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Clark Agri Service Inc v 705680 Ontario Ltd, (1996) 2 CPC (4th) 78

Facts:

At issue is the offers to settle that were withdrawn before the D accepted the offer.

P entered agreement to purchase land on which a grain elevator operated. P made a formal offer to settle which was never expressly withdrawn. P later made a 2nd offer, which was also never withdrawn. D asked for extension of offer. P granted the extension. Then tornado, after which D accepted an offer. Property damaged

Issue(s):

Were the offers made pursuant to r.49?

Ratio:

R.49.04(3) – where offer to settle specifies a time for acceptance and it not accepted or withdrawn w/in that time – offer expires.

Any offer, regardless of r.49 or common law, is premised on idea that there is no material change of the thing sought to be settled over

Analysis:

Offer under s.49 must have following features:
**Must be in writing
**Must be effectively delivered to the opposing party
**Must be proposal that can be constructed as an offer to settle, open for acceptance
**May be in Form 49A
**May be communicated between counsel

If above features present offer will be presumed to be a r.49 unless express otherwise – or if can demonstrate that didn’t intend it to fall under r.49

This case
**Offer 1 was intended to be under r.49 because form 49A was used
**Second offer was a “letter offer” – it was not intended to be a common law offer – thus presumed to be under r.49
***A prior counter-offer or a rejection of an offer has the effect of terminating the common law offer – BUT a r.49 offer may be accepted notwithstanding a prior counter-offer or rejection

Was either offer open for acceptance?
**R.49.04(3) – where offer to settle specifies a time for acceptance and it not accepted or withdrawn w/in that time – offer expires
***The time had expired when D accepted the 2nd offer
**1st offer did not expire nor was it withdrawn – any offer, regardless of r.49 or common law, is premised on idea that there is no material change of the thing sought to be settled over

When parties made 2nd offer – not reasonable to think they thought 1st offer was still open

Holding:

Nether offer was available to be accepted – costs awarded on substantial indemnity basis


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