Aquatec-Maxcon Pty Ltd v Barwon Region Water Authority (No 3)

Aquatec-Maxcon Pty Ltd was engaged by Barwon Region Water Authority to carry out engineering works. A dispute arose between the parties regarding the works, leading to litigation. The case was before the Court of Appeal in Victoria, where Aquatec-Maxcon sought a determination on the issue of costs. The central issue for the Court was whether an offer of compromise made by Aquatec-Maxcon was capable of acceptance under the rules of court.

The Court found that the offer of compromise made by Aquatec-Maxcon was not capable of acceptance because it did not meet the requirements of the rules of court. The offer was conditional upon the acceptance of Aquatec-Maxcon's interpretation of certain provisions of the contract, which the Court found was not a valid condition. The Court held that the offer was not capable of acceptance because it was not a genuine offer of compromise, as required by the rules of court.

The Court further held that the issue of costs should be determined on the basis of proportionate liability, rather than on the basis of the offer of compromise. The Court found that Aquatec-Maxcon was entitled to costs on a proportionate basis, but that Barwon Region Water Authority was also entitled to costs for the work it had completed. The Court ordered that the parties bear their own costs of the appeal.

This decision highlights the importance of ensuring that any offer of compromise made in litigation is capable of acceptance under the rules of court. It also emphasises the need for parties to carefully consider the basis on which costs will be determined in any given case.