Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union (NSW Branch) (No 2)

In the case of Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union (NSW Branch) (No 2), the Court was asked to determine the appropriate costs to be awarded following a pre-trial offer of compromise made by the appellant, Port Kembla Coal Terminal Ltd (PKCT), and rejected by the respondent, Construction, Forestry, Mining and Energy Union (NSW Branch) (CFMEU). The dispute arose from the first instance proceedings and subsequent appeal, where the CFMEU had been unsuccessful. The primary focus of the court was whether the pre-trial offer of compromise by PKCT complied with the requirements of rule 20.26 of the Uniform Civil Procedure Rules 2005 (UCPR), and whether the CFMEU's refusal to accept the offer justified the award of indemnity costs.

The legal issues before the Court involved the interpretation and application of rule 20.26 of the UCPR, specifically whether the offer was made in accordance with the rule, whether a reasonable time was allowed for acceptance of the offer, and whether the offer was a genuine attempt to compromise. Furthermore, the Court had to consider whether a pre-trial offer of compromise could have any effect on the costs in subsequent appeal proceedings. The CFMEU argued that the offer was not in accordance with the rule due to the inclusion of a collateral term, the dismissal of their Notice of Motion, and that it did not allow a reasonable time for acceptance. They also contended that the offer was not a genuine attempt to compromise but rather a strategic move to trigger costs consequences.

The Court found that the offer by PKCT did comply with the requirements of rule 20.26 of the UCPR, despite the inclusion of a collateral term. The Court held that the purpose of the rule was to encourage parties to attempt to settle their disputes without the need for full litigation, and that the collateral term did not prevent the offer from being in accordance with the rule. The Court also found that a reasonable time was allowed for acceptance of the offer, and that it was a genuine attempt to compromise. As for the appeal proceedings, the Court held that a pre-trial offer of compromise could have an effect on the costs in subsequent appeal proceedings, but only if the offer was in accordance with the rule and a genuine attempt to compromise. Given the findings, the Court ordered that the CFMEU pay PKCT's costs on an indemnity basis in relation to the first instance proceedings and on the ordinary basis in relation to the appeal proceedings.