Calderbank offers and the indemnity costs order
Last week’s case of E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296 shows how difficult it can be in securing indemnity costs even where a party has beaten their own Calderbank offer.
Key takeaways:
When putting forward a Calderbank offer (or considering acceptance of such an offer), always consider the following, non-exhaustive, list of questions:
Does your opponent have enough information/evidence to determine whether the offer is a reasonable one?
Does the period for acceptance allow the other side to properly consider the offer and accept it?
Is the offer unambiguous?
Is your opponent able to accept the offer?
If the answer to any of the above is ‘no’, there is a higher likelihood that the Calderbank offer will not secure indemnity costs even if a higher amount is achieved at trial.
Further takeaway; if the Calderbank offer precluded your opponent from accepting the offer, consider reopening this offer once this has been rectified. This could at least secure indemnity costs from the date of the subsequent Calderbank offer
The Facts:
On 15 December 2020, the Plaintiff put forward a Calderbank offer, open for 14 days, as well as filing a proposed amended appeal statement.
Without going into the minutiae of the judgment, it was broadly accepted that the judgment obtained was better than the Calderbank offer put forward.
The Defendant accepted that costs should follow the event, but disputed the making of an indemnity costs order. HHJ Ward CJ agreed, noting that a significant amount of evidence was provided to the Defendant only after the expiry of the offer.
“To my mind, the complexity of the issues in dispute, and the inconsistencies raised by the proposed amended appeal statement with the evidence served to that point, are powerful factors pointing against a conclusion that it was unreasonable for the defendant not to accept the Calderbank offer at the time it was made.”
Ward CJ also noted that although 14 days is often a reasonable timeframe for acceptance, the timing of the amended appeal statement meant that, in this instance, it was insufficient.
“in the present case, that gives rise to the particular difficulty of allowing only 14 days for acceptance of the offer because, at the same time as the offer, the plaintiff was foreshadowing an amended appeal statement.”
This case illustrates how broadly a Court will exercise its discretion under s 98 of the Civil Procedure Act 2005 (NSW), thereby making it even more difficult to secure an indemnity costs order for your client, even where a properly formulated Calderbank offer was made that clearly should have been accepted before trial.
If you have any questions as to the above, or on any costs issue that you may have, get in touch with us today.