Wine ACC Supplies Pty Ltd v Bordex Wineracks Pty Ltd (No 2)

Wine ACC Supplies Pty Ltd (the applicant) sought indemnity costs from Bordex Wineracks Pty Ltd (the respondent) following earlier proceedings in the Federal Court of Australia. The dispute concerned the respondent's claim for damages for breach of contract and misleading or deceptive conduct, and the applicant's defence and counterclaim. The applicant had made an offer of compromise pursuant to Order 24 of the Federal Court Rules 1998 (Cth) which was not accepted by the respondent. The respondent's claim was ultimately dismissed, and the applicant's counterclaim was also dismissed.

The primary legal issue before the Full Federal Court was whether the applicant was entitled to an order for indemnity costs, or alternatively, costs on a party and party basis, based on its unaccepted offer of compromise. This required the court to consider the application of Order 24 of the Federal Court Rules, specifically the provisions relating to offers of compromise and the consequences of a party failing to obtain a more favourable outcome than that offered.

The Full Federal Court held that the applicant was entitled to indemnity costs. The court reasoned that the respondent's claim had been dismissed and it had failed to obtain judgment for an amount greater than the applicant's offer of compromise. Therefore, the conditions for ordering indemnity costs under Order 24 were met. The court applied the principle that where an offer of compromise is not accepted and the offering party ultimately succeeds, or the other party fails to achieve a better result, the offering party is generally entitled to indemnity costs from the date of the offer.

The Full Federal Court ordered that the respondent pay the applicant's costs of the proceeding on an indemnity basis from the date of the offer of compromise, and on a party and party basis for the period prior to the offer.