Michell as trustee of the Property of Holbrook, a Bankrupt v Holbrook (No.2)

This matter concerned an application by the trustee of the property of a bankrupt, Mr Holbrook, for an order that the costs of the respondent be assessed on an indemnity basis. The trustee sought this order on the grounds that the respondent had not accepted a *Calderbank* offer made by the applicant, and that the respondent's subsequent conduct in the litigation warranted such an order. The application was heard in the Federal Court of Australia.

The primary legal issues before the Court were whether the *Calderbank* offer constituted a genuine offer of compromise, and whether the terms of the offer, specifically the time it was open for acceptance and the timing of its delivery relative to the hearing, rendered it unreasonable. The Court was required to determine if these factors justified departing from the usual order for costs on a party-and-party basis and instead ordering indemnity costs.

In reaching its decision, the Court considered the principles governing *Calderbank* offers and the circumstances in which indemnity costs may be awarded. His Honour Judge Manousaridis found that the *Calderbank* offer was a genuine offer of compromise. However, the Court determined that the offer was open for acceptance for an unreasonably short period, and that its timing in relation to the hearing was also unreasonable. Despite these findings, the Court ultimately ordered that the respondent's costs be assessed on an indemnity basis from the date the *Calderbank* offer was open for acceptance.