Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd

In the case of Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd, the parties were engaged in a dispute over indemnity costs, with Rickard Constructions seeking costs against Rickard Hails Moretti. The case was heard in the Supreme Court of New South Wales. The third defendant had previously sent a Calderbank letter and made a separate offer of compromise before the trial, which Rickard Constructions had rejected. The court was required to determine whether the Calderbank offer was reasonable and whether Rickard Constructions' rejection of the offer was unreasonable. The reasonableness of the offer was to be determined objectively, without any question of principle.

The court considered the principles governing indemnity costs and the application of the Calderbank principle. The court acknowledged that the Calderbank offer was an attempt to settle the dispute and avoid the costs and risks associated with litigation. The court emphasised that the reasonableness of the offer was to be assessed objectively, based on the information available at the time of the offer, and without regard to the outcome of the litigation. The court also noted that the rejection of a Calderbank offer could potentially lead to an order for indemnity costs if the rejection was found to be unreasonable.

After carefully considering the evidence and the arguments presented by both parties, the court found that the Calderbank offer was reasonable. The court also determined that Rickard Constructions' rejection of the offer was not unreasonable, given the circumstances of the case. Consequently, the court dismissed the application for indemnity costs. The court emphasised that the decision was based on the specific facts and circumstances of the case, and did not establish a new principle of law.