A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2)

In the matter of A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2), the dispute involved an offer of compromise made by McConnell Dowell Constructors (Aust) Pty Ltd to A J Lucas Drilling Pty Ltd. The offer was made in accordance with the Supreme Court (General Civil Procedure) Rules 2005. The central issue before the court was whether the offer of compromise was valid and whether the plaintiff had obtained a judgment more favourable than the terms of the offer. The plaintiff sought to have the costs order made on 29 August 2008 varied, while the defendant sought to have the costs paid on a solicitor/client basis. Additionally, the court had to consider the impact of an uncertain Goods and Services Tax (GST) clause in the offer of compromise.

The court had to determine whether the judgment sum obtained by the plaintiff was more favourable than the terms of the defendant's offer of compromise. The defendant relied on Rule 26.08(3) of the Supreme Court (General Civil Procedure) Rules 2005, which provides that if the judgment sum is not more favourable than the terms of the offer, the court may order the costs of the proceeding to be paid by the plaintiff from the date of the offer. The court also had to consider whether the GST clause in the offer of compromise created uncertainty, and if so, whether this uncertainty affected the validity of the offer. Furthermore, the court needed to decide whether the plaintiff's conduct during the trial warranted the defendant to be reimbursed for its costs on a solicitor/client basis.

The court found that the judgment sum obtained by the plaintiff was not more favourable than the terms of the defendant's offer of compromise. The court also held that the uncertain GST clause in the offer of compromise did not render the offer invalid. The court ordered that the costs of the proceeding be paid by the plaintiff from the date of the offer. The court further held that the plaintiff's conduct during the trial warranted the defendant to be reimbursed for its costs on a solicitor/client basis. The court found that the plaintiff's conduct, particularly after 7 December 2007, was in obdurate disregard of the trial judge's reasons, which justified the defendant's claim for costs on a solicitor/client basis.

In light of the above, the court ordered that the costs of the proceeding be paid by the plaintiff from the date of the offer, and that the defendant's costs subsequent to 7 December 2007 be paid on a solicitor/client basis. The court also ordered that the parties bear their own costs of the proceeding from 5 September 2007.