Calix Limited v Grenof Pty Ltd (No 2)

In the matter of Calix Limited v Grenof Pty Ltd (No 2), the dispute involved a claim for costs by Grenof Pty Ltd against Calix Limited. The Federal Court was tasked with determining whether Grenof should be awarded costs on an indemnity basis, considering the failure of Calix to accept an offer of compromise. The court was also required to assess whether Calix's refusal to accept the offer was unreasonable under rule 25.14(2) of the Federal Court Rules 2011 (Cth).

The primary legal issue before the court was the appropriate basis for awarding costs, specifically whether Grenof should be compensated for the full extent of its costs after a certain point, as opposed to a more limited recovery under the usual party and party basis. This hinged on whether Calix's rejection of Grenof's offer of compromise was unreasonable, which could affect the assessment of costs under the Federal Court Rules.

The court found that Calix's refusal to accept the offer of compromise was indeed unreasonable, leading to the conclusion that Grenof was entitled to indemnity costs from the point of refusal onwards. The court reasoned that the offer was fair and that Calix's decision to reject it without a justifiable reason warranted the more stringent cost recovery arrangement. The assessment of costs was thus divided, with indemnity costs applicable from the date of the unreasonable refusal.

Consequently, the court ordered that the costs payable by Calix to Grenof be assessed on a party and party basis until 11am on 9 September 2022, and on an indemnity basis thereafter. For the second respondent, the costs were to be assessed on a party and party basis.