Kelleher v Electricity Supply Board (Alternative title: Good v Electricity Supply Board) (Approved)

Factual and Procedural Background

This case involves a dispute between the Plaintiff and Company A concerning compensation claims arising from a wayleave notice served pursuant to Section 53 of the Electricity (Supply) Act 1927. On 16 August 2016, Company A served a wayleave notice on the Plaintiff. The Plaintiff submitted a claim for compensation on 30 August 2016. A Property Arbitrator was initially nominated but recused himself, leading to the appointment of a second Arbitrator.

Company A made two unconditional offers of compensation to the Plaintiff, dated 8 February 2017 and 21 June 2017, which were not accepted. The Plaintiff sought a preliminary ruling from the Property Arbitrator as to whether these letters constituted valid unconditional offers under Section 5 of the Acquisition of Land (Assessment of Compensation) Act 1919. The Arbitrator ruled neither letter was a valid unconditional offer and refused to state a case to the High Court, considering the issue factual rather than legal.

Company A initiated judicial review proceedings to compel the Arbitrator to state a case on three questions directed by the High Court. The Plaintiff did not oppose the relief sought. The High Court heard the matter together with a related case, referencing prior judgments and legislative provisions.

Legal Issues Presented

1. Does the letter dated 8 February 2017 constitute a valid unconditional offer for the purposes of subsection 5(1) of the Acquisition of Land (Assessment of Compensation) Act 1919?
2. Does the letter dated 21 June 2017 constitute a valid unconditional offer for the purposes of subsection 5(1) of the Acquisition of Land (Assessment of Compensation) Act 1919?
3. If either or both letters constitute valid unconditional offers, can such offers be accepted at any time prior to the making of an award by the Property Arbitrator?

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff contended that neither letter constituted a valid unconditional offer due to lack of clarity, particularly regarding whether pre-reference costs were included in the compensation sums.
• The Plaintiff initially proposed the third question regarding timing of acceptance but later submitted it was moot and should not be answered.

Company A's Arguments

• Company A argued that an unconditional offer exists if an unconditional sum is offered for compensation, and it is not necessary to specify costs in the offer.
• Company A maintained that the second letter (21 June 2017) was clear and constituted an unconditional offer, including payment of costs as directed by the Property Arbitrator.
• Regarding the timing of acceptance, Company A submitted that an offer may be withdrawn before acceptance but emphasized that tardy acceptance could have cost consequences, suggesting a reasonable acceptance period (e.g., five days).

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analyzed the clarity and content of the two offer letters in light of Section 5(1) of the Acquisition of Land (Assessment of Compensation) Act 1919 and relevant case law. The first letter (8 February 2017) was found to be fatally unclear regarding whether pre-reference costs were included in the compensation sum or covered separately, thus failing to meet the statutory requirement of an unconditional offer. The Court emphasized that the Plaintiff must understand precisely what is being offered to answer the test from Fisher.

Conversely, the second letter (21 June 2017) was materially identical to an offer previously held valid in a related case and was found to constitute a valid unconditional offer. The Court rejected the Property Arbitrator’s reasons for finding otherwise, including concerns about multiple simultaneous offers, conditionality regarding costs, and the payment of reasonable costs for advice.

Regarding the third question on whether such unconditional offers can be accepted at any time before an award by the Property Arbitrator, the Court held that the legislation’s purpose is to facilitate settlement and does not impose a time limit for acceptance. The offer remains open until the Arbitrator’s award. However, the Court acknowledged that if acceptance is delayed unreasonably, cost consequences may follow, with the Arbitrator having discretion to allocate costs accordingly. Factors influencing what is reasonable include the Plaintiff’s personal circumstances, availability of advice, complexity of the claim, and proximity of arbitration hearing.

The Court also noted that while Company A reserved some “wriggle room” regarding costs incurred after a reasonable acceptance period, the unconditional nature of the offer was not negated.

Holding and Implications

The Court’s final rulings are as follows:

• Question one (8 February 2017 letter): Does not constitute a valid unconditional offer.
• Question two (21 June 2017 letter): Constitutes a valid unconditional offer.
• Question three (timing of acceptance): Such unconditional offers can be accepted at any time prior to the Property Arbitrator’s award.

The direct effect of this decision is that the Plaintiff may accept the valid offer made on 21 June 2017 up until the Arbitrator’s award, subject to potential cost implications for unreasonable delay. The ruling clarifies the interpretation of unconditional offers under the 1919 Act but does not establish new precedent beyond the specific statutory context. The case will be listed for further mention to address outstanding matters, including costs.