Bigby v Kondra (No 2)

The plaintiffs brought an action against the two defendants seeking relief from the consequences of the defendants' conduct in relation to a property development. The matter proceeded to judgment in favour of the plaintiffs. The plaintiffs had made a formal offer to settle the proceeding, which the defendants had rejected. The plaintiffs subsequently sought their costs on the indemnity basis, as permitted under UCPR r 360. The defendants argued that the offer to settle was not a genuine compromise, and that there had been other offers made that were not properly considered. The second defendant also made a Calderbank offer, which was wrongly repudiated by the first defendant.

The court examined the nature of the offer to settle and the subsequent Calderbank offer. It found that the formal offer to settle was sufficiently unambiguous and constituted a genuine compromise. The court rejected the defendants' argument that other offers had not been properly considered. The court held that the first defendant was liable to indemnify the second defendant for the costs ordered against the first defendant. The court further ordered that the plaintiffs should exhaust their means of enforcement against the second defendant before seeking to recover those costs against the first defendant.

The court ordered that the defendants pay the plaintiffs’ costs of and incidental to the proceeding, to be assessed on the standard basis up until 15 April 2016 and on the indemnity basis thereafter. The second defendant was ordered to pay the first defendant’s costs of and incidental to the proceeding, less the sum of $37,000, on the indemnity basis. The second defendant was also ordered to indemnify the first defendant in respect of its liability to the plaintiffs in relation to the costs ordered in the judgment. The court further directed that, in respect of the costs ordered, the plaintiffs shall exhaust their means of enforcement and recovery against the second defendant before seeking to recover those costs against the first defendant.