Barnes v Hatch Associates Pty Ltd (No.2)

In the matter of *Barnes v Hatch Associates Pty Ltd (No.2)*, the Supreme Court of Queensland was asked to consider an application by the plaintiff, Mr. Barnes, for an order that the defendant, Hatch Associates Pty Ltd, pay the plaintiff's costs of the proceeding. This application followed an earlier decision of the Court where the plaintiff had been awarded damages for breach of contract.

The central legal issue before the Court was whether the plaintiff should be awarded indemnity costs, rather than the usual party-and-party costs, in relation to the proceeding. The plaintiff argued that indemnity costs were warranted due to the defendant's conduct during the litigation, specifically alleging that the defendant had made a "Calderbank offer" that was not accepted and that the defendant had engaged in conduct that necessitated the plaintiff incurring costs beyond what would ordinarily be expected.

Judge Vasta considered the principles governing the award of indemnity costs, which are exceptional and require a demonstration of conduct that is unreasonable, vexatious, or amounts to an abuse of process. His Honour noted that while a Calderbank offer can be a factor in awarding indemnity costs, it is not determinative. The Court examined the nature of the offer and the overall conduct of the defendant throughout the litigation. Ultimately, Judge Vasta found that the defendant's conduct did not meet the high threshold required for an award of indemnity costs. The Court concluded that the defendant's actions, while perhaps not ideal, did not warrant departing from the usual rule that costs follow the event on a party-and-party basis.

Accordingly, the Court ordered that the defendant pay the plaintiff's costs of the proceeding to be assessed on the standard basis.