Lo v Russell (No 2)

In the case of Lo v Russell (No 2), the appellants sought to challenge the refusal of the respondent to accept a Calderbank offer made before the trial. The offer, which was for a modest discount, was rejected by the respondent, who went on to be successful in the trial but ultimately unsuccessful on appeal. The primary focus of the appeal was to determine if the refusal of this offer was unreasonable under the circumstances. The legal issues that needed resolution revolved around the principles established in previous cases such as Stewart v Atco Controls Pty Ltd (in liq) [No 2], Miwa Pty Ltd v Siantan Properties Pte Ltd [No 2], and Crossman v Sheahan [No 2]. These cases highlighted the relevance of the trial outcome in assessing the reasonableness of refusing a Calderbank offer.

The court examined whether the refusal of the offer was reasonable given the modest nature of the discount and the subsequent trial outcome. It noted that while the respondent's success at trial might typically influence the assessment, the key consideration was the proportionality of the offer in relation to the risk of losing at trial. The court found that in this instance, the respondent's refusal was not unreasonable, taking into account the context and the principles established in previous cases. The court emphasised that the refusal was not disproportionately harsh, considering the modest nature of the offer and the potential risk involved for the respondent.

Consequently, the court ruled that the respondent's refusal of the Calderbank offer was not unreasonable. As a result, the appellants were awarded costs of the trial on a standard basis. This decision underscores the importance of evaluating the reasonableness of a Calderbank offer refusal in light of the specific circumstances of the case, including the nature of the offer and the outcomes at both trial and appeal levels. The court's ruling reinforces the need for careful consideration of such offers to avoid unjust cost implications.