MIS Funding No 1 Pty Limited v N W Truskett (No 2); In the matter of Willmott Forests Limited (No 2)

In the Federal Court, MIS Funding No 1 Pty Limited, the assignee of a contract, sued N W Truskett for breach of contract. Truskett, the unsuccessful party, had previously agreed to pay the assignor's costs of enforcing the contract. MIS Funding sought indemnity costs against Truskett. The primary issue before the court was whether the terms of the contract allowed for such indemnity costs to be awarded.

The court found that the contract contained a clause which permitted the assignee to recover costs from the unsuccessful party. This clause was clear and unambiguous, and the court held that MIS Funding was entitled to indemnity costs. Additionally, the court considered whether Truskett's failure to accept a Calderbank offer was unreasonable, which could have affected the award of costs. The court found that Truskett's refusal was not unreasonable given the circumstances, and therefore, this did not alter the outcome regarding costs.

MIS Funding was awarded indemnity costs against Truskett, reflecting the terms of the contract. The court's decision emphasised the importance of clear contractual terms in determining the allocation of costs in such disputes. The court did not find that Truskett's conduct in rejecting the Calderbank offer was unreasonable under the circumstances presented.