In Hail Creek Coal Holdings Pty Ltd & Ors v O’Loughlin & Ors (No 2) [2024] QLC 6, the court was tasked with determining the allocation of legal costs following a dispute over compensation for advanced mining activities on the O’Loughlins' property, Exevale Station. After a series of legal submissions and the rejection of a Calderbank offer by the O’Loughlins, which would have halted proceedings in favour of a settlement more beneficial to them than the court's decision, the court ultimately ruled in favour of Hail Creek Coal Holdings and its co-applicants. Consequently, the O’Loughlins were ordered to cover the applicants' legal costs on a standard basis from the beginning of proceedings until October 17, 2023. However, following the hearing's start on October 18, costs were to be calculated on an indemnity basis, reflecting the failure of the O’Loughlins to accept a reasonable settlement offer. This case highlights the critical importance of Calderbank offers in legal negotiations, demonstrating how the refusal of a reasonable offer can significantly impact cost liabilities in litigation, especially under the scrutinizing principle that costs follow the event, taking into consideration the success on dominant issues and the reasonableness of the parties' actions in the context of settlement offers.
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