Bonny Glen Pty Ltd v Country Energy (No 2)

Bonny Glen Pty Ltd (the plaintiff) and Country Energy (the defendant) were parties to proceedings in the Supreme Court of New South Wales. The dispute concerned the plaintiff's entitlement to costs following a judgment in its favour. The court was required to determine whether the defendant had unreasonably refused to accept *Calderbank* offers made by the plaintiff.

The central legal issue before the Court of Appeal was whether the costs orders made by the primary judge, which had largely disadvantaged the plaintiff, should be set aside. This required the court to consider the reasonableness of the defendant's refusal to accept the plaintiff's *Calderbank* offers, which are offers to settle made without prejudice save as to costs.

The Court of Appeal found that the defendant's refusal to accept the plaintiff's *Calderbank* offers was unreasonable. The court reasoned that the offers were made in good faith and were of a nature that a reasonable defendant, in the circumstances, ought to have accepted. Consequently, the court determined that the original costs orders were unjust.

Accordingly, the Court of Appeal set aside the costs orders made by the primary judge on 31 August 2007 and 2 October 2007. In their place, the court ordered that Country Energy pay Bonny Glen's costs of the proceedings below.