Moyle v Quarles [No 4] - [2025] WASC 458

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   MOYLE -v- QUARLES [No 4] [2025] WASC 458
CORAM:   LUNDBERG J
HEARD:   28 OCTOBER 2025
DELIVERED          :   14 NOVEMBER 2025
FILE NO/S:   CIV 1770 of 2016
(Consolidated with CIV 1279 of 2022)

BETWEEN: ALAN LESLIE MOYLE
Plaintiff
AND
ALEXANDER FRANS HENRI QUARLES DE QUARLES as executor of the estate of LESLIE MOYLE
First Defendant
CHERIE PATRICIA CAMPBELL in her own capacity and as trustee for THE TESTAMENTARY TRUST CREATED IN THE WILL OF THE LATE LESLIE MOYLE FOR THE BENEFIT OF JOANNE MARGARET CAMPBELL
Second Defendant

FILE NO/S: CIV 2197 of 2022
BETWEEN: MOYLE HOLDINGS PTY LTD
Plaintiff
AND
ALEXANDER FRANS HENRI QUARLES DE QUARLES
First Defendant
QUARLES PTY LTD
Second Defendant

Catchwords:

Costs - Whether indemnity costs should be ordered - Calderbank offers made by the second defendant in the Company Proceeding - Offers required the parties to agree the terms of a settlement deed - Offers proposed the inclusion of terms as to mutual releases and settlement of claims beyond those in the proceedings - Whether these matters were such as to render non-acceptance of the offers by the plaintiff as not unreasonable - Exercise of the discretion

Legislation:

Rules of the Supreme Court 1971 (WA), O 24A
Supreme Court Act 1935 (WA), s 37.

Result:

Application for indemnity costs dismissed.

Category: B

Representation:

CIV 1770 of 2016

(Consolidated with CIV 1279 of 2022)

Counsel:

Plaintiff	:	S P Tomasich
First Defendant	:	S M Standing
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Croftbridge
First Defendant	:	Arns & Associates
Second Defendant	:	Mossensons

CIV 2197 of 2022

Counsel:

Plaintiff	:	S P Tomasich
First Defendant	:	S M Standing
Second Defendant	:	T Langdon

Solicitors:

Plaintiff	:	Croftbridge
First Defendant	:	Arns & Associates
Second Defendant	:	Barry Nilsson Lawyers (WA)

Case(s) referred to in decision(s):

Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107
Calderbank v Calderbank [1975] 3 All ER 333
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 (2009) 41 WAR 1
Frigger v Lean [2012] WASCA 66
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435
Jones v Bradley (No 2) [2003] NSWCA 258
Little v Saunders [2004] NSWSC 655
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (S)
Olivera Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd (No 3) [2023] NSWSC 1500
Rayney v Roberts [2022] WASC 360 (S)
Sim Development Pty Ltd v Greenvale Property Group Pty Ltd [2018] VSCA 201
Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29
SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
Wirepa v Hill (No 2) [2023] NSWSC 1654

LUNDBERG J:

A. Introduction

On 17 October 2025, the court delivered reasons for judgment in these actions (Reasons), referred to as the Estate Proceeding and the Company Proceeding.
On 28 October 2025, the court heard from the parties as to the orders which should be made in the actions to give effect to the reasons, including as to the appropriate costs orders.
Orders were made on that date that an account be undertaken on a wilful default basis to ascertain the quantum of the loss suffered by the Estate, arising from the breach of the executor's duty. An account has also been ordered to ascertain the quantum of the loss arising from the breach by Mr Quarles of his duties as a director of Moyle Holdings.
I have adjourned the question as to the relief which should be granted in several other respects until the conclusion of the account process, including as to the costs between Mr Moyle and Mr Quarles in the Estate Proceeding, and between Moyle Holding and Mr Quarles in the Company Proceeding.
The remaining issue, on which I heard submissions from the parties at the hearing on 28 October 2025, is the question whether indemnity costs should be ordered in favour of QPL, as against Moyle Holdings, in the Company Proceeding, given the existence of rejected settlement offers purportedly made in accordance with the principles in Calderbank v Calderbank.[1] I have addressed that issue in these reasons.
[1] Calderbank v Calderbank [1975] 3 All ER 333.

