Wiggins Island Coal Export Terminal Pty Limited v Civil Mining & Construction Pty Ltd

This case involved an appeal against orders that costs follow the event for each of a successful claim and counterclaim. Notably, the Court gave consideration to whether an offer to settle pursuant to r 353 UCPR could cover both a claim and counterclaim (or whether they could not, due to their being separate proceedings); whether it was possible to consider the “net result” of orders on a claim and counterclaim for the purposes of rr 360 and 361 UCPR; and whether an offer expressed to be made pursuant to the Rules, but defective under them, was effective as a Calderbank offer, or could otherwise be considered in exercising the discretion as to costs.

Holmes CJ and Philippides JA and Brown J

29 January 2021

Background

Wiggins Island Coal Export Terminal Pty Ltd (“Wiggins”) appealed against costs orders made in proceedings in which Civil Mining & Construction Pty Ltd (“Civil Mining”) succeeded on its claim, and Wiggins succeeded on its counterclaim. [1]. The net result of the two judgments was that Wiggins was required to pay Civil Mining ~$1.7 million. [1].

The costs issues arise from the fact that Wiggins had made an “all up offer”, purportedly pursuant to Ch 9 Pt 5 of the Uniform Civil Procedure Rules (“UCPR”), to settle “all claims in the proceeding”. [2]. Wiggins contended that, once interest was added, the offer was worth ~$1.8 million, and therefore more than the net result achieved by Civil Mining. [2]. It argued that its offer was effective under rr 360 and 361 of the UCPR, with the cost consequences provided by those Rules. [3]. Alternatively, it argued that its offer was effective as a Calderbank offer. [3].

At first instance, Flanagan J concluded that Wiggins’ offer was not effective either under r 360 or r 361 UCPR, or as a Calderbank offer. [5]. His Honour ordered each party to pay the other’s costs in the proceeding (of the claim and counterclaim respectively), in accordance with the general Rule. [5]. Wiggins appeals against those orders, re-agitating the arguments mentioned above. [7].

Whether Wiggins’ offer was valid under r 353 UCPR

Apart from the appeal issues raised by Wiggins, Civil Mining filed a Notice of Contention which argued that Wiggins’ offer was not valid under r 353 UCPR. [7]. That rule provides that “[a] party to a proceeding may serve on another party to the proceeding an offer to settle 1 or more of the claims in the proceeding”. [9]. Civil Mining alleged that Wiggins’ counterclaim was a separate proceeding from that commenced by its claim, and that an offer to settle could not be made in respect of more than one proceeding. [12].

Holmes CJ considered that the “weight and sense” of the UCPR as a whole was against regarding counterclaims as independent proceedings for the purposes of r 353. [24]. The “more obvious reading” of the expression “claims in the proceeding” in r 353 was that “it refers to causes of action or claims for relief, rather than a plaintiff’s claim, a counterclaim or claim against a third party”. [29]. In this case Wiggins’ offer was to settle “all claims in this proceeding”, which “was reasonably to be read as all the claims made in the plaintiff’s claim and all the claims the defendant made by counterclaim”. [30]. Accordingly, Wiggins’ offer was within the language of r 353. [31].

Whether Wiggins’ offer was effective under rr 360 and 361 UCPR

The trial judge considered that rr 360 and 361 required a comparison between the offer and the order which the plaintiff obtained – and “for that comparison it was necessary to compare the part of the offer relating to the claim under consideration with the orders obtained on the claim”, a comparison which was “not possible in the present case”. [32]. The offer by Wiggins to settle both claim and counterclaim for a single amount meant that it “could not demonstrate that the orders Civil Mining obtained on its claim were less favourable to it than the offer or that the outcome of its counterclaim was more favourable to itself than its offer”. [34]. His Honour therefore concluded that rr 360 and 361 had no application. [34].

Wiggins argued that the comparison could be made between the net result of different orders on the claim and counterclaim. [40]. It contended that an amendment in 2014, to replace the word “judgment” with “order” in rr 360 and 361, was of significance, and wide enough to include the net outcome of a proceeding. [35]. It was suggested that this broader construction was consistent with the purpose of Pt 5 UCPR, in promoting the expeditious resolution of proceedings at minimum expense, including through early settlement. [37].

Holmes CJ considered that, while the word “order” was likely intended to widen the application of the rules, it “cannot extend to reading those rules as though ‘order’ can embrace the net result of different orders”. [40]. In this case there were two judgments – on the claim and counterclaim – each with different orders. They could not be regarded as a single order for the purposes of rr 360 and 361. [40]. It remained impossible for the necessary comparisons to be made for the purposes of the rules. As a result, the “trial judge was right to conclude that the offer was not one to which rr 360 and 361 could be applied”. [43].

Whether Wiggins’ offer was effective as a Calderbank offer or could otherwise influence the discretion as to costs

The trial judge considered that, as there was nothing in the Wiggins offer to indicate that it intended to rely on the relevant letter except for the purposes of the UCPR, it could not be relied upon as a Calderbank offer. [45]. After a review of the authorities, Holmes CJ agreed, considering that a “party who receives an offer expressed to be made under the Rules, and conveying no intent that it be used for any other purpose, should be entitled to rely on what it represents”. [74]. Accordingly, the offer could not take effect as a Calderbank offer. [70]–[72].

In summary, her Honour concluded that the Wiggins offer was not effective as a Calderbank offer, nor effective “for any other purpose”. [70], [75].

Conclusion

Philippides JA and Brown J generally agreed with Holmes CJ, with the result that the appeal was dismissed. [83]–[84].

W Isdale