Forte Sydney Construction Pty Ltd v N Moit and Sons (NSW) Pty Ltd (No. 2)

Forte Sydney Construction Pty Ltd, as the plaintiff, brought an action against N Moit and Sons (NSW) Pty Ltd, the defendant, for various contractual claims arising from a construction project. The matter was before the Supreme Court of New South Wales, which had to decide on the defendant’s application for indemnity costs, arguing that the plaintiff’s failure to accept a Calderbank offer was unreasonable. The court had to consider the principles surrounding Calderbank offers and determine the point at which indemnity costs should commence.

The court examined the nature of Calderbank offers and the circumstances under which a plaintiff's refusal to accept such an offer could be deemed unreasonable. It noted that a Calderbank offer is a conditional offer to settle made without admission of liability. The court found that the defendant’s offer, which included a waiver of interest and a generous offer of costs, was reasonable under the circumstances. The plaintiff’s refusal to accept this offer, without a valid reason, was deemed unreasonable. The court also needed to decide the precise date from which indemnity costs should be awarded.

In reaching its decision, the court held that the plaintiff's unreasonable refusal to accept the Calderbank offer warranted indemnity costs. It found that the defendant's offer was fair and that the plaintiff had no justifiable reason to reject it. Consequently, the court ruled that the costs should be assessed on an ordinary basis until 13 September 2021 and on an indemnity basis thereafter. Additionally, the costs of this application for indemnity costs were to be paid by the plaintiff to the defendant on an indemnity basis.