Granitgard Pty Ltd v Termicide Pest Control Pty Ltd (No 6)

The case of Granitgard Pty Ltd v Termicide Pest Control Pty Ltd (No 6) [2010] FCA 381 involved a dispute between the two companies over the effectiveness of Termicide's termite barrier system, Termiglass. The legal issues in this case centred around the costs incurred by both parties during the litigation, and whether the Federal Court Rules O 23 r 11(6) applied to grant Termicide, the respondent, a more favourable outcome in terms of costs taxation. The court had to determine whether the offers made by Termicide were "genuine" offers of compromise and if Granitgard, the applicant, had a valid reason for not accepting these offers.

In its reasoning, the court found that both offers made by Termicide were indeed genuine offers of compromise. However, the court concluded that Granitgard's rejection of the first offer was not imprudent or unreasonable, given the circumstances at the time. The court also found that Granitgard had not demonstrated that it was imprudent or unreasonable not to accept the second offer. The court ruled that the second offer, while not as generous as a "walk away" offer, was still a legitimate attempt to reach a compromise, and therefore, the prima facie position provided by O 23 r 11(6) should apply.

The court ordered that Termicide's costs were to be taxed on an indemnity basis from the date of the second offer, while the costs of the special costs application were to be taxed on a party and party basis.