B. The claims against QPL

Two claims had been advanced by Moyle Holdings at trial, both of which I concluded should be dismissed.
First, a claim was advanced that QPL breached a term of the contract implied by law between the parties, to the effect that QPL would exercise the professional care, skill and diligence of an accountant and financial advisor in carrying out or assisting in the directorial and managerial services for Moyle Holdings. See Reasons [781] to [825].
Second, Moyle Holdings alleged that, by reason of the contractual engagement of QPL, QPL owed a tortious duty of care to Moyle Holdings to exercise the professional care, skill and diligence of an accountant and financial advisor in carrying out or assisting in the directorial and managerial services for the plaintiff. See Reasons [826] to [833].
There is no dispute the action brought by Moyle Holdings as against QPL should be dismissed, having regard to the court's reasons. I made an order to that effect on 28 October 2025, in accordance with the Reasons at [781] to [833] and [835].

C. The position of QPL as to costs

QPL sought a costs order that Moyle Holdings pay QPL's costs of the action, to be assessed as follows:
(a)through until 19 January 2024, the costs be assessed on a party and party basis; and
(b)from 20 January 2024, the costs be assessed on an indemnity basis.
The basis for QPL's claim for indemnity costs is said to be the plaintiff's unreasonable decision not to accept the offer made on 21 December 2023 in the form of a Calderbank offer (the First QPL Offer).[2] The QPL Offer expired on 19 January 2024. Counsel for QPL submitted that the court should exercise its discretion to award costs to the second defendant on an indemnity basis from 20 January 2024 onward.
[2] Affidavit of Michael Massarotto affirmed on 27 October 2025, Attachment MM1.
In substance, the terms of the First QPL Offer were that QPL would pay to Moyle Holdings the sum of $75,000 (inclusive of costs), the claim would be dismissed and there would be no order as to costs. The First QPL Offer was contained in a two page letter from the solicitors for QPL, Barry Nilsson. Some features of the letter ought be noted.
First, the second defendant's solicitors explained that they maintained the view there was no prospect of Moyle Holdings being successful should the action proceed to trial.
Second, the solicitors described the plaintiff's case as involving an artificial view of the actions of Mr Quarles, without regard to the underling factual basis and circumstances in which Mr Quarles was acting. A range of factual matters and aspects of the proceeding were noted by the solicitors, not all of which the court has accepted. In essence, the letter sought to persuade the reader that the factual basis for the Moyle Holdings' claim would not be sustained at trial, and the claim against QPL would fail.
Third, the letter set out the terms of the offer as follows, which included a proposed deed of settlement and resolution of claims beyond those raised in the proceedings (see [4(c)] and [4(d)] below):
4.Despite the matters set out above, with a view to avoiding the on-going costs in defending this Action, we are instructed to make the following offer on behalf of our client:
(a)Our client will pay your client the total sum of $75,000 inclusive of costs and interest (Settlement Sum);
(b)The Action, as against our client, be dismissed with no orders as to costs;
(c)Our respective clients enter into a deed of settlement, on terms to be agreed with you, which will incorporate full releases between our respective clients in relation to the services provided by our client to your client and the Action;
(d)The settlement is in full and final settlement of all claims arising directly or indirectly out of, or in any way connected to the services provided by our client to your client, including (but not limited to) the matters raised in the Action; and
(e)The Settlement Sum will be paid within 28 days of the parties duly executing the foreshadowed deed of settlement.
5. This offer is open for acceptance until 5:00pm, 19 January 2024 (AWST), at which time it immediately lapses.
6.We consider the above to be a genuine offer of compromise of the Action.
7.If your client does not accept the above offer and obtains a result at trial on terms that are not more favourable to it than this offer, we are instructed to rely on this letter in an application for costs on an indemnity basis against your client in accordance with Calderbank v Calderbank [1975] 3 All ER 333 and Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298.
The plaintiff did not respond to the First QPL Offer by 19 January 2025, or at all.
QPL made a further offer on 11 February 2025, on similar terms, save that the amount offered sum was increased to $100,000 and Moyle Holdings would recover the amount it had paid into court as security for QPL's costs (the Second QPL Offer).[3] The Second QPL Offer was also met with silence.
[3] Affidavit of Michael Massarotto affirmed on 27 October 2025, Attachment MM1.
QPL filed submissions in support of its costs position. In the circumstances, it was submitted that it was unreasonable for Moyle Holdings to not accept the First QPL Offer (or the Second QPL Offer). Counsel for QPL emphasised the low prospects of the claim, the fact there was much work to be done before the matter would be ready for trial, and the fact the further cost involved (for both parties) would have been avoided had the offer been accepted.
Counsel submitted that, by comparison to the low prospects of success, the First QPL Offer was generous. It provided the plaintiff with 'an opportunity to dispense with an unmeritorious claim without incurring further costs, without incurring liability for the second defendant’s costs, while receiving a substantial payment'.

