Savio Solicitors in Parramatta, New South Wales | Lawyer & law firm

Savio Solicitors

Locality: Parramatta, New South Wales

Phone: +61 2 9890 7744

Address: Suite 102, 18-20 Ross Street 2151 Parramatta, NSW, Australia

Website: http://www.saviosolicitors.com.au

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05.01.2022 CHECK BEFORE YOU SEND A CHEQUE Sending cheques for ‘Full and Final Settlement’ In the past, a cunning way to settle a matter was to send a cheque to a debtor for a reduced amount with an enclosing letter expressing that the cheque was tendered on a full and final settlement basis. In cashing the cheque the debtor accepted these terms and their rights to further action in the matter were extinguished. ... The decision of the New South Wales Court of Appeal in J P Morgan Australia Ltd v Consolidated Minerals Pty Ltd [2011] NSWCA 3 exposed the perils of debtors offering a part payment. In this case the debt was $50 million and the cheque offered was for $20 million, here, the creditor simply banked the cheque and replied, thank you very much but we still want the rest of our money, and the Courts agreed. The Decision The main issue highlighted was accord and satisfaction. Neither the trial judge nor the Court of Appeal found there was an accord and satisfaction. The Court said for any accord and satisfaction to exist J P Morgan must be shown to have agreed to accept the cheque and finalise the matter. Reasons The Court said that the wording of the letter was such that it identified what they (Consolidated) thought was due and enclosed a cheque for that amount; There was no identified method of acceptance in the letter. The Court said it would have been more likely to succeed as an offer if there had been a line referring to the banking of the cheque as acceptance; The Court also held that the actions of J P Morgan in sending a return letter, clearly stating that they did not accept the cheque as full and final payment but however, as a part payment of a larger debt, also indicated there was no accord and satisfaction.