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UCPR OFFER NEEDS DISCHARGE

4 December 2012

On 23 November 2012 McMeekin J held in Armstrong v Allianz Australia Insurance Limited and another [2012] QSC 370 that a faxed Offer to Settle pursuant to rule 361 of the Uniform Civil Procedure Rules (UCPR) must be certain and in this particular case:

  • Should have been accompanied by a Release and Discharge; and
  • Should have conformed with rule 122 of the UCPR.

The offer made by the defendants was relevant because judgement was given to the plaintiff for $492,277.25 and the defendants' UCPR offer was $500,000.00 plus standard costs and outlays up to the date of the offer.

If the UCPR offer was valid, the Court would need to consider exercising its discretion to award costs against the plaintiff.

However, the Court found the UCPR offer was subject to the plaintiff signing a "suitably worded discharge to the satisfaction of the defendants" and the terms of the discharge were not disclosed. The Court stated "what "suitably worded" might mean is at least contentious. Suitable to whom would be the relevant question... that there was the potential for the plaintiff's rights to be affected by the discharge cannot be doubted".

On that point, the Court ruled:

"In these circumstances and where the terms of the proposed discharge are not defined I cannot see why a plaintiff is not entitled to see the terms of the discharge before committing himself to accepting the offer. Otherwise he may be committing himself to the giving up of rights that he would not otherwise have done.

The onus it seems to me is plainly on the defendant to show that the offer made met the pre-conditions set down in the rule if the defendant is to take advantage of the rule. Here there was a further condition imposed which has the potential to require the plaintiff to give up rights that went beyond the effect of any judgement in the proceedings. Hence I am not satisfied that the offer did in fact meet the pre-conditions of r 361".

The Court also found that service of the UCPR offer by fax did not comply with r 122 of the UCPR which meant that service was not effected by fax but later by post which (had the offer been valid) would have affected the date from which costs would have been calculated.

Ultimately, the Court found that the purported UCPR offer should not be considered in determining costs and on that basis costs were in the discretion of the Court and should usually follow the event. The Court ordered the second defendant pay the plaintiff's costs of the proceedings on a standard basis.

For further information, please contact:

Cameron Seymour | Partner
Mullins Lawyers
t +61 7 3224 0360
f +61 7 3224 0333
cseymour@mullinslaw.com.au

 

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