Arkbay Investments Pty Ltd (in liquidation)(receivers and managers appointed) v Tripod Funds Management Pty Ltd (No 2)

In Arkbay Investments Pty Ltd (in liquidation)(receivers and managers appointed) v Tripod Funds Management Pty Ltd (No 2), the plaintiff, Arkbay Investments, sought costs from the defendant, Tripod Funds Management, on an indemnity basis for a successful claim for compensation under section 74 of the Real Property Act 1900 (NSW). The case arose from a dispute over the lodgement of a caveat by Tripod Funds Management, which prevented the sale of a property. The property was owned by Arkbay Investments, which was in liquidation and had receivers and managers appointed.

The legal issues the court had to decide were whether the defendant was entitled to indemnity costs because it had no arguable claim for an estate or interest in the property, and whether the defendant's unreasonable rejection of a Calderbank offer impacted the costs decision. A Calderbank offer is a settlement offer made before a trial which, if rejected unreasonably, may affect the costs outcome. The court had to consider whether the defendant's actions in lodging the caveat and subsequently rejecting the Calderbank offer were unreasonable.

The court found that the defendant had no arguable claim for an estate or interest in the property, which was a critical factor in determining the indemnity costs. Additionally, the defendant's unreasonable rejection of the Calderbank offer was considered. The court held that these factors warranted an indemnity costs order against the defendant. The court also noted that the defendant had already been ordered to pay indemnity costs in separate removal of caveat proceedings, reinforcing the decision to order indemnity costs in this case. This decision underscores the importance of considering the reasonableness of a party's actions in the context of settlement offers and caveat lodgement.