Kerr v Australian Executor Trustees (SA) Ltd; Australian Executor Trustees (SA) Ltd v Fuller and others trading as Sparke Helmore Lawyers (No 2)

Kerr v Australian Executor Trustees (SA) Ltd involved the plaintiff suing the first defendant and a number of other defendants in relation to alleged breaches of fiduciary duty and breaches of trust. The case was heard in the South Australian Supreme Court, where the plaintiff sought a determination of liability and damages. The first defendant, Australian Executor Trustees (SA) Ltd, pleaded a proportionate liability defence and cross-claimed against a number of other defendants. The court was required to consider the costs implications of the proceedings, including whether it was reasonable for the plaintiff to have brought the proceedings against the second to sixty-first defendants and the application of a Calderbank offer.

The court examined the principles regarding party/party costs, particularly in cases where proceedings involve multiple parties. The court considered whether it was reasonable for the plaintiff to have brought the proceedings against the second to sixty-first defendants, given that the first defendant had pleaded a proportionate liability defence and joined them by its cross-claim. The court also assessed the effect of a Calderbank offer on the costs outcomes. A Calderbank offer is an offer to settle on terms that are favourable to the opponent, which, if accepted, may result in the costs of the proceedings being awarded on a party/party basis. The court had to determine whether the offer was made in good faith and whether it was reasonable for the plaintiff to have rejected it.

The court concluded that it was reasonable for the plaintiff to have brought the proceedings against the second to sixty-first defendants, given the nature of the claims and the proportionate liability defence pleaded by the first defendant. The court found that the Calderbank offer was not made in good faith, as it was conditional on the withdrawal of certain claims, which the plaintiff had no obligation to accept. The court determined that the plaintiff was entitled to costs on a party/party basis from the first defendant and on an indemnity basis from the second to sixty-first defendants. The court also ordered that the plaintiff pay the costs of the second to sixty-first defendants up to the date of the Calderbank offer.

The court made orders that the plaintiff recover costs from the first defendant on a party/party basis and from the second to sixty-first defendants on an indemnity basis. The plaintiff was also ordered to pay the costs of the second to sixty-first defendants up to the date of the Calderbank offer. The court's decision provides guidance on the application of party/party costs in complex litigation involving multiple defendants and the assessment of Calderbank offers.