MENDEL and ORS v BENJAMIN [1997] NSWCA 200

MENDEL v BENJAMIN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P, SHELLER and STEIN JJA 18, 19 November 1997, 19 December 1997

[1997] NSWCA 200

Contracts - construction and interpretation - offer and acceptance - whether letter constitutes acceptance of offer - Costs - discretion - whether trial judge erred

The primary issue on this appeal was whether a letter the solicitors for the first respondent (Benjamin) wrote to the solicitors for the appellants (Mender, K Mendel Pty Ltd and Delta Sportswear Pty Ltd) was an acceptance of an offer made by a previous letter from Mendel on behalf of the appellants to the first respondent, so as to give rise to a binding contract between the parties. The appellants contended that this was not an acceptance of the offer, but a counter-offer which they never accepted, and that, accordingly, there was no binding contract.

Also in issue, assuming such a contract to have been established, were the costs order made by the trial Judge and, in the cross-appeal by Benjamin and the other cross-appellant, Chesdeed Pty Ltd, questions about a claim to indemnity for accounting services performed for K Mendel as trustee, and how the amount due to Benjamin under the contract should be calculated.

Held:

The trial Judge was correct in finding that the letter was an acceptance of the earlier offer giving rise to a binding contract between the parties.

The principal matter of contest during the hearing was whether there was a contract or not. On this the appellants failed. The contest about the construction of the contract was secondary. The respondents' failure at first instance to persuade the trial Judge that their preferred construction was correct was not in the circumstances a reason for saying that her Honour erred in exercising her discretion when she ordered the appellants to pay the respondents' costs.