Mann Travel Pty Ltd v Skyscanner Ltd

Mann Travel Pty Ltd applied for an order that Skyscanner Ltd pay its costs on a party/party basis in accordance with Part 40 of the Federal Court Rules. The application was brought more than 28 days after the proceedings were dismissed by consent, requiring leave to bring the application. The dispute concerns the meaning and effect of a term in a Notice of Offer to compromise made by Skyscanner and accepted by Mann Travel, which referred to the assessment of costs in accordance with Rule 21.11(2) of the Federal Circuit Court Rules 2011. Skyscanner contends that by referring to Rule 21.11 FCCR, it was accepting assessment upon the item based method set out in FCR Schedule 3, not agreeing to Mann Travel having its costs assessed at the full Federal Court scale. Mann Travel submits that it is entitled to have its costs assessed at the full Federal Court scale. The court held that the construction of the Costs Term must be determined by what a reasonable person would have understood it to mean, requiring consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. The court accepted that the reference to the incorrect schedule number was an obvious error, and that it was immaterial. The court further held that the meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. The court held that the Offer was made with the purpose and object of settling the proceeding, and if it was not accepted, to enable Skyscanner to rely on it for the purposes of costs if the matter proceeded to hearing and Skyscanner obtained a better result than the Offer. The court concluded that by referring to taxation under Rule 21.11 FCCR, Skyscanner was accepting assessment on a party/party basis in accordance with Part 40 of the Federal Court Rules. The court granted leave to the applicant to bring the application and ordered that the respondent pay the applicant’s costs of the proceeding as agreed or to be taxed on a party/party basis in accordance with Part 40 of the Federal Court Rules.