Nextra Australia Pty Limited v Fletcher (No 2)

Nextra Australia Pty Limited, an applicant, was involved in legal proceedings against Fletcher, the respondent, concerning an alleged defamation caused by blog posts published by the respondent. The Federal Circuit Court was tasked with determining the costs incurred during the litigation. The applicant initially sought damages, but withdrew this claim on 6 March 2012. The respondent argued that the applicant should bear the costs from 28 March 2013, while the applicant claimed they were entitled to their costs on a party-party basis. The court had to decide whether the applicant was entitled to indemnity costs and if any costs should be discounted.

The central legal issues were whether the applicant was entitled to indemnity costs under r 25.14 of the Federal Court Rules and whether the applicant's costs should be discounted or if the respondent should bear any costs. The court examined the procedural history, including the applicant's early withdrawal of the damages claim and the respondent's settlement offers. The applicant's costs, which had escalated to over $42,000, were scrutinized against the background of the respondent's settlement proposals and the principle that costs generally follow the event. The court also considered the principles of misconduct in rejecting settlement offers and the appropriateness of apportioning costs based on the remedies sought and achieved.

The court concluded that the applicant was entitled to its costs on a party-party basis, rejecting the respondent's argument for indemnity costs and the discounting of the applicant's costs. The judge found that the applicant had not unreasonably multiplied issues and acted properly in withdrawing its damages claim. The respondent's misconduct in rejecting settlement offers was not sufficient to warrant indemnity costs. The court held that the respondent should pay the applicant's costs from the date of the amendment to the statement of claim, 21 October 2011, to the conclusion of the proceedings. The final order was for the respondent to pay the applicant's costs on a party-party basis, to be taxed if not otherwise agreed.