In the matter of Domicgra Trading Pty Ltd (No 2)

In the Federal Court of Australia, Domicgra Trading Pty Ltd (No 2) dealt with a case concerning a plaintiff's application for further orders that the defendant pay costs on an indemnity basis. The defendant had previously applied to set aside a creditor's statutory demand, and the plaintiff sought an order for indemnity costs. The court was required to decide whether the defendant's prosecution of its defence involved the degree of delinquency necessary to warrant such an order and whether there was a proper Calderbank offer from the plaintiff.

The court examined the circumstances in which it would order an unsuccessful defendant to pay costs on an indemnity basis. It found that the defendant was entitled to challenge the plaintiff's case that there was a genuine dispute as to the existence of a debt. Regarding the Calderbank offer, the court held that one day was insufficient time for the defendant to consider the offer. Additionally, the offer was not limited to the settlement of the present proceedings but required a compromise of the entire dispute between the parties. Consequently, the court rejected the plaintiff's application for indemnity costs and ordered the plaintiff to pay the defendant's costs.

The court's decision underscored the importance of providing adequate time for consideration of settlement offers and the need for such offers to be properly tailored to the specific issues at hand. The court's ruling also highlighted that defendants have the right to challenge creditor's statutory demands without incurring indemnity costs unless their conduct is delinquent. The final orders required the plaintiff to pay the defendant's costs, reflecting the court's assessment of the parties' conduct and the nature of the settlement offer.