The Game Meats Company of Australia Pty Ltd v Farm Transparency International Limited (Costs)

This was a costs judgment from the Full Court of the Federal Court of Australia. It came after an earlier appeal in which The Game Meats Company of Australia Pty Ltd, or GMC, succeeded against Farm Transparency International Limited, or FTI.

The earlier appeal is important because it explains what the parties were really fighting about. The Full Court had already granted an injunction restraining FTI from publishing, other than to the Commonwealth Department of Agriculture, Fisheries and Forestry, images obtained or captured by FTI at GMC’s premises between 9 January 2024 and 13 April 2024. The court also found that FTI held copyright in those images on constructive trust for GMC.

The costs judgment therefore was not a side issue in a minor procedural skirmish. It was the final step in a commercially significant dispute about footage taken from business premises, publication of that material, and who could control it. The court’s reasoning shows that when it came to costs, it focused on that central commercial conflict rather than simply counting how many pleaded causes of action each side had won or lost.

There were two main costs questions before the Full Court.

First, should GMC’s costs be reduced because it had not succeeded on every claim or argument? FTI argued that GMC’s costs should be cut by 50% at first instance and by 50% on appeal. FTI relied on two points. It said GMC had failed before the primary judge on misleading or deceptive conduct and injurious falsehood. It also said GMC had failed on appeal grounds relating to trespass.

Second, should FTI have to pay indemnity costs after 5 June 2024 because it rejected GMC’s settlement offer dated 22 May 2024? GMC said yes. FTI said no, arguing in substance that its rejection of the offer was not imprudent or unreasonable, particularly because the constructive trust issue was said to be relatively novel.

Those two questions raised different but related themes. The first was about overlap between successful and unsuccessful claims. The second was about settlement risk and whether a party acted reasonably when deciding to fight on.

The Full Court rejected FTI’s attempt to reduce GMC’s costs by 50%. The judges said there was substantial overlap between the misleading or deceptive conduct and injurious falsehood claims, which had failed at first instance, and the constructive trust issue on which GMC ultimately succeeded.

The court relied on the primary judge’s description of the proceeding’s “main game”. That was the footage FTI had obtained of GMC’s premises. FTI wanted to be able to publish it. GMC wanted the court to stop publication. The Full Court said that fundamental controversy lay at the heart of all four causes of action alleged by GMC. In other words, the court treated the publication fight as the real contest between the parties.

The judgment then became more specific. In the misleading or deceptive conduct and injurious falsehood claims, GMC alleged that FTI’s publications conveyed serious representations about cruelty, systematic cruelty, recklessness as to animal welfare and lack of care for animal welfare. FTI had opened at trial by alleging that the 14-minute footage depicted illegal conduct and breaches of the criminal law. Although those allegations were not ultimately maintained in that form, FTI’s final submissions still alleged non-compliance with applicable regulatory standards.

That mattered because similar issues also arose in the constructive trust case. FTI relied on the allegation that the footage showed illegal conduct by GMC as part of a discretionary defence of unclean hands. The primary judge did not accept that the nature of the events shown in the footage should lead to equitable relief being refused. The Full Court used that overlap to show that the failed and successful claims were not cleanly severable. They were all tied to the same factual and commercial dispute about the footage, what it showed, and whether publication should be restrained.

The court also said that, apart from those overlapping areas, the remaining aspects of the misleading or deceptive conduct and injurious falsehood claims did not appear to have occupied enough court or party time to justify reducing GMC’s costs.

FTI’s separate argument about trespass grounds on appeal also failed. The Full Court said GMC had not really failed on those grounds in the sense argued by FTI. Rather, the court had simply declined to deal with them because GMC had already succeeded on the constructive trust argument. That is an important distinction. A ground that is left undecided because another ground succeeds is not necessarily a basis for reducing costs.

The second major issue was indemnity costs. GMC relied on an offer of compromise made on 22 May 2024. The offer was expressed to be open for 14 days, so it expired on 5 June 2024. It expressly referred to Calderbank principles.

The offer proposed two things. First, FTI would offer the court a permanent undertaking in the form given the previous day before Justice Snaden. Second, both parties would agree to orders that the proceedings be dismissed and each party bear its own costs. The undertaking previously given was temporary and prevented publication, other than to the Australian Government Department of Agriculture, Fisheries and Forestry, of video images depicting events at GMC’s premises between 29 January 2024 and 11 April 2024 until 5 pm on Friday 24 May 2024.

