Costs: Calderbank offer & “unreasonably or imprudently”

J & D Rigging Pty Ltd v Agripower Australia Limited & Ors [2014] QCA 23

 

The plurality of the court applied the Calderbank offer principles and the matters for discretion as enunciated in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) when considering whether the offer was “unreasonably or imprudently” rejected. It is an excellent example of the weighting and matters that need to be considered:

 

[5] The failure to accept a Calderbank offer is a matter to which a court should have regard when considering whether to order indemnity costs. The refusal of an offer to compromise does not warrant the exercise of the discretion to award indemnity costs. The critical question is whether the rejection of the offer was unreasonable in the circumstances. The party seeking costs on an indemnity basis must show that the party acted “unreasonably or imprudently” in not accepting the Calderbank offer.

[6] In Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2), the Victorian Court of Appeal stated that a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard to at least the following matters:

“(a)  the stage of the proceeding at which the offer was received;

(b)      the time allowed to the offeree to consider the offer;

(c)       the extent of the compromise offered;

(d)      the offeree’s prospects of success, assessed as at the date of the offer;

(e)       the clarity with which the terms of the offer were expressed;

(f)       whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.”

 

(footnotes omitted)

 

Brisbane Barrister – David Cormack

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