Dorsch v HEAD Oceania Pty Ltd (Costs)

The respondent, HEAD Oceania, sought an order that Mr Dorsch pay its costs of the proceedings from 14 June 2023 (or alternatively 20 June 2023) on an indemnity basis. The court was required to determine whether it was unreasonable for Mr Dorsch to have rejected two offers of compromise from HEAD Oceania, which included the release of non-parties, and whether the costs should be awarded on a party/party or indemnity basis. The court found that Mr Dorsch should pay the costs incurred by HEAD Oceania from 14 June 2023 on a party/party basis, except for any costs related to the penalty aspect of the proceedings, which were to be paid on a lump sum basis.

The court examined the two offers made by HEAD Oceania to Mr Dorsch. The first offer was made on a without admission basis and included Mr Dorsch discontinuing the proceeding, HEAD Oceania making payment of $80,000 within 21 days, and Mr Dorsch releasing all entities within the HEAD Oceania corporate group. The second offer was similar but with a reduced payment of $50,000. Mr Dorsch made a counteroffer which was rejected by HEAD Oceania. The court considered the reasonableness of Mr Dorsch’s rejection of the offers, taking into account the principles in Calderbank v Calderbank. The court found that it was not unreasonable for Mr Dorsch to reject the offers, as the terms were not sufficiently advantageous, and the offers did not include a reciprocal release of Mr Dorsch. Therefore, HEAD Oceania was not entitled to indemnity costs. The court ordered that Mr Dorsch pay HEAD Oceania’s costs from 14 June 2023 on a party/party basis, with the exception of costs related to the penalty aspect, which were to be paid on a lump sum basis. The Registrar of the Court was directed to determine the quantum of the costs and the payment timeline.