Cumming v Sands

In the Federal Circuit Court, Cumming sought to recover costs on an indemnity basis against Sands, following a failed attempt to settle the matter via a Calderbank letter. The primary dispute between the parties was over the ownership and usage of a property, with secondary issues involving cross claims and the availability of set-off. The court was required to decide whether the circumstances warranted departing from the general rule of costs following a losing party, and if so, what factors should be considered. Additionally, the court needed to determine the applicability of equitable set-off in relation to the cross claims between the parties.

The court held that the general rule of costs following a losing party could be departed from if there were exceptional circumstances, such as the conduct of the parties in the proceedings. In this instance, the court found that the Calderbank letter did not provide sufficient grounds for departing from the general rule, as it was not a genuine attempt at settlement. The court also considered the conduct of the parties throughout the proceedings, including the timing and manner of the Calderbank letter, which ultimately did not warrant an indemnity costs order. Regarding the cross claims and set-off, the court found that the rule in Cherry v Boultbee applied, allowing for equitable set-off between the parties' claims. This decision was based on the interdependence of the claims and the fact that the matters were being determined in the same proceedings.

The court dismissed Cumming's application for costs on an indemnity basis against Sands. In relation to the cross claims, the court allowed for equitable set-off between the parties' claims, in accordance with the rule in Cherry v Boultbee. The court emphasised that the Calderbank letter did not warrant a departure from the general rule of costs, and that the conduct of the parties throughout the proceedings did not provide sufficient grounds for such a departure. The court also found that the cross claims were interdependent and that the matters were being determined in the same proceedings, which supported the application of equitable set-off.