Irvine v Paterson [2026] QDC 32

(a) Referred to the pleadings, an undertaking given to the Court to leave within 90 days on 17 November 2022 and the disclosure provided;

(b) Asserted that the plaintiff had a "profoundly strong case" and foreshadowed a summary judgment application;

(c) Set out the facts upon which Mrs Irvine's case was based and submitted that she would succeed on uncontentious facts as registered proprietor subject to any defence; and

(d) Articulated the allegations in defence as filed at that time (which is referred to in the principal judgment) and submitted the facts relied upon were contested but that in any event submitted for 10 reasons that the pleaded defence had no prospects of success.

[5] It is unnecessary to set out in full those 10 reasons. It is sufficient to note that many of them are reflected in the reasons given in the principal judgment for rejecting Ms Paterson's defence. Indeed, a number of the points were ultimately conceded by Ms Paterson, including that there was no mortgage over the Property nor any insurance over the Property such that the allegations in the defence relying on those allegations (later abandoned) were plainly wrong. The plaintiff also pointed out that there could be no agreement with Mrs Irvine in favour of Ms Paterson at the time the Property was acquired because she had not heard of her at the time. This was also fundamental to the failure of the defence and it was not disputed by Ms Paterson at trial that she had ever met Mrs Irvine at that time.

[6] The letter then made an offer to settle as follows:

1. Our client offers to settle this matter on the following terms:

(a) you agree to permanently vacate the Property within 14 days from the date a deed of settlement is signed by all parties.

(b) you agree that, when you vacate the Property, to:

(i) leave all of Barry's possessions, including, but not limited to, chattles, vehicles and fixtures (Barry's Possessions), behind (to be clear, you agree to only take property that you lawfully own);

(ii) not damage the Property or any of Barry's Possessions.

(c) our Client agrees to release you from any and all liability to pay her mesne profits (totalling approximately $38,100 as of the present date) for your occupation of the Property to date, including, from the date that a deed of settlement is signed by all parties, until the date you leave the Property in accordance with (a); and

(d) our Client agrees to file a Notice of Discontinuance, ending the proceedings against you, within 30 days of you vacating the Property;

(e) our Client agrees to not seek costs from you, and that each party bear their own costs of the proceeding;

(f) you agree to formalising the Deed of Settlement (the terms of which are to be to be negotiated between the parties in accordance with this offer) by consenting to the filing of a consent order with the District Court, requiring you to undertake the requirements of (a) and (b) above.

1. This offer is subject to it being formalised in a deed of settlement to be drafted by our firm, agreed and signed by both parties, as well as obligations in 48(a) and (b) being the subject of a consent order filed in Court to be agreed and signed by both parties.
2. In this regard, if you accept our offer (outlined above) by the required date for acceptance (outlined below), it is an additional condition that you:

(a) negotiate and agree to sign such a deed within 30 days of receiving it; and

(b) agree to and sign the consent orders to be made by the District Court in accordance with 48(a) and (b) above within 30 days of receiving it.

1. Failure to do either of these things within the timeframe will result in a failure to accept our client's offer, and our client will proceed to file her summary judgment application.
2. This offer is open for acceptance in writing on or before 14 days from the date of the letter. After that time, the offer shall lapse.

[7] The offer was made without prejudice except as to cost and also under Chapter 9 Part 5 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).

[8] Mrs Irvine relied on r 360 UCPR which provides:

(1) This rule applies if -

(a) the plaintiff makes an offer that is not accepted by the defendant; and

(b) the plaintiff obtains an order no less favourable than the offer; and

(c) the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer.

(2) Unless the defendant shows another order for costs is appropriate in the circumstances, the court must order the defendant to pay the plaintiff's costs -

(a) calculated on the standard basis, up to and including the day of service of the offer; and

(b) calculated on the indemnity basis, after the day of service of the offer.

[9] The plaintiff plainly did better than the offer, in the broad sense, in that it obtained judgment for possession plus damages of $34,200 and is entitled on any view to costs on a standard basis. However, the offer did not confine itself to the relief sought in the claim. It also sought terms relating to Mr Irvine's personal property. Further it required a formal Deed of Settlement, the terms of which were not specified, and upon which the offer was conditional.

[10] As to the former, it might be thought that it could be ignored for the purposes of the comparison called for by r 360 UCPR because it merely calls on Ms Irvine to do that which she was obliged to do at law in any event. However, it was apt to create terms of the settlement which are ambiguous given the real prospect of a dispute as to the personal property which fell within the scope of the terms sought. Ambiguity in an offer can frustrate the comparison called for in r 360(2).[1]

[11] As to the latter, in Deeson Heavy Haulage Pty Ltd v Cox & Ors,[2] the defendants' offer to settle included, amongst other elements, a condition that the parties enter into a Deed of Settlement and Release. The terms of the proposed Deed were not spelt out and potentially may have meant that the Deed was more onerous than the judgment could have been. McMeekin J was "... not persuaded that the offer made satisfies the precondition necessary to attract the benefit of the rules."

