Denham Constructions Pty Ltd v Islamic Republic of Pakistan (No 3)

Denham Constructions Pty Ltd, a construction company, brought a case against the Islamic Republic of Pakistan over a construction contract dispute. The matter was heard in the Supreme Court of the Australian Capital Territory. The central issue was whether the defendant's failure to accept an offer of settlement was unreasonable, considering the defendant's position under the Building and Construction Industry (Security of Payment) Act 2009 (ACT). Additionally, the court had to determine if the Attorney-General, who intervened in the case, was entitled to any costs associated with the hearing.

The court found that the defendant's refusal to accept the offer of settlement was unreasonable, as the offer was clear and unambiguous. The court held that the defendant's non-acceptance should be assessed against the policy of the Security of Payment Act, which encourages timely and fair resolution of disputes. The court further held that the Attorney-General, who intervened in the proceedings, was not entitled to costs despite the case's constitutional significance. The court reasoned that the intervention was not sufficient to warrant an order for costs in the Attorney-General's favour, as the statutory provisions only addressed orders against the Attorney-General.

The court ruled that the defendant must pay the plaintiff's costs of the proceedings, on a party and party basis up until a specific date, and thereafter on a solicitor and client basis. The court did not make any other orders regarding the costs of the proceedings. This decision highlights the importance of clear and unambiguous offers of settlement in construction disputes and the limited circumstances under which an intervener may be entitled to costs.