Recovery costs & costs assessment in settlement agreements: Object or beware

BACKGROUND

The Queensland Court of Appeal's recent decision in Ultra Tune Australia Pty Ltd v Mackenzie Auto Repairs Pty Ltd ('Ultra v Mackenzie') demonstrates the importance for parties to take special care when preparing offers to settle and notices of objection in response to costs statements.  The Uniform Civil Procedure Rules  ('UCPR') encourages parties to facilitate the just and expeditious resolution of disputes, such as by reaching a settlement. If a party makes an offer to settle that is not accepted by the other side, and the other side obtains an outcome at trial that is less favourable than the offer, the court may order that the other side pay the offeror's costs of the proceeding (despite being successful).