Koonara Management Pty Ltd v Rockliff (No 3)

The case of Koonara Management Pty Ltd v Rockliff (No 3) involved an application for indemnity costs by the respondents and a cross-claimant, alongside a dispute over lump sum and consolidated costs orders. Both the applicants and the cross-claimant were unsuccessful in their respective claims and were held liable to pay the costs of the other party. The applicants and cross-respondents had previously made several offers of settlement, which were not accepted by the applicants and cross-respondents, raising the question of whether these offers were genuine and whether the refusal to accept them was unreasonable. The court needed to determine the appropriate approach to the apportionment of costs between the primary claim and the cross-claim.

The court examined the principle that costs should follow the event and defined the 'event' in this context. It considered the nature of the offers made by the respondents and the cross-claimant, including whether they were genuine and whether the refusal to accept them was unreasonable. The court found that the refusal of the offers was not unreasonable in the circumstances. As for the competing applications for lump sum and consolidated costs orders, the court found that it was in the interests of justice to adopt the approach proposed by the Reschke parties for a consolidated costs order. The court also considered the necessity of apportionment of costs between the primary claim and the cross-claim.

The court concluded that the application for indemnity costs should be refused, as the refusal to accept the settlement offers was not unreasonable. The court further ordered that lump sum costs orders be consolidated, reflecting the extent of success or failure on the costs questions determined by the orders. The parties were instructed to endeavour to agree on appropriate costs orders by a specified date and to file any agreed proposed orders or their respective proposed orders and supporting evidence if they could not reach an agreement.

The final orders included the fixing of specific lump sums for costs payable by the applicants to the respondents and by the cross-claimant to the cross-respondents, with instructions for the parties to endeavour to agree on consolidated lump sum costs orders and to file their proposed orders by certain dates. The court determined that the costs of the parties’ respective claims for indemnity, consolidated and lump sum costs would be decided on the papers.