Oliveri Legal Pty Ltd v Cassegrain Tea Tree Oil Pty Ltd

The caveats

1. The primary reason behind the plaintiff's notice of motion is that if the appeal is successful, it will have lost the benefit of the caveats which provide a protection, or preservation, of the monies that it is seeking from the defendant.
2. The defendant's response is that it has been deprived of the right to deal with the properties since May 2021 and this has had, and will have, a deleterious effect upon the defendant's business. For example, the defendant cannot raise funds through a bank loan if property that it might provide as a security is subject to a caveat.
3. The verdict sought by the plaintiff is large (almost $2 million) and it is fairly obvious from the affidavit filed by Mr Oliveri that the plaintiff is not an overly successful law firm. In other words, if the appeal is successful, the properties could well represent the best chance of recovering much-needed funds from the defendant. Although the defendant is apparently controlled by Mr Thomas Cassegrain, it may well be that Mr Claude Cassegrain still plays a part. I expressed some doubt about Mr Claude Cassegrain's credit at [92] of the primary judgment.
4. I obviously cannot express any opinion on the chances of success of the appeal. Mr Oliveri thinks the prospects are "reasonable." Mr Locke, who appears for the plaintiff, in his written submissions has elevated the prospects to "real." I can only say that there were a number of complex issues in the case all of which were forcefully argued by both sides.
5. The appeal is not far away, and although some time may pass before a decision is delivered, I think the caveats should remain in place in case the appeal is successful.
6. Finally, in respect of the caveats, and to some extent consistent with my above observation about the plaintiff's law practice, the defendant submitted that there could be little substance behind any undertaking as to damages flowing from the continuing existence of the caveats. The submission depended upon there effectively being an extension of the caveats because, it was said, they would otherwise have expired upon conclusion of the proceedings. In my view, at least for current purposes, and noting that the caveats are in place "until further order," I think there is no need for any new undertaking as to damages and that the continuation of the caveats is not dependent upon any further undertaking.
7. I also note that it will be open to the defendant to raise the question of the caveats at the appeal hearing, either in response to this decision or as an interim provision pending the decision of the Court of Appeal.