D. The position of Moyle Holdings as to costs

Moyle Holdings accepts it should pay QPL's costs. It opposes those costs being assessed on an indemnity basis, however.
Counsel for Moyle Holdings emphasised that the mere fact that the recipient of a Calderbank offer is ultimately worse off than they would have been had the offer been accepted, does not mean that the rejection of the offer was unreasonable.
Moyle Holdings submits, in the circumstances, it was not unreasonable for Moyle Holdings to reject the offer. Two points are highlighted in this regard.
First, it is said the terms of the offer were not clear. The offer was subject to further negotiation to agree the terms of a deed. No proposed terms were offered or suggested. In short, the offer letter did not sufficiently define the terms of the agreement, which would then be reduced into a deed. Rather, the letter expressly identified that further negotiation and agreement was required in order to implement the offer. It is submitted that it was not unreasonable to reject an offer:[4]
…that is, in truth, subject to further negotiation (particularly given there was no certainty agreement would be reached). This raises a question as to whether the offer was a valid Calderbank offer at all. But in any event, it could not be unreasonable to reject an offer that was not certain, not capable of immediate acceptance and subject to further negotiation between the parties (and it being uncertain whether that further negotiation would have been fruitful).
[4] Moyle Holdings submissions dated 27 October 2025 [29(a)].
Second, the offer described as being broader than resolving the present proceedings. Specifically, it was submitted that, by the First QPL Offer, QPL sought full releases in relation to the services provided by QPL to Moyle Holdings. It was submitted that such a term went beyond the scope of the issues in the proceeding and no order could have been made following judgment to release QPL from all claims that Moyle Holdings might have against QPL. Such claims were not the subject of the Company Proceeding and it was not appropriate for the offer to be subject to such releases being given. Yet, it was submitted, the offer was conditional on full releases being given.

E. Relevant principles

(1) General principles

It is trite that the court has a wide discretion to award costs.[5]
[5] Supreme Court Act 1935 (WA), s 37.
The discretion regarding costs has been described as 'absolute, unconfined or unfettered, although a discretion that must be exercised judicially, not arbitrarily or capriciously, or on grounds unconnected with the litigation'.[6]
[6] Frigger v Lean [2012] WASCA 66 [53].
The central and overriding principle in assessing costs is that of doing substantial justice to the parties in each particular case, there being 'no better test than the test of what is fair and just between the parties'.[7]

(2) Principles relating to Calderbank offers

[7] Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 [5] as cited in G E Dal Pont, Law of Costs (4th ed, 2018, LexisNexis Butterworths) (Dal Pont) at [6.15]

