GPP Arundel Pty Ltd v Basford Pty Ltd (No 2)

In the case of GPP Arundel Pty Ltd v Basford Pty Ltd (No 2), the applicants, GPP Arundel, brought a claim against the respondents, Basford, which was subsequently dismissed. The respondents made a settlement offer under Calderbank, which required the applicants to pay 75% of the respondents' costs up to the date of the offer on the standard basis and for the claim to be dismissed. The applicants did not accept this offer, leading to the respondents seeking indemnity costs from the date of the offer. The applicants argued against this, stating that their decision not to accept the offer was not unreasonable or imprudent, considering the limited compromise offered and their prospects of success at the time of the offer.

The court was required to determine whether the costs of the proceeding should be awarded on the indemnity basis from the date of the offer. The applicants contended that they did not act unreasonably or imprudently by rejecting the offer, as the compromise offered was minimal and their prospects of success were not negligible. The respondents, on the other hand, argued that the applicants' refusal to accept the offer was unreasonable, and therefore, they should be awarded indemnity costs. The court had to weigh these submissions to determine the appropriate costs order.

The court found that the applicants did not act unreasonably in rejecting the offer, as the compromise was limited and their prospects of success were not entirely negligible. Consequently, the court dismissed the respondents' counterclaim and ordered that the applicants pay the respondents' costs of and incidental to the proceeding to be assessed on the standard basis if not agreed. This decision underscores the importance of assessing the reasonableness of a party's decision not to accept a Calderbank offer, considering the terms of the offer and the prospects of success at the time.