9 Directing myself in accordance with that passage and bearing in mind that the plaintiff's Calderbank letter foreshadowed an application for costs on an indemnity basis, I do not think it matters in this case that the rule refers only to costs on a solicitor and client basis. The question is whether the Council should be ordered to pay the plaintiff's costs of the Council's appeal after 16th September 2004 on an indemnity basis.
10 Some of the parties' original submissions have been overtaken by the Hazeldene case. For example, there are no preconceptions about when the rejection of a Calderbank offer should lead to the making of a special costs order.[9] The correct approach is to treat the rejection of a Calderbank offer as a matter to which the Court of Appeal should have regard when considering whether to order indemnity costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rules as to costs.[10] The test to be applied is whether the rejection of the offer was unreasonable in the circumstances.[11]
11 In my opinion it was not unreasonable for the Council to reject the offer. The letter of 16th September 2004 began by referring to the cross-appeal. The offer related to all proceedings between the plaintiff and the defendants. An application for costs on an indemnity basis was threatened if the offer was not accepted and the cross-appeal was successful. The Council correctly assessed that the cross-appeal would fail. The Council should not have to pay the plaintiff's costs of its appeal on an indemnity basis. The ordinary rule as to costs should apply.
A Bullock or Sanderson order
12 The plaintiff also submits that we should make orders to achieve the effect that the Council, rather than the plaintiff, bear the Commission's costs of the trial and of the Commission's appeal. It primarily seeks a Sanderson order[12]. Its fall back position is a Bullock order[13]. The Council concedes that it should pay the Commission's costs of the contribution proceedings below but resists the making of a Sanderson or Bullock order. The Commission submits that, if such an order is made, it should be a Bullock order.
13 There are two principal issues to be resolved. The first is whether the plaintiff's claim against the Commission was interdependent with, or in a real sense alternative to, his claim against the Council.[14] The second issue is whether it was reasonable for the plaintiff to have joined the Commission and whether the Council's conduct was such as to make it just to require the Council to pay the Commission's costs.[15] It will be apparent that that second issue sometimes involves two questions, but in truth it is a matter of convenience whether to adopt a two-step analysis or to ask a single question, namely whether it is fair, as between the plaintiff and the unsuccessful defendant, that the latter should pay the successful defendant's costs.[16] Translated into the circumstances of this case, the single question relating to the second issue would be whether it is fair, as between the plaintiff and the Council, that the Council should pay the Commission's costs.
14 Neither of those issues should be resolved in any narrow or technical way. In my opinion, both should be resolved against the Council because it denied that the log jutted out from the land it managed. The Council claimed that the whole of the exposed part of the log was located on the Commission's land, which would have meant that the Council simply managed the approaches to the boundary.[17] The Council's denial made the claims interdependent in a practical sense and made it reasonable for the plaintiff to continue the proceeding against both defendants. The judge's finding as to the location of the log was challenged in the notice of appeal. The point was not abandoned until the first day of the hearing. The Council still maintained that the accident occurred wholly on the Commission's land and that the Commission was solely responsible.[18] I would make a Bullock order in relation to the Commission's costs of both the trial and the appeal. There is no occasion for a Sanderson order, particularly as there are complications attending the Council's insurance. The other members of the Court are of a different opinion. The orders proposed in [3] above reflect their view.
The Commission's Calderbank offer to the Council
15 On 8th December 2003, before the trial, the Commission's solicitors wrote to the Council's solicitors. They said that their expert evidence indicated that the land from which the accident site was accessed was under the Council's management and control and the log was embedded in that land. Accordingly, the letter continued, if by 13th January 2004 the Council withdrew its notice of contribution against the Commission and agreed to indemnify the Commission in respect of the proceeding the Commission would be prepared to bear its own costs.[19] A warning followed that, if the offer were not accepted and the matter proceeded to judgment and the Council obtained a result no more favourable than that offered by the Commission, the letter would be produced on the question of costs. Reference was made to the same three cases as in the plaintiff's subsequent Calderbank letter to the Council.
16 The Commission originally submitted that, as the Council failed to achieve an outcome more favourable than the offer, it should pay the Commission's costs of the contribution proceedings from 13th January 2004 on a solicitor and client basis. In
submissions following the Hazeldene case, that too was amended to costs on an indemnity basis. Specifically, the Commission submits that, in lieu of paragraphs 6 and 7 of the order made below, there should be judgment for the Commission in the contribution proceedings between the Council and the Commission and that the Council should pay the Commission's costs of those proceedings, including any reserved costs, on a party-party basis up to and including 13th January 2004 and on an indemnity basis thereafter.[20]
17 I accept the Council's submission in response that the letter of 8th December 2003 was not so much an offer of compromise as a demand to capitulate and that it was reasonable for the Council not to accept it. That conclusion is reflected in paragraph 5 of the order I have proposed in [3] above.
Indemnity certificates
18 The parties' submissions also refer to indemnity certificates. In my opinion, the plaintiff and the Council should each have a certificate pursuant to s.4 of the Appeal Costs Act 1998 in respect of the Commission's appeal. The "other matters" part of the authenticated order proposed in [3] above should also record that those certificates were granted.