RESOLUTE MINING TEACHES COMMISSIONER OF STATE REVENUE THE PERILS OF IGNORING CALDERBANK OFFERS
Resolute Mining Ltd v Commissioner of State Revenue (No 2) [2020] QSC 302 (1 October 2020)
This case involves the appellant making a settlement offer to the respondent after completely succeeding in its appeal. The appellant alleges that the commissioner rejected such offers unreasonably.
Facts:
The appellant succeeded completely in its appeal against the decision of the respondent (the commissioner) to disallow an objection to the commissioner’s assessment and reassessment (the assessments) of the transfer duty payable on an agreement to transfer land found in a written instrument (the Funding Agreement). The orders required the commissioner to repay to the appellant the difference between amount paid pursuant to the reassessment and the appellant’s true liability for transfer duty, and also to pay the appellant interest on the overpaid amount.
When those orders were pronounced, the parties were invited to make submissions on costs, as had been their request at the hearing. The appellant made the first offer of settlement about three and a half months after it commenced the proceeding. The commissioner instructed his solicitor to reject the first offer. The second offer was made about six months after the first offer was rejected. It was materially in the same terms as the first offer. The commissioner did not respond to the second offer.
The appellant submits the commissioner’s rejection of the first offer was unreasonable and his failure to accept the second offer was also unreasonable. The first offer was made at an early stage but, by the time the second offer was made, the appellant’s case was clear and the respondent must have known he did not have reasonable prospects of challenging it.
Issue:
Is the rejection of offers by the commissioner unreasonable?
Held:
Perhaps, at the time of the first offer, the commissioner anticipated some case might be developed that would have reasonable prospects of challenging the appellant’s case. By the time of the second offer, the commissioner must have known that he had developed no such case.
In the circumstances, the second offer was a genuine offer of a realistic compromise. The commissioner’s failure to accept it was unreasonable and imprudent. An order that the commissioner pay the appellant’s costs to be assessed on the indemnity basis from the date it failed to accept the second offer will serve the purpose of encouraging the compromise and shortening of litigation. There is no reason to conclude it would deter parties with genuine defenses or with good prospects from resisting lesser claims.
Conclusion:
Orders should be made to the effect that the commissioner pay the appellant’s costs of the proceeding.
