Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (No 2)

In the case of Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (No 2), the court was tasked with determining the costs of the proceedings following the resolution of the substantive issues. The dispute involved intellectual property infringement, with Review 2 Pty Ltd as the applicant and Redberry Enterprise Pty Ltd as the respondent. The applicants sought costs associated with their successful application, while Redberry contested the extent of the costs it should bear, particularly regarding its unsuccessful cross-claim. The court had to navigate through the procedural history and settlement offers made by both parties to arrive at a fair costs determination.

The primary legal issue before the court was how to allocate costs between the parties given the procedural history and the settlement offers. The court had to consider the effect of the offers of compromise made by Redberry on the costs order, specifically whether Redberry was entitled to indemnity costs following the unsuccessful outcome of its cross-claim. Redberry argued that its offer of compromise, made in accordance with Order 23 of the Federal Court Rules, entitled it to indemnity costs as the unsuccessful party. The applicants, however, contended that the costs should be allocated based on the usual rule where the unsuccessful party pays the costs of the successful party, without regard to the offers of compromise.

The court analysed the relevant provisions of the Federal Court Rules and concluded that the offers of compromise did not entitle Redberry to indemnity costs. It determined that the provisions concerning indemnity costs after a respondent’s offer of compromise did not apply because the offers were made prior to their commencement. Furthermore, the court found that the applicants’ complete failure in their claim meant that the provision dealing with the applicant's rejection of a respondent's offer did not apply either. Consequently, the court held that the usual rule of costs allocation should be applied, where the unsuccessful party pays the costs of the successful party on both the application and the cross-claim.

In its final orders, the court ruled that Review 2 Pty Ltd and Review Australia Pty Ltd (the applicants) should pay the costs of Redberry Enterprise Pty Ltd in relation to the application. Additionally, Redberry Enterprise Pty Ltd was ordered to pay the costs of the cross-claim incurred by the applicants. This decision underscores the importance of considering the procedural context and the specific terms of any settlement offers when determining costs in litigation.