Ari v Decevic (No. 2)

The case of Ari v Decevic was heard in the Supreme Court of New South Wales. The dispute between the parties centred around the rejection of a Calderbank offer made by the defendant, Decevic, to the plaintiff, Ari. This offer was made prior to the service of evidence and sought to settle the matter with indemnity costs to the offeree. The plaintiff sought to challenge the defendant's entitlement to costs, arguing that the rejection of the Calderbank offer was unreasonable and not made in the spirit of the offer. The court was tasked with determining whether it was reasonable for the plaintiff to reject the defendant's Calderbank offer, whether the rejection before evidence had been served was reasonable, and whether the "walk away" offer constituted a genuine offer. Additionally, the court needed to decide whether the plaintiff had been provided with an appropriate opportunity to consider and deal with the offer.

The court examined the principles surrounding Calderbank offers and the expectations of conduct when such offers are made. It noted that a Calderbank offer carries with it an undertaking that if the offer is not accepted and the offeror subsequently succeeds in the proceedings, the offeree will pay the offeror's costs of the action on an indemnity basis. The court considered the circumstances under which the offer was made and whether the plaintiff had a reasonable basis for rejecting it. In particular, the court looked at whether the rejection was made in good faith and whether there were any factors that could justify the plaintiff's decision to decline the offer. The court also assessed whether the timing of the rejection, before evidence had been served, was reasonable, and if the "walk away" nature of the offer could be considered genuine. Furthermore, the court evaluated whether the plaintiff had an adequate opportunity to consider the offer before making a decision.

The court concluded that the rejection of the Calderbank offer was not reasonable, particularly given the circumstances under which it was made. It found that the timing of the rejection, before evidence had been served, was unreasonable and did not align with the spirit of the Calderbank offer. The court also held that the "walk away" nature of the offer did not detract from its genuineness. Moreover, the court determined that the plaintiff had been given an appropriate opportunity to consider the offer. As a result, the court found that the defendant was not entitled to indemnity costs. The plaintiff's challenge to the defendant's costs was upheld, and the defendant's claim for indemnity costs was dismissed.

The final orders of the court reflected its determination that the defendant was not entitled to indemnity costs. The plaintiff's challenge to the defendant's costs was successful, and the defendant's claim for indemnity costs was dismissed. The court's decision underscored the importance of considering the spirit of Calderbank offers and the need for parties to act reasonably when dealing with such offers.