One basis for exercising the discretion to award indemnity costs is the rejection of an offer made in accordance with Calderbank v Calderbank.[8] A Calderbank offer is an offer to settle proceedings made on the basis that, if it is not accepted and the offeree does not receive at trial a judgment which is more favourable than the offer, the offer will be relied on by the offeror on the question of costs.[9]
[8] Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 (2009) 41 WAR 1 [16] – [18] (Buss JA, as his Honour then was, Wheeler JA agreeing).
[9] Gething M, Joseph R and Tomasi B, Civil Procedure : Western Australia (Vol 1), [24A.11.1]
Such offers may legitimately be made notwithstanding the express procedure provided for in O 24A of the Rules of the Supreme Court 1971 (WA) (RSC), which addresses the same subject matter. The regime in O 24A RSC does not operate as an exclusive code for making settlement offers with costs consequences.[10]
[10] McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (S) [93] (Beech J, as his Honour then was).
An offer made pursuant to the principles in Calderbank v Calderbank will not justify an award of indemnity costs unless its rejection was unreasonable.[11] This is an essential element, which involves matters of judgment and impression. The enquiry is objective. The party who makes the Calderbank offer that is rejected bears the onus of satisfying the court that it should make an award of indemnity costs in their favour.[12] All of the relevant facts and circumstances must be considered in determining whether a party's rejection of such an offer was unreasonable. The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable – the matter is not to be approached by way of a presumption.[13]
[11] Ford Motor Company of Australia Ltd v Lo Presti [16] (Buss JA), citing Jones v Bradley (No 2) [2003] NSWCA 258 [7] - [9], among other authorities.
[12] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 [82].
[13] Ford Motor Company of Australia Ltd v Lo Presti [16] – [18] and [31] (Buss JA), referring to SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 [37] and Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 [23], among other authorities.
In general terms, the factors which are said to be relevant to the reasonableness of a party in rejecting a Calderbank offer, while not closed, include the following:[14]
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree's prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed; and
(f) whether the offer foreshadowed an application for indemnity costs in the event that the offeree rejected it.
[14] Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [25]; and Rayney v Roberts [2022] WASC 360 (S) [15] (Hill J).
I turn now to consider authorities in which extraneous terms have been incorporated into settlement offers.

(3) Inclusion of extraneous terms

Both counsel made reference to authorities in which courts had considered the effect on the efficacy of a Calderbank offer of the inclusion of what might broadly be described as extraneous terms.
In Wirepa v Hill (No 2),[15] the Supreme Court of New South Wales made indemnity costs orders against a plaintiff based on the unreasonable rejection of a Calderbank offer. By way of obiter comments, Slattery J observed that he would not have made an indemnity costs order based upon the second such offer, which had been drafted in different terms to the first offer.
[15] Wirepa v Hill (No 2) [2023] NSWSC 1654 (Wirepa v Hill).
The second offer in that case dealt with the terms of the proposed deed of settlement and release in more detail than the first offer. In particular, the offer stated that a deed of settlement and release would be prepared to reflect the terms, 'which shall include: (a) mutual releases; (b) non-disparagement clauses; and (c) confidentiality clauses'.
His Honour indicated that the inclusion of mutual releases was a reasonable and integral part of a settlement offer on Calderbank terms. Indeed, Slattery J noted that this would have been the effect of the outcome of the proceedings upon the entry of judgment, which would have had the effect of ending the proceedings between the parties.[16]
[16] Wirepa v Hill [21].
His Honour expressed a different conclusion in relation to the inclusion of the disparagement and confidentiality clauses.
Slattery J noted that the inclusion of such clauses in an offer would 'probably have made the Calderbank letter ineffective, as rejection of the offer would have been reasonable'.[17] This was because such requirements stipulated an outcome which the defendants in that case could not have achieved in the litigation.
[17] Wirepa v Hill [23].
Counsel for the plaintiff referred me to a decision of the Supreme Court of South Australia, in Slater v Ecosol Pty Ltd (No 2).[18] In that case, Blue J considered an application for indemnity costs in connection with the dismissal of a defamation action. More than one Calderbank offer had been made by the successful defendant. The terms of the relevant offer included terms as to the sale of various shares, the discontinuance of the actions with no order as to costs, the settlement being strictly confidential and subject to confidentiality provisions, the settlement being subject to full releases, and the settlement being subject to non-disparagement clauses.[19]
[18] Slater v Ecosol Pty Ltd (No 2) [2024] SASC 29 (Slater v Ecosol).
[19] Slater v Ecosol [128].
Blue J described the terms of the offer as being 'very different to an offer to consent to judgment'. His Honour described the term of the second offer as to the release of 'any other potential claim' against certain parties as being extraneous to the action, as were the terms dealing with:
(a)the sale of the shares;
(b)the proposed obligation not to disparage the opposite parties in future; and
(c)the obligation to keep the terms of settlement confidential.[20]
[20] Slater v Ecosol [130] – [131].

