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The First Defendant’s position

7. On 13 May 2025, Balfran served an offer of compromise on CIT in which Balfran proposed that CIT contribute 40% of the settlement sum and costs payable to the Plaintiff. The offer was expressed to be a “Calderbank” offer, in reference to Calderbank v Calderbank [1975] 3 All ER 333, and was open to be accepted until 4pm on 14 May 2025. The letter of offer also referred to Part 2.10 of the Court Procedure Rules 2006 (ACT) (the Rules).

8. The offer was not accepted and CIT was ultimately found to bear 50% of the liability for the Plaintiff’s injuries and damage. Balfran claims indemnity costs from 4pm on 14 May 2025 and in relation to the costs of prosecuting the notice of contribution. The Second Defendant’s position

9. CIT relies on the Notice Claiming Contribution or Indemnity served on Balfran on 26 August 2024 in answer to Balfran’s claim to indemnity costs, to contend that CIT was successful on its claim for indemnity, and argued that it was not unreasonable not to accept Balfran’s offer to compromise.

Principles

10. The awarding of costs is discretionary and, absent any special circumstances, a successful litigant is entitled to recover their costs from the opposing party (see Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [134]). The result must be a fair one having regard to the particular facts and circumstances of the proceedings in the interests of justice: Clarkson Williams Partners Pty Ltd v Vaughan (No 2) [2016] ACTCA 8 at [8], citing Lewis v Chief Executive, Department of Justice and Community Safety (ACT) (No 2) [2014] ACTSC 196.

11. There is a strong public interest and interest of the litigants in the acceptance of reasonable offers of compromise.

12. In determining whether costs ought to be awarded here, where Balfran served its offer in the form of a “Calderbank letter”, it is necessary to consider whether the offer was “unreasonably rejected”.

13. In Hulanicki v Walton (No 2) [2015] ACTCA 45 at [14]-[15], the Court said: When a Calderbank offer has been made, the issue is whether it was unreasonable to reject the offer, considering all the circumstances of the case, including the apparent strength of each party’s case at the time that the offer was made: Quirk v Bawden (1992) 112 ACTR 1 at 6; Leichhardt Municipal Council v Green [2004] NSWCA 341 at [56]; South Eastern Sydney Area Health Service v King [2006] NSWCA 2 at [90]. In Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [25] the Victorian Court of Appeal noted that other matters that should be taken into consideration when evaluating the reasonableness of a rejection are: (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 indemnity costs in the event of the offeree’s rejecting it. Even where it is found that a Calderbank offer should have been accepted and the offeree achieves a result that is no better than the offer, it does not automatically follow that indemnity costs will be awarded against the offeree: Evans v Braddock (No 2) [2015] NSWSC 518 at [49]

14. The offer was made after the conclusion of the Plaintiff’s evidence. In its submissions as to costs, CIT argued that at the end of the Plaintiff’s evidence there was still a strong argument that its duty of care to the Plaintiff had not been breached. CIT argued in the contribution hearing that the contract with Balfran entitled CIT to rely on the expertise of Balfran’s employees to conduct the necessary work.

15. However, it was the Plaintiff’s evidence that, when he was told of the work that was to be done, he made two suggestions to CIT of ways to perform the work required of him which were, in his view, safe. Both of those suggested methods were rejected by CIT who directed the way the work was to be done, leaving the Plaintiff in the position of performing the work in an way which left him exposed to and, ultimately resulted in his, serious injuries. Cross examination of the Plaintiff on behalf of CIT did not throw doubt on his version. Whether CIT believed it retained a strong case against breach of its duty of care to the Plaintiff, that belief was unsupported by the evidence.

16. Thus, at the end of the evidence and when the offer was made to CIT, the evidence as to its liability was apparent. While in its defence CIT relied on the contract of services between it and Balfran, it was in my view obvious that CIT’s employee at the site intervened in the way in which the work contracted for was to be performed.

17. Next, it was argued that the apportionment as to liability proposed by Balfran did not adequately recognise what CIT said was the disparity of the defendants’ position. The Plaintiff said that, when his suggested means of doing the work were rejected, he contacted his supervisor who gave him short shrift and told him to get on with the work. CIT argued that it was incumbent on Balfran to identify (another) safe system of doing the work or to call a halt to the work and this indicated a greater culpability for the Plaintiff’s resulting accident.

18. However, it was the employee of CIT who told the Plaintiff how the work was to be done in light of the Plaintiff’s clear indications of two other means. No reason was given as to why at least one of those options, opening the doors of the skip and walking the rubbish into it, was unacceptable. The second suggested method of backing the truck squarely up to the skip and throwing things directly in was rejected apparently because the Plaintiff was told that the access road adjacent to the skip was not to be blocked.

19. In my view, CIT’s intervention was made plain by the Plaintiff’s evidence and represented a significant level of responsibility for the Plaintiff’s injuries which ought to have been appreciated by CIT.

20. The offer by Balfran represented a proper compromise

21. In short, in my view CIT’s rejection of the offer was unreasonable. The result obtained by Balfran was better than the offer.

22. CIT argued that the particular circumstances of the case are such that an order for indemnity costs ought not be made. That is, whether the failure to accept the offer “warrants departure from the ordinary rule as to costs”: SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 per Giles JA at [37]. In my view it does.

23. The offer represented a genuine offer of compromise in light of the Plaintiff’s evidence, and was rejected in CIT’s full knowledge of the extent of that evidence and CIT’s role in the performance of the work that resulted in the Plaintiff’s injuries.

24. CIT argued that no order for indemnity costs should be made in the absence of some evidence or information as to the retainer arrangements between the parties and their solicitors and the practical effect of any order as between the particular solicitor and client. How this information was necessary to the making of an order for indemnity costs was not further explained and, in my view, does not impede the making of the order.

25. I thus propose to make an order for indemnity costs to be paid by CIT from 14 May 2025.

Costs of prosecuting the Contribution Notice

26. CIT contends that since both it and Balfran had filed Notices seeking Contribution and Indemnity and each obtained an order against each other, there should be no costs order in Balfran’s favour relating to the costs of that hearing.

27. I agree, each defendant should pay its own costs of prosecuting the contribution application. Orders

28. The orders of the Court are: (1) Indemnity costs are to be paid by CIT from 4pm on 14 May 2025. (2) Each defendant should pay its own costs of prosecuting the contribution application.

I certify that the preceding twenty-eight [28] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Acting Justice Ainslie-Wallace.

Associate: Date: