McDermott v Black [1940] HCA 4

McDermott v Black [1940] HCA 4

The withdrawal of allegations imputing impropriety, in consideration for an extension of time for completion, constituted a binding contract. This amounted to an accord and satisfaction, or a release of any cause of action based on the withdrawn allegations. Accordingly, it provided a complete defence to an action for deceit based on those misrepresentations.

Parties
Appellant; Defendant: William Seymour McDermott; Respondent; Plaintiff: John Black; Respondent; Defendant: Francis Swann
Jurisdiction
Australia
Procedural Posture
Appeal / High Court of Australia Decision on Appeal From Supreme Court of Victoria
Outcome
Appeal allowed in part
Legal Topics
Misrepresentation, Fraud, Accord and Satisfaction, Release, Rescission, Damages for Deceit
Contract Law Equity Tort Law Misrepresentation Fraud Accord and Satisfaction Release Rescission +1 more

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Parties

William Seymour McDermott

Appellant; Defendant

John Black

Respondent; Plaintiff

Francis Swann

Respondent; Defendant

Procedural Posture

Appeal / High Court of Australia Decision on Appeal From Supreme Court of Victoria

Legal Issues

  1. 1 Whether withdrawal of allegations for extension of time constitutes a binding contract
  2. 2 Whether such withdrawal amounts to an accord and satisfaction or release of cause of action for misrepresentation/deceit
  3. 3 Whether the withdrawal bars subsequent action for damages for deceit

Ratio Decidendi

The withdrawal of allegations imputing impropriety, in consideration for an extension of time for completion, constituted a binding contract. This amounted to an accord and satisfaction, or a release of any cause of action based on the withdrawn allegations. Accordingly, it provided a complete defence to an action for deceit based on those misrepresentations.

Court Disposition

Appeal allowed in part

Orders

  • Judgment of Supreme Court set aside.
  • Judgment for defendant McDermott with costs, except costs increased by issue of fraud on which plaintiff succeeded, which costs plaintiff shall have (to be set off).