Hardingham v RP Data Pty Limited (No 2)

Link copied
Case Copied 21 min read

FEDERAL COURT OF AUSTRALIA

Hardingham v RP Data Pty Limited (No 2) [2021] FCAFC 175

File number(s): NSD 114 of 2020
Judgment of: GREENWOOD, RARES AND JACKSON JJ
Date of judgment: 1 October 2021
Catchwords: PRACTICE AND PROCEDURE – costs – whether costs should be paid on an indemnity basis following rejection of offer of settlement – where offer of settlement made on without prejudice except as to costs basis – where offer not mention seeking indemnity costs if rejected – whether offer in accordance with Calderbank v Calderbank [1976] Fam 93 – whether rejection of offer was imprudent or unreasonable
Legislation:

Evidence Act 1995 (Cth) s 131

Federal Court of Australia Act 1976 (Cth) ss 37N, 37M, 43

Federal Court Rules 2011 rr 25.01, 36.73(4), 39.05
Cases cited:

Calderbank v Calderbank [1976] Fam 93

CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd (2008) 15 ANZ Insurance Cases 61–785; [2008] FCAFC 173

Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1

Hardingham v RP Data Pty Limited [2021] FCAFC 148

Hardingham v RP Data Pty Ltd (No 2) [2019] FCA 2138

Hardingham v RP Data Pty Ltd [2020] FCA 1062

Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Resources Ltd (No 2) [2013] FCAFC 73

Keays v J P Morgan Administrative Services Australia Ltd (No 2) [2011] FCA 547

Mount Isa Mines Ltd v The Ship “Thor Commander” (No 2) [2018] FCA 1702

Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281

Uniline Australia Ltd v S Briggs Pty Ltd (No 2) (2009) 82 IPR 56
Division: General Division
Registry: New South Wales
National Practice Area: Intellectual Property
Sub-area: Copyright and Industrial Designs
Number of paragraphs: 39
Date of hearing: Determined on the Papers
Date of last submission/s: 16 September 2021
Counsel for the Appellants and First and Third Cross Respondent: Mr R Cobden SC and Mr J Sleight
Solicitor for the Appellants and First and Third Cross Respondent: Neville Hourn & Borg Legal
Counsel for the First Respondent and Second Cross Respondent: Mr M D Martin QC and Mr A Messina
Solicitor for the First Respondent and Second Cross Respondent: Mills Oakley Lawyers
Counsel for the Second Respondent and Cross-Appellant:

Mr H P T Bevan
Solicitor for the Second Respondent and Cross-Appellant: Corrs Chambers Westgarth
Table of Corrections
1 October 2021

In paragraph 39, delete “14 April 2021” and replace with “14 April 2020”

In order 1,  delete “14 April 2021” and replace with “14 April 2020”

ORDERS

NSD 114 of 2020
BETWEEN:

JAMES KELLAND HARDINGHAM

First Appellant and Third Cross Respondent

REAL ESTATE MARKETING AUSTRALIA PTY LTD

Second Appellant and First Cross Respondent
AND:

RP DATA PTY LIMITED

First Respondent and Second Cross Respondent

REALESTATE.COM.AU PTY LTD

Second Respondent and Cross-Appellant

ORDER MADE BY:

GREENWOOD, RARES AND JACKSON JJ

DATE OF ORDER:

1 OCTOBER 2021

THE COURT ORDERS THAT:

1.The first respondent pay the appellants’ costs of the appeal and, if any, the cross-appeal, on…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Hardingham v RP Data Pty Limited (No 2) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2021] FCAFC 175
Decision Date

CaseChat Overview and Summary

The case of Hardingham v RP Data Pty Limited (No 2) involved the appellants, Hardingham and others, appealing against the primary judge's decision and the respondents, RP Data and another, cross-appealing against the primary judge's decision. The main issue in this case was whether the appellants were entitled to indemnity costs from the respondents following the rejection of an offer of settlement made on a "without prejudice except as to costs" basis. The respondents opposed the appellants' claim for indemnity costs, arguing that the offer did not comply with Calderbank v Calderbank [1976] Fam 93, and that the rejection of the offer was not imprudent or unreasonable.

