Tlais v Tlais [2003] NSWSC 1143

New South Wales Supreme Court

CITATION : Tlais v Tlais [2003] NSWSC 1143 HEARING DATE(S) : 20 November 2003 JUDGMENT DATE : 20 November 2003 JURISDICTION: Equity Division JUDGMENT OF : Windeyer J at 1 DECISION : Agreement set aside

CATCHWORDS : CONTRACT - rescission - unilateral mistake - obvious mistake in offer of compromise known to offeree accepting the mistaken offer Deputy Commissioner of Taxation (NSW) v Chamberlain (1990) 26 FCR 221 CASES CITED : Griffiths v Kerkemeyer (1977) 139 CLR 161 Hartog v Colin Shiels (1939) 3 All ER 556 Taylor v Johnson (1983) 151 CLR 422 Ahmad Tlais (First Plaintiff) PARTIES : Anthony Jourbane (Second Plaintiff) Salma Tlais (Defendant) FILE NUMBER(S) : SC 4487 of 2003 COUNSEL : Mr K Andrews (Plaintiffs) Mr S Galitsky (Defendant) SOLICITORS : Blake Dawson Waldron (Plaintiffs) Bechara & Company (Defendant)

- 3 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

THURSDAY 20 NOVEMBER 2003

4487/03 AHMAD TLAIS & ANOR V SALMA TLAIS JUDGMENT 1 HIS HONOUR: In this matter the plaintiff seeks by summons filed on 25 August 2003 a declaration that no compromise has been effected in an action between the plaintiff and the defendant in the District Court of New South Wales under which the defendant in these proceedings sues the plaintiffs for damages for personal injuries. 2 What happened was that the solicitor for the plaintiffs here obtained instructions to make an offer of $28,500 plus costs of $8,000 or costs to be assessed. By mistake he had prepared and forwarded an offer of compromise for $285,000 plus the $8,000 costs or otherwise costs to be assessed. 3 On the evidence a notice of acceptance of that offer of compromise was forwarded before the solicitors for the defendant here were informed that a mistake had been made. They were so informed by a telephone call and by a facsimile transmission on the same date as the date of acceptance of the offer. The evidence, I think on the balance of probabilities, is such that I should conclude that the offer was accepted prior to the mistake having been notified. The intended offer was repeated by the solicitor for the plaintiffs here in what I will describe as a corrected document. 4 While the summons does not on its face seek appropriate relief, it is accepted that the plaintiff is seeking an order in equity setting aside the agreement made on the basis of a contract being entered into by unilateral mistake. On the evidence before the court there would have been no possibility whatsoever of the plaintiff obtaining a verdict in the court for the amount of the incorrect offer. It is not suggested there was any such possibility. There is no evidence to establish that it might have been within any possible range. The medical reports which are annexed to the affidavit of Mr Aquilina make it perfectly clear that when one considers the maximum figure available in motor vehicle accidents for non-economic loss, the amount was so high that it could not possibly have been offered other than through a mistake. I should say that it is not suggested in any evidence of the solicitor for the defendant in this matter that that is not the position. There was some cross-examination relating to a document which became exhibit 1 in these proceedings, which was a letter forwarded by Mr Aquilina, the plaintiff's solicitor, to the Claims Department of the third party insurer involved, which did make some allowance for a Griffiths v Kerkemeyer (1977) 139 CLR 161 claim which had never been made by the plaintiff and which it is not suggested would have been made. Therefore that can be disregarded. 5 It seems to me that on the facts of this case it is determined by the principles set out in what was probably, I think, the fifth phase of the litigation between Mr Chamberlain and the Deputy Commissioner of Taxation, that being the decision of Justice Wilcox in Deputy Commissioner of Taxation (NSW) v Chamberlain (1990) 26 FCR 221 explaining how the decision in Taylor v Johnson (1983) 151 CLR 422 should be applied in matters such as this. While the Australian law is perhaps not quite so clear as the law in England in matters such as this, as is found in cases such as Hartog v Colin Shiels (1939) 3 All ER 556, nevertheless, it is clear that when a party has entered into a contract knowing that there is a mistake as to the terms of the offer which it purports to accept, then the court in exercise of its equitable jurisdiction can set that contract aside. I should say that there is no evidence from the defendant that that was not the position, and the facts in my view make it perfectly clear that I must draw an inference that was the position. In those circumstances it is necessary to make the appropriate order bringing the contract to an end. 6 I order that the contract which came into existence between the plaintiffs and the defendant by the acceptance by the plaintiff of offer of compromise dated 21 May 2002 made by the plaintiff to the defendant in proceedings in the District Court of New South Wales number 208 of 2002 be set aside. 7 Order the defendant pay eighty per cent of the plaintiffs' costs. 8 The exhibits can be returned.