Davies v Whitehaven Coal Mining Ltd (No 2)

The case involved an application for costs by the plaintiff against the defendant, where the defendant had made a settlement offer through a Calderbank letter. The offer was conditional upon the plaintiff withdrawing its claim and the defendant being indemnified against costs. The court was tasked with determining whether the plaintiff's refusal to accept the offer was unreasonable and whether the defendant was entitled to indemnity costs.

The central legal issue was whether the plaintiff's refusal to accept the defendant's offer, which included a condition for indemnity costs, was unreasonable and whether the defendant was entitled to those costs. The court needed to consider the circumstances under which such an offer could be refused and whether the refusal was justifiable based on the content of the offer and the context of the litigation.

The court examined the terms of the Calderbank letter and noted that it did not explicitly mention the defendant's entitlement to indemnity costs. The court found that it was not unreasonable for the plaintiff to refuse the offer without agreeing to the indemnity costs condition, as the terms of the offer were not clear and did not explicitly reference indemnity costs. Consequently, the court ruled that the defendant was not entitled to indemnity costs, as the plaintiff's refusal to accept the offer was reasonable under the circumstances.

The court's decision concluded that the plaintiff's refusal to accept the defendant's settlement offer was not unreasonable, and the defendant was not entitled to indemnity costs. The court did not order indemnity costs in favour of the defendant, upholding the plaintiff's position in the litigation.