Verrocchi v Direct Chemist Outlet Pty Ltd (No 2)

FEDERAL COURT OF AUSTRALIA

Verrocchi v Direct Chemist Outlet Pty Ltd (No 2) [2016] FCAFC 162

Appeal from:

Verrocchi v Direct Chemist Outlet Pty Ltd [2015] FCA 234; (2015) 112 IPR 200

File number:

VID 211 of 2015

Judges:

NICHOLAS, MURPHY AND BEACH JJ

Date of judgment:

29 November 2016

Catchwords:

COSTS – application for indemnity costs – offer of compromise made under r 25.01 of the Federal Court Rules 2011 (Cth) – “walk away” offers – whether offer was a genuine offer of compromise – whether rejection of offer was unreasonable

Legislation:

Federal Court Rules 2011 (Cth) rr 25.01, 25.14(1), 25.14(2)

Cases cited:

Austin Nichols & Co Inc v Lodestar Anstalt (No 2) (2012) 202 FCR 506

Barnes v Forty Two International Pty Limited (No 2) [2015] FCAFC 19

Date of hearing:

Determined on the papers

Registry:

Victoria

Division:

General Division

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Category:

Catchwords

Number of paragraphs:

16

Counsel for the Appellants:

Mr C D Golvan QC with Mr T D Cordiner

Solicitor for the Appellants:

Rotstein Commercial Lawyers

Counsel for the Respondents:

Mr G S Clarke QC with Mr I P Horak

Solicitor for the Respondents:

Harwood Andrews

ORDERS

VID 211 of 2015

BETWEEN:

MARIO VERROCCHI

First Appellant

JACK GANCE

Second Appellant

AND:

DIRECT CHEMIST OUTLET PTY LTD (ACN 123 831 210)

First Respondent

IAN TAUMAN

Second Respondent

JUDGES:	NICHOLAS, MURPHY AND BEACH JJ
DATE OF ORDER:	29 NOVEMBER 2016

THE COURT ORDERS THAT:

1.The respondents’ application for indemnity costs be dismissed.

2.The parties bear their own costs of and incidental to such an application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1. The Court in its judgment in this matter (Verrocchi v Direct Chemist Outlet Pty Ltd [2016] FCAFC 104) ordered that the appeal be dismissed with the appellants to pay the respondents’ costs of and incidental to the appeal on a party/party basis.

2. The respondents now seek an order that the appellants pay the costs of the appeal from 12 June 2015 on an indemnity basis. The respondents’ claim for indemnity costs is made under rr 25.14(1) or 25.14(2) of the Federal Court Rules 2011 (Cth) (the Rules) which provide:

   (1)If an offer is made by a respondent and not accepted by an applicant, and the applicant obtains a judgment that is less favourable than the terms of the offer:

   (a)the applicant is not entitled to any costs after 11.00 am on the second business day after the offer was served; and

   (b)the respondent is entitled to an order that the applicant pay the respondent's costs after that time on an indemnity basis.

   (2)If an offer is made by a respondent and an applicant unreasonably fails to accept the offer and the applicant’s proceeding is dismissed, the respondent is entitled to an order that the applicant pay the respondent's costs:

   (a)before 11.00 am on the second business day after…