In the matter of Bicher and Son Pty Ltd

In the Federal Court of Australia, Bicher and Son Pty Ltd, a creditor, brought proceedings against another party, seeking to wind up the company. The defendant resisted the winding-up application, and the proceedings ultimately resulted in the company not being wound up. The creditor applied for costs on the party and party basis, arguing that the defendant's actions post-proceedings initiation justified the costs being awarded to the creditor. The defendant objected to the costs application, arguing that there were valid reasons not to accept a compromise offer made during the proceedings.

The court was required to determine whether the general rule that costs follow the event applied, considering the defendant's actions post-commencement of the proceedings. Additionally, the court needed to evaluate the reasonableness of the creditor's refusal to accept a compromise offer made by the defendant under Calderbank. The court had to weigh the merits of the defendant's actions in resisting the winding-up application against the creditor's right to be awarded costs.

The court found that the defendant's actions were not so unreasonable as to warrant a deviation from the general rule that costs follow the event. The court held that the company was not wound up due to the defendant's actions post-commencement, but this did not justify awarding costs to the creditor. The court also determined that it was not unreasonable for the creditor not to accept the compromise offer made by the defendant, as the offer was conditional and the creditor was entitled to pursue its rights in the proceedings. Consequently, the creditor's application for costs was dismissed.

The court ordered that the creditor pay the defendant's costs of the application for costs.