The Real Thing Food Supplements CC v Media Tag Pty Ltd (No 2)

The Real Thing Food Supplements CC brought an action against Media Tag Pty Ltd in the Federal Court of Australia. The plaintiff sought relief for breaches of contract and associated claims of misleading and deceptive conduct under the Australian Consumer Law. The defendant denied the claims and sought to defend the action, arguing that the plaintiff’s claims were without merit. During the course of the proceedings, the defendant made a Calderbank offer to the plaintiff. The offer was made at a relatively early stage in the litigation, and it was a “walk away” offer. The plaintiff declined to accept the offer and the matter proceeded to trial. After the trial, the plaintiff was unsuccessful in its claims and the defendant applied for special costs on an indemnity basis.

The court was required to consider whether it was appropriate to award special costs on an indemnity basis in light of the defendant’s Calderbank offer. The court considered the nature and timing of the offer and whether it was unreasonable for the plaintiff not to have accepted it. The court also considered the effect of the plaintiff’s failure to accept the offer on the overall costs outcome of the case.

The court found that the defendant’s offer was not unreasonable in the circumstances. The court noted that the offer was made at a relatively early stage in the litigation and it was a “walk away” offer. The court found that it was unreasonable for the plaintiff not to have accepted the offer, given the strength of the defendant’s position and the risk of incurring significant costs if the offer was not accepted and the plaintiff was ultimately unsuccessful at trial. The court found that the defendant was entitled to special costs on an indemnity basis, in the amount of $150,000.

The court ordered that the defendant recover special costs in the amount of $150,000 from the plaintiff on an indemnity basis. The court noted that the amount of the costs order reflected the early stage at which the offer was made and the relative strengths of the parties’ positions. The court also noted that the order was not intended to be punitive, but rather to reflect the consequences of the plaintiff’s decision not to accept the defendant’s offer.