Portelli v Tabriska Pty Ltd (No 2)

In the matter of Portelli v Tabriska Pty Ltd (No 2), the Federal Court of Australia addressed a dispute concerning the assessment of costs. The applicant, Portelli, sought an order for the respondent, Tabriska Pty Ltd, to pay a significant portion of his legal costs. The dispute arose from a previous litigation where Portelli had been successful, and now, in the context of costs assessment, he sought to recover the expenses incurred during the earlier proceedings.

The court was tasked with determining whether the respondent's rejection of a Calderbank offer made by Portelli was reasonable. A Calderbank offer is a conditional offer to settle a claim on terms that includes a promise to pay the opponent’s costs if the offer is rejected but the outcome at trial is no better than the terms offered. The key issue was whether the rejection of such an offer could be deemed unreasonable, and if so, whether this could justify an order for costs.

The court examined the content and timing of the Calderbank offer, the nature of the proceedings, and the circumstances under which the offer was made. It found that the offer was not unreasonable given the significant disparity between the amount offered and the potential costs that could be incurred if the offer was rejected. The court concluded that the respondent's decision to reject the offer was not unreasonable, and thus, the applicant was not entitled to the costs he sought. Consequently, the court dismissed the application for costs.