CONSIDERATION
15 With these principles in mind I turn to consider, first, whether Pasma's offer was a genuine offer. The key question in that assessment is whether the offer "contained a genuine element of compromise". Answering that question requires a slightly more detailed examination of the procedural history to the proceeding. As is noted above (at [3]), the originating application in this proceeding was filed on 11 October 2017. After some amendments to the pleadings and the parties had conducted an unsuccessful mediation, the proceeding was eventually set down for a four day trial commencing on 30 March 2020. On 17 March 2020, the parties were notified by my chambers that it was necessary to vacate that trial following the onset of the COVID-19 pandemic. New trial dates were fixed commencing on 27 July 2020, but COVID-related issues caused its adjournment after three days. The trial was ultimately completed on 13 November 2020 after a further four days of hearing.
16 By the date of the offer, it follows that: the proceeding had been on foot for approximately two years and four months; it had been set down for trial once and vacated; and, as at that date, new trial dates remained to be fixed. It follows further that, because the vacation of the original trial occurred shortly before it was due to commence in late March 2020, the parties were likely to have been well advanced in their preparations for that trial and to have incurred a significant amount of costs.
17 Mr Tregidga and Ms Jenkins have complained that the offer was made after those costs had already been incurred. While they have not adduced any evidence of the approximate quantum of those costs, I can infer that they must have been significant. On the other hand, Pasma's offer of $450,000 was for a quite significant sum. It is likely to have at least equalled, if not exceeded, the trial preparation costs that Mr Tregidga and Ms Jenkins had incurred by that date. It is also important to note that the offer was put on the basis that Mr Tregidga and Ms Jenkins had no reasonable prospects of success in the proceeding. Having regard to all these factors, despite its timing, I consider the offer represented a genuine attempt at compromise of the proceeding.
18 The next question is whether Mr Tregidga and Ms Jenkins unreasonably failed to accept the offer. For the following reasons, I consider they did. First, and most importantly, by the time the offer was made, Mr Tregidga and Ms Jenkins would, as already observed, have been well advanced in their preparations for the original vacated trial. In those circumstances, the flaws in their case, which ultimately led to its complete failure, must have been readily apparent to them. That being so, if they had accepted the offer, they would have received $450,000 against the costs they had already incurred, and which, as it turned out, they would not have been able to recover. They would also have avoided the costs of a seven day trial. Conversely, they would have avoided inflicting the costs of that trial on Pasma. In those circumstances, it is not difficult to conclude that their rejection of the offer was unreasonable.
19 As to the other factors they have advanced, I do not consider the indemnity sought by Pasma placed it in a more advantageous position than that it ultimately achieved, namely the complete dismissal of the proceeding. Further, given that it was put on the basis that their claims were completely without merit and that was the ultimate outcome, I do not consider the so-called "rolled up" form of the offer is at all relevant. Finally, I also do not consider their counter-offer is relevant. Whatever its terms, I do not consider it could have affected the outcome described above. For these reasons, I have little hesitation in concluding that Mr Tregidga and Ms Jenkins unreasonably rejected Pasma's offer.
20 Finally, I do not consider any of the discretionary matters advanced by Mr Tregidga and Ms Jenkins weigh against the exercise of the discretion to make an indemnity costs order. In brief, I am not satisfied that Pasma improperly prolonged the trial. In my view, both parties were at fault for not properly pleading the ownership issue. Further, since Pasma was ultimately successful on the primary liability issues, it was not necessary to determine the proportionate liability issue. Nonetheless, I do not consider it raised that issue improperly because, in the prevailing circumstances, there were several parties who may have reasonably been considered to be the cause of the fire. I also do not consider Pasma's abandoned plea with respect to vicarious liability had any significant effect on the length of the trial. Finally, the contention that Pasma did not "vigorously pursue" certain matters at the trial is too vague and general to be of any moment.