Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd (No 3)

The case involved a dispute between Oliveri Legal Pty Ltd and Cassegrain Tea Tree Oil Pty Ltd. The litigation arose from an earlier case in which Oliveri Legal sought an injunction against Cassegrain, claiming that Cassegrain had infringed their intellectual property rights by selling essential oils. The matter was settled by a consent order, which included an indemnity costs order. The present case involved a subsequent application by Oliveri Legal for costs on an indemnity basis for the proceedings leading up to the consent order.

The primary legal issue before the court was whether it was unreasonable for Cassegrain to reject an offer from Oliveri Legal, which was made pursuant to the terms of the Calderbank principle. The offer required both parties to mutually release each other in respect of all claims, both known and unknown, and to remove the caveats pending appeal. The court had to determine whether the rejection of the offer constituted unreasonable conduct, thereby entitling Oliveri Legal to indemnity costs.

The court found that the Calderbank offer was a significant one, as it sought a release from all claims. The offer was reasonable and not oppressive, and the rejection of the offer was considered unreasonable conduct. The court held that the rejection of the Calderbank offer was a significant factor in determining the entitlement to indemnity costs. The court also noted that the removal of the caveats pending appeal was another factor supporting the entitlement to indemnity costs. The court held that it was open to the primary judge to conclude that the rejection of the Calderbank offer constituted unreasonable conduct, and that Oliveri Legal was entitled to indemnity costs.

The court allowed the appeal in part, setting aside the order for costs on the standard basis and substituting an order for costs on an indemnity basis. The order was made against Cassegrain and in favour of Oliveri Legal. The order also required Cassegrain to remove the caveats pending appeal.