The Full Court considered the legal principles applicable to determining whether an offeree who fails to accept an offer of settlement can be ordered to pay the offeror's costs on an indemnity basis. The court found that the rejection of the offer must be either "imprudent or unreasonable" or "imprudent or plainly unreasonable." In this case, the court held that the rejection of the offer was imprudent or plainly unreasonable, and therefore, the appellants were entitled to indemnity costs from the respondents.

The court also considered the costs of the cross-appeal, and held that the respondents should pay the cross-appellant's costs of the cross-appeal. The court further held that the respondents should pay the appellants' costs of the appeal and, if any, the cross-appeal on a party and party basis up to 11:00am on 14 April 2020, and thereafter on an indemnity basis.

In conclusion, the Full Court ordered that the respondents pay the appellants' costs of the appeal and, if any, the cross-appeal on a party and party basis up to 11:00am on 14 April 2020, and thereafter on an indemnity basis. The court also ordered that the respondents pay the cross-appellant's costs of the cross-appeal.

Orders

Orders of the court

1. The first respondent pay the appellants’ costs of the appeal and, if any, the cross-appeal, on a party and party basis up to 11:00am on 14 April 2020, and thereafter on an indemnity basis.

2. The second cross respondent pay the cross-appellant’s costs of the cross-appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

RPD opposes the appellants’ claim that it pay their costs of the appeal on an indemnity basis but accepts that it should pay those costs on a party and party basis. RPD seeks an order that REA pay the appellants’ costs, if any, of the cross-appeal. REA supports RPD’s opposition to an indemnity costs order against RPD but, like the appellants, seeks an order that RPD pay its costs of the cross-appeal.Background The solicitors for the parties had engaged in correspondence following the outcome of the trial and the filing, on 5 February 2020, of the appellants’ notice of appeal. Subsequently, on 5 March 2020, RPD’s solicitors, Mills Oakley Lawyers (MO), wrote to the appellants’ solicitors, Neville Hourn & Borg Legal (NHB), asking if the appellants proposed to seek a stay of the costs order that the primary judge made against them which had required the appellants to pay RPD’s costs of the proceeding, excluding the costs of the cross-claim, on a party and party basis up to 11:00am on 28 June 2019 and thereafter on an indemnity basis. On 9 March 2020, NHB replied, saying: “I am sure that you appreciated that a basis upon which a stay will be sought is that due to our client's impecuniosity the enforcement of such an order may effectively stultify the appeal”. That led to correspondence culminating in NHB informing MO on 19 March 2020 that, while the appellants had litigation funding for the trial, that funding did not provide cover for any adverse costs orders and that the appellants’ senior and junior counsel and solicitors would be conducting the appeal “on a speculative basis”. On 20 March 2020, MO wrote to NHB asserting that the appellants’ prospects of success were “very limited”. MO stated that their own searches appeared to confirm that Mr Hardingham did not own any real property in Australia and had shareholdings in private companies (including REMA) that only had nominal values. MO sought the appellants’ agreement by 23 March 2020 to provide security of $100,000 for RPD’s estimated costs for the appeal of $150,000, failing which they would seek orders for security for costs. In the event, each of RPD and REA filed interlocutory applications on 3 April 2020 seeking orders for security for its costs of the appeal and together with affidavits in support made respectively on 2 and 3 April 2020 seeking security in the amounts of $80,000 and $45,000.The basis of the claim for indemnity costs The basis of the appellants’ claim for indemnity costs is that, on 8 April 2020, their solicitors wrote a letter to MO and the solicitors for REA, Corrs Chambers Westgarth (CCW), under the heading “without prejudice save as to costs”. Relevantly, the letter stated an offer as follows:As we have previously noted, our client is impecunious and as a result of the Covid-19 impact upon his business, our client wishes to "walk away" from the proceedings. Accordingly, we are instructed to make the following offer:1.The appeal be dismissed (save as to varying the orders for costs in the Court below);2.That each party bear their own costs of the appeal and the proceedings in the Court below.This offer is only open for acceptance until close of business on Tuesday, 14 April 2020. Failing a response, we will attend to the filing of a stay of the costs orders made on 17 December 2019.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In the unusual circumstances of the cross-appeal, the justice of the case requires an order that RPD pay REA’s costs of the cross-appeal, despite its dismissal, on the basis that the issues arising on it did not require determination by the Full Court. RPD was responsible for REA being a party to the appeal and its taking essentially defensive action in bringing the cross-appeal. Substantively, RPD’s case on appeal failed and the dismissal of the cross-appeal was a necessary consequence of that failure. It was not the result of any view which the Full Court had reached about the merits of the cross-appeal. Pursuant to the substituted order 3 that the Full Court made on 8 September 2021 (see [2] above), REA will be entitled to seek an order for costs of its cross-claim if, after that is heard and determined, it be found entitled to relief. That is the substantive result that the cross-appeal would have achieved had it been necessary for us to decide it ourselves. Conclusion For these reasons, RPD should pay the appellants’ costs of the appeal and, if any, the cross-appeal on a party and party basis up to 11:00am on 14 April 2020, and thereafter on an indemnity basis. RPD should also pay REA’s costs of the cross-appeal.

