McFadzean & Ors v Construction Forestry Mining and Energy Union & Ors (No 2)

The case involved McFadzean and others against the Construction Forestry Mining and Energy Union and others. The parties were in dispute over indemnity costs, specifically whether the union's rejection of an offer of compromise was unreasonable. The matter was heard in the Federal Court of Australia. The central legal issue was whether the union's decision to reject the offer of compromise was unreasonable and whether this justified the award of indemnity costs against them.

The court examined the relevant provisions of the Civil Procedure Act 2005, which allow for indemnity costs where a party rejects an offer of compromise that is not substantially more favourable than the offer. The court assessed the terms of the offer and the circumstances surrounding its rejection. The union argued that the offer was unreasonable and that their rejection was justified. However, the court found that the union's rejection was unreasonable given the terms of the offer and the circumstances of the case.

Consequently, the court held that the union's rejection was unreasonable and awarded indemnity costs against them. The union was ordered to pay the costs of the offeror in relation to the proceedings up to the date of the offer. This decision underscores the importance of carefully considering offers of compromise and the potential consequences of unreasonable rejections.