Moon v Whitehead (No 2)

The Full Court of the Supreme Court of Western Australia considered an application for indemnity costs following the rejection of a Calderbank offer. The dispute arose from an appeal concerning the reasonableness of a Calderbank offer made by the respondent, Mr. Whitehead, to the appellant, Ms. Moon.

The central legal issue before the Full Court was whether the appellant's rejection of the respondent's Calderbank offer was unreasonable, thereby justifying an award of indemnity costs in favour of the respondent. The Court was required to assess the reasonableness of the offer in light of the circumstances at the time it was made and the subsequent outcome of the appeal.

The Court reasoned that an award of indemnity costs is an exceptional remedy and requires a high degree of unreasonableness in the rejection of a Calderbank offer. In this instance, the Court found that while the appellant's rejection of the offer may not have been the most prudent course, it did not reach the threshold of unreasonableness necessary to depart from the usual order for costs. The Court applied the principle that the discretion to award indemnity costs should be exercised cautiously, and the onus is on the party seeking such costs to demonstrate that the other party's conduct in rejecting the offer was clearly unreasonable.

Consequently, the Full Court refused the application for indemnity costs.