J & D Rigging Pty Ltd v Agripower Australia Limited

J & D Rigging Pty Ltd brought an action against Agripower Australia Limited, contending that Agripower had breached the terms of a contract for the supply of equipment. The dispute reached the Supreme Court of Queensland, where the primary judge found in favour of J & D Rigging, awarding damages. Agripower appealed the decision, and the Court of Appeal reversed the primary judge's decision, ruling in favour of Agripower. In the initial proceedings, Agripower had made a Calderbank offer to J & D Rigging, which was declined. The court was tasked with determining whether the refusal to accept the Calderbank offer was unreasonable or imprudent and, if so, whether J & D Rigging was entitled to indemnity costs.

The court considered the principles governing indemnity costs in light of the Calderbank offer. It examined the circumstances under which the offer was made, the terms of the offer, and the reasoning behind the refusal. The court assessed whether the offer was fair and whether J & D Rigging had a reasonable basis for rejecting it. It found that the offer was reasonable and that the refusal was not justifiable under the circumstances. Consequently, the court held that the decision to reject the Calderbank offer was imprudent.

The court ordered that J & D Rigging was entitled to indemnity costs from Agripower. The reasoning was that the rejection of the Calderbank offer was unreasonable, and as a result, J & D Rigging should be compensated for the costs incurred in pursuing the appeal. The court emphasised that the principle of indemnity costs was intended to deter parties from rejecting reasonable settlement offers without proper justification. As a result of the court's decision, J & D Rigging was awarded indemnity costs from Agripower for the appeal proceedings.