By Ryan Attard, Law Clerk
Requirements for an effective Calderbank offer
Judge Strickland sitting as the appellate judge in an appeal from the Federal Circuit Court of Australia allowed the husband’s appeal against a costs order after finding that the trial judge did not account for all relevant circumstances at the time of the making of a Calderbank offer by the wife.
The wife instituted proceedings pursuant to which she sought “an adjustment of property and financial resources as is deemed just and equitable”, spousal maintenance and departure from administrative assessment of child support.
The wife made a Calderbank offer regarding property settlement, however did not provide, or reference, information which would enable the husband to reasonably assess the merits of the offer, notably what the wife proposed in respect of spousal maintenance and child support. The husband rejected the offer and made a counter-offer which was rejected by the wife.
Orders were made by the Court on 19 July 2019 for property settlement and the wife’s application for spousal maintenance and departure from administrative assessment of child support were dismissed.
Upon the wife’s application for costs, orders were made on 11 September 2019 pursuant to which the husband was required to pay the wife’s costs fixed at $62,000 by reason of his rejection of the Calderbank offer. The trial judge did not accept that it was unreasonable for the husband to accept the offer at the time it was made and that the offer was similar to, and more favourable than, the final property orders ultimately made.
In dealing with the husband’s appeal, Strickland J relied on Harris v Harris (1987) FLC 91-822 which is authority for the requirement that an offer must be expressed “with precision” and “in terms which are objectively capable of being clearly understood”. There is “no obligation on the offeree to seek to clarify the terms” of the offer.
His Honour paid attention to the lack of clarity regarding the parties’ assets and their respective values at the time of the wife’s Calderbank offer, referring to the trial judge’s description of the information as “rubbery”.
Referring to Pennisi v Pennisi (1997) FLC 92-774, the Court determined it was not unreasonable to reject the offer due to the lack of information regarding the parties’ financial circumstances and the lack of reference to what she proposed in respect of her other applications for spousal support and departure from administrative assessment, which would have been important for the husband to know in order to be able to assess whether he had the financial capacity to carry out the proposals under the wife’s offer. “If the recipient of the offer is demonstrably unable to comply with his or her obligations under the proposed settlement it is difficult to see how the offer could be relied upon.”
The Court allowed the husband’s appeal and set aside the costs orders made 11 September 2019.