His Honour explained his assessment of these extraneous terms, in the context of the 'better off analysis' and the 'unreasonable non-acceptance analysis', as follows:
[132]The mere fact that the offer included a term providing for the sale of Mr Slater’s shares does not automatically, in and of itself, preclude the making of a special costs order by reason of Mr Slater’s non-acceptance. However, it does impact the better off analysis and the unreasonable non-acceptance analysis.
[133]In relation to the sale of the Slater shares, Mr Slater had demonstrated a very high, if not all-consuming, interest in his shares in Ecosol. He had no obligation to sell them for any price. Ecosol and Mr Smith did not adduce evidence of the monetary value of those shares. This renders it impossible to undertake the better off analysis. In addition, the inclusion of this extraneous condition is an additional reason, further to the reasons given below in respect of the third offer, why it was not unreasonable for Mr Slater to reject the offer.
[134]The inclusion of the term relating to release of any other potential claim against Ecosol or Mr Smith also does not automatically, in and of itself, preclude the making of a special costs order by reason of Mr Slater’s non-acceptance. However, it does impact the better off analysis and the unreasonable non-acceptance analysis.
[135]Again Mr Slater had demonstrated a very high interest in what he regarded as egregious conduct by Ecosol and Mr Smith. He had no obligation to release them from any other claims. It is impossible to assess the value of such a release. This renders it impossible to undertake the better off analysis. In addition, the inclusion of this extraneous condition is an additional reason, further to the reasons given below in respect of the third offer, why it was not unreasonable for Mr Slater to have rejected the offer.
[136]Even without those two extraneous provisions, I would have concluded (for the reasons given below in relation to the third Ecosol offer) that the non-acceptance of the first Ecosol offer should not give rise to a special costs order.
It is apparent from his Honour's reasons that he had similar concerns in relation to the terms included in the third offer.[21]
[21] Slater v Ecosol [137] – [204].
The inclusion of mutual releases concerning claims known and unknown was the subject of consideration by Elkaim AJ in Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd (No 3).[22] In his Honour's ex tempore reasons, he noted there was 'some substance' to the point taken about the inclusion of the mutual releases. His Honour accepted that 'a settlement of proceedings will often include terms to ensure that the whole of the dispute between the parties is finalised', but expressed the view that 'the extension to any possible future claim renders the rejection of the offers to be not unreasonable'.[23]
[22] Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd (No 3) [2023] NSWSC 1500 (Oliveri Legal).
[23] Oliveri Legal [30] (emphasis added).
Nonetheless, his Honour proceeded to conclude that an indemnity costs order was appropriate, having regard to the recipient party's failure to respond to the offer, recognising that party 'could have suggested an amendment to the release or some other term with which it was comfortable'.[24] His Honour had regard to the size of the offer, and the time it was made, and concluded that an award of indemnity costs was 'fair and just' in the exercise of the discretion.
[24] Oliveri Legal [31].
