Artesian Hospitality Pty Ltd v Tsuen Fung Holdings Pty Ltd (No 2)

The case of Artesian Hospitality Pty Ltd v Tsuen Fung Holdings Pty Ltd (No 2) involved a dispute between the applicant and the respondent concerning an originating application brought by the applicant for an early trial. The respondent had previously sent a Calderbank letter to the applicant before the exchange of trial submissions, offering for the originating application to be dismissed and for each party to bear its own costs. The applicant refused this offer and proceeded to trial, believing it had a real prospect of success. However, the applicant was unsuccessful at trial, and the originating application was dismissed. The respondent sought costs on the indemnity basis, arguing that the applicant's refusal of the Calderbank offer was unreasonable.

The legal issues before the court included whether it was unreasonable for the applicant to refuse the Calderbank offer and whether indemnity costs should be awarded to the respondent. The court noted that the offer was clearly expressed, and the applicant accepted that the offer was valid, although it was open for a shorter period than required by the Uniform Civil Procedure Rules 1999 (Qld). The applicant argued that the compromise offered was minimal at best, nothing at worst, and thus, indemnity costs should not be awarded. However, the court found that the applicant's refusal of the Calderbank offer was unreasonable, and as such, it was appropriate to award indemnity costs to the respondent.

The court held that the respondent was entitled to its costs on the indemnity basis from 1 October 2021, the date the Calderbank offer was made. The court also noted that the applicant should pay the respondent’s costs of the amended originating application, including the costs reserved by Kelly J on 8 September 2021. The interlocutory injunction order made in paragraph 2 of the order of Kelly J on 8 September 2021 was discharged.