Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2)

Baulderstone Hornibrook Engineering Pty Ltd (the appellant) sought indemnity costs from Gordian Runoff Ltd (the respondent) following an appeal. The dispute concerned the respondent's entitlement to indemnity costs in the primary court, which had been refused by the primary judge. The appeal court was therefore required to consider whether the respondent was entitled to indemnity costs in the primary court, and consequently, whether it should be awarded indemnity costs on appeal.

The central legal issue was whether the respondent had made a genuine offer of compromise to the appellant, and if so, whether the appellant's rejection of that offer was unreasonable, thereby entitling the respondent to indemnity costs in the primary court. A further issue arose as to whether the appellant's appeal, which ultimately failed, was so devoid of merit as to warrant an order for indemnity costs in favour of the respondent on appeal.

The appeal court found that the offer of compromise made by the respondent was not a genuine offer in the circumstances, and therefore the appellant's rejection of it could not be considered unreasonable. The court noted that the primary judge had not dealt with the argument that ultimately failed on appeal, and that the appeal itself was not without merit. Consequently, the appeal court dismissed the appellant's motion for indemnity costs. The costs of the motion were awarded to the respondent.