Bailey v BMW Sydney Pty Limited (No. 2)

The case of Bailey v BMW Sydney Pty Limited (No. 2) involved a dispute between the plaintiff, Mr Bailey, and the defendants, BMW Sydney Pty Limited, in the Federal Circuit and Family Court of Australia. The central issue was whether the defendants were entitled to an indemnity costs order in light of various settlement offers made during the course of the litigation. The defendants had made several offers, including a Calderbank offer with a non-disparagement and confidentiality clause, which Mr Bailey had reasonably rejected as it was not part of the relief sought in the proceedings. The court also examined confidential mediation offers and a settlement offer contingent upon the execution of a settlement deed, which was incomplete as no terms were proposed.

The court had to determine whether the rejection of the non-disparagement clause was unreasonable, the confidentiality of offers made during mediation, and the enforceability of a settlement offer that was conditional on a deed without proposed terms. The court found that Mr Bailey’s refusal to accept the non-disparagement clause was not unreasonable given it was not part of the relief sought. Regarding the mediation, the court held that the confidentiality of the mediation process precluded the defendants from claiming indemnity costs for those discussions. The court also concluded that the settlement offer was not complete and thus not capable of acceptance as it lacked terms for the proposed settlement deed.

The court dismissed the defendants’ application for an indemnity costs order and ordered the defendants to pay the plaintiff’s costs in relation to the application. This decision underscores the importance of the terms of settlement offers and the confidentiality of mediation processes in determining costs orders in litigation.