[12] It is understandable that a party making an offer might include other terms with a view to securing a complete settlement of all issues or to secure resolution of practical issues which might flow from success on their claim. However, including such matters makes the comparison of the order on the trial with the terms of the offer difficult. In this case, I am not persuaded that it is possible to do so. The offer does not engage r 360 UCPR.

[13] The offer was also made expressly as a Calderbank offer. There is no reason why an ineffective offer under the rules cannot also be made as a Calderbank offer, so long as it is properly identified as being made without prejudice except as to costs.

[14] The principles applicable in determining the impact of a Calderbank offer on costs can be summarised as follows:[3]

[11] The fact that a Calderbank offer to settle is not accepted and the offeree ends up worse off than if the offer had been accepted is a matter which the court may have regard to in deciding whether to exercise the costs discretion to depart from the usual order, but it does not automatically bring a different order as to costs: see SMEC Testing Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] per Giles JA; Jones v Bradley (No 2) [2003] NSWCA 258 at [8]- [9]. Ultimately, the court is required to determine whether the offeree's failure to accept the offer warrants departure from the ordinary rule as to costs having regard to all the circumstances of the case.

[12] In considering whether the discretion ought to be exercised other than in the usual manner, regard will be had as to whether the offer made must be shown to be a genuine one: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [21]- [24], [36]. Whether or not an offer is viewed as genuine depends on the circumstances of the case. It is the task of the court to consider, "whether the particular offer in the circumstances represented a genuine attempt to reach a negotiated settlement, rather than merely, trigger any costs sanctions": see Leichardt Municipal Council v Green [2004] NSWCA 341 at [39] per Santow JA.

[13] Further, the offeree ought to be provided with an appropriate opportunity to consider and deal with the offer: Elite Protective Personnel v Salmon [2007] NSWCA 322 at [99].

[14] It will be relevant to consider whether it can be shown that the rejection of the offer was unreasonable in the circumstances of the case. In that regard, it was observed in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 that the competing considerations which the court has regard to could

"[23] ... be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as 'manifestly' or 'plainly' unreasonable.

[24] Of course, deciding whether conduct is 'reasonable' or 'unreasonable' will always involve matters of judgment and impression. These are questions about which different judges might properly arrive at different conclusions. As Gleeson CJ said recently, 'unreasonableness is a protean concept'. But a test of reasonableness is, we think, entirely appropriate to the exercise of a discretion such as this." (footnotes omitted).

[15] In Hazeldene's case the court considered the factors relevant to assessing reasonableness:

"[25] The discretion with respect to costs must, like every other discretion, be exercised taking into account all relevant considerations and ignoring all irrelevant considerations. It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to 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).

[16] The prospect of success is a relevant consideration to the costs determination. Additionally, in Pirrotta v Citibank Limited (1998) 72 SASR 259 Debelle J observed at [27]:

"... the writing of a Calderbank letter should be one of the factors, albeit a significant factor, to be weighed by a court when considering whether to order indemnity costs. I do not think that the complexity of litigation standing alone should necessarily preclude the operation of the rule. The rule is designed to promote settlement of both complex and straightforward litigation and the court will have regard to all relevant circumstances in determining whether the penalty rule as to costs should apply."

[17] In Elite Protective Personnel v Salmon [2007] NSWCA 322, Basten JA observed:

"[147] Greater sympathy may be accorded a defendant who receives an offer early in proceedings where there has been no reasonable opportunity for it to assess its questions of liability or its likely exposure in damages. Such matters must be assessed on a case by case basis. Usually litigation will not be the first that the defendant hears of the claim. However, a defendant which receives an offer of settlement in circumstances where it reasonably requires more time to consider its position would no doubt be advised to respond to that effect and, if necessary, make a counter-offer in due course."

[15] The 27 May 2024 offer provides a compelling case that the rejection of the offer was unreasonable at the time it was made because:

(a) It was plainly genuine and could have been performed by Mrs Irvine; all it required of her was to give up various claims advanced in the proceedings;

(b) The issues which affected whether the strict comparison called for by r 360(1)(b) UCPR are not a difficulty in considering the broader question of the unreasonableness of rejection of the offer as a whole. There is no reason to think that the terms of the proposed deed could not have been settled easily and that issues of ownership or possession would not impede the settling of the proceedings;

(c) The offer was a very good one. It involved very substantial compromise on Mrs Irvine's claim, limiting itself to the substantial objective of the proceedings, possession of the Property;

(d) The offer correctly articulated defects in the defence which made it an extremely weak case, something accepted in large degree by Ms Paterson in the manner in which the trial was run, as I found in the principal reasons; and

(e) The offer was made after pleadings had closed and disclosure was complete, at least so far as the plaintiff was aware.

