Hestbay Pty Ltd v One Sector Pty Ltd

Hestbay Pty Ltd v One Sector Pty Ltd involved a dispute between two companies, Hestbay and One Sector, concerning a contract for the sale of a property. The case was heard in a state court, where the primary issue was the allocation of costs incurred during the proceedings. The court was required to decide whether Hestbay should bear the costs on an indemnity basis post the defendant's Calderbank offer, whether the costs should be apportioned on an issues basis, and whether the defendant should be limited to the costs of two counsel given the complexity of the matter. Additionally, the court needed to determine whether Hestbay should pay the third party's costs and whether the defendant's conduct in joining the third party was reasonable.

The court examined the nature of Hestbay's conduct, finding it inadequate but not unreasonable enough to warrant an order for indemnity costs. It was noted that Hestbay misunderstood critical evidence and failed to prove certain claims, but these shortcomings did not rise to the level of unreasonableness. The court also considered the fairness principle in allocating costs, referencing James & Ors v Surf Road Nominees Pt Limited & Ors (No 2) [2005] NSWCA 296, but found that Hestbay's conduct did not justify costs on an issues basis. The court held that the defendant's costs should be limited to the costs of two counsel as the matter was not sufficiently complex to warrant three counsel. Regarding the third party's costs, the court ruled that the defendant should bear them, and the plaintiff should pay the defendant's costs of a specific hearing.

The final orders of the court required Hestbay to pay One Sector's costs of the claim and counterclaim on the standard basis up to a certain date and on an indemnity basis thereafter. The defendant's costs, concerning counsel, were to be limited to two counsel. The defendant was also ordered to pay the third party's costs, including reserved costs, and to cover the plaintiff's costs of a particular hearing.