Insurance Australia Limited v HIH Casualty & General Insurance Limited (in liq) (No 2)

Insurance Australia Limited and HIH Casualty & General Insurance Limited (in liquidation) were the parties involved in this dispute, which was heard in the Supreme Court of Victoria. The primary issue at hand was the calculation of costs associated with claims for indemnity and equitable contribution, where the quantum did not exceed the one-half of the jurisdiction of the County Court. The dispute centred on whether the costs should be awarded on a lower scale in accordance with rule 63.24(1) of the Supreme Court (General Civil Procedure) Rules 2005.

The court needed to determine whether the proceeding was intertwined with the principal proceeding, which would warrant the application of the lower scale of costs. Additionally, the court was required to consider whether indemnity costs should be awarded, given that the respondent had made a Calderbank offer. A Calderbank offer is an offer to settle on terms favourable to the opponent, usually made without admission of liability, and if rejected, it may have implications for costs.

In its reasoning, the court found that the proceeding was indeed intertwined with the principal proceeding, and therefore, the lower scale of costs should apply. The court further determined that indemnity costs should not be awarded, as the Calderbank offer had not been accepted. The court held that the offer was not sufficiently advantageous to warrant such an award.

The court ordered that the costs of the proceeding be assessed and awarded on the lower scale provided for by rule 63.24(1) of the Supreme Court (General Civil Procedure) Rules 2005. Furthermore, indemnity costs were not to be awarded to either party.