The final decision to which I was referred by counsel is Sim Development Pty Ltd v Greenvale Property Group Pty Ltd,[25] a decision of the Victorian Court of Appeal. Kyrou, McLeish and Niall JJA addressed a Calderbank costs question at [74] to [85]. There were multiple offers and counter-offers in the case. The relevant initial settlement offer had been expressed to be subject to the drafting of terms of settlement containing 'standard mutual releases, mutual non-disparagement clauses and a confidentiality clause', with the responsive offer indicating its preparedness to consider documenting the settlement more fully in terms 'which may also include [a] non-disparagement clause and a confidentiality clause'.[26]
[25] Sim Development Pty Ltd v Greenvale Property Group Pty Ltd [2018] VSCA 201 (Sim Development).
[26] Sim Development [41].
The trial judge held that there was every reason to believe that the parties would have reached agreement about the above matters, had the appellant accepted the respondent's offer. The trial judge found that the offers met the requirements for a valid Calderbank offer, and concluded that the appellant had acted unreasonably in not accepting either offer (and, in particular, the second offer).[27]
[27] Sim Development [42].
The Court of Appeal unanimously rejected this ground of appeal. The following points explain their analysis.
First, the court accepted that the clarity with which an offer is expressed is relevant to determining whether it was unreasonable of the offeree not to accept it, but emphasised that the reasonableness of a party not accepting an offer of settlement must be judged against all the relevant circumstances.[28]
[28] Sim Development [76].
Second, the offer in question had made clear what subjects would be covered in the terms of the settlement, distinguishing the facts in Little v Saunders.[29] That was a matter in which Campbell J had refused an application for special costs 'because the offer required the parties to enter into a deed of settlement with no way of knowing what it would contain, such that acceptance of the offer would result in a contract that was void for uncertainty'.[30] In the instant case being considered by the Court of Appeal, their Honours were of the view that the recipient of the offer could reasonably understand the boundaries of the offer, having been 'plainly spelt out together with standard releases and other clauses commonly found in terms of settlement'.[31]
[29] Little v Saunders [2004] NSWSC 655.
[30] Sim Development [75].
[31] Sim Development [77].
Third, the Court of Appeal gave weight to the appellant's own letter in response, which had included an offer to settle the proceedings, and which in effect indicated it had no difficulty with subsequently documenting such terms. Indeed, the letter stated that, 'If the offer above is accepted our clients are prepared to consider more fully documenting the settlement in terms acceptable to the parties which may also include non-disparagement clause [sic] and a confidentiality clause'.[32]
[32] Sim Development [78].
The Court of Appeal concluded:
[79] In the circumstances, there was every reason to think, as the judge found, that if the substantive terms of [the respondent's] offer had been acceptable to [the appellant], the parties would have negotiated terms of settlement dealing with the matters yet to be specifically spelt out. Those matters were of a kind typically contained in terms of settlement and both parties indicated their preparedness to discuss such matters once the commercial dispute was resolved.
[80] In the circumstances, the fact that these matters were not the subject of express stipulation in the offer did not deprive the offer of clarity or make it reasonable for [the appellant] not to accept it.

