Ainger v Coffs Harbour City Council (No 2)

In *Ainger v Coffs Harbour City Council (No 2)*, the plaintiff sought indemnity costs for both the trial and the appeal, relying on an offer of compromise made before the trial pursuant to the *District Court Rules 1972* (NSW) Pt 39 r 25. The defendant opposed this application. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the pre-trial offer of compromise was relevant to the costs of the appeal, and if so, whether it warranted an order for indemnity costs for the appeal. The court also considered the application of the *Uniform Civil Procedure Rules 1999* (NSW) to an offer made under the repealed District Court Rules and the principles governing the reasonableness of rejecting an offer of compromise in light of a subsequent change in legal outlook.

The Court of Appeal held that neither the District Court Rules nor the Supreme Court Rules applied to the offer of compromise in the context of the appeal. The court determined that an order for indemnity costs of the appeal was a matter for the court's discretion and required demonstration of unreasonable or delinquent conduct by the party against whom the order was sought. As no such conduct was demonstrated, the motion for indemnity costs of the appeal was refused. However, the court ordered that the costs of the first trial be paid by the opponent on a solicitor/client basis, reflecting the application of the UCPR to the offer of compromise made under the former District Court Rules. There were no orders as to the costs of the motion itself.