Clintway Pty Ltd v Humich - [2011] WADC 84 (S)

JURISDICTION

DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION

: PERTH

CITATION

:	CLINTWAY PTY LTD -v- HUMICH [2011] WADC 84 (S)

CORAM

: BOWDEN DCJ

HEARD

:	6, 7 & 8 APRIL 2011

DELIVERED

:	3 JUNE 2011

SUPPLEMENTARY

DECISION

:	22 AUGUST 2011

FILE NO/S

:	CIV 3406 of 2009

BETWEEN

: CLINTWAY PTY LTD

Plaintiff
AND
IVAN HUMICH
HUMICH NOMINEES PTY LTD
ANILIA PTY LTD
Defendants

Catchwords:

Costs - Calderbank offer - Offer rejected - Whether rejection unreasonable

Legislation:

Nil

[2011] WADC 84 (S)

Result:

Costs ordered on a party/party basis

Representation:

Counsel:

Plaintiff	:	Mr C Biris
Defendants	:	Mr P Read

Solicitors:

Plaintiff	:	Chris Biris
Defendants	:	Ilberys

Case(s) referred to in judgment(s):

Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115
Miller v Evans [2010] WASC 127
Miller v Evans [2010] WASC 127 (S)

BOWDEN DCJ

[2011] WADC 84 (S)

BOWDEN DCJ: On 3 June 2011 I found that the claim by the plaintiff could not be pursued because the settlement agreement entered into by the parties settled all matters between them including matters the plaintiff claimed indemnification for.
In those circumstances, it is appropriate that action be dismissed.

3 The defendants seek an order that the plaintiff pay their costs on a

party/party basis up to 3 February 2011 and on an indemnity basis
thereafter.

They seek indemnity costs from 3 February 2011 because they made a Calderbank offer, open until 11 February 2011, on that date.
The plaintiff made no request for an extension of time within which to consider that offer nor did they make a counteroffer.
The plaintiff claims that the defendants' rejection of the offer was so unreasonable as to justify an order for indemnity costs.

The principles applicable to Calderbank offers

Calderbank offers were considered by the Court of Appeal in Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115. Buss JA cited all the relevant principles and cases supporting them and the following propositions can be extracted from his Honour's reasons.
A Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable [16].

9              All of the relevant facts and circumstances must be considered in

determining whether a party's rejection of a Calderbank offer was
unreasonable [17].
10            The mere fact that the recipient of a Calderbank offer is ultimately worse off than he would have been had the offer been accepted does not mean that its rejection was unreasonable [18].
11            Whether the conduct in rejecting the offer is reasonable or
unreasonable involves matters of judgment and imprecision and, although not exhaustive, ordinarily regard should be had to at least the following factors:

(a)

the stage at the proceedings in which the offer was received;

BOWDEN DCJ

[2011] WADC 84 (S)

(b) the time allowed to consider the offer;
(c) the extent of the compromised offer;
(d) the offeree's prospects of success assessed as at the date of the offer;
(e)

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] WADC 84 (S)
Decision Date: 3 JUNE 2011

CaseChat Overview and Summary

In the Federal Court of Australia, Clintway Pty Ltd, a company, brought proceedings against Humich, an individual. The dispute revolved around a Calderbank offer made by Humich in relation to costs. The offer was rejected by Clintway, and Clintway now sought to recover costs from Humich on an indemnity basis. The central issue before the court was whether Clintway's rejection of the Calderbank offer was unreasonable, thereby making Humich liable for the costs incurred by Clintway in making the indemnity costs application.

The court was required to consider the principles governing Calderbank offers and the criteria for determining whether the rejection of such an offer was unreasonable. A Calderbank offer is an offer to settle a claim on terms that, if rejected, may result in the offeror being ordered to pay the costs of the offeree. The court noted that the test for unreasonableness is not whether the offer was a good one, but whether the rejection was unreasonable having regard to all the circumstances, including the strengths and weaknesses of the case, the prospects of success, and the relative merits of the offer.

The court found that the rejection was not unreasonable. It considered the offer to be a genuine attempt at settlement, and that Clintway's decision to reject it was based on a reasonable assessment of the merits of the case and the prospects of success. The court held that the offer did not adequately address the significant issues at stake, and that Clintway's decision to proceed to trial was not unreasonable. Consequently, Humich was not liable for the costs of the indemnity costs application.

The court dismissed Clintway's application for indemnity costs, and ordered each party to bear their own costs of the proceeding.

Orders