[16] Ms Paterson submitted that indemnity costs ought not follow from the Calderbank offer and rather sought an order for each party to bear her own costs or at worst an order that Ms Paterson pay costs on a standard basis.

[17] The principal submission from Ms Paterson in support of those costs orders was that Ms Paterson was self-represented and did not understand the Calderbank offer nor its significance if it was rejected. Her non-acceptance of the offer was not deliberate and understandable in any event given it required her to give up her residence.

[18] Ms Paterson also submitted that her claim arose from the relationship with Mr Irvine and that Ms Paterson's claims arising out of that relationship, though unsuccessful, were not an abuse of process or hopeless.

[19] As to the principal submission, I do not accept that Ms Paterson did not sufficiently understand that the 27 May letter comprised an offer to settle by which Ms Irvine was giving up a good deal to obtain possession promptly. Ms Paterson was not an unintelligent person, and the written evidence showed her to be literate. The offer was not in obtuse or obscure language.

[20] It might be that she did not understand the subtleties of the potential cost consequences of a Calderbank offer, though I even doubt that to be true. But even if it is, that would be no proper basis to refuse the indemnity costs order. While judges must try, within the scope of their impartial role, to facilitate a fair hearing when a party is self-represented, a represented party's rights are not to be diminished or reduced because of self-represented status.[4] As a general rule, if it is objectively unreasonable for a represented litigant to have rejected an offer, the same consequence must apply to an unrepresented litigant. Any other approach would impose a penalty on a represented party trying to resolve litigation efficiently by compromise. There might be cases where the court forms the view that an offer was made in a manner which was calculated to take advantage of an unrepresented party's limitations, but this is not such a case.

[21] As to the alternative submission, that proceeds on the basis of a misunderstanding. It is no answer to a claim for indemnity costs on a Calderbank offer that the conduct of the recipient in defending the proceedings or counterclaiming was not to advance a hopeless case. Indeed, where a party advances a hopeless claim or defence, indemnity costs can follow because the proceedings might be characterised by the court as an abuse of process: Levick v Deputy Commissioner of Taxation [2000] FCA 674; (2000) 102 FCR 155. Most Calderbank offers will be made where a defence or counterclaim is at least arguable. Further, it is worth keeping in mind that as the trial developed, it became obvious that the case in the defence was indeed hopeless, as I explain in the principal reasons. It is not relevant that the offer required Ms Paterson to leave the Property. The purpose of the proceedings was to recover possession and the case for her possession was weak. Even a litigant-in-person cannot simply ignore unpleasant realities. It might be a partial explanation for her failure to accept the offer, but it is not an excuse which answers the plaintiff's arguments.

[22] There is one aspect of the proceedings, however, which does assist Ms Paterson. After some directions hearings, she ultimately filed a counterclaim. That counterclaim advanced a different claim for possession from that articulated in the defence, as I explain in the principal judgment. The counterclaim ultimately failed. However, no offer was made which addressed that further claim by the plaintiff. The trial was largely conducted on the basis of the case in the counterclaim. While that makes the argument in favour of indemnity costs on the defence stronger, it does mean that a different approach is reasonably open to costs after service of the counterclaim. The counterclaim was served on 28 November 2025. Assessment of costs issues in the context of proceedings evolving over time is not an exact science. In my view, substantial justice is achieved by recognising an entitlement to costs of the defence on an indemnity from service of the offer basis but otherwise to limit the plaintiff to standard costs in respect of the counterclaim. As the counterclaim was the principal claim at trial I think the following orders should be made. The defendant pay the plaintiff's costs of the proceedings including reserve costs:

(a) On the standard basis from commencement of the proceedings to 27 May 2024;

(b) On the indemnity basis from 27 May 2024 to 28 November 2025; and

(c) On the standard basis from 28 November 2025.

[1] See, e.g., Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2020] QSC 1 and Australian & New Zealand Banking Group Ltd v Alirezai (No 2) [2002] QSC 205.

[2] [2009] QSC 348, [49].

[3] State of Queensland v Hayes (No 2) [2013] QSC 80.

[4] Rajski v Scitec Corporation Pty Ltd (Unreported NSWCA No 146 of 1986) approved by the High Court in Nobarani v Mariconte [2018] HCA 36; (2018) 92 ALJR 806; (2018) 359 ALR 31.