F. Disposition

The authorities which I have discussed above serve to reinforce two points, which stand as general principles in this field. The first is that a Calderbank offer will not justify an award of indemnity costs unless its rejection was unreasonable. The second is that all of the relevant facts and circumstances must be considered in determining this question.
Further, these authorities support an approach that, where a Calderbank offer includes additional or extraneous aspects beyond the boundaries of the relief sought in the proceedings and beyond the issues raised in the proceedings, it is necessary that the court, in undertaking the necessary analysis, give careful attention to:
(a)the clarity of the offer, and whether the recipient was able to comprehend the scope of the offer, in an objective sense; and
(b)whether the inclusion of extraneous matters complicates (or indeed renders impossible) the assessment as to whether the non-acceptance of the offer was unreasonable and whether the offeree would have been better off if he or she had accepted the offer, relative to the outcome achieved through the court's judgment.
The analysis is necessarily fact sensitive.
Having regard to these principles, I consider the contention advanced by Moyle Holdings should be accepted. I find that QPL has not discharged the onus of persuading the court that the rejection of the First QPL Offer (or the Second QPL Offer, for that matter) was unreasonable. I have reached that view for the following reasons.
First, it must be accepted that the First QPL Offer was generous (as was the Second QPL Offer), relative to the outcome achieved in the proceedings, and these offers afforded the plaintiff sufficient time to consider whether to accept or reject the proposal. The offers were also made at points in time in the proceedings at which the plaintiff was fairly able to assess its position in the litigation. The offers alerted the recipient to the costs consequences which might follow, as well. That said, these matters are significantly outweighed by the following considerations, concerning the lack of clarity in the offers and the inclusion of extraneous matters.
Second, the terms of the offers lacked clarity. In particular, the offers were subject to further negotiation by the parties to agree the terms of a settlement deed, with no terms for that deed being proposed, other than full releases, the payment terms, and the resolution of the Company Proceeding. This has a direct impact on the analysis as to whether the rejection of the offers was unreasonable or not. .
Unlike the factual setting before the Victorian Court of Appeal in Sim Development, there are no objective indicia in the present case which might lead the court to conclude that the parties would have readily negotiated the requisite terms.
In my view, it is highly relevant to the analysis of reasonableness that the First QPL Offer was not certain, was not capable of immediate acceptance, and was subject to further negotiation between the parties.
Third, it is a significant feature of the offers that they drew in matters beyond the scope of the issues in the Company Proceeding, which could not properly have been the subject of orders following any judgment in the action. The terms of the offers were not confined to the issues raised in the proceedings.
The offers, if accepted, would have required Moyle Holdings to provide full releases in relation to the services which had been provided to Moyle Holdings by QPL, which had served as its accounting firm for a lengthy period of time. The language of the offers squarely demonstrates the intended scope as travelling beyond the extant proceedings. The offers proposed that there would be 'full releases between our respective clients in relation to the services provided by our client to your client and the Action' and stated the settlement was to be:
…in full and final settlement of all claims arising directly or indirectly out of, or in any way connected to the services provided by our client to your client, including (but not limited to) the matters raised in the Action.
Within the proceedings, the plaintiff rightly observes that QPL would be entitled to its costs in the event the court found in its favour, and QPL would also have had the benefit of a res judicata precluding the claims being reagitated thereafter. But QPL could not have obtained relief from the court at the conclusion of the proceedings by which Moyle Holdings released it from all liability it might have including in respect of matters not the subject of the proceedings.
I am thus unable to conclude in the circumstances that the non-acceptance of either offer made by QPL was unreasonable, or that Moyle Holdings would have been better off if it had accepted the offer, relative to the dismissal of the claims, as has now transpired. That is largely because the offers required Moyle Holdings, in return for accepting the payment of $75,000 or $100,000 (as respectively proposed in the First QPL Offer and the Second QPL Offer), to release QPL from all other claims which Moyle Holdings might have, which had not yet been litigated, and which were not the subject of these proceedings.
The offers made by QPL might strike one as being entirely sensible from a commercial perspective, there being an evident desirability to 'wrap-up' all claims between the parties as part of such a settlement. However, the breadth of the offers renders the unreasonableness analysis more than problematic in the circumstances of this case.

G. Conclusion

For the foregoing reasons, I consider the discretion of the court should be exercised to refuse the application for indemnity costs in favour of QPL. The costs order will be confined to party and party costs. I will ask the solicitors for the parties to provide a minute of the costs orders to be made to give effect to these reasons, including the orders required for the release of amounts paid into court by the plaintiff as security.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
IR
Associate to the Hon Justice Lundberg
14 NOVEMBER 2025