Masters Home Improvement Pty Ltd v North East Solution Pty Ltd (No 2)

The appeal before the Court involved Masters Home Improvement Pty Ltd as the appellant and North East Solution Pty Ltd as the respondent. The dispute arose from a failed construction project, with the appellants seeking costs from the respondents on an indemnity basis. The case was heard in the Supreme Court of Queensland. The appellants argued that the respondents' refusal to accept two Calderbank offers was unreasonable and that this refusal justified the imposition of indemnity costs. Additionally, the appellants sought indemnity costs for the appeal, asserting that the respondents' conduct during the trial warranted such costs.

The court was tasked with determining whether the respondents' rejection of the Calderbank offers was unreasonable and whether this provided grounds for the respondents to pay the appellants' trial costs on an indemnity basis. The court also needed to decide if the respondents' conduct during the trial warranted indemnity costs for the appeal. The legal issues centred around the interpretation of Supreme Court (General Civil Procedure) Rules 2015, specifically rules 63.34(3) and 63.34(4), which deal with indemnity costs and the circumstances in which they may be awarded.

In its reasoning, the court found that the respondents' rejection of the Calderbank offers was not unreasonable, as both offers were conditional and did not adequately address the core issues of the dispute. Consequently, the court concluded that there were no grounds for the respondents to pay the appellants' trial costs on an indemnity basis. Furthermore, the court held that the respondents' conduct during the trial did not warrant indemnity costs for the appeal. Instead, the court ordered that the costs of the trial and the appeal be paid on a standard basis. Finally, the matter of increasing Counsel's fees in excess of the scale was referred to the Costs Court for further determination.