Ganbros Pty Ltd v Commissioner for Liquor and Gaming

[4] Between these parties, there is no dispute that costs should follow the event. The dispute is to whether a special costs order should be made. The second respondents seek their costs on the standard basis up to and including 23 July 2025 and thereafter on the indemnity basis. They do so in reliance on an offer made pursuant to the principles in Calderbank v Calderbank[1] on 9 July 2025 and which lapsed on 23 July 2025. The applicants submit that the general costs rule should apply and that they should pay the second respondents' costs on the standard basis.

[5] The rejection of a Calderbank offer does not give rise to a presumption that the offeree is to pay the offeror's costs on the indemnity basis. The principled approach is to consider whether the rejection, or failure to accept, the offer was unreasonable. This involves a matter of judgment and impression. But the court will, in assessing such matters, ordinarily have regard to the following:[2]

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

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

(c) the extent of the compromise offered;

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

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

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

[6] The applicants commenced the proceeding on 19 June 2025. The offer was made on 9 July 2025. It was open for acceptance for two weeks and foreshadowed an application for indemnity costs. It cannot be said it was not expressed with clarity.

[7] The extent of the compromise offered was a demand to capitulate. The applicants, by reference to authority, submit that a refusal of such an offer is usually insufficient to depart from the usual position as to costs.[3] As a matter of principle this is correct, although the authorities cited draw a distinction between a situation where a genuine offer of a realistic compromise is made and, by contrast, a demand to capitulate in circumstances where the case has some prospect of success. Presumably, the applicants characterise the offer as falling within the second category.

[8] In any event, the application of the principle to judicial review proceedings is not without difficulty. Almost inevitably, every judicial review proceeding turns upon whether there was a reviewable error and, if so, what discretionary remedy under s 30 of the Judicial Review Act 1991 (Qld) is appropriate. While not inconceivable, the situations where any compromise involves something other than capitulation will be rare.

[9] As to other considerations, the offer was made at a very early stage of the proceedings. It pre-dated, by several months, the parties' written submissions. In terms of the reasons why the second respondents urged acceptance of the offer, it stated that "upon review of the material ... served ... we cannot see how your clients have standing to seek a review of the decision."

[10] There were no other substantive reasons provided as to strength or otherwise of the applicants' case. On 14 July 2025, while the offer remained open, the applicants' solicitors sought an explanation as to the asserted basis of a lack of standing. A detailed explanation was provided on 16 July 2025. As matters transpired, the standing issue was determined in favour of the applicants, including for reasons not articulated in the correspondence or advanced at the hearing.

[11] In these circumstances, it cannot be said that the applicants had poor prospects of success on this issue. Nor can it be said that, as at the date of the offer, the case lacked merit. The proposition advanced by the second respondents that the other weaknesses in the applicants' case ought to have been apparent to them is, in my view, without merit. The case had a degree of complexity to it. It raised issues concerning the legislative regime under the Liquor Act 1992 (Qld) which had not, based upon the submissions advanced at the hearing, been previously considered by a court.

[12] In those circumstances, it was not, in my view, unreasonable for the applicants to refuse the second respondents' Calderbank offer. This is not an appropriate case for the Court to exercise its discretion to depart from the usual rule as to costs.

[13] I order that the applicants pay the second respondents' costs of the proceeding on the standard basis.

[1] [1975] 3 All ER 333.

[2] McGee v Independent Assessor & Anor (No 2) [2024] QCA 7 at [23] (Cooper J).

[3] Baygol Pty Ltd v Foamex Polystyrene Pty Ltd [2005] FCA 1089, [12]; Gbar (Australia) Pty Ltd v Brown [2020] QSC 34, [12].