AGL Sales (Qld) Pty Ltd v Dawson Sales Pty Ltd (No 2)

AGL Sales (Qld) Pty Ltd brought an action against Dawson Sales Pty Ltd concerning contractual disputes. The case came before the court for a determination on costs, following a Calderbank offer made by the plaintiff which the defendants had rejected. The primary issue was whether the rejection of the offer was unreasonable and if the judgment was more favourable to the plaintiff than the terms of the offer, warranting a departure from the general rule regarding costs.

The court examined the circumstances surrounding the Calderbank offer, considering whether the defendants' rejection was justified. The court also assessed if the outcome of the case was more favourable to the plaintiff compared to the terms of the offer. Furthermore, the court deliberated on the distribution of costs, particularly focusing on the significant amount of trial time spent on issues related to Good Engineering and Operating Practice, which ultimately proved to be unnecessary. Despite the plaintiff's failure on many points related to these practices, the court recognised the success on the principal argument.

In reaching its decision, the court determined that the defendants' rejection of the Calderbank offer was indeed unreasonable. Consequently, the court decided to depart from the general rule that costs follow the event, and ordered the defendants to pay all of the plaintiff’s costs of the proceedings, including any reserved costs, to be assessed. This ruling was influenced by the significant time spent on unnecessary factual issues and the plaintiff’s ultimate success on the principal argument.