When making an offer on the steps of court can pay off
Although the question of the (un)reasonableness of a party’s rejection of a Calderbank letter is one which requires an analysis of all the facts and circumstances, sending such an offer to resolve a proceeding too close to trial can be a wasted effort, particularly if the offer is deemed not to have been open for the other party’s acceptance for a reasonable period of time.
In a recent matter in the New South Wales Supreme Court,[1] the defendants served a Calderbank letter four days before trial — including a weekend. The plaintiffs rejected the offer to settle, and went on to lose at trial. The defendants applied for indemnity costs as a consequence of the letter’s rejection.
Rees J, delivering the Court’s judgment, allowed indemnity costs. Her Honour stated:
Ordinarily, I would not countenance an application for indemnity costs made on the basis of a Calderbank offer made so shortly before the commencement of a trial. However, in this case, the defendants’ offer was made in response to a Calderbank offer made by the plaintiffs earlier that same day. [The defendants’ offer, her Honour later observed, had not come ‘out of the blue’.] Also on that day, the parties served their outline of submissions, chronologies, objections, list of issues for determination and lists of authorities. … This flurry of activity indicates that the parties were then ensconced with their respective counsel preparing for trial and were thus well-placed to receive immediate advice on whether or not the Calderbank offers were worthy of consideration and acceptance, or not.
The decision suggests that, somewhat counterintuitively, there may at times be some force in making an offer to settle when very near the steps of court.
[1]: SSABR Pty Ltd v AMA Group Ltd (No 2) [2024] NSWSC 24.
[2]: Ibid [24]–[25] (emphasis in original).