Note taking, written confirmation of offers and settlement

The dangers in failing to reduce offers to writing and an agreement to writing were exposed in the recent decision of Gailey Projects Pty Ltd v McCartney & Anor [2017] QSC 185.

Briefly, the parties were formerly engaged in the sale of off the plan units in the Jade development on the Gold Coast.  A dispute arose and the agreement terminated.  A 2-week Supreme Court trial was all set to run.  At the end of the first day of the trial, an apparent agreement was reached and the trial adjourned.  When trying to formulate what had been purportedly agreed, a further dispute arose to the extent that one party decided no formal agreement had been reached as it was too uncertain and because there was a change in terms of the agreement.

In trying to unravel this situation, the Court noted that no-one took detailed notes of the offers made.  One solicitor took brief notes, but was not present when all offers were being exchanged.  The offers were not simple and involved call or put options and various unit specifications.

To compound the issue, when the parties likely came to agreement, it was not immediately reduced to writing and signed.

When trying to draft a deed of settlement, the whole thing blew up and the parties then had to go to Court with a new set of counsel, as all original counsel had to give evidence about the negotiations.

The Court found a concluded agreement had been reached, was not uncertain and could be enforced, thus ending the original trial and the dispute, over about a million dollars.  The costs incurred in unraveling this mess will be substantial and who foots the final bills may yet end up in further Court action.

The clear lessons from this “moment” are:

  1. Having counsel exchange offers can be useful to break apart relationship dynamics, but should always be confirmed in writing;
  2. Complex offers, such as those involving property and unit entitlements need careful thought, as shown here, with car park entitlements being an afterthought; and
  3. Any concluded agreement should immediately be reduced to writing and signed by legal representatives or preferably the parties themselves.


Peter Matus | Special Counsel, Compensation Claims