Wiesac Pty Ltd v Insurance Australia Limited (No 2)

The case of Wiesac Pty Ltd v Insurance Australia Limited (No 2) involved a dispute concerning indemnity costs within the context of civil proceedings in the Australian court system. The plaintiff, Wiesac Pty Ltd, sought indemnity costs from the defendant, Insurance Australia Limited, following a litigation process. The legal issue before the court was whether the refusal to accept an offer, which included a Calderbank letter, was unreasonable given that the matters raised were consistent with the findings in favour of the plaintiff at trial.

The court examined the nature and timing of the offers made by the plaintiff, which included a formal offer and a Calderbank letter. A Calderbank letter is a non-privileged offer to settle on terms that, if not accepted, can be used to argue for indemnity costs if the offeror subsequently prevails. The court had to determine if the refusal of such an offer was unreasonable, considering the alignment of the offer's terms with the trial's outcome. The court concluded that the refusal was unreasonable, given the consistency between the offer and the findings in the plaintiff's favour.

Ultimately, the court ruled that the plaintiff's refusal to accept the defendant's offers was unreasonable, thereby warranting the award of indemnity costs. However, the court ordered that the plaintiff pay the defendant's costs of the proceedings on the standard basis, indicating a nuanced approach to awarding indemnity costs despite finding the refusal unreasonable. This decision underscores the importance of evaluating the reasonableness of refusals in settlement offers, particularly those made in the form of Calderbank letters.