Cargill Australia Ltd v Viterra Malt Pty Ltd (No 32)

In the matter of Cargill Australia Ltd v Viterra Malt Pty Ltd (No 32), the Court considered several complex issues relating to the assessment of costs and indemnity costs in the context of a prolonged and contentious litigation. The dispute centred on whether the plaintiff, having obtained a judgment significantly exceeding an earlier offer of compromise, should be awarded indemnity costs. Additionally, the Court had to address the apportionment of costs between the parties and the appropriateness of awarding indemnity costs to third parties.

The legal issues before the Court included the application of Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 26.08, concerning indemnity costs where the judgment sum is substantially higher than the offer of compromise, and the Civil Procedure Act 2010 (Vic) in relation to the apportionment of costs based on the conduct of the parties and their success on various matters. Furthermore, the Court had to determine the appropriate method for assessing costs, considering the principles of taxation versus gross sum assessment.

The Court held that the plaintiff was not entitled to indemnity costs as the judgment sum was not far in excess of the offer of compromise, and the plaintiff had not properly assessed the case at the time of the offer. The Court found that the plaintiff's case had undergone significant changes, and the quantum of the claim was uncertain, with a lack of particulars provided. In terms of cost apportionment, the Court determined that the defendants had achieved material success on various matters, warranting an uneven distribution of costs. Finally, the Court concluded that the costs should be assessed by taxation, given the unchallenged expert evidence on the taxation method.

The Court ordered that costs of and incidental to the proceeding be awarded on a standard basis and apportionment of costs based on the conduct of the parties. The Court also awarded indemnity costs to relevant third-party individuals for the duration of the third-party proceeding, reflecting a wilful disregard of known facts or clearly established law.