Seven Network Ltd v News Ltd

In the case of Seven Network Ltd v News Ltd, the court was asked to determine the consequences of an applicant not accepting an offer of compromise made by a respondent under Order 23 of the Federal Court Rules. The dispute involved the applicant's rejection of a compromise offer and subsequent failure to achieve a more favourable outcome in the proceedings. The court was required to decide whether the respondent could rely on the offer of compromise to obtain an order for costs on an indemnity basis when the applicant was wholly unsuccessful.

The court examined the relevant rules and case law, noting that the terms of Order 23, rule 11(5) do not apply when an applicant rejects an offer and is wholly unsuccessful in the proceedings. It was established that in such cases, a respondent cannot rely on the express language of Order 23, rule 11(5) to obtain an order for costs on an indemnity basis. However, the court recognised that the making of an offer by a respondent, which is rejected by the ultimately unsuccessful applicant, is a factor to be considered when determining the appropriate costs order. The court held that there should be a prima facie presumption that the party rejecting the offer should pay the costs of the other party on an indemnity basis from the date of the making of the offer.

The court concluded that the application of the costs respondents for an order that the applicants pay the costs of the proceedings incurred after a specific date on an indemnity basis should be dismissed. The applicants were required to file and serve any lay and expert evidence in response to the expert reports and lay evidence served by the costs respondents in relation to the foreshadowed applications for a gross sum order for costs, including evidence addressing questions of quantum and whether a gross sum order ought to be made, on or before a specified date. The experts retained by the parties were to attend a preliminary meeting with a Registrar of the Court to determine the extent of any common ground on issues the subject of the experts' reports. The matter was to be listed for directions and tentatively listed for further hearing on specified dates.