When the Full Court compared that offer with the eventual outcome, GMC had done substantially better than the offer. The court specifically noted that GMC had been awarded total damages of $130,000, as well as the costs order made in the costs judgment. That comparison was significant because one established basis for indemnity costs is the imprudent refusal of a reasonable settlement offer.

The court then applied the familiar approach from Anchorage. The question was not whether rejection looked bad with hindsight alone. It was whether rejection was unreasonable in light of the circumstances existing at the time the offer was rejected. The court listed the usual non-exhaustive factors: the stage of the proceeding, the time allowed to consider the offer, the extent of the compromise, the offeree’s prospects of success at the date of the offer, the clarity of the offer terms, and whether the offer foreshadowed an indemnity costs application if rejected.

FTI did not take issue in written submissions with most of those factors. The main live point was prospects of success. FTI argued that the litigation was relatively novel in relation to the constructive trust over copyright claim, and that it was therefore not unreasonable to defend the claim and reject the offer.

The majority rejected that submission. Referring back to the substantive appeal, the court said the constructive trust case was based on dicta of four judges in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, later referred to with apparent approval by three further judges in Smethurst v Commissioner of the Australian Federal Police. The Full Court said in the earlier appeal that it was difficult to think of a clearer case for application of that principle. Against that background, the majority concluded that rejection of the 22 May 2024 offer was imprudent and unreasonable.

The court also dealt with a narrower point about the form of the offer. GMC’s offer did not itself contain a reasoned explanation of why FTI would fail and why the offer should be accepted. The court acknowledged earlier authority saying that offers outside the court rules will ordinarily be unlikely to attract indemnity costs unless they are reasonable and contain such a statement. But the court also accepted later authority that there is no inflexible rule requiring a reasoned explanation in every case. Communications during the litigation may already expose the weakness of a party’s position. Because FTI did not make submissions on that aspect despite GMC having raised it, the court did not need to go further.

By majority, the Full Court ordered that FTI pay GMC’s costs of the proceedings at first instance on a party-party basis until 5 June 2024, and pay GMC’s costs of the proceedings at first instance and the costs of the appeal and cross-appeal on the indemnity basis after 5 June 2024.

The court rejected FTI’s proposed 50% reduction in GMC’s costs. It held that GMC had succeeded on the fundamental controversy and that the unsuccessful claims were not severable in the way FTI suggested. There was substantial overlap between the failed misleading or deceptive conduct and injurious falsehood claims and the successful constructive trust issue. The trespass grounds were not treated as failed grounds warranting a discount because the court had simply not needed to decide them once GMC succeeded on the constructive trust argument.

On indemnity costs, the majority held that FTI’s rejection of GMC’s 22 May 2024 Calderbank-style offer was imprudent and unreasonable. The result was a split costs order by date: ordinary costs until the offer expired, then indemnity costs after that point.

This case is useful for businesses for two practical reasons.

First, if your dispute involves footage, photographs or other material taken from your premises, the legal fight may not be confined to simple ownership or authorship questions. The earlier appeal, as summarised in this costs judgment, involved injunctive relief and a finding that copyright was held on constructive trust. That means control of content can turn on equitable principles as well as standard IP analysis. If publication of the material could damage your operations, reputation or regulatory position, urgent advice may be needed early.

Second, costs exposure can become one of the biggest commercial risks in litigation. A business may think it is justified in fighting because the law seems unsettled or the other side’s case seems ambitious. This judgment shows that courts will still ask whether rejection of a settlement offer was reasonable at the time. If the offer represented a real compromise and the rejecting party later does materially worse, indemnity costs may follow.

The case also shows that partial failure does not automatically reduce a successful party’s costs. If the unsuccessful claims are bound up with the same factual matrix and the same commercial objective as the successful claim, the court may still award full costs. That is especially relevant where multiple causes of action are pleaded to protect the same business interest, such as stopping publication, preserving confidential material or controlling use of content.

The costs judgment was delivered on 25 September 2025 by Burley, Jackman and Horan JJ in the Full Court of the Federal Court of Australia. The hearing on costs took place on 1 August 2025, and the judgment records that the last submissions were on 17 September 2025.

The key settlement date was 22 May 2024, when GMC made its Calderbank-style offer. The offer remained open for 14 days and expired on 5 June 2024. That expiry date became the dividing line between ordinary costs and indemnity costs in the final orders.