Colagrande v Kim (No 2)

Colagrande v Kim (No 2) involved a dispute between the applicant, Mr Colagrande, and the respondents, Mr and Mrs Kim, concerning defamation claims. The case was heard in the Federal Court of Australia. The primary legal issue was whether the respondents' refusal to accept settlement offers and their denial of the applicant's claims, despite overwhelming evidence to the contrary, justified an award of indemnity costs. The court had to determine whether the general law principles permitted such an award and if section 40 of the Defamation Act 2005 (NSW) provided an alternative basis for indemnity costs.

The court examined the general law principles and concluded that there was no basis for awarding indemnity costs under those principles. However, it found that section 40 of the Defamation Act 2005 (NSW) applied, as the respondents unreasonably failed to make a settlement offer and there was no foundation for the interests of justice requiring anything other than indemnity costs under section 40(2). The court noted the unmeritorious nature of the respondents' denials and their unreasonable conduct in rejecting settlement offers, leading to the conclusion that an indemnity costs order was appropriate.

The court varied Order 5 of the Court’s orders dated 21 April 2022 by deleting the words “as agreed or taxed” and replacing them with the words “on an indemnity basis”. This decision was made in accordance with Rule 39.32 of the Federal Court Rules 2011. The court's ruling ensured that the applicant would be compensated for the costs incurred due to the respondents' unreasonable actions and unmeritorious denials.