ISS Facility Management Pty Ltd & Anor v Quality Bakers Australia Pty Ltd & Ors (No. 2) [2020] NSWDC 513

ISS Facility Management Pty Ltd & Anor v Quality Bakers Australia Pty Ltd & Ors (No. 2) [2020] NSWDC 513

The Court declined to order indemnity costs. It was not unreasonable for Goodman Fielder to reject the pre-proceeding informal offer because the litigation outcome was not a foregone conclusion, Goodman Fielder had reasonably arguable construction arguments, the offer intermingled other commercial issues, and the letter did not foreshadow reliance on Calderbank principles for indemnity costs. The Rules Offer also did not warrant indemnity costs because the difference between the offer and the judgment was very small in an all or nothing case and did not amount to a real and genuine compromise, so the Court ordered otherwise under r 42.14 of the UCPR.

Jurisdiction
Australia
Judgment Date
07 September 2020
Procedural Posture
Civil Costs Application / On the Papers After Earlier Reasons; Final Orders as to Verdict and Costs
Outcome
Judgment for the plaintiffs in the amount of AUD 634,904.64 inclusive of pre-judgment interest; defendants to pay plaintiffs' costs on the ordinary basis as agreed or assessed; indemnity costs refused.
Legal Topics
['indemnity Costs' 'informal Settlement Offer' 'calderbank Offer' 'offer of Compromise' 'real and Genuine Compromise' 'construction of Commercial Contract' 'due Diligence Costs']
['civil Procedure' 'costs' 'contract Law'] ['indemnity Costs' 'informal Settlement Offer' 'calderbank Offer' 'offer of Compromise' 'real and Genuine Compromise' 'construction of Commercial Contract' 'due Diligence Costs']

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Procedural Posture

Civil Costs Application / On the Papers After Earlier Reasons; Final Orders as to Verdict and Costs

Legal Issues

  1. 1 ["Whether the defendants should pay the plaintiffs' costs on an indemnity basis from commencement of the proceeding because of rejection of a pre-proceeding informal offer." "Whether the defendants should pay the plaintiffs' costs on an indemnity basis from 8 November 2019 because of rejection of an offer of compromise under the Uniform Civil Procedure Rules 2005 (NSW)." "Whether the defendants' rejection of the informal offer was unreasonable." 'Whether the Rules Offer amounted to a real and genuine compromise in an all or nothing contract construction dispute.']

Ratio Decidendi

The Court declined to order indemnity costs. It was not unreasonable for Goodman Fielder to reject the pre-proceeding informal offer because the litigation outcome was not a foregone conclusion, Goodman Fielder had reasonably arguable construction arguments, the offer intermingled other commercial issues, and the letter did not foreshadow reliance on Calderbank principles for indemnity costs. The Rules Offer also did not warrant indemnity costs because the difference between the offer and the judgment was very small in an all or nothing case and did not amount to a real and genuine compromise, so the Court ordered otherwise under r 42.14 of the UCPR.

Court Disposition

Judgment for the plaintiffs in the amount of AUD 634,904.64 inclusive of pre-judgment interest; defendants to pay plaintiffs' costs on the ordinary basis as agreed or assessed; indemnity costs refused.

Orders

  • ['Verdict and Judgment for the plaintiffs for the sum of $634,904.64, which sum is inclusive of pre-judgment interest.' "The defendants are to pay the plaintiffs' costs of the proceeding as agreed or assessed."]