Amaca Pty Ltd v Werfel (No 2)

In *Amaca Pty Ltd v Werfel (No 2)*, the Full Court of the Supreme Court of South Australia considered an appeal concerning the costs of an appeal. The dispute arose from an offer to settle made by the respondent, Mr Werfel, to the appellant, Amaca Pty Ltd (James Hardie), during the appeal proceedings. The court was required to determine the appropriate costs order, particularly in light of the offer and the parties' conduct during the appeal.

The central legal issues before the court were whether Mr Werfel's appeal offer complied with the relevant court rules, and if so, what costs consequences should follow from Amaca's failure to accept the offer. Specifically, the court had to consider the application of rules governing appeal offers, including the test for determining if an offer was "no less favourable" to the offeror, and the court's discretion in awarding costs on a solicitor-client basis. The court also had to weigh the success of the parties on the various issues in the appeal against the existence and nature of the settlement offer.

The court reasoned that Mr Werfel's appeal offer was a complying offer, noting that a failure to specify whether an appeal would be allowed or dismissed did not invalidate it. Furthermore, Amaca's failure to serve a formal response meant the offer was deemed compliant under rule 188A(5) of the Supreme Court Civil Rules 2006 (SA). The court applied rule 188H, which governs appeal offers, and found that while it did not automatically trigger an indemnity costs order after 14 days as some other rules might, it required the court to take into account the offer and the stage at which it was made when determining costs. The court acknowledged that Amaca had a significant interest in the appeal due to its precedential effect, but found that Amaca's determination to litigate all issues, despite the offer, and its limited substantive response, undermined any claim for relief from adverse costs.

Ultimately, the court ordered that Mr Werfel recover 85 per cent of his costs of the appeal on a standard basis until 10 October 2019, and thereafter, 85 per cent of his costs on a solicitor-client basis. This reflected a balance between Mr Werfel's success in recovering a judgment in negligence and his appeal offer, and the fact that he failed in eight of the nine issues contested on appeal.