Toyota Finance Australia Ltd v Gardiner (No 2)

Toyota Finance Australia Ltd (Toyota Finance) and Mr Gardiner were parties to litigation concerning a dispute that led to an offer of compromise being made by Toyota Finance. The proceedings were heard in the Court of Appeal of New South Wales, with McColl, Leeming and Payne JJA presiding.

The central legal issue before the Court of Appeal was whether the offer of compromise made by Toyota Finance, described as a "walk-away" offer, should be treated as an offer to which the usual costs consequences under the Uniform Civil Procedure Rules 1999 (NSW) applied. Specifically, the court had to determine if the offer, which effectively required Mr Gardiner to discontinue his proceedings without any payment from Toyota Finance, constituted a valid offer for the purposes of triggering the relevant costs rules.

The Court of Appeal reasoned that a "walk-away" offer, by its nature, does not involve an offer to pay money or to provide any other form of benefit to the offeree. Such an offer does not meet the requirements of an offer of compromise as contemplated by the Uniform Civil Procedure Rules, which are designed to facilitate settlement by offering a compromise of the claim, typically involving some concession or payment. Consequently, the court held that the "walk-away" offer was not a valid offer of compromise for the purposes of the rules.

The application to vary the costs order of 12 July 2016 was refused.