Australia: Offers of compromise and Calderbank offers in the Supreme Court of Tasmania and costs ramifications

Last Updated: 17 November 2012
Article by Louise Cooper

Calderbank offers

Where a party has unreasonably failed to accept a Calderbank offer, the letter of offer may be tendered in support of an application for costs and, in particular, any application for indemnity costs. For a party who chooses to make a Calderbank offer, the offer should be expressed to be such. In this jurisdiction the usual practice is to head the letter "Without prejudice save as to costs".

Offers of compromise

Pursuant to r.280 of the Supreme Court Rules 2000 ("SCR"), parties may make an offer of compromise by offering to:

  1. Pay/Accept a nominated sum of money. Plaintiffs may do so after giving credit to the defendant for any set-off or counterclaim raised by the defendant against the plaintiff, stating whether the offer requires the defendant to pay the whole, or a stated proportion, of the plaintiff's costs.
  2. Accept/Concede a percentage of the claim.
  3. Give/Accept any relief that it is contended is sufficient to dispose of the whole action or one or more causes of action.

Pursuant to r.281, an offer of compromise must be in writing and is to contain the following:

  1. The title of the proceeding.
  2. The name of the party making the offer and the name of the party to whom the offer is made.
  3. A statement that it is served in accordance with Part 9 of the SCR.
  4. The cause(s) of action to which the offer relates
  5. Whether or not the offer is made in addition to any payment into Court previously made by the offerer under Part 8 of the SCR.

The offer of compromise may also include an offer to pay/accept costs on a specified scale. Typically an offer of compromise includes provision for payment of costs as agreed or taxed.

An offer of compromise remains open for at least 14 days after service (r.280(7) and r.283) and must be made before trial (r.280(6)).

If there are multiple defendants alleged to be jointly/severally liable and a right of contribution or indemnity is alleged to exist between them, then in order to be protected by the costs consequences under the SCR the offer of compromise must be made so as to resolve the claim against all defendants (r.290). If the offer is made by multiple defendants, then the defendants are jointly/severally liable to the plaintiff for the whole amount of the offer (r.290).

Costs ramifications

The power to award costs is discretionary pursuant to r.57 of the SCR and s.12 of the Supreme Court Civil Procedure Act 1932. A successful litigant is generally entitled to an award of costs (Oshlack v Richmond River Council (1998) 193 CLR 72 per McHugh J at [67]).

To place yourself in optimal position to apply for costs, it is best practice to make any offer, be it a Calderbank offer or an Offer of Compromise under the SCR, on a plus costs basis. In any event, pursuant to r.284 of the SCR, if a defendant accepts a plaintiff's offer of compromise then, subject to the terms of the offer, the defendant is to pay the plaintiff's costs up to the day of service of the offer unless otherwise ordered.

Generally, there is more certainty as to the costs consequences for offers of compromise compared to Calderbank offers because of the relevant provisions under the SCR as set out below. For Calderbank offers the Court will have regard to all relevant circumstances in exercising its discretion in relation to costs.

Pursuant to r.289 of the SCR:

  1. Unless it is otherwise ordered, a plaintiff is entitled to an order for costs against a defendant taxed on a solicitor-client basis if judgment is no less favourable to the plaintiff than the terms of the offer.
  2. Unless it is otherwise ordered, a plaintiff is entitled to an order for costs against a defendant, up to and including the day of service of the offer, on a party and party basis and the defendant is entitled to an order for costs against the plaintiff after the service of the offer on a party and party basis if the judgment is no more favourable to the plaintiff than the terms of the defendant's offer.

In considering the exercise of its discretion and whether to "otherwise order", the Court will have regard to whether failure to accept an offer was reasonable. Further, the potential for modification of the ordinary rule that costs will follow the event depends on the circumstances of each case. This was discussed in Hughes v Western Australian Cricket Association (Inc) (1986) ATPR ¶40-748, where the successful applicant had failed on more issues than he had succeeded. At 48,136 Toohey J stated the applicable principles in relation to costs as follows:

  1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. Ritter v Godfrey (1920) 2 KB 47.
  2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. Forster v Farquhar (1893) 1 QB 564.
  3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. Cretazzo v. Lombardi (1975) 13 SASR 4 at 12.

Tasmanian cases

Tennent J in Evans v Dawson (No 2) BC201203663 made reference to the South Australian case of Morris v McEwen [2005] SASC 284, in discussing the interaction between Calderbank offers and offers of compromise under the relevant rules:

"A court may have regard to a Calderbank letter even though an offer in accordance with the Rules of Court could have been lodged. The second matter suggests that there are some limitations on the circumstances in which it will be appropriate to attach any weight to a Calderbank letter. It suggests that in order for effect to be given to a Calderbank letter, it should be framed in terms which are consistent with the spirit and intent of Rule 40. In particular, for effect to be given to a Calderbank letter where an offer in accordance with the Rules of Court could have been lodged, the Calderbank letter should not impose more onerous obligations on the recipient than would an offer filed in accordance with the Rules. ...To the extent that a defendant departs from that régime, it runs the risk that the Court will regard the manner or content of its offer as being unreasonable and, therefore, as not warranting any alteration of the usual position as to costs.

In considering whether to give a Calderbank letter the same effect as an offer lodged pursuant to Rule 40, a number of matters will be relevant. These will include: whether or not an offer could have been lodged pursuant to Rule 40; any difficulties associated with the framing of an appropriate offer; any difficulties occurring because of the involvement of other parties in the litigation; the proximity of the trial at the time when the offer was made and the time available to the plaintiff in which to consider the offer; the commitments to which the plaintiff may be subject at that time; and the extent to which, if at all, the circumstances of the offer, or its terms and conditions, differ from the circumstances, or terms and conditions, of an offer lodged in accordance with Rule 40. This is not intended to be an exhaustive list of the matters which may be relevant."

In O'Pray v Olbrich [2012] TASSC 3, Wood J stated in relation to Calderbank offers and costs:

"Ordinarily, costs are awarded on a party and party basis unless there are particular circumstances which justify a departure from this practice: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) [2002] FCA 1294 at [22]. The power of the court to award costs is an unfettered discretionary power and there is not a closed category of circumstances which justify an order departing from the usual approach of the court: Safeway [22], Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 233. If the justification for seeking indemnity costs or solicitor and client costs is non-acceptance of an offer of settlement, the party seeking such costs bears the onus of establishing that the non-acceptance was imprudent or plainly unreasonable: Safeway at [28]. I glean from these authorities the more general proposition that the party seeking the exceptional order faces the task of persuading the court that the particular facts and circumstances before the court warrant the making of an order for the payment of costs on a solicitor and client basis."

Wood J also referred to the earlier decision of Slicer J in Poulson and noted the discretionary nature of any consideration of a Calderbank offer:

"It was held that the making of a Calderbank offer and its rejection, without more, might justify a costs order...Thus, the court's wide discretion would permit such an offer to be taken into account but, in considering the merits of the application, there are strong reasons why a mere Calderbank offer and its rejection would not provide sufficient basis for a solicitor and client costs order...that a solicitor and client costs order is exceptional, and the making of such a costs order on the basis of a refusal of a Calderbank offer, even more exceptional."


There may be cogent reasons throughout negotiations for making a Calderbank offer (for example if proceedings have not yet commenced or if it is necessary to limit the time of the offer to less than 14 days). However, ultimately, for the strongest protection to argue costs – particularly if an application is to be made for solicitor/client or indemnity costs – then you are best placed if you can rely on an offer of compromise made on a costs plus basis and in accordance with the SCR.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.