The Trust Company (Australia) Ltd in its capacity as custodian of the Asia Pacific Data Centre Trust v Nextdc Limited [No 2]

In the Federal Court, The Trust Company (Australia) Ltd, acting as custodian of the Asia Pacific Data Centre Trust, initiated legal proceedings against Nextdc Limited. The dispute revolves around the interpretation and enforcement of the terms of a deed of settlement and related agreements, including the determination of costs. The plaintiffs sought indemnity costs, claiming that their refusal to accept two offers of settlement and an offer of compromise from the defendant justified such an order. The defendant, in response, argued that the plaintiffs had not achieved better terms than those offered, thereby warranting indemnity costs under the relevant rules of the Uniform Civil Procedure Rules (UCPR).

The court examined whether the refusal of the settlement offers and the lack of improvement in the plaintiffs' position over the defendant's offer of compromise justified the imposition of indemnity costs. The court considered the principles governing indemnity costs under UCPR rules 20.26, 42.1, and 42.15A. It assessed whether there were any exceptional circumstances warranting such an order and whether the refusal of the offers was reasonable or justified. The court also weighed the plaintiffs' failure to achieve better terms than the defendant's offer of compromise.

In determining the matter, the court found that while the plaintiffs' refusal to accept the settlement offers and the offer of compromise was not unreasonable, it did not warrant the imposition of indemnity costs. The court held that there were no exceptional circumstances that would justify the plaintiffs receiving indemnity costs, as they did not fare better than the terms proposed by the defendant. Consequently, the court ruled against the plaintiffs' application for indemnity costs, finding no basis for such an order given the outcomes achieved.