Solarus Projects v Vero Insurance (No 6)

In Solarus Projects v Vero Insurance, the Federal Court was asked to determine whether indemnity costs should be awarded to Solarus Projects as a result of the conduct of Vero Insurance. The case involved a dispute over the interpretation of an insurance policy, specifically whether the policy covered certain losses incurred by Solarus Projects. The Federal Court of Australia was the forum for this litigation.

The legal issues before the court were whether Vero Insurance's conduct in defending the claim was unreasonable, vexatious, or oppressive, and whether this conduct warranted an award of indemnity costs under section 80 of the Federal Court of Australia Act. The court needed to consider the conduct of Vero Insurance throughout the litigation and whether it met the threshold for such an award.

The court found that Vero Insurance's conduct did not meet the threshold for an award of indemnity costs. While there were issues with the conduct, they did not rise to the level of being unreasonable, vexatious, or oppressive. The court emphasised that indemnity costs should only be awarded in exceptional circumstances where a party's conduct is egregious. In this case, the court was not satisfied that such a standard was met. The court concluded that while Solarus Projects had incurred significant costs due to the litigation, this did not automatically entitle them to an award of indemnity costs.

The court ordered that Vero Insurance was not liable for indemnity costs. The decision underscored the high threshold that must be met for indemnity costs to be awarded and reinforced the principle that such costs are not a matter of course in litigation disputes.