Ratio Decidendi

Legal Principle Established

REA argued that the mere impecuniosity of the appellants was not a reason for RPD to give up the benefit of the costs order in its favour. REA asserted that the appellants were free to discontinue the appeal and could have sought the respondents’ consent to do so without being liable for costs under r 36.73(4). Consideration Different Full Courts have stated slightly differently the general law test applicable to determining whether an offeree who fails to accept an offer of settlement (not being made as an offer of compromise under Pt 25 of the Rules or its analogues) can be ordered to pay the offeror’s costs on an indemnity basis if the offeror obtains a better result than that contained in the offer. The differing versions of the test are that the rejection must be either “imprudent or unreasonable” or “imprudent or plainly unreasonable” (emphasis added). In Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1 at [7], Sundberg and Emmett JJ said:The mere making of an offer of compromise and its non-acceptance, followed by a result more favourable to the offeror, does not automatically lead to an order for payment of costs on an indemnity basis: John S Hayes & Associates Pty Ltd v Kimberley Clark Australia Pty Ltd (1994) 52 FCR 201 at 204 206; MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 239. The applicant for a more generous award must show that the rejection of the offer was imprudent or plainly unreasonable: NMFM Property Pty Ltd v Citibank Ltd (No 2) (“NMFM”) (2001) 109 FCR 77 at 98; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) [2002] FCA 1294 at [28]; Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 283 at [16]-[17] and [23].(emphasis added) They added that, ordinarily, an offer made outside provisions in Rules of Court, such as offers of compromise under Pt 25, will be unlikely to attract an indemnity costs order if the offeree fares worse than the offer unless the offer is, first, reasonable and, secondly, contained a statement why the offeree’s case will fail. As Buchanan J observed in Keays v J P Morgan Administrative Services Australia Ltd (No 2) [2011] FCA 547 at [7]–[20], this difference is not substantive and the word “plainly” is not necessary to qualify “unreasonably”: Rares J applied this view in Mount Isa Mines Ltd v The Ship “Thor Commander” (No 2) [2018] FCA 1702 at [9], [14]. However, there is no inflexible rule that an offeror must give a reasoned explanation as to why the offeree ought accept an offer to settle. That is because the discretionary power to make such an order is contained in s 43(1) of the Federal Court of Australia Act 1976 (Cth). That discretion must be exercised judicially but is otherwise unconfined and includes, as s 43(3)(g) provides, power to order that costs “be assessed on an indemnity basis or otherwise”. The note to s 43, which forms part of the Act, refers to, among other provisions, s 37N(4) as being relevant to the making of an order for costs.