Amending the costs order

1. The plaintiff, as expressed many times during the hearing, took a very dim view of the defendant not calling witnesses from whom affidavits had been served. This related to Mr Claude Cassegrain and Mr Thomas Cassegrain. The plaintiff went to considerable expense to respond to the affidavits and obviously prepared for the hearing on the basis that the witnesses would be called.
2. When it became obvious that the witnesses would not be called, the plaintiff needed to amend its approach and even to rely upon some parts of the affidavits, as admissions, that had been served by the defendant.
3. The plaintiff says that the defendant should pay the costs of preparing for the hearing on the basis that the defendant's witnesses would be called. There is a fundamental flaw in the plaintiff's argument.
4. A plaintiff must prove its case. It may do so through material emanating from a defendant, for example by way of a notice to admit facts or the tendering of documents produced by a defendant. However, if a defendant, at the conclusion of the plaintiff's case comes to a forensic decision that the plaintiff has not proved its case and there is no need to call its witnesses then it is perfectly entitled to do so. Of course, the tactical decision might fail, and the plaintiff would receive all of its costs. But in this case, it did not fail.
5. I cannot see any basis upon which there should be an amendment to the costs order because the plaintiff anticipated the way the defence would be run, but it was run in a different way.
6. The defendant's amendments to the costs order are in two categories: 1. there should be orders in its favour in respect of two decisions by Lindsay J to reserve costs; and 2. there should be an order for indemnity costs arising from pre-hearing offers made by the defendant, the offers being more favourable to the plaintiff than the ultimate result.
7. In relation to the costs reserved by Lindsay J, the plaintiff accepted that they should effectively be treated as an order for costs in the cause so that they fall under the general order I have made that the plaintiff pay the defendant's costs of the proceedings.
8. Turning now to the pre-hearing offers, there were three offers, all styled as Calderbank offers (derived from Calderbank v Calderbank [1975] 3 All ER 333).
9. The first offer was made on 19 November 2021. It was in the following terms: "(a) The parties file consent orders, in the Proceedings, as follows: (i) Proceedings dismissed. (ii) Order that the Caveats lodged on title dealing numbers AK400763 and AK275111 be removed. (iii) Order that Oliveri be released from the undertaking as to damages given to the Court on 18 May 2021. (iv) Order that the costs order made by the Court on 5 November 2021 be set aside. (v) Each party otherwise bear their own costs of and incidental to the proceeding. (b) The parties mutually release one another in respect of all claims, whether known or unknown. (c) The parties enter into a deed of settlement and release to record but not substantially alter the terms set out at paragraph 5(a) to 5(b) above. The offer is inclusive of costs"
10. The plaintiff did not respond to the offer. It submitted that it was not unreasonable to take this course. It submitted that the offer was no more than a 'walk away' proposal and not a genuine compromise. In addition, the offer was made at an early stage when the defendant's evidence had not been served and the plaintiff was not in a position to assess the likely outcome of the proceedings.
11. In addition, the offer (and in fact all three offers), required the plaintiff to enter into a mutual release of all claims, whether known or unknown. This might have included claims separate to those arising from the proceedings so that such a requirement was not reasonable.
12. The second offer was made on 14 October 2022. This offer included the following: "(a) Our client pays your client the sum of $100,000 (Settlement Sum). (b) The settlement sum be paid as follows: (i) $50,000 on or before 31 January 2023; and (ii) $50,000 on or before 28 February 2023. (c) Within 14 days from the date of acceptance of this offer, the parties do all acts and things necessary to cause consent orders to be signed and filed on the following terms: (i) Proceedings dismissed. (ii) Order that the Caveats lodged on title dealing numbers AK400763 and AK275111 be removed. (iii) Order that Oliveri be released from the undertaking as to damages given to the Court on 18 May 2021. (iv) Order that the costs order made by the Court on 5 November 2021 be set aside. (v) Each party otherwise bear their own costs of and incidental to the proceeding. (d) The parties mutually release one another in respect of all claims, whether known or unknown. (e) The parties enter into a deed of settlement and release to record but not substantially alter the terms set out at paragraph 12(a) to 12(d) above. The offer is inclusive of costs."
13. Once again there was no response to the offer. This time there was more substance to the offer because it contained the payment to the plaintiff of $100,000, albeit in instalments and inclusive of costs.
14. Once again, the primary point made by the plaintiff, in justification of its failure to respond, was that the offer required the release of all claims, both known and unknown.
15. The third offer was made on 18 July 2023. It was made shortly after an unsuccessful mediation. It had these terms: "5. In this respect, we are instructed to make the following offer, strictly on a without prejudice and without admissions basis: (a) the defendant to pay the plaintiff the sum of $250,000 (Settlement Sum) in full and final settlement of all claims; (b) the Settlement Sum is to be paid in full within twenty-eight (28) days of the plaintiff's acceptance of this offer; (c) the parties to file consent orders within two (2) business days of the plaintiff's acceptance of this offer containing the following terms: (i) hearing commencing on 28 August 2022 be vacated; (ii) proceedings dismissed; (iii) order that the caveats lodged on title of the defendant's properties, bearing dealing numbers AK400763 and AK275111, be removed from title; (iv) order that the plaintiff be released from the undertaking as to damages given to the Court on 18 May 2021; (v) order that the costs orders made on 5 November 2021 and 3 June 2022 be set aside; (vi) each party otherwise bear their own costs of and incidental to the proceeding. (d) the parties mutually release one another in respect of all claims, whether known or unknown; and (e) the parties to enter into a deed of settlement and release to record the above terms."
16. This offer did prompt a response. The following day, 19 July 2023, the plaintiff made the following offer: "1. The Defendant is to pay an amount of $750,000.00 ("the Settlement Sum") to the Plaintiff. 2. The Settlement Sum is to be paid by the Defendant to the Plaintiff within seven days of the date of acceptance of the Offer. 3. Within fourteen days of the date of receipt of the Settlement Sum by the Plaintiff, the parties are to do all acts and things necessary for: a. The filing of consent orders as set out below: i. AN ORDER that the Proceedings be dismissed. ii. AN ORDER that the Plaintiff is released from the undertaking as to damages given to the Court on 18 May 2021. iii. AN ORDER that the costs order made by the Court on 5 November 2021 be set aside. iv. No order as to costs to the intent that each party is to bear their own costs of the proceedings. b. Caveats AK400763 and AK275111 to be withdrawn."
17. The offer was expressed to be open until 2 August 2023. It was not accepted. It was also put as a Calderbank offer.
18. I think there is some substance in the plaintiff's point about the mutual release, in particular concerning claims known and unknown. I accept that a settlement of proceedings will often include terms to ensure that the whole of the dispute between the parties is finalised, but I think the extension to any possible future claim renders the rejection of the offers to be not unreasonable.
19. However, at the same time, I think that the plaintiff's failure to respond is important; the plaintiff could have suggested an amendment to the release or some other term with which it was comfortable.
20. I also think that by the time the third offer was made, in particular because it included a monetary payment of some size ($250,000 within 28 days and not in instalments) that the rejection of the offer had become unreasonable. There can be little doubt that the offer would have placed the plaintiff in a better position than the ultimate result of the case.
21. Unlike an offer of compromise under the court rules, there is a greater room for discretion when considering a Calderbank offer. My ultimate purpose in deciding costs is to reach a conclusion which is fair and just. I think this is achieved by awarding indemnity costs from the date of the third offer, namely 19 July 2023.
22. While the plaintiff, perhaps consistent with the way the practice was run, as referred to in my principal judgment, could have responded to the first two offers I do not think it would be fair and just to amend the costs order as a result of those offers.
23. By the time of the third offer however, when the defendant was offering a real sum, payable within 28 days, I think the position had changed. In relation to the release, the plaintiff could have responded suggesting a different formula. Also, the plaintiff could have requested that the caveats not be removed from the title until receipt of the $250,000. Instead, the plaintiff simply made a counter-offer for a much larger sum.
24. In relation to costs of the two motions before me, I think each party has had a degree of success, such that they should each pay their own costs of the motions.
25. I make the following orders: 1. Order '2' made on 7 September 2023 is varied to read as follows: 1. The plaintiff is to pay the defendant's costs of the proceedings. 2. The costs are to be assessed on an indemnity basis on and from 19 July 2023. 3. Noted that Order (a) includes the costs reserved by Lindsay J on 13 May 2021 and 18 May 2021. 1. The defendant's application for withdrawal of the caveats bearing identifications AK400763 and AK275111 is refused. 2. Each party is to pay its own costs of the notices of motion filed on 22 September 2023 (by the defendant) and on 20 October 2023 (by the plaintiff).

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