Case: Calderbank v Calderbank [1975] 3 All ER 333
Outcome: cited
In the present case, the applicant alleges the one head of loss and damage: it paid more for Broadmoor and Lower Wilmot than they were truly worth. Each respondent was facing the same monetary liability (as I have held, recent statutory provisions for proportionate liability were not applicable). It was open to either respondent to pay the $800,000 and, failing agreement with the other respondent, to proceed with its cross-claim, in the course of which it could have made its own Order 23 offer or a Calderbank offer (see Calderbank v Calderbank [1975] 3 All ER 333). If either respondent had agreed to pay $800,000, it would have been significantly better off than it now is, each respondent being liable to the applicant for $894,568. True it is Mantach now has a right of indemnity against the Robinsons for the full amount, but as its counsel accepted, it would have had a right of recovery against the Robinsons back in March had it accepted the $800,000 offer. And Mantach would have had greater prospects of effective recovery had the Robinsons' assets not been depleted by a fourteen day trial. Even if Mantach had to run a case against the Robinsons to judgment, that would have been a substantially less expensive exercise than the three cornered contest which in fact took place. 17 Put another way, there would have been no practical difference if the applicant had addressed an offer to the Robinsons offering to accept $800,000, and an otherwise identical document addressed to Mantach also offering to accept $800,000. It would be an odd and formalistic result if the fact that the offers were in the one document made a critical difference. 19 In MGICA there was no Order 23 offer but there had been a Calderbank letter which Lindgren J at 238 accepted as relevant. His Honour pointed out that s 43, and perhaps also 23, of the Federal Court of Australia Act 1976 (Cth) empower the Court to award costs on an indemnity basis. The discretion must of course be exercised judicially. His Honour at 239 reviewed a number of single instance Federal Court decisions and in particular John S Hayes &amp; Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 204-206 and Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, 7 February 1996). In these cases indemnity costs were refused because, although the offeree achieved a worse result at judgment, it could not be said that there was "no chance of success" ( John S Hayes at 206) or that in not accepting the offer the offeree's conduct was "plainly unreasonable" ( Sanko at 9). 21 Recently a Full Court of the Federal Court in WSA Online Limited v Arms (No 2) [2006] FCAFC 108 said at [16], citing MGCIA : A Calderbank offer does not carry the same presumptive entitlement to indemnity costs, but the public policy of encouraging settlement of litigation should nevertheless lead the Court to make an order for indemnity costs where a Calderbank offer has been made in terms which are clear and where it is appropriate to do so. It is worth noting that one of the aspects of the offer being considered in WSA Online was that it was made to a number of parties and one of them could not accept it independently without the agreement of others. Nevertheless the Full Court said at [18] this "was not a matter which conclusively operates against the costs order sought". In King at [8] the later Full Court cited WSA Online with no suggestion of disapproval.