Kemp v Ryan

The case of Kemp v Ryan involved the plaintiff, Kemp, seeking indemnity costs from the defendant, Ryan, following the resolution of a building dispute through consent orders. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was whether Kemp was entitled to indemnity costs based on a Calderbank offer made by Ryan. A Calderbank offer is a written offer to settle a case on terms that include a provision for indemnity costs if the offer is not accepted and the offeree ultimately obtains a more favourable outcome. The court needed to determine whether Ryan's offer was sufficiently clear and unambiguous to be capable of acceptance and thereby create a binding contract.

In considering the nature of the Calderbank offer, the court held that Ryan's offer did not unambiguously specify the terms on which indemnity costs would be payable. The offer lacked clarity regarding the precise conditions under which indemnity costs would apply, making it impossible for Kemp to accept the offer in a manner that would create a binding contract. Consequently, the court found that Ryan's offer was not capable of being accepted, and therefore, Kemp was not entitled to indemnity costs. The court also declined to order costs on a party-and-party basis, emphasising the need for clear and unambiguous terms in such offers to avoid potential disputes over their enforceability.

In light of the above, the court dismissed Kemp's application for an order that costs be assessed on an indemnity basis. Additionally, the court ruled that there should be no order as to the costs of the application. This decision underscores the importance of precision and clarity in drafting Calderbank offers to ensure they can be effectively accepted and enforced as binding agreements.