Named Defendant pay to the Claimant the sum of $5,000.00 together with costs to be agreed or taxed.

  2. 2 The Claimant discontinue any claim, action, suit or demand against the Third Named Defendant, Spizbiz Pty Ltd, relating to the matters referred to in the Action B07 60042.’

11

In order to better explain the dispute between the parties, it is necessary to set out the Rules r32 and r89, which are as follows:

‘32 Discontinuance of action

(1) A party may discontinue an action commenced by that party at any stage of the proceedings by notice in writing filed and served on any other party.

(2) Unless the parties agree otherwise, costs of the action are to be paid by the party discontinuing the action.

89 Offer of compromise

(1) A party may file and serve on any other party an offer of compromise before final judgment.

(2) The offer may be made subject to any specified condition.

(3) The offer may relate to liability, quantum, matters in issue in the action or any order, remedy or relief sought.

(4) An offer of compromise is to specify –

  1. (a) whether the offer includes costs and interest; or

  2. (b) the amount offered for costs and interest up to the date of the offer.

(5) If the offer does not comply with subrule (4) –

  1. (a) the offer is taken to refer only to the sum of money claimed in the action; and

  2. (b) the party accepting the offer may apply for costs and interest in addition to the sum of money comprised in the offer.’

12

As can be seen, r 89(2), expressly authorises the making of an offer ‘subject to any specified condition’. The defendants' offer included a condition that the claimant discontinue any claim action, suit or demand against the third defendant, and this condition was agreed to by the claimant. The judgment which the claimant applied for and obtained, included that condition in the form of an order. In consequence of that order, in brief summary, it was contended on behalf of the third defendant that the claimant had discontinued its action against the third defendant, pursuant to r32(1), and that by reason of r32(2), the claimant was obliged to pay the third defendant's costs of the action. The third defendant successfully applied to a magistrate for an order to the effect of this contention, and the claimant unsuccessfully appealed to a judge of this Court against the magistrate's order. The learned magistrate, in effect, found that by applying for, and obtaining, the consent judgment, the claimant had discontinued the action against the third defendant, pursuant to r32(1), and that, in consequence, the claimant was obliged to pay the third defendant's costs pursuant to r32(2).

13

The learned primary judge did not find it necessary to reach a concluded view on the correctness of this finding made by the learned magistrate, as her Honour arrived at the same result asthe learned magistrate on the basis of her construction of the agreement constituted by the acceptance of the offer of compromise.

14

In my view, her Honour was correct in focussing on the construction of that agreement. However, as I have reached a different conclusion to her Honour on that construction, it is necessary for me to address the learned magistrate's finding that the entry of judgment by the claimant constituted the filing and service of a notice of discontinuance for the purposes of r32. In the course of announcing his reasons for finding as he did, the learned magistrate said: ‘It could not be argued that the...

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