Aghajanian v Stanley Thompson Valuers Pty Ltd

The case of Aghajanian v Stanley Thompson Valuers Pty Ltd dealt with a dispute between the plaintiffs, who were seeking damages for alleged negligent misstatements, and the defendants, a firm of valuers. The plaintiffs claimed that the defendants' valuation report was flawed, leading to financial loss. The matter was heard in the Supreme Court of New South Wales. The central legal issues revolved around the principles governing the awarding of costs on an indemnity basis, particularly in light of the plaintiffs' conduct throughout the litigation, including their responses to settlement offers.

The court was required to determine whether the plaintiffs' conduct was reasonable and whether the defendants were entitled to costs on an indemnity basis. Key considerations included the plaintiffs' response to the defendants' settlement offer made via a Calderbank letter and the overall hopelessness of the plaintiffs' case. The court examined whether the plaintiffs' decision to reject the settlement offer was reasonable, taking into account all circumstances at the time of the offer. It also considered the plaintiffs' conduct throughout the litigation and whether it was reasonable in light of the prospects of success of their claims.

The court concluded that the plaintiffs' conduct was unreasonable and that their case was hopeless. The court found that the plaintiffs had unreasonably rejected the defendants' settlement offer, which was made in good faith and was a genuine attempt to resolve the dispute. The court also found that the plaintiffs' case had no reasonable prospect of success, given the evidence and arguments presented. Consequently, the court departed from the general rule and ordered the plaintiffs to pay the defendants' costs on an indemnity basis. The court's reasoning emphasised the importance of considering all relevant factors, including settlement offers and the reasonableness of the parties' conduct, when deciding on costs.