Bahamad v Wong (No. 2)

The case of Bahamad v Wong (No. 2) involved a dispute between the plaintiff, Bahamad, and the defendants, Wong. The matter pertained to costs orders following a settlement of the plaintiff's claim for relief under section 88K of the Conveyancing Act 1919, which sought the creation of an easement over the defendants' properties. The proceedings had settled after three days of hearing, with the parties agreeing that the plaintiff would pay the defendants' costs of the proceedings up to and including the first day of the hearing. The Court's first judgment included a specified gross sum costs order under section 98(4)(c) of the Civil Procedure Act 2005, ordering the plaintiff to pay the defendants' costs of the second and third days of the hearing. The quantum of the specified gross sum costs order was fixed in the first judgment, but a Calderbank offer was made by the defendants prior to the costs argument and was now before the Court.

The primary legal issues before the Court were whether an indemnity costs order should be made in respect of the contest over a specified gross sum costs order and whether sufficient time was allowed for the plaintiff to accept the defendants' Calderbank offer. The Court considered the difficulties encountered by the offeree, when no clear period for acceptance by the offeree is set out in the offer and the offer is withdrawn after a short period. The Court also discussed whether the offeree had sufficient evidence and submissions to hand properly to consider the offer. Furthermore, the Court examined the relationship between the complexity of the material to be considered by the offeree and the length of time allowed for acceptance of the offer. The Court also discussed the form of Calderbank offers and the need for them to clearly warn that non-acceptance of the offer may result in an application for indemnity costs.

After considering the aforementioned factors, the Court found that an indemnity costs order should be made in respect of the contest over a specified gross sum costs order. The Court held that the plaintiff had not been given sufficient time to consider the defendants' Calderbank offer. The Court noted that the offer was withdrawn after a short period and that the plaintiff did not have sufficient evidence and submissions to hand properly to consider the offer. The Court emphasised the importance of Calderbank offers clearly warning that non-acceptance of the offer may result in an application for indemnity costs. The Court's final orders included an indemnity costs order in favour of the defendants, reflecting the Court's findings on the legal issues presented in the case.