Dr Leo Shanahan v Jatese Pty Ltd [No 2]

Dr Leo Shanahan commenced proceedings against Jatese Pty Ltd, alleging oppressive conduct by the company. The dispute came before the Supreme Court of New South Wales. The plaintiffs sought various forms of relief, including declarations of oppressive conduct, orders for accounts, and an injunction. They argued that the conduct of the company was oppressive and that they were prejudiced as a result. However, the plaintiffs did not establish any economic consequences arising from the conduct complained of.

The primary legal issue before the court was whether the costs should follow the event or whether an apportionment of costs should be made. The court was also required to consider whether the offers of compromise made at an early stage, which proposed judgment for the defendants with no order as to costs, should be taken into account in determining the costs order. The plaintiffs argued that the offers of compromise were not genuine and should not be considered. Conversely, the defendants argued that the offers of compromise should be taken into account, and that the costs should follow the event.

The court held that the costs should follow the event, meaning that the plaintiffs, as the unsuccessful party, should bear the costs of the proceedings. The court found that the offers of compromise made at an early stage did not involve a genuine offer of compromise because they did not address the substantive relief sought by the plaintiffs. Therefore, the court declined to make an order for indemnity costs based on those offers of compromise. The court emphasised the importance of genuine offers of compromise in determining the costs order and noted that the offers of compromise in this case were not genuine.

The court made no order for indemnity costs based on the offers of compromise and directed that the costs of the proceedings should follow the event.