Rivex Crane Hire Pty Ltd v Armquip Pty Ltd (No 2)

Rivex Crane Hire Pty Ltd sued Armquip Pty Ltd over a dispute concerning a contract for crane hire. The case was heard in the County Court of Victoria. The primary issue before the court was whether Rivex was entitled to indemnity costs in the event that Armquip made a successful counter-claim. This hinged on whether Rivex's conduct warranted the imposition of costs on an indemnity basis, considering the offer of compromise made by Armquip. The court was required to determine the applicability of the principles set out in Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority [2005] VSCA 298 and North West Melbourne Recycling Pty Ltd v Commissioner of State Revenue (No 2) [2007] VSC 726 in the context of Supreme Court (General Civil Procedure) Rules 2015, Rule 26.

The court examined the conduct of both parties, with particular focus on Rivex's conduct in relation to the offer of compromise. It was established that an offer of compromise could potentially affect the costs outcome, particularly if the offer was made in good faith and was not withdrawn. The court applied the principles from Hazeldene’s Chicken Farm, where it was held that a party who makes a genuine offer of compromise could be protected from indemnity costs if the offer was not accepted and the party making the offer was ultimately unsuccessful. Additionally, the court considered the relevance of North West Melbourne Recycling, which emphasised the importance of good faith in making such offers.

In determining the outcome, the court found that Rivex's conduct did not warrant the imposition of indemnity costs. The offer made by Armquip was deemed to be genuine and made in good faith. The court held that the principles established in the referenced cases applied, and that the conduct of Rivex did not warrant indemnity costs. Consequently, the court ruled that Armquip was not entitled to indemnity costs.

The court ordered that Armquip was not to be awarded indemnity costs in the event that its counter-claim was successful. This decision was based on the genuine nature of the offer of compromise made by Armquip and the absence of any conduct by Rivex that would warrant indemnity costs. The court’s ruling thus protected Armquip from bearing the risk of indemnity costs in the